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Question 1 of 8
1. Question
Working as the internal auditor for a listed company, you encounter a situation involving DEA Form 973 (Controlled Substance Registration Certificate Application Renewal) during internal audit remediation. Upon examining a board risk appetite statement regarding regulatory compliance, you identify that a distribution center’s registration expired on the 30th of the month, but the renewal application via DEA Form 973 was not submitted until the 5th of the following month. The center continued to process and ship controlled substances during this five-day gap, claiming that the submission of the renewal application provides retroactive authorization. Which of the following statements correctly identifies the regulatory standing of the distribution center during those five days?
Correct
Correct: Under the Controlled Substances Act and DEA regulations, a registration is valid only until the expiration date printed on the certificate (DEA Form 700). There is no provision for a grace period or retroactive authorization for a registration that has lapsed. If a registrant fails to renew by the expiration date, they no longer have the legal authority to handle, distribute, or dispense controlled substances. Any such activity conducted after the expiration date and before a new registration is granted constitutes a violation of federal law.
Incorrect: The belief that there is a 15-day or 30-day grace period for administrative delays is a common misconception; federal law is strict regarding the expiration date. There is no ‘reporting period’ exception that allows for continuous activity if the form is filed within the same month. Furthermore, the authority to distribute existing inventory is also tied to a valid registration; once the registration expires, the facility cannot legally move or handle controlled substances, even for the purpose of clearing inventory to other registrants.
Takeaway: DEA registrations expire strictly at midnight on the expiration date, and any controlled substance activity conducted after that point without a valid renewal is a violation of federal law.
Incorrect
Correct: Under the Controlled Substances Act and DEA regulations, a registration is valid only until the expiration date printed on the certificate (DEA Form 700). There is no provision for a grace period or retroactive authorization for a registration that has lapsed. If a registrant fails to renew by the expiration date, they no longer have the legal authority to handle, distribute, or dispense controlled substances. Any such activity conducted after the expiration date and before a new registration is granted constitutes a violation of federal law.
Incorrect: The belief that there is a 15-day or 30-day grace period for administrative delays is a common misconception; federal law is strict regarding the expiration date. There is no ‘reporting period’ exception that allows for continuous activity if the form is filed within the same month. Furthermore, the authority to distribute existing inventory is also tied to a valid registration; once the registration expires, the facility cannot legally move or handle controlled substances, even for the purpose of clearing inventory to other registrants.
Takeaway: DEA registrations expire strictly at midnight on the expiration date, and any controlled substance activity conducted after that point without a valid renewal is a violation of federal law.
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Question 2 of 8
2. Question
An internal review at a broker-dealer examining DEA Form 1026 (Controlled Substance Registration Certificate Application) as part of onboarding has uncovered that several applications for new pharmacy registrants were submitted without verifying the specific authority of the signatory. During the audit of the 2023 onboarding cycle, it was noted that some forms were signed by the designated Pharmacist-in-Charge (PIC) who does not hold an ownership stake or a corporate officer title. To ensure compliance with federal registration requirements and prevent potential delays in the issuance of the registration certificate, the internal auditor must determine the appropriate signatory for the application. According to federal regulations, who is authorized to sign the application for a new DEA registration?
Correct
Correct: According to 21 CFR 1301.13, the application for a DEA registration must be signed by the applicant if an individual, by a partner if a partnership, or by an officer if a corporation, corporate division, association, trust, or other entity. This requirement ensures that the individual signing the document has the legal authority to bind the entity to the responsibilities and regulations associated with handling controlled substances.
Incorrect: The Pharmacist-in-Charge (PIC) manages the pharmacy’s operations but does not necessarily have the legal authority to sign the registration application unless they are also an officer or partner. Power of Attorney (POA) is a mechanism used to allow designated individuals to sign DEA Form 222 (order forms), but the authority to sign the initial registration application is reserved for the owners or officers of the entity. Third-party brokers or compliance officers are external to the registrant entity and lack the legal standing to sign the application on behalf of the registrant.
Takeaway: Initial DEA registration applications must be signed by an individual with specific legal authority over the entity, such as an owner, partner, or corporate officer.
Incorrect
Correct: According to 21 CFR 1301.13, the application for a DEA registration must be signed by the applicant if an individual, by a partner if a partnership, or by an officer if a corporation, corporate division, association, trust, or other entity. This requirement ensures that the individual signing the document has the legal authority to bind the entity to the responsibilities and regulations associated with handling controlled substances.
Incorrect: The Pharmacist-in-Charge (PIC) manages the pharmacy’s operations but does not necessarily have the legal authority to sign the registration application unless they are also an officer or partner. Power of Attorney (POA) is a mechanism used to allow designated individuals to sign DEA Form 222 (order forms), but the authority to sign the initial registration application is reserved for the owners or officers of the entity. Third-party brokers or compliance officers are external to the registrant entity and lack the legal standing to sign the application on behalf of the registrant.
