Denver lacks important security measures at its homeless shelters, does not keep track of its spending on the facilities and is unable to ensure city funds are used appropriately, according to a released Thursday.
The report represents an indictment of one of Mayor Mike Johnston’s core initiatives — the program — and calls into question the effectiveness of the , the city agency tasked with sheltering Denver’s most vulnerable population.
Because Denver does such a poor job tracking its spending, City Auditor Timothy O’Brien said, he did his own math: Between January 2022 and March 2024, the city spent an estimated $149.6 million to operate the 25 shelters used to house individuals experiencing homelessness.
The audit, which represented the first look at shelters by O’Brien, found Denver’s lack of security measures at one hotel run by the contributed to the shootings of three individuals, two of whom were killed.
Only a limited camera system was present in the converted hotel and the building had no security guards, the report noted.
“We found that Housing Stability lacks a formalized, strategic approach to ensuring timely security measures are in place at the shelters it oversees,” the audit states.
The city took over security at the property following the first shooting.
The auditor recommended Denver develop a needs assessment that outlines the type of security measures that may be required for different types of shelters. Other recommendations included developing policies and procedures on shelter security monitoring.
The auditor also found the city is not tracking and documenting its overall shelter-related spending. The department is unable to ensure city funds are used appropriately because its processes for reviewing and approving provider invoices do not hold providers accountable for following contract requirements.
“Without regular tracking of the departmentap overall spending on homeless shelters, the department cannot effectively monitor or enforce accountability for shelter spending,” the report notes.
More than $88 million of the nearly $150 million spent on shelters goes to day-to-day operational costs to run the facilities, the auditor found. Other top expenses include construction services and loans ($15.9 million), temporary housing assistance ($12.3 million) and leases and rentals ($11 million).
The Salvation Army received the most city funding ($27.2 million), followed by the Denver Rescue Mission ($19.8 million), Catholic Charities of Denver ($17.6 million) and Urban Peak Denver ($12.2 million).
The audit made a simple recommendation for the city: routinely track all shelter-related expenses.
“This is a work in progress. They haven’t done this before,” O’Brien said in an interview Thursday, referring to the large-scale sheltering program. “They’re learning from it. But I’m surprised they don’t have a better handle on (tracking the expenses).”
Jordan Fuja, a Johnston spokesperson, took issue with the audit, saying the All in Mile High program has “transformed the city’s homelessness resolution system.”
“The auditor’s report on Denver’s shelter system references data and information from more than eight months ago, and is not an accurate representation of the current state of our shelter system,” she said in a statement. “We continue to constantly improve our programs, which is why, although we acknowledge the auditor’s findings, it’s important to note that (the Department of Housing Stability) and the city have long been working to improve the system throughout 2024.”
The Department of Housing Stability, in a statement Thursday, said the audit “failed to acknowledge the substantial progress in reducing unsheltered homelessness while simultaneously improving our systems.”
Most of the recommendations included in the audit were already well underway, the department said, and many additional shelter improvements are in the works. These include safety plans and assessments, grievance procedures to ensure equity among shelter residents, and training requirements for shelter staff.
Leadership expressed confidence that sheltered residents’ safety “is the No. 1 priority following considerable steps to increase levels of security across All in Mile High communities earlier this year.”
The city said it implemented a seven-point action plan following the homicides at the Salvation Army site to improve management, staffing, badging systems, security and police presence.
But Denver City Councilwoman Shontel Lewis said in an interview that the audit validated her deep concerns about the effectiveness and lack of oversight and accountability surrounding the city’s shelter system. She said the current system results in the city warehousing unhoused individuals without actually improving their lives.
“We dropped the ball,” she said of the city’s approach. “We allowed ourselves to fail.”
The auditor also made several other findings, including:
- The Department of Housing Stability is not properly restricting access to sensitive information on its shared drive
- A lack of an established method for shelter guests to file complaints with shelters
- Insufficient anti-discrimination policies at some shelters
- A cost-reimbursement policy used by the department that does not follow contractual requirements or city rules
“I think what they’re doing is important work,” O’Brien said in the interview. “Everyone in Denver has sympathy for the homeless population. By doing some of the things we recommend, it increases the likelihood that these individuals get the services they need.”
Johnston made addressing homelessness one of his top priorities when he came into office last year.
Since the launch of the All in Mile High program last year, the city has helped more than 2,150 people move indoors, including connecting more than 800 people to permanent housing. More than 1,800 people — or 82% — moved indoors have remained off the streets, according to .
The city touts that it has closed more than 350 city blocks to camping.
Thursday’s report marks the second time the auditor has come down hard on the city for not tracking its expenses.
A 2023 report by O’Brien’s office found the city could not accurately calculate how much it spends on enforcing its camping ban, cleaning up homeless encampments and conducting street outreach to unhoused people.
An estimate during that audit found the city spent $13.65 million responding to encampments, including $8.18 million on outreach and $2.49 million to regularly clean up, or sweep, those settlements and move residents on to other places.
