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Denver auditor finds safety, recordkeeping and nondiscrimination risks at city-contracted shelters
Summary
A Denver Auditor review found gaps in shelter safety, expense documentation and data protection at shelters overseen by the Department of Housing Stability, and flagged a Salvation Army staff policy that could conflict with its city contract.
The Denver Auditor released an audit finding safety, financial and information-protection weaknesses at shelters overseen by the Department of Housing Stability (HOST), the auditor said Oct. 7.
The auditor said reviewers found that HOST funds and monitors organizations that operate shelters and that the department “agreed with all but one” of the audit recommendations. The audit excluded emergency shelters set up for migrants who arrived in Denver after December 2022, the auditor said.
The audit flagged multiple safety concerns tied to a city contract with the Salvation Army to operate a shelter at a converted hotel. The auditor said the city provided the Salvation Army with a security budget of more than $800,000 but that months later the Salvation Army had not hired a contractor to provide a security presence at the property. The auditor reported two shelter guests were shot and killed and another was shot weeks later, and said the incidents “likely traumatized shelter guests and could have affected the engagement and morale of shelter staff.”
The review also found weaknesses in expense reporting. The auditor reported HOST could not produce documentation identifying overall shelter-related spending from January 2022 through March 2024 and estimated, based on invoices reviewed, that the department spent nearly $150,000,000 during that period. The auditor said HOST had begun a policy that reduced documentation required for shelter reimbursement and that the guidance did not comply with city rules that require supporting documentation such as original receipts or credit card statements.
The auditor said the department disagreed with the recommendation to end the revised cost-reimbursement policy and warned that issuing reimbursements without evidence exposes the city to risks of fraud, waste and abuse.
Auditors also reported lapses in protection of sensitive personal data: they said confidential guest information was stored on a shared drive accessible to staff in other city agencies. Separately, the audit cited language in the Salvation Army’s employee handbook that the auditor said conflicted with the city contract. The handbook, the auditor reported, states the Salvation Army will follow nondiscrimination law “unless it goes against their religious practice.” The auditor commented, “To say an agency is going to follow the law, except for when it's different from their religious practices, is unacceptable. An agency's handbook does not supersede the terms of an agreed upon contract.”
The auditor said a follow-up review will check whether and how HOST implements the recommendations. The full audit report is available at denverauditor.org, the auditor said.
