Topline: The Caring for Denver Foundation, tasked with running substance abuse prevention programs, is seemingly drunk on its own spending. The nonprofit spent $28,200 on its own meals and alcoholic drinks in a “disregard for fiscal accountability,” according to a new report by City Auditor Tim O’Brien.
The city agency overseeing the nonprofit does not think that’s a problem. In its response to the audit, the Denver Department of Public Health & Environment wrote that city laws requiring purchases to be “reasonable” may not be “appropriate or applicable” to the nonprofit.
Key facts: The Caring for Denver Foundation gets more than $40 million per year from a .25% sales tax approved by voters in 2019. It spends about $2.5 million annually on administrative expenses, but the audit claims that many of those costs were not permitted under city law. In a sample of 734 administrative expenses from 2022 to 2024, there were 83 not allowed by law and 571 with “questionable allowability.”
The expenses must be “necessary to carry out city business,” which generally does not apply to employees’ own lunch and dinner. One executive billed taxpayers for an average of four meals per week for over three years, including one week with 10 meals. Another purchased alcohol 75 times for $3,130.
The foundation made 173 purchases worth $8,190 at a self-described “high-end Denver cocktail lounge that serves coffee alongside fine wine, exquisitely crafted cocktails, beautifully prepared food, and impeccable sipping spirits,” according to the audit. Employees did not keep their receipts, but records obtained from the restaurant showed the bill included cocktails costing more than $20 each.
The Caring for Denver Foundation’s board members said they were unaware of the purchases. They told the city that foundation money should not be used on alcohol and spending on meals should be the “exception, not the rule.”
Executive employees disagreed. They argued the alcohol was “integral to Caring for Denver’s work because occasional face-to-face meetings are needed to build relationships. They also said these types of meetings and expenses aligned with ‘foundation best practices,’” O’Brien wrote.
As a taxpayer-funded nonprofit — not a city agency — the Caring for Denver Foundation claimed that it is not required to follow fiscal laws for government employees. The Denver Department of Public Health & Environment agreed. They said they would not reassess the nonprofit’s spending rules until its contract expires in 2027.
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Summary: Strict oversight rules and reasonable purchases are always applicable when taxpayer money is involved.
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This article was originally published by RealClearInvestigations and made available via RealClearWire.
