Denver has spent nearly $13.7 million on the design phase of the new National Western Livestock Center, but auditors found the project lacked documentation, governance and oversight, according to a report released Thursday. 

Auditors found that the Mayor’s Office of the National Western Center (NWCO) did not fully follow recommended guidance, such as that from Colorado Department of Transportation (CDOT), to justify its choice of construction manager/general contractor (CMGC), independently confirm project costs, or ensure that subconsultants were competitively selected and adequately managed.

“While we found the city received what it contracted for, the audit determined the office had inadequate governance and oversight over its consultants, resulting in untimely invoice submissions and processing, reduced project transparency, and heightened risks of overpayment,” Denver Auditor Tim O’Brien said. 

Of the nine recommendations made by the Auditor to the NWCO, Executive Director Michael Bouchard declined to implement seven, disagreeing with several of the findings.

Bouchard pushed back, arguing that NWCO followed industry standards and that CMCG guidance, such as that used by CDOT, primarily addresses horizontal construction, not vertical, and would not have been an appropriate set of guidelines at the time the project began.

NWCO officials stated that this was due to the construction manager/general contractor program commencing before the city’s updated guidance was published. As a result, no additional policies or detailed procedures were developed or adopted.

“Subsequent to these decisions, and when we were both procuring and managing this process, the city has since come out with its own CMGC guidance,” Bouchard said.”Should we be in a situation of looking at CMGC in the future, we would absolutely use the best available guidance from the city to do so.”

Auditors also found that NWCO officials did not retain selection committee member scores for bid proposals, including those for which Populous was to be the winning architectural design firm.

“The office did not keep selection committee members’ calls for bid proposals and interviews, nor did it keep any records of the contract price negotiations before the final price was set,” Associate Auditor George Zziwa told members of the audit committee. “Also, the office did not keep documentation on how it chose committee members, their qualifications or how members’ identities were kept anonymous.”

Zziwa added that NWCO leaders said “they do not keep committee scores or records of price negotiations after contracts are awarded, and that they choose committee members through verbal discussions.”

“We’ve been through this before out at the airport, and the former executive director of the airport gave us a very similar answer,” Jack Blumenthal, vice chairman of the audit board, said to Bouchard. “The good news is, the current CEO and executive director has implemented procedures, policies, and procedures to do exactly what they weren’t doing in the first place … which is exactly what the audit staff is now asking of you to do.”

When asked how NWCO felt about going forward with the project and not maintaining the records, Allison Hanna, project delivery manager, stated that because the selection and the results of the committee, as well as leadership approval, are documented, “that is the record of the selection.”

Still, retention policies require agencies to keep purchasing records for seven years, Zziwa added, and without these records, the NWCO cannot show how it scored firms and chose committee members who kept them anonymous.

NWCO also failed to use an independent cost estimator to ensure the city did not overpay for services, maintain all required financial records within the city’s system, and did not correctly manage invoice processing, causing late payments to subconsultants, the report stated.

In one instance, auditors found ”recurring errors where the costs to date were consistently underreported by $68,110 from 2022 through 2024, an error that should have been caught by reconciling the submitted forms.”

NWCO, in its formal response to the audit findings, stated that it did employ an independent cost estimate process that was unbiased and separate from that of the CMGC contract.

“However, the cost estimator, Rider Levett Bucknall Ltd., was subcontracted to Populous, the prime consultant,” auditors wrote. “Because the estimator was selected and paid through Populous, it was not independent. Office leaders did not participate in selecting the estimator and did not perform an independent estimate to evaluate design proposals. Instead, they said they compared multiple cost proposals to judge reasonableness, which is not a substitute for a formal, third-party review.”

While reviewing subconsulatant invoices, the audit team found 2,843, or 68%, of 4,153 supporting document pages were missing from Workday, the city’s system for financial operations and management. 

Copies were saved elsewhere and provided to auditors.

The practice of storing such documentation outside of Workday “does not meet city requirements.”

The NWCO office did not properly manage who could access project data, the auditors stated, “which made it more likely that the data could be accessed without authorization.”

They also expressed frustrations with NWCO’s delays in providing the requested documentation, which delayed the completion of the audit by as much as two months.

O’Brien stated that a follow-up audit should be expected.

The Sue Anschutz-Rodgers Livestock Center, a key element of the city’s new National Western Complex, is expected to be completed by the end of 2025 and open for the 2026 National Western Stock Show in January.