How To Prepare For An Arizona Restaurant Liquor License Audit

The Audit Unit reviews Hotel/Motel with Restaurant (series 11) and Restaurant (series 12) to ensure they maintain a 40:60 food-to-liquor sales ratio required by Title 4.

If you receive a request for an appointment from a DLLC Auditor, the list below will help you prepare to answer some of the questions you will be asked during the initial audit interview.

• Schedule the necessary personnel to attend the audit interview.

Audit definitions that are not included in statute or rule and are used by the department for enforcement purposes are:

1. “Food” - hot and cold items (not to include water) prepared at the licensed premise, intended for human consumption on the licensed premise. Food that is catered off the premise is not considered a food sale for the 40% rule. Food prepared, catered, and consumed on the premises is considered a food sale for the 40% rule. The sale of non-alcoholic beverages and snack items are also included. Income from food items sold at a discount is considered at the discounted value. Only actual monies received for food sales will be considered. Delivery charges on take out orders are not included in food sales.
2. “Non-Food” - for purposes of completing a Cost of Sales Audit, the following items shall be excluded as non-food from food purveyor invoices:
• 1/2 of orange juice purchases
• 1/2 of orange purchases
• 1/2 of cranberry juice purchases (if serve breakfast, otherwise 100%)
• 1/2 of tomato / vegetable juice / Clamato purchases (if serve breakfast, otherwise 100%)
• Energy Drinks
• Mixers
• Any groceries not readily identified as to what they are
3. Gather and attach receipts which support the information you have included in the Business Data Report
4. Review the forms on this pageRequired Records for Audit - Links To Forms.

During your initial interview, the DLLC Auditor will let you know if there is any other information needed and if another meeting will be necessary.

If you need more information about liquor license audits, please contact the Audit Unit.