A taxpayer-funded group that has a mission of preventing suicide and helping people with substance use problems has misused thousands of dollars in recent years, issued Thursday by the Denver auditor’s office.
Among the audit’s findings is that an executive from the , which receives a dedicated portion of the city’s sales and use tax, spent more than $3,000 of taxpayer money to buy expensive alcoholic drinks as part of the group’s high spending on meals. The staff spent more than $28,000 on meals over three years, the report says.
The organization has also given out grants for purposes that are technically outside of whatap allowed under city ordinance, including for healing circles and “self-care,” auditors found. In other instances, Caring for Denver gave money to groups that lied on their grant applications, according to the report.
“These expenses show a disregard for fiscal accountability,” Auditor Tim O’Brien said . “I question whether it is best practice for taxpayers to foot the bill for alcohol and meals in the amount and frequency we discovered.”
The Denver Auditor’s Office is charged with serving as a watchdog for Denver government and regularly produces reports looking into the finances of various agencies and taxpayer-funded organizations, making public recommendations on how they can make improvements.
In 2018, Denver voters approved an initiative creating a 0.25% sales tax to create the Caring for Denver Fund, which is managed by the Caring for Denver Foundation. It is among several dedicated sales taxes approved by voters to support various causes over the last decade.
Among those who spearheaded the Caring for Denver initiative to support mental health programs was then-state Rep. Leslie Herod, who later ran for mayor and is currently listed on the foundation’s website as its board chair. As of 2024, the foundation had awarded more than $185 million in grants to 270 groups.
Caring for Denver’s leaders on how to make improvements, according to the report.
Lorez Meinhold, the executive director of the foundation — and the executive who spent thousands of dollars on alcohol and meals — said by phone Thursday that those expenses were a small fraction of the organization’s funding.
“We meet grantees where they are and what they’re comfortable with,” she said. “We recognize that we were entrusted with funds and that even this small contradiction matters.”
Meals helped build relationships, exec says
The auditor found that Meinhold and some other staff members regularly paid for meals and alcoholic beverages using the fund. In a sample of 734 expenses examined, the auditor’s office found that 598 of them, or 81%, were for meals.
Meinhold said that many of those were actually coffee meetings but were classified as meals. She added that she and other staff members’ spending on meals and alcohol was not against the foundation’s internal policies. The organization is now considering changing those policies.
Meinhold was reimbursed for more than 200 items classified as “meals” — about four per week — and about $3,130 spent on alcohol, according to the audit. At the , she bought more than 70 drinks that cost more than $20 each over three years. Sometimes, she claimed more than eight “meals” in a week, the auditor’s news release says.
Meinhold emphasized that relationships are a major part of the organization’s work.
“People like to build relationships in person,” she said. “We want to be accessible to everyone.”
City rules say food and beverage costs should be reimbursed only when necessary, excluding alcohol and routine meals, according to the auditor’s release.
Other auditor concerns
The audit also highlighted other systemic problems within the foundation.
In one instance, Caring for Denver gave nearly $570,000 — for work with children and families — to an organization whose executive director was accused of domestic violence with children present, according to the report.
In a review of the foundation’s work, the auditor found three instances of grantees lying about their partnerships with other agencies on their applications. One of them received a grant of about $310,000, according to the report.
Meinhold said the nonprofit had recently improved its policies and procedures related to reviewing partnerships, but she added that those relationships don’t carry much weight in deciding whether a group will receive a grant.
In a sample review of grant applications, the auditor’s office found that 40% of the packets were missing at least one required financial document.
The auditor’s office also reported that 10 of the 35 grants it reviewed weren’t in line with the voter-approved ordinance. Meinhold said the foundation believes they were appropriate grants because all of them were for helping groups build their capacity — and while that isn’t explicitly stated as an allowed use, it isn’t prohibited.
“We generally follow best practices,” she said. “At the same time, we take the auditor’s review seriously.”
O’Brien lambasted the group in the press release, saying he was disappointed that the group “is not delivering what voters approved.”
“Voters approved millions of tax dollars to help Denver residents, but Caring for Denver doesn’t ensure its spending is effective or even appropriate at times,” he said.
The auditor’s office presented the findings during a meeting with the organization at the City and County Building on Thursday morning.
