Caring for Denver grants still need better city oversight

Caring for Denver grants still need better city oversight

Published on September 05, 2024

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DENVER - Two years after auditing the city's oversight of co-responder grant dollars funded by a voter-approved ballot initiative, the audit team found remaining risks - plus new areas of concern - according to a new follow-up report from Denver Auditor Timothy M. O'Brien, CPA.

"When third-party organizations get involved with awarding tax dollars through grants or when they spend the money to provide services, the city should be taking extra care to ensure the dollars are used as the voters intended," Auditor O'Brien said.

The Denver Police Department and the Department of Public Safety fully implemented 10 recommendations. But they only partially implemented five and did not implement nine, leaving more than half of the recommendations with more work to do. The departments disagreed with one additional recommendation to calculate and pay overdue interest to WellPower, so we assume they took no action to address that risk, either.

In 2018, voters approved a 0.25% sales and use tax increase to fund behavioral health services for city residents. These funds are disbursed through grants by a nonprofit organization, the Caring for Denver Foundation. In 2020, the Police Department received a grant from the Caring for Denver Foundation, to fund the Co-Responder Program. The program is meant to pair licensed mental health clinicians - also called co-responders - with police officers to respond to calls for service involving individuals with suspected or known mental health needs. The city contracts with WellPower for those services.

Since 2022, the departments have improved how they collaborate on, maintain, and protect the security of records and sensitive data. They also finalized more transparent documentation explaining the sole-source decision to contract with WellPower for the co-responder program.

However, there are still concerns about returning unspent funds and interest to the Caring for Denver Foundation, as well as paying WellPower interest for late payments in the past. Plus, the contract terms for how much "indirect costs" can be charged to the grant remain unclear.

Not complying with grant and contract compliance requirements jeopardizes future funding and could create hardship for the city's partners if there are disagreements about late payments, miscommunications related to invoices, or unclear rules for reimbursement of indirect costs.

While conducting the follow-up work, we saw that there could also be additional risks regarding records retention. Without consistent policies and procedures, some records could be discarded earlier than they should.

Grant oversight and monitoring remains weak because - although specific individuals have been identified to monitor grant compliance for Caring for Denver - related policies and procedures lack specific steps to follow.

And contract oversight is even more problematic because there were no new improvements to oversight of the contract terms with WellPower. This oversight and specific steps for ensuring all contract requirements are met are important to make sure the city gets what it pays for from the service provider.

"Dedicated tax revenue is not a blank check to the city and its contractors," Auditor O'Brien said. "There have to be strong steps for tracking the money from the moment it is collected all the way through when it goes back out the door to support the community."

Additionally, the city needs to work on ensuring invoices are paid on time, travel expenses are paid for using allowable funds and accounted for in the correct time periods, and that grants are closed on time.

"There are some administrative gaps when it comes to using this tax revenue transparently, accurately, and effectively," Auditor O'Brien said. "This isn't just about making sure grant dollars are protected for an important program, it's also about making sure the city is doing its due diligence on behalf of the voters who passed the tax increase."

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor´s Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: [email protected]
Call: 720-913-5000
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