Takeaway: Initial DEA registration applications must be signed by an individual with specific legal authority over the entity, such as an owner, partner, or corporate officer.
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Question 3 of 8
3. Question
Your team is drafting a policy on DEA Form 1004 (Controlled Substance Registration Certificate Application) as part of model risk for a payment services provider. A key unresolved point is the validation of registration status for high-volume pharmaceutical clients. During an internal audit of the compliance framework, it was noted that several merchants were onboarded while their DEA Form 1004 was still in pending status. To ensure adherence to federal law and minimize regulatory risk, the auditor must clarify the legal limitations regarding the commencement of controlled substance activities.
Correct
Correct: Under the Controlled Substances Act (CSA), registration is a mandatory prerequisite for any person or entity that manufactures, distributes, or dispenses controlled substances. The submission of an application (such as Form 1004) does not grant any legal authority to handle controlled substances. Authorization only begins once the DEA has processed the application, approved the registrant, and issued a Certificate of Registration containing a unique DEA number. From an audit and risk perspective, allowing a merchant to operate or be onboarded for controlled substance transactions without a finalized registration number constitutes a significant compliance failure.
Incorrect: Option B is incorrect because state licensure is a separate requirement and does not grant federal authority to handle controlled substances; federal registration is always required regardless of the schedule (I-V). Option C is incorrect because while business transfers allow for certain transitions, they do not provide a blanket 90-day grace period for new applications, and specific legal requirements like a Power of Attorney and 14-day notice must be met. Option D is incorrect because the procurement or receipt of controlled substances is a regulated activity that requires a valid DEA registration number to be provided to the supplier or wholesaler at the time of the order.
Takeaway: Federal law strictly prohibits any handling, procurement, or distribution of controlled substances until a DEA registration number has been officially issued and the certificate is received.
Incorrect
Correct: Under the Controlled Substances Act (CSA), registration is a mandatory prerequisite for any person or entity that manufactures, distributes, or dispenses controlled substances. The submission of an application (such as Form 1004) does not grant any legal authority to handle controlled substances. Authorization only begins once the DEA has processed the application, approved the registrant, and issued a Certificate of Registration containing a unique DEA number. From an audit and risk perspective, allowing a merchant to operate or be onboarded for controlled substance transactions without a finalized registration number constitutes a significant compliance failure.
Incorrect: Option B is incorrect because state licensure is a separate requirement and does not grant federal authority to handle controlled substances; federal registration is always required regardless of the schedule (I-V). Option C is incorrect because while business transfers allow for certain transitions, they do not provide a blanket 90-day grace period for new applications, and specific legal requirements like a Power of Attorney and 14-day notice must be met. Option D is incorrect because the procurement or receipt of controlled substances is a regulated activity that requires a valid DEA registration number to be provided to the supplier or wholesaler at the time of the order.
Takeaway: Federal law strictly prohibits any handling, procurement, or distribution of controlled substances until a DEA registration number has been officially issued and the certificate is received.
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Question 4 of 8
4. Question
As the product governance lead at a listed company, you are reviewing DEA Form 974 (Controlled Substance Registration Certificate Application) during data protection when a suspicious activity escalation arrives on your desk. It reveals that a pharmacy location’s registration expired 14 days ago, yet the facility continues to dispense controlled substances. The pharmacy manager provides documentation showing the renewal application was submitted 60 days prior to expiration, but the DEA has not yet processed the request. Based on federal regulations regarding registration continuity, what is the most appropriate audit conclusion regarding the facility’s current operational status?
Correct
Correct: Under 21 CFR 1301.13, if a registrant has filed an application for renewal at least 60 days before the expiration of their existing registration, the existing registration continues in effect until the DEA has reached a final decision on the application. This ensures continuity of care and business operations during administrative processing delays.
Incorrect
Correct: Under 21 CFR 1301.13, if a registrant has filed an application for renewal at least 60 days before the expiration of their existing registration, the existing registration continues in effect until the DEA has reached a final decision on the application. This ensures continuity of care and business operations during administrative processing delays.
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Question 5 of 8
5. Question
The portfolio manager at a fund administrator is tasked with addressing DEA Form 1031 (Controlled Substance Registration Certificate Application Renewal) during record-keeping. After reviewing a board risk appetite review pack, the key concern identified is the risk of regulatory non-compliance leading to a temporary suspension of pharmacy operations. As part of a risk-based internal audit, the manager is reviewing the standard operating procedures for the timely submission of registration renewals for a multi-state pharmacy chain. To maintain a robust control environment and adhere to federal requirements for this specific certificate renewal, the manager must confirm that the renewal application is submitted within which of the following timeframes?
