A recent audit conducted this month by Denver Auditor Timothy M. O'Brien, CPA, has disclosed several operational deficiencies within the Department of Housing Stability, including problems with shelter security, spending, and adherence to contract requirements. The audit specifically points out the adverse impacts of these issues on Denver's shelters, which serve vulnerable populations that could be put at risk due to such organizational flaws.
According to the audit findings, Housing Stability exhibits ineffective methods for monitoring the performance of shelter providers. Notably, the city had allocated a security budget of $807,000 for a shelter operated by the Salvation Army at a former DoubleTree hotel, yet there was a significant delay in the hiring of a security contractor. This lapse in security arguably reached a critical point when, by March 2024, two guests of the shelter were fatally shot, with a third guest being injured in a separate incident. It was only after these violent events that the city assumed responsibility for the property's security, according to the Denver Auditor´s Office.
In terms of financial oversight, the department has struggled with enforcing the terms of contracts, particularly relating to expense reimbursements and accurate documentation of shelter-related spending. Between January 2022 and March 2024, Housing Stability could not furnish the essential records identifying the total expenditures on shelters. Despite this lack of specific tracking, the audit estimated that nearly $150 million was expended on these services during the aforementioned period. The department's weak financial control was further underscored by instances of providers submitting invoices past the deadline and requests for duplicate reimbursements, some of which were erroneously issued.
Additionally, the audit unveiled lapses in the protection of sensitive information, where confidential data was vulnerable within a shared drive accessible by staff in other city agencies, and deficiencies in nondiscrimination policies, where some shelters did not adequately document their efforts to prevent discrimination against their guests. On the matter of potential conflicts with nondiscrimination laws, O'Brien declared, "To say that we are going to follow the law, except for when its different from our religious practices is unacceptable," as per the Denver Auditor´s Office. The Salvation Army's employee handbook, which hinted at such an exemption, was directly at odds with its contractual agreement to not discriminate.
Housing Stability has acknowledged the merit in most of the auditor's recommendations, promising corrections to policy and procedural errors relating to nondiscrimination, grievance processes, improved tracking of expenses, and the formulation of comprehensive security plans. The department, however, stood by its controversial cost-reimbursement policy, challenging the auditor's position concerning fiscal responsibility and compliance with city rules.
