Denver Police mismanaged taxpayer money meant for mental health support

According to city audit report, DPD and the Department of Public Safety paid a nonprofit late, misspent some of the money and failed to spend the rest in time. The Department of Public Safety says the report doesn’t take into account challenges brought by the pandemic and understaffing.
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DPD cruisers blocking the intersection of Speer Boulevard and 8th Avenue. (Kevin J. Beaty/Denverite)

The Denver Police Department (DPD) and Department of Public Safety mismanaged taxpayer dollars they received for a program pairing mental health responders with police officers, according to a report from the Denver Auditor's Office released Thursday.

The report found that the Police Department used grant dollars in prohibited ways, such as on travel expenses, indirect costs like rent and utilities as well as expenses from the wrong grant year. The city also failed to pay providers with the co-responder program on time.

DPD also neglected to use over $380,000 dollars of its grant from the Caring for Denver Foundation, meant to go toward the co-responder program. That unused money accrued interest, reaching $438,000. Caring for Denver Communications Director Kindle Morell said the funds have now been returned.

The Department of Public Safety issued a letter in response to the audit. They claim the report did not take into account challenges from the past few years, particularly recent understaffing.

"The overall tone and tenor of the audit lacked objectivity and consideration of several fundamental factors that drastically impacted operations, including a global pandemic, civil unrest, and economic hurdles unlike anything the city had faced in recent memory," wrote Department of Public Safety Executive Director Armando Saldate, III.

The audit took place as part of a group of audits that monitors compliance of grants, and did not measure the effectiveness of the programs. Morell said it's been going well.

"I've heard only good things about the co-responder's program," she said.

Sending out mental health responders with police is part of a growing approach to emergency calls that aims to recognize that many people in crisis might benefit more from mental health support than from police.

Caring for Denver is funded by a .25 percent sales tax increase, passed by close to 70% of Denver voters in 2018 through a ballot measure aimed at mental health and substance abuse services.

A press release from the Auditor's Office said managers of the money believed the grants rolled over, and that they could use unspent money in the future. That's not the case.

"Unfortunately, grants can't be treated like regular city budgets that roll over from year to year," Denver Auditor Timothy O'Brien said in the press release. "It's use it or lose it -- and in this case the people of Denver lost the opportunity in that funding year to receive even more services from this innovative new co-responder program."

Morell clarified that the money hasn't been lost for good. "It's taxpayer money, it's going back into grant making and will go back out to the community, and the city is always able to reapply," she said, adding that the co-responders program is part of Caring for Denver's founding ordinances, so the program will continue to get funding in the future.

Also, because of the late payments - sometimes up to seven and a half months - the city could have owed an extra $32,000 in late penalties to WellPower, the nonprofit contracted to provide the mental health services, but those fees were waived.

"WellPower told us they initially did not agree to waiving those penalties and later agreed only after the request of finance managers from Public Safety," said Taylor Overschmidt, Director of Communications for Denver Auditor's Office, in the press release. "WellPower's managers said late payment of invoices creates 'operational difficulties' and cash flow issues."

O'Brien said in the press release that WellPower is not the first contractor that's had issues with late payments from the city, and that the nonprofit did not get paid despite following up multiple times.

Meanwhile, the audit also said that DPD is not taking measures to make sure WellPower's data on the program's efficacy is accurate, and questioned the department's decision to solely contract through WellPower, as opposed to through a competitive bidding process.

The auditor's office released a list of recommendations. The Department of Public Safety agreed with all but one of them, and says some have already taken effect.

Some suggestions include better tracking and reimbursing indirect costs and travel expenses, appointing people for grant oversight and developing procedures around entering and monitoring program data.

The Department of Safety says it has already complied with some recommendations, like reimbursing Caring for Denver. The sticking point is over paying the fines with interest to WellPower, which the department says was fairly waived.

WellPower did not respond to Denverite's request for comment before publication.

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