The audit, produced by the Office of the Legislative Auditor, says the governor’s office “departed from its Standard Operating Procedure for Executive Director Appointments” when selecting Erin Dupree as director of the state’s Office of Cannabis Management.

Three differences from that procedure — all related to the background check — contributed to Democratic Gov. Tim Walz appointing Dupree “without having full and complete information,” the audit says.

Dupree resigned a day after her appointment in September following media reports that she ran a business that sold products exceeding state limits on THC potency, owed money to former associates and accumulated tens of thousands of dollars in tax liens.

The audit found the Bureau of Criminal Apprehension conducted its background check on Dupree largely without the involvement of the Alcohol and Gambling Enforcement Division, which is typically involved in such checks on behalf of the governor’s office.

The governor’s office said the AGED did not have statutory authority to perform the background study for the new Office of Cannabis Management, which is why BCA did it instead, according to the audit. The governor’s office also said BCA consulted with AGED to ensure its process was consistent with past practice, but BCA still had never performed a background study for the governor’s office before.

“As a result, it is possible that some assumptions the Governor’s Office made about the background checks — such as assuming that BCA was reviewing Department of Revenue information — were incorrect,” the audit says.

Other issues revolved around faulty assumptions of how the BCA would proceed after receiving Dupree’s signed release forms, and how the agency conducted financial background checks, resulting in not spotting unpaid tax liens.

Immediately following the appointment, the governor’s office reviewed its processes and implemented changes, including the recommendations listed in the audit, Mary Fee, general counsel in the governor’s office, said in a statement. Fee said the governor’s office also increased its capacity for research about potential appointments.

The audit recommended the governor’s office independently confirm that any background checks on people considered for “sensitive positions” include a review of individual and business tax information from the Department of Revenue, criminal history records from the departments of Public Safety and Corrections and potentially the FBI, and outstanding court judgements.

Sensitive positions include the heads of the cannabis office, Gambling Control Board and Minnesota Lottery.

It also recommended that the governor wait to make appointments to sensitive positions until the office has reviewed the complete background check report and made an independent determination of the suitability of the candidate.

The audit says it considers the matter closed and will not conduct a special review.

Minnesota’s legalization of recreational marijuana went into effect in August, allowing people 21 and older to legally possess and grow their own marijuana for recreational purposes, subject to limits as the state establishes a legal cannabis industry in the coming months and years. Minnesota is the 23rd in the country to legalize recreational marijuana.