State cannabis audit will stand as is

Published 7:21 pm Tuesday, November 21, 2023

Secretary of State LaVonne Griffin-Valade has let stand a controversial audit critical of state regulation of the cannabis industry.

The audit became controversial after news disclosures about Shemia Fagan, Griffin-Valade’s predecessor, having a consultancy with the cannabis company La Mota. Fagan, a Democrat elected in 2020, resigned on April 3.

Auditors said Fagan did not affect their conclusions, among them that the Oregon Liquor and Cannabis Commission should ease some regulations. An outside review by the Sacramento, Calif., firm of Sjoberg Evashenk concluded that the audit was not tainted by Fagan. Attorney General Ellen Rosenblum — who arranged for the review upon a request from Gov. Tina Kotek — agreed with its conclusion that the audit should be withdrawn from public inspection.

However, Griffin-Valade — appointed by Kotek and sworn in on June 30 for the 18 months remaining in Fagan’s term — chose not to do so.

She conducted her own review. On Tuesday, Nov. 21, she announced she would maintain the audit as is on the secretary of state website. But she also accepted several other recommendations from the outside review for changes in the Audits Division process.

Griffin-Valade had been a government auditor for 16 years, including stints as the elected Multnomah County and Portland city auditor, before she left government service at the end of 2016. She also was on the peer review committee of the Association of Local Government Auditors.

Her statement on Nov. 21:

“There’s no doubt public confidence was shaken by the former secretary’s actions. However, the public interest in this case is best served by independent auditors providing evidence-supported recommendations to state government. Neither my review nor any other has uncovered a reason to think this report is anything short of that standard. For that reason, I encourage the auditee and other state leaders to treat this report with the same high regard they do any other report from the Oregon Audits Division.”

The Sjoberg-Evashenk review did not attempt to redo the audit or any other work by the Audits Division. But its review did say that the division could have done more to ensure there was no appearance of interference in the audit.

Griffin-Valade listed the recommendations for implementation by the Audits Division:

• The division will revise its audit process to remove the executive office and secretary of state from the two scoping meetings attended by former secretaries. This change will clarify the secretary’s limited role in the audit process and strengthen the division’s independence.

• Even though auditors followed governmental auditing standards with regard to independence protocols, the division will go further to strengthen its independence policy to ensure that threats and conflicts of interest are carefully reviewed and documented at multiple points during each audit engagement.

• The division will overhaul its audit plan process to document a standardized, risk-assessment based approach in determining which audit subjects are chosen.

• The division will contract with a third-party, independent consultant to develop further improvements to the audit plan risk assessment process.

pwong@pamplinmedia.com