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Rocky Mountain Human Services has Tightened Spending

DENVER – The Denver Department of Human Services is now holding Rocky Mountain Human Services accountable for use of city money to help children and adults with intellectual and developmental disabilities thanks to recommendations from a 2015 audit.

Auditor Timothy M. O’Brien, CPA, initiated an audit of the contract between the Denver Department of Human Services and Rocky Mountain Human Services in 2015 after the department asked Auditor O’Brien to investigate reported financial troubles within the organization. A new follow-up report finds the department implemented all the Auditor’s recommendations and has new policies for the best use of funds to help people with intellectual and developmental disabilities.

“I am glad to see the Denver Department of Human Services make certain that public money is used to get individuals with intellectual and developmental disabilities the services they need,” Auditor O’Brien said. “I am proud our audit had a hand spurring change in the city and ensuring tax dollars are used effectively.”

Rocky Mountain Human Services is a not-for-profit community centered board designated by state law to provide case management and services to people with intellectual and developmental disabilities. The organization receives federal, state and local funds, as well as private contributions.

The initial audit found the Denver Department of Human Services was not monitoring the contract with the not-for-profit. The lack of contract monitoring led to unreasonable spending. Auditors found Rocky Mountain Human Services was spending public money improperly. The financial mismanagement led to the termination of the not-for-profit’s chief executive officer and chief financial officer.

Auditors found Rocky Mountain Human Services was using mill levy funding for services provided to individuals who did not live in Denver, including training sponsorships for clinicians as far away as the Pacific Northwest.

The organization was also overcharging the Department of Human Services for administrative expenses and executive salaries. The CEO’s salary was more than double that of the next-highest-paid top executive of a comparable Colorado community centered board.

The follow-up report found the department, in collaboration with Rocky Mountain Human Services, implemented every recommendation from the audit. According to new procedures at Rocky Mountain Human Services, executives’ salaries are properly classified as administrative expenses and administrative costs are capped at 15 percent. Rocky Mountain Human Services kept overhead charges to 9 percent in 2016, well below the 15 percent cap.

The department now requires regular reporting from Rocky Mountain Human Services on contract’s progress. The Denver Department of Human Services hired an internal auditor to monitor the organization’s expenses. The contract between the department and the not-for-profit also specifies a budget for each service or program.

The department also clarified reasonable expenses for mill levy funds, prohibited the money from use for fundraising and limited fund use for communications to efforts related to supporting intellectual and developmental disability programs.

The 2015 audit also led the Denver City Council to approve new ordinance No. 1071-16, which outlines permitted uses of mill levy revenues, requires regular reporting and establishes a residency requirement for receipt of the money.

Read the follow-up report.

Read the 2015 audit. 

"After being slammed two years ago, Denver nonprofit for disabled has cleaned up, auditor says" - Denver Post - Oct. 19, 2017