DENVER – A recent Denver Auditor’s report found the Caring for Denver Foundation, a nonprofit receiving city tax dollars, allegedly misused funds by spending thousands of dollars on alcoholic beverages and meals while also issuing funds to grantees that submitted falsified documents or failed to submit financial records during the application process.
The foundation's leaders responded to the audit, giving additional context while also saying they're committed to making changes.
According to the audit, the auditor reviewed a sample of 734 administrative expenses and found 598 were related to meal reimbursements. More than 200 meals were reimbursed to the executive, and at least 75 included about $3,130 spent on alcohol.
“Many of those expenditures were one person having dinner and drinks,” Denver Auditor Timothy M. O’Brien. Auditor O’Brien said. “There were times where, you know, the same person was submitting reimbursement for four or five meals in a week. One time, I think it was up to 10 meals in a week.”
According to the Caring for Denver Foundation, the nonprofit’s mission is to address Denver’s mental health and substance misuse needs by growing community-informed solutions, dismantling stigma, and turning the community’s desire to help into action.
The Caring for Denver Executive Director Lorez Meinhold said the alcoholic beverage expenses were equal to about $1,000 per year over the past three years.
“All of this was allowable, and it's out of a $2.5 million dollar budget. But we recognize that when we're entrusted with public funds to address substance misuse, even small symbolic (gestures) matter, and so we are moving forward, recommending changing our policy to not allow for the reimbursement of alcohol,” Meinhold said.
O’Brien said his audit also uncovered application process concerns.
“The other thing that is equally as concerning is the process that they use to actually grant money to people that apply for the grants. Poorly documented, not structured as well as we would like to see it, which means you could end up, you know, giving grants to people that really aren't able to deliver the kind of service that you expect,” O’Brien said.
The audit also found three grantees falsely reported partnerships with other agencies and one of those grantees received $310,000.
The audit went on to identify one grantee executive director applied for and received $568,000 to work with children and families who allegedly had a prior formal allegation of domestic violence with children present filed with the courts.
“Our job as a foundation, we fund organizations, so we do organization, financial and legal checks. And what I'll say related to that person is they were never charged. And so, allegations happen, and so that's where we trust the legal process," Meinhold said. "If there was a formal charge, we also would have known about that."
Meinhold continued: “One of our big investments is in peer specialists, so people with lived experience who have struggled with mental health and substance misuse and have hit the legal system, and that's what makes them so effective at connecting with people and helping them in recovery, because they see the possibility. And for us, that's super important, and it's SAMHSA best practice. We've even funded these peer specialists at Denver Health, and it's been shown to reduce mental health wait times by 94% by creating this connection."
"So the fact that somebody has hit the legal system doesn't impact their ability to do good in this space," Meinhold said.
The auditor’s office said in total, the Caring for Denver Foundation issued 10 grants that did not align with city ordinance.
The auditor issued 15 recommendations to the foundation.
“They rejected seven of them. That's a very high rejection rate. So when you reject a recommendation that says that you're not going to improve things, you're not going to improve transparency, you're not going to improve accountability, you're not going to establish your own policies and procedures as to what are appropriate, reasonable, necessary staff expenditures, I think the taxpayers are at risk of continuing to pay for some of these things,” O’Brien said.
Meinhold interprets disagreeing with seven recommendations differently.
“Our option with responding to the city auditor is to agree or disagree. There's no partial agreement. So even if you see our responses to the audit findings, you'll see…even when we disagree, where we're still making changes, not because we, you know, again, when we disagreed, it's not because we disagreed with the spirit of them,” Meinhold said.
Caring for Denver Foundation’s contract with the City of Denver is set to expired in 2027.
The auditor said he will follow up on the recommendations Caring for Denver agreed to at a later date.
Read the Audit [denvergov.org]
