City auditor finds safety, spending and data-protection gaps in Denver shelter oversight

City Auditor: An audit released Aug. 2025 found the Department of Housing Stability (HOST) did not adequately ensure safety, maintain complete expense records or protect sensitive client information at contracted shelter sites.

Why it matters: The auditor said weaknesses in documentation, security and nondiscrimination compliance create risks for people staying in shelters and for city finances and data privacy.

The auditor’s office reported that HOST could not provide a complete accounting of shelter-related spending between Jan. 2022 and March 2024; reviewers estimated nearly $150,000,000 in expenditures for that period based on available invoices. The report said HOST had instituted a reimbursement practice that did not require original receipts or credit-card statements and that this guidance did not comply with city rules on supporting documentation.

The auditor also identified safety lapses at contracted sites. The report said the city contracted with the Salvation Army to operate a shelter at a former hotel; “another guest was shot weeks later,” the auditor wrote, and such incidents likely traumatized shelter guests and staff. The audit concluded HOST does not adequately ensure safety at shelter locations.

Auditors reported sensitive housing-client records left unprotected on a shared drive accessible to staff in other city agencies. The audit called that a lapse in information-protection practices and recommended stronger controls.

The report flagged a potential conflict between the Salvation Army’s employee handbook and its contract with the city. The handbook, the auditors wrote, states the Salvation Army will follow nondiscrimination law “unless it goes against their religious practice.” The auditor called that language unacceptable and noted that an agency handbook does not supersede contract terms.

Auditor recommendations included ending the department’s permissive reimbursement practice, strengthening data protections and ensuring contracted providers adhere to nondiscrimination requirements. HOST “agreed with all but one” of the recommendations, the auditor said; the department disagreed with ending the cost-reimbursement policy. The auditor noted that issuing reimbursements without supporting evidence creates risk of fraud, waste and abuse.

The auditor’s statement said the office will follow up to see how HOST implements recommendations. The audit report is available at denverauditor.org, the auditor’s office said.

What’s next: The auditor plans a follow-up to track HOST’s response to the recommendations. The audit’s findings intersect with ongoing City Council and committee briefings on shelter contracts and procurement.