An emergency audit that Gov. Steve Sisolak first announced last fall at a press conference when he said he was “shocked” by the “longstanding, alarming” conduct of the Nevada Board of Pharmacy was finally unveiled on Wednesday.

The audit reveals actions taken to address the board’s failure over nearly 15 years to comply with a background check requirement on wholesale pharmacy companies or to submit “fingerprint cards” in spite of collecting tens of thousands of dollars in fingerprint processing fees. The matter led to the resignation of the pharmacy board’s president and the appointment of four new members to the board.

“It is unconscionable that this board and staff simply ignored their statutory obligation to conduct background checks to ensure that professionals in this space were properly vetted,” Sisolak said in remarks during the Executive Branch Audit Committee meeting on Wednesday. “It's beyond the pale that this board collected money from Nevadans to perform a service that was never actually being done.”

He added that “I expect that those who knew of this problem, and sat idly by, will be held accountable.”

But whether Sisolak can actually carry out that promise, which comes as part of the governor’s ongoing efforts to rein in questionable conduct by the state’s more than 30 powerful occupational licensing boards, is doubtful. During the meeting, Sisolak asked if as governor, he has “any authority to discipline the individuals that were lax in their oversight.”

Audit division head Warren Lowman responded that that authority lies with the Board of Pharmacy.

“See, this is my issue. I don't have any authority to discipline or to change any of these people that are there,” Sisolak said.

A pharmacy board representative said that anyone who had been dealing with fingerprints since May, when the lapse came to Sisolak’s attention, had been moved out of the role. But Attorney General Aaron Ford cut off further discussion about repercussions for board employees, saying those personnel matters shouldn’t be discussed in an open meeting.

The audit released Wednesday details new policies to ensure the board follows through on background checks, including documenting the status of applications and dividing the duties of processing the applications between different people to add extra internal controls. Applicants who require a background check and have a “disqualifying event” on their record must appear before the board.

The board also plans to enforce the fingerprint requirement more evenly by keeping better tabs on whether all people with “significant influence over the operation” receive a background check. And the board is working to return $53,000, plus interest, in fingerprinting fees that were paid by applicants since 2006 but never used to process fingerprints.

Auditors are also recommending that background checks be required of all of the 17 license types regulated by the Board of Pharmacy — including pharmacists and pharmacy technicians — and not just wholesalers.

Auditors said that Sisolak was notified that the background checks had not been fully completed since 2005 and he issued a moratorium on wholesale license applications on May 3, 2019. The board was found to be in full compliance with FBI and state policies on Aug. 22, and the moratorium was lifted on Oct. 29 — the same day Sisolak held the press conference announcing he was shocked by the board’s conduct.

State lawmakers passed a bill in 2005 calling for any wholesaler of pharmaceutical drugs — the companies that sell drugs to retail pharmacies — to submit fingerprints as part of a background check before operating in Nevada. The law stemmed from concerns about the proliferation of counterfeit medications.

The Board of Pharmacy was empowered to conduct the background checks and submit fingerprint records to the state’s Central Repository for criminal history records.

The fingerprint records — which cost applicants $40.25 each — are one facet of a background check that requires companies to submit other legal documents and fill out an application that includes questions on administrative penalties and criminal history. Both in-state and out-of-state companies are subject to the checks.

The Nevada Board of Pharmacy oversees about 40,000 licenses. More than 1,100 of those are wholesaler licenses subject to the background checks.

Board of Pharmacy Audit by Michelle Rindels on Scribd