Summary
The Sale of Liquor Act 1989 (the Act) gives each of New Zealand’s 73 territorial authorities the responsibilities and powers of a District Licensing Agency (DLA).A DLA issues licences for the sale and supply of liquor to the public, and certifies managers who are in control of those premises. DLAs are also empowered to carry out other activities consistent with the purpose of the Act - establishing a reasonable system of control with the aim of reducing alcohol abuse. These activities include working with other regulatory bodies such as the Police and public health services, and monitoring licensees’ compliance with the conditions of their liquor licence and the requirements of the Act.
Our performance audit examined:
- the resources and systems supporting DLAs;
- compliance monitoring by the DLAs;
- the service offered by DLAs to applicants, licensees, and the public; and
- DLAs’ compliance with the liquor licensing legislation.
Resources and systems supporting District Licensing Agencies
Our examination of resources and systems identified the need for territorial authorities to clearly define the scope of their statutory responsibilities under the Act, specify the nature and purpose of activities required to give effect to those responsibilities, and provide the necessary resources to carry out those activities. We examined liquor licensing practices in 12 authorities.
Systematic resource planning is about assigning the right number of staff to a function, and organising those staff in the best way. For each territorial authority these tasks need to take account of the nature and extent of liquor licensing work in its district.
Staffing arrangements varied, and we observed the absence of informed and systematic approaches to determining resourcing requirements. We were not satisfied that the time of territorial authority staff allocated to liquor licensing work accurately reflected the full range of tasks associated with carrying out this regulatory function, including active monitoring of licensed premises. Territorial authorities need to carry out a more informed assessment of the scope of activities liquor licensing staff need to perform as part of their jobs. There were benefits and drawbacks associated with the different arrangements for organising staff , and all relevant factors need to be considered by each territorial authority in deciding on its preferred staffing structure.
To effectively administer the Act, DLAs must work closely with the Police and public health services. These working relationships were generally close, with evidence of effective collaboration. However, information was not always well co-ordinated between the three. Moreover, each approaches the liquor licensing function with different expectations and priorities, and has different resources available for this work.
In our view, a formal agreement between the local DLAs, the Police, and the public health services - such as a protocol - to record the common goals, differing roles, and agreed approach to processing applications, sharing information, and pooling resources would help. With appropriate endorsement from senior management, such arrangements can serve as an enduring record and practical operating framework for working together.
Compliance monitoring by District Licensing Agencies
Compliance monitoring provides assurance that licensees are meeting their statutory requirements under the Act and complying with the conditions of their licences. All DLAs were carrying out compliance monitoring in some form, but practices varied.
The DLAs that we visited were unable to provide us with a clear rationale, based on a target level of assurance about compliance with the Act, for their monitoring strategies. DLAs were aware of high-risk premises from their contacts with the Police and public health services. However, better co-ordination and analysis of intelligence, an emphasis on active, risk-based monitoring for all licence types, and the use of monitoring results to report on trends in compliance would improve the focus and efficiency of compliance monitoring.
Customer service
Applicants, licensees, and the public had access to a range of relevant information about the Act and the licensing system. Standardising some of this material would provide access to more consistent and comprehensive guidance across the different territorial authority areas.
DLAs offered a number of services to applicants, and were responsive to their needs. The responses to our survey of licensees confirmed the positive findings from our assessment of customer service practices. All DLAs should consider carrying out their own regular surveys of licensees to assess satisfaction with their services.
Training, education, and various forms of communication are all important in promoting a better understanding of statutory obligations and encouraging voluntary compliance. DLAs should recognise training and education as an important part of the work of all inspectors.
Applications should be processed within a reasonable period, to provide certainty to the applicant and minimise business costs. All DLAs had licensing information systems capable of measuring processing timeliness, but not all had targets, and not all were reporting on the time taken to process applications.
Compliance with liquor licensing legislation
Consistent application of the law ensures fairness and certainty. District Licensing Agencies were applying the main provisions of the Act and the Sale of Liquor Regulations 1990 (the Regulations) consistently. Because of this, the statutory processes that applicants were required to follow showed little variation from one district to another.
However, there were some differences in how the legislation was applied and interpreted, and different arrangements for reaching and documenting decisions about applications. DLAs were not always using documentation or following procedures that, in our view, clearly complied with the Act and the Regulations. This exposes the DLAs to risks that the processes leading to decisions, or the validity of those decisions, are open to challenge.