Liquor licensing by territorial authorities
Under the Sale of Liquor Act 1989 (the Act), each of the 73 territorial authorities (city and district councils) has the status of a District Licensing Agency (DLA). DLAs are responsible for considering applications and issuing licences for selling and supplying liquor to the public.
The scope of our audit
The Auditor-General’s interest in the regulatory practices of local government led us to audit how territorial authorities were managing their liquor licensing responsibilities under the Act. We assessed how 12 territorial authorities were using the Act’s powers, and whether the Act’s purpose - controlling the sale and supply of liquor to reduce alcohol-related harm - was reflected in the systems and processes used by the territorial authorities.
Specifically, we looked at:
- 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.
Our findings
Usually, territorial authorities were doing a good job, although there were some important areas for improvement.
Resources and systems supporting District Licensing Agencies
DLAs lacked informed and systematic approaches to decide on the resources they needed to do their job, including actively monitoring licensed premises. Consequently, territorial authorities needed to:
- clearly define their statutory responsibilities under the Act;
- specify what activities are required to carry out those responsibilities, and
- provide the necessary resources.
DLAs must work closely with the Police and public health services to administer the Act effectively. There was evidence of close, collaborative working relationships. But we were of the view that a formal agreement between the local DLAs, the Police, and the public health services would help better co-ordinate information between the three groups. Such an agreement would record the common goals, differing roles, and agreed approach to processing applications, sharing information, and pooling resources.
Compliance monitoring by District Licensing Agencies
Under the Act, DLAs are responsible for issuing liquor licences, and monitoring and enforcing compliance with licence conditions and the Act. Not all DLAs were sufficiently committed to this responsibility. All DLAs needed to consider whether they had enough resources allocated to this work, and to follow active and systematic monitoring strategies.
Customer service
DLAs’ customer service to applicants, licensees, and the public was responsive. We identified some areas for potential improvement, such as more training and education by DLA staff to encourage greater voluntary compliance, using target timeframes for processing applications, and surveying licensees to assess their satisfaction with the DLA’s service.
Compliance with liquor licensing legislation
DLAs were applying liquor licensing legislation provisions consistently. However, DLAs were not always using documentation or following procedures that clearly complied with the legislation. As a result, DLAs could be challenged about their decision-making processes and the validity of their decisions.
The response to our findings
All the agencies we dealt with during our audit endorsed our findings and the issues we raised for consideration by local authorities.
We encouraged each territorial authority to review its own practices against the better practice framework outlined in our report, and are aware that some territorial authorities have done this. Such changes will take time to consider and put in place, and we intend seeking feedback on each authority’s response to our report in July 2009.
Since publishing our report, we have worked closely with Local Government New Zealand to identify priority areas for improving licensing practice, and co-ordinate initiatives to share and promote guidance to the sector. We intend maintaining close contact with Local Government New Zealand on matters relating to our report.
We have set out the findings from our audit and indicated areas for improvement in various presentations to practitioners, territorial authority managers, and other stakeholders.
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