In 2018, Denver voters authorized the Caring for Denver Foundation, establishing a 0.25% city sales tax increase for mental health and substance abuse services — and entrusting the foundation with distributing those funds responsibly. A city audit released last week found something very different.

Rather than responsibly stewarding $40 million in annual taxpayer funds, the foundation has lavishly spent taxpayer dollars on meals and drinks, given hundreds of thousands of dollars to organizations that falsified their applications, and outright refused reform recommendations from the city auditor.

The audit reviewed 35 grant applications to the foundation, 26 of which were flagged with issues. Five grantees weren’t registered with the Colorado Secretary of State’s Office, and three claimed false partnerships with city agencies. Among the grants was $310,000 given to one grantee claiming partnerships with Denver Human Services and law enforcement agencies.

What’s more, 40% of applications missed at least one required financial disclosure, yet foundation staff allowed some grantees to move forward anyway.

The audit thoroughly examined 734 expense reports, a whopping 81% of which were meal reimbursements — costing $28,200. A full 94% lacked proper documentation required by city fiscal rules, with 11% of the expenses outright disallowed.

The report points out these rules are “created to promote accountability for spending, ensure legal use of public funds, maintain public trust, and promote strong internal controls.”

It’s no wonder. One foundation executive alone, identified in press reports as Executive Director Lorez Meinhold, was reimbursed for more than 200 meals, averaging four — and as many as 10 — a week. Seventy-five of those reimbursements included $3,130 spent on alcohol.

“By reimbursing staff and executives for costs that are questionable or are typically not allowed when using taxpayer money, the foundation risks the appearance of impropriety or misuse of voter-approved funds that were intended to support mental health initiatives,” the report found.

Meinhold insists her foundation has substantially improved its fiscal policies and “put guardrails” around meal-related expenses, including alcohol. We hope that’s true.

However, it isn’t encouraging that the foundation outright refused seven of Denver Auditor Tim O’Brien’s 15 recommendations. 

O’Brien says the vast majority of audit recommendations — as much as 93% or 94% — have been accepted. The foundation agreed to several recommendations, including to stop reimbursing alcohol and improve record keeping.

But it rejected key recommendations to verify grantees’ financial and legal histories, use objective criteria to rank grantees, and requiring fiscal rules in the foundation’s contract with the city — specific items O’Brien found particularly troubling.

The foundation’s goals are noble. Behavioral health services, substance abuse and suicide prevention, and mental health programs are more critical to the community than ever.

But that only underscores how important it is for the public to trust stewards of taxpayer dollars. Failing to adequately show accuracy and financial compliance, the audit concludes, means the foundation can’t prove grantees are “effective at helping people in the ways voters intended.”

And isn’t that the point?

This audit is the latest example of why O’Brien, who’s been a tenacious watchdog over City Hall, provides perhaps the only real check on Denver government these days aside from a few city council members who aren’t afraid to ask questions.

The smart and competent is focused on his job. And he understands good intentions don’t necessarily mean good outcomes.

Denver would benefit greatly from more public officials focused on accountability to voters and taxpayers.