First State Audit Shows the Social Equity Council Still Wrestling With Oversight

By Connecticut CannaTimes Editor 7.29.2026

When former State Representative Brandon McGee became Executive Director of Connecticut’s Social Equity Council in August 2024, he inherited an agency at a turning point.

Just two months earlier, on June 6, 2024, Public Act 24-151 had expanded the Council’s authority, required it to adopt bylaws defining the powers of the Council versus the Executive Director, update its social equity plan, and expand reporting requirements. At the same time, the Council was still managing the aftermath of its first Community Reinvestment Grant Program, which had distributed $6 million during fiscal year 2023, sending $1 million to each of six grant managers to distribute to community organizations.

Over the next two years, McGee consistently described the Council as moving beyond its startup years.

The agency spoke publicly about strengthening internal controls, improving underwriting, redesigning grant oversight and building a more accountable Community Reinvestment Program. Those reforms became the foundation for Round 2 (R2), the Council’s redesigned community grant initiative announced during 2025 and launched in 2026.

Now, Connecticut’s first independent audit of the Social Equity Council provides the public’s first opportunity to measure those claims against the state’s own findings.

The answer is more complicated than either supporters or critics may expect.

The largest findings began before McGee arrived

Most of the audit’s biggest findings involve decisions made before August 2024.

Auditors found that after the Council distributed $6 million during fiscal year 2023, it could not document many of the most basic oversight requirements.

According to the audit, the Council had no documentation approving proposed subrecipient awards made by any of the six grant managers. It had not obtained detailed expenditure schedules from any grant manager. It had not verified that subrecipients submitted required impact reports, nor had it collected those reports itself.

By June 2025, nearly a year after McGee became Executive Director, auditors also found unspent grant money still sitting with three subrecipients whose budget periods had ended in June and September 2024. The Council later recovered $45,704 in unspent funds.

Those findings largely describe the administration of the Council’s original grant program under former Executive Director Ginne-Rae Clay.

But they also became part of the system McGee inherited.

The audit follows the Council into McGee’s administration

Unlike many state audits, this report does not stop at the formal audit period.

Although it officially covers fiscal years ending June 30, 2023 and June 30, 2024, auditors repeatedly examined events that occurred throughout 2025.

That matters because the Council spent much of 2025 publicly discussing reform.

On May 5, 2026, McGee told Council members that Round 2 of the Community Reinvestment Program was moving forward, regional grant managers were being onboarded, and funding opportunities were expected later that month. On May 26, 2026, the Council officially opened the R2 Notice of Funding Opportunity.

Applications closed on July 15, 2026.

Throughout the rollout, the Council emphasized stronger accountability, standardized reporting, monthly financial reporting, quarterly program reporting, annual site visits and corrective action plans designed to improve upon the original program.

The audit shows that while those reforms were being developed, significant administrative issues continued to emerge.

December 2025 becomes one of the audit’s most important dates

One of the report’s most significant findings occurred after the leadership transition.

Auditors found that in December 2025, while the Council was preparing support services for its Community Reinvestment Program, staff attempted to finalize sole-source contracts with two vendors without first obtaining required approval from the Office of Policy and Management. According to the audit, discussions with those vendors had already begun before the required approvals were sought, violating state procurement standards. The Council agreed with the finding and said it has since implemented corrective actions and staff training.

The timing is notable.

The procurement finding did not occur during the Council’s earliest months.

It occurred approximately 16 months after McGee became Executive Director, during the same period the agency was publicly describing itself as operating under strengthened controls and preparing the launch of R2.

Loan oversight also remained under construction

Auditors also reviewed the Council’s Canna-Business Revolving Loan Fund, which had distributed $1.48 million across three projects as of May 2025.

They found required investor tax returns were missing from two loan applications. They found concerns raised by DECD’s Office of Financial Review regarding insufficient collateral had not been adequately addressed on one application. They also found the Council had not developed written policies governing the loan fund.

The Council responded that those weaknesses had already prompted significant changes, including the addition of DECD fiscal review, creation of a loan advisory team and strengthened underwriting procedures.

Another finding involved $20,684 in grant funds

Auditors also examined a Community Reinvestment Grant recipient that had been instructed to return $20,684 in unspent funds.

Instead of returning the money, the recipient informed the Council it was waiting for another DECD payment before repaying the grant.

Auditors concluded the money had already been spent for unauthorized purposes because it was no longer available when repayment was requested. They criticized the Council for accepting the repayment proposal rather than immediately notifying DECD so future funding could be frozen pending investigation.

Reform remains a work in progress

One theme runs throughout the audit.

In nearly every response, the Council agreed improvements were needed while pointing to reforms already underway. It cited additional compliance training, stronger reporting systems, improved loan review procedures and new oversight mechanisms.

The auditors did not dispute that changes had begun.

Instead, they documented that several significant deficiencies continued into 2025, including one involving procurement that occurred while the Council was actively preparing the next generation of its flagship community grant program.

For Connecticut’s cannabis industry, the audit does not tell the story of an agency standing still.

It tells the story of an agency attempting to rebuild itself after a turbulent first chapter, while continuing to encounter significant administrative problems along the way.

Whether Round 2 ultimately fulfills the Council’s promise of stronger oversight will likely become clearer in the next state audit. For now, the July 29 report serves as the first independent benchmark of the McGee era, showing measurable efforts to strengthen the agency but also documenting that the work remained unfinished well into 2025.