College Affordability Fund Program

Voters approved the College Affordability Fund program to help Denver students from low-income families be better able to pay for the high costs of a college education.

But without sufficient and reliable data and verification of source documentation, the program may not operate as voters intended. This exposes the city to a heightened risk of errors and potential fraud, and the city cannot be transparent about who the program helps.

FINDING 1 — Minimal oversight and insufficient data management practices do not ensure accurate and complete records for serving students

• Prosperity Denver’s data is fragmented and contains inaccuracies and missing details. Prosperity Denver does not use data analytics to look for potential errors or fraud.
• Prosperity Denver does not collect information about all students served or their demographics. Prosperity Denver currently has no unique identifiers for some students, making it difficult to determine how many the city serves.
• Prosperity Denver did not research all potential issues regarding student eligibility related to known errors its consultant had found before our audit.

FINDING 2 — Prosperity Denver Fund and some supported organizations have not adequately verified eligibility for some students

• Prosperity Denver mostly relies on the 35 supported organizations to establish and confirm students’ eligibility and to maintain supporting documentation.
• Prosperity Denver should expand its requirements for what documents the supported organizations should have. In our sample, we found some students were ineligible or documentation was missing.
• Children’s Affairs has not ensured Prosperity Denver has adequate policies and procedures to confirm student eligibility in all cases.

FINDING 3 — Some supported organizations lack sufficient documentation to support every payment for eligible students

Some supported organizations do not keep sufficient records to verify scholarship payments to post-secondary institutions, reimbursements from Prosperity Denver, or their calculations for support services costs.

1.1 Provide greater oversight – The Office of Children’s Affairs should update its contract administration plan to increase its supervision of Prosperity Denver Fund. At a minimum, the updated plan should include proper safeguards to ensure Prosperity Denver’s reimbursement and reporting processes are accurate so that the city receives a true picture of the program’s performance, including who it is serving.

Agency Response – Agree, Implementation Date – Dec. 31, 2023

1.2 Create data management plan – The Office of Children’s Affairs should ensure Prosperity Denver Fund establishes and adheres to a comprehensive data management plan. This plan should clearly define the roles and responsibilities of all parties involved in the Denver College Affordability Fund program to ensure the data is complete and accurate. At a minimum, the plan should require the use of unique identifiers for students served and require that staff document any changes or additional information they use to supplement a reimbursement request. This plan should also include a requirement for a centralized database and regular data analyses to detect indicators of potential errors or fraud, such as missing essential fields and duplicate entries.

Agency Response – Agree, Implementation Date – June 30, 2024

1.3 Follow up on quality assurance findings – Prosperity Denver Fund should work with the Office of Children’s Affairs to address additional potential errors for items highlighted in the quality assurance reports, such as reimbursements for students who did not qualify but for whom Prosperity Denver reimbursed other supported organizations. In addition, Prosperity Denver and the associated supported organizations should continue implementing the recommendations from those reports.

Agency Response – Agree, Implementation Date – Dec. 31, 2023

2.1 Ensure oversight of student eligibility – The Office of Children’s Affairs should ensure Prosperity Denver Fund adequately oversees the process of verifying students’ eligibility to receive the designated tax dollars from the College Affordability Fund program. Prosperity Denver Fund’s oversight process should be documented, and Children’s Affairs should enforce it. At a minimum, Children’s Affairs should ensure Prosperity Denver Fund:

• Aligns its records retention requirements with its own policy, especially related to keeping supporting documentation regarding students’ eligibility.
• Periodically reviews and updates its policies and procedures to ensure supported organizations obtain and keep documentation evidencing students’ eligibility.
• Makes its updated policies and procedures readily available to all supported organizations.
• Requires that reimbursement requests undergo a secondary review by someone other than the individual who prepared it.
• Continues providing training to supported organizations to ensure policies and procedures are clearly communicated.

Agency Response – Agree, Implementation Date – June 30, 2024

2.2 Review supporting documentation – The Office of Children’s Affairs and Prosperity Denver Fund should design and implement a process to review a sample of supporting documentation from the supported organizations during each reimbursement period. This process should be used to identify weaknesses in the reimbursement process and to update guidance to the supported organizations to ensure only eligible students receive tax-funded support.

Agency Response – Agree, Implementation Date – May 31, 2024

2.3 Obtain refunds for errors discovered in this audit – In line with previous refund practices, the Office of Children’s Affairs and Prosperity Denver Fund should obtain refunds from supported organizations for reimbursements where this audit could not find sufficient evidence of students being eligible. In addition, Prosperity Denver Fund should analyze and identify other potential instances where these ineligible students may have been inappropriately reimbursed, so the city can be refunded.

Agency Response – Agree, Implementation Date – Aug. 15, 2023

3.1 Establish detailed requirements for retaining documentation evidencing payments – The Office of Children’s Affairs should ensure Prosperity Denver Fund establishes and documents clear requirements for supported organizations to maintain records showing all funds received from Prosperity Denver Fund and all funds paid for student scholarships.

Agency Response – Agree, Implementation Date – Dec. 31, 2023

3.2 Establish detailed requirements of support services documentation – The Office of Children’s Affairs should ensure Prosperity Denver Fund establishes and documents clear requirements for supported organizations to prepare and keep reliable and accurate supporting documentation for calculating support services costs. At a minimum, the requirements should include:

• Keeping any documents and calculations necessary to validate a reimbursement request— such as payroll reports, a list of students served, and accounting reports for relevant costs.
• Having a second person review and formally approve initial calculations before submitting a reimbursement request to Prosperity Denver Fund.

Agency Response – Agree, Implementation Date – Dec. 31, 2023