Correct
Correct: According to federal regulations governing the Drug Enforcement Administration (DEA) registration process, a registrant may submit an application for renewal no more than 60 days prior to the expiration date of the current registration. This 60-day window is the standard period during which the electronic renewal system (or paper forms where applicable) accepts submissions to ensure that the registration remains continuous without a lapse in authority to handle controlled substances.
Incorrect: The 30-day timeframe is incorrect because, while it is within the allowed window, it is not the earliest possible submission date and represents a higher risk of administrative delay. The 90-day and 180-day timeframes are incorrect because the DEA does not typically permit the submission of renewal applications that far in advance of the expiration date, as the registration system is designed to capture the most current operational and compliance data closer to the renewal period.
Takeaway: DEA registration renewals must be submitted within the 60-day window prior to expiration to ensure continuous legal authority to dispense or distribute controlled substances.
Incorrect
Correct: According to federal regulations governing the Drug Enforcement Administration (DEA) registration process, a registrant may submit an application for renewal no more than 60 days prior to the expiration date of the current registration. This 60-day window is the standard period during which the electronic renewal system (or paper forms where applicable) accepts submissions to ensure that the registration remains continuous without a lapse in authority to handle controlled substances.
Incorrect: The 30-day timeframe is incorrect because, while it is within the allowed window, it is not the earliest possible submission date and represents a higher risk of administrative delay. The 90-day and 180-day timeframes are incorrect because the DEA does not typically permit the submission of renewal applications that far in advance of the expiration date, as the registration system is designed to capture the most current operational and compliance data closer to the renewal period.
Takeaway: DEA registration renewals must be submitted within the 60-day window prior to expiration to ensure continuous legal authority to dispense or distribute controlled substances.
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Question 6 of 8
6. Question
Which statement most accurately reflects DEA Form 950 (Controlled Substance Registration Certificate Application) for Multistate Pharmacy Jurisprudence Examination (MPJE) in practice? During a pre-operational audit of a new retail pharmacy, an internal auditor is reviewing the completed application for a DEA registration to ensure it meets all federal regulatory requirements.
Correct
Correct: Under federal regulations (21 CFR 1301.13), the application for DEA registration must be signed by the person applying (if an individual), by a partner (if a partnership), or by an officer (if a corporation or other entity). A power of attorney may be used to authorize another individual to sign the form, which is a critical control for auditors to verify when the signatory is not a high-level officer.
Incorrect
Correct: Under federal regulations (21 CFR 1301.13), the application for DEA registration must be signed by the person applying (if an individual), by a partner (if a partnership), or by an officer (if a corporation or other entity). A power of attorney may be used to authorize another individual to sign the form, which is a critical control for auditors to verify when the signatory is not a high-level officer.
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Question 7 of 8
7. Question
The supervisory authority has issued an inquiry to a fintech lender concerning DEA Form 1004 (Controlled Substance Registration Certificate Application) in the context of outsourcing. The letter states that a recent internal audit of a pharmacy-service provider revealed that the entity’s registration certificate was not physically present at the dispensing site but was instead held at the lender’s central compliance office for safekeeping. To mitigate the risk of a regulatory violation during a DEA inspection, which protocol should the internal auditor recommend regarding the location and accessibility of DEA Form 1004?
Correct
Correct: Federal regulations under the Controlled Substances Act mandate that every registrant must keep the registration certificate (DEA Form 1004, as specified) at the registered location. It must be maintained in a manner that is readily retrievable and available for inspection by any authorized employee of the DEA or other law enforcement agencies.
Incorrect
Correct: Federal regulations under the Controlled Substances Act mandate that every registrant must keep the registration certificate (DEA Form 1004, as specified) at the registered location. It must be maintained in a manner that is readily retrievable and available for inspection by any authorized employee of the DEA or other law enforcement agencies.
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Question 8 of 8
8. Question
A new business initiative at a broker-dealer requires guidance on DEA Form 964 (Controlled Substance Registration Certificate Application) as part of third-party risk. The proposal raises questions about the regulatory validity of a third-party chemical broker’s credentials. As part of the risk assessment, the internal audit team must determine if the broker’s registration is current and properly maintained according to federal requirements. Which of the following statements correctly identifies the renewal requirement for this specific type of DEA registration?
Correct
Correct: Under the Controlled Substances Act and 21 CFR 1309.11, registrations for chemical brokers and other non-practitioner entities are issued for a one-year period. To maintain compliance, the auditor must verify that the registration is renewed annually, ensuring the vendor’s authority to facilitate List I chemical transactions remains active.
Incorrect
Correct: Under the Controlled Substances Act and 21 CFR 1309.11, registrations for chemical brokers and other non-practitioner entities are issued for a one-year period. To maintain compliance, the auditor must verify that the registration is renewed annually, ensuring the vendor’s authority to facilitate List I chemical transactions remains active.
