Denver Improves Grant Reporting, Subcontractor Accountability
Published on September 02, 2021
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DENVER – Denver is in a better position to support job seekers after implementing audit recommendations to manage federal grant money, according to one of two new follow-up reports from Denver Auditor Timothy M. O’Brien, CPA. The city is also better prepared to hold contractors and subcontractors at the National Western Center accountable, according to the second report.
Auditor O’Brien’s office released two follow-up reports this month: the “Employment Services Cluster Grants” Follow-Up Report with Denver Economic Development & Opportunity and the “Hensel Phelps Construction Contract” Follow-Up Report with the National Western Center.
Grants for Job Seekers:
“With hundreds of millions of dollars coming to the city from the federal government this year, the results of the grants follow-up are a small but important example of how to properly manage the money,” Auditor O’Brien said.
Federal grant requirements ensure agencies spend grant money on appropriate programs and services — which in the case of the Employment Services Cluster grants means helping job seekers find work.
We recommended the city do more to ensure reporting requirements are met by submitting reports to the state on time. Economic Development addressed this by submitting all reports on time in the past year, in addition to working with the city’s Technology Services agency to ensure city software updates do not interfere with staff’s ability to upload reports to the state’s system.
We also recommended better documentation for travel costs to ensure all expenditures are allowable according to grant requirements. Economic Development implemented this recommendation by updating its travel request forms.
“Following federal guidelines for grants and other federal dollars is important to ensure the city is able to use every dollar it receives to the greatest benefit of the people we serve,” Auditor O’Brien said. “Small steps like these lead to greater accountability overall.”
Because our recommendations were fully implemented, the city can be sure it submits employment services grant reports on time to the state so that the state can monitor grant spending and verify the city is following federal requirements.
Denver Economic Development & Opportunity can also now ensure grant money is being spent on allowable employment programs that help Denver residents find work.
National Western Center Subcontractor Accountability:
Meanwhile, the National Western Center fully implemented two recommendations from our 2020 audit and partially implemented the third.
The Auditor’s Office worked with BKD LLP last year to evaluate how well the National Western Center reviewed contractor Hensel Phelps’ compliance with contract terms, including payment applications, change orders, the use of subcontractors, and project reporting requirements.
At the time of follow-up, our team found National Western Center staff did update their invoice review procedures to include new steps to confirm a subcontractor payment is correct if those payments are not already in the contract. There have not yet been any invoices that fell under the new procedures; however we consider this recommendation fully implemented.
“Many city agencies are struggling with appropriate oversight of contracts and contractors,” Auditor O’Brien said. “I hope to see updated procedures like the National Western Center’s to double check extra payments made to subcontractors become more of a standard practice across the city.”
National Western Center staff also followed up with subcontractors regarding late payments and updated their prompt pay procedures to ensure subcontractors get paid on time. And the National Western Center team took steps to work with the City Attorney’s Office to ensure conflict-of-interest clauses are updated in future construction contracts.
“Our recommendations are meant to help agencies serve the people of Denver better,” Auditor O’Brien said. “When agencies like Economic Development and the National Western Center welcome our input and take constructive action, we all win.”
AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor's Office
201 W. Colfax Ave. #705 Denver, CO 80202
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