Denver’s Office of Social Equity and Innovation has yet to implement half of the 14 recommendations made by auditors in 2024, leaving the city and the Colorado Youth Detention Continuum Program at risk of misusing small-dollar funds.

A follow-up report released by City Auditor Tim O’Brien on Thursday noted that, while the office has made progress, gaps involving policies and procedures, inconsistent financial records and insufficient monitoring of grant-related expenses remain.

Denver’s Chief Equity Officer Ben Sanders told The Denver Gazette that much of what is in the auditor’s report about the youth detention program is “fair.”

“The auditor is auditing a program that transitioned, starting in the summer of 2024, from the Department of Safety over to the Office of Social Equity and Innovation,” Sanders said. “The audit itself shows that many of the concerns highlighted in the document are, in fact, addressed in practice and in documentation provided by our office, but that there are a few places where official policy has not been developed and implemented.”

The Department of Public Safety, which oversaw the youth detention program at the time, agreed to implement all 14 of the auditors’ recommendations. 

As of the January 2026 follow-up, the equity office had only implemented seven of the original recommendations, partially implemented one, and failed to implement the remaining six. 

“We are still, as an agency, in the process of finalizing an internal policy development process, not just for CYDC, but for all of our internal programs,” Sanders said. “We have documentation, we have spreadsheets and (we have) internal processes for all of the spending, but the written policies explaining those processes are what we’re working on.” 

CYDC is a state grant program that aims to reduce the number of children in detention centers. 

Denver receives grant funding from the state — which the city uses to conduct assessments and provide services to children, according to official city information. Staff in the equity office oversee the local program.

“We, as a city agency, act as a fiscal pass-through,” Sanders explained. “So, like a lot of what we’re doing is documenting for the city auditor’s office that the state program is working in good partnership with the state. So, we’re developing a sort of local policy for statewide work.”

Auditors assert that the 2024 gaps identified in OSEI policies and procedures risk future compliance with state and city rules and could impact future grant qualification. 

Formal documentation is still needed, auditors said, to specify which program staff training expenses are exempt from state approval; otherwise, staff may incur unapproved training costs. 

Also, regular reviews of purchase card expenses are needed to ensure proper card use and purchase approval.

Overall, Sanders said he is happy with the progress his office has made toward implementing the auditors’ recommendations, adding that the biggest challenge, for now, is time.

“It just takes a little bit of time,” he said. “We want to make sure all our leaders are on the same page and that the policies accurately reflect how we’ll do our work.”

“Although the Office of Social Equity and Innovation has made progress, it did not fully address all the risks associated with our original findings,” O’Brien wrote in the follow-up report. “Consequently, we may revisit these risk areas in future audits to ensure the city takes appropriate corrective action.”

Last year, during another follow-up audit, auditors found that the office lacked measurable objectives and had not yet fully developed detailed programs, strategies, policies, and procedures.

Only two of the 16 recommendations issued in an August 2022 audit had been fully implemented, according to the report.

Auditors said that, at the time, while the office had created a strategic plan, it lacked measurable objectives, updated metrics, cost and responsibility designations, and a detailed feedback analysis process.

“When there is no formal process to track performance metrics, we can’t guarantee these programs are achieving their intended outcomes,” O’Brien said.

However, OSEI’s biggest challenge comes from the vague executive order that created it.

In December 2022, former Denver Mayor Michael Hancock issued Executive Order No. 146 that formalized and launched the office.

The executive order’s lack of clarity means the office lacks the authority to enforce its requirements for city agencies, such as ensuring that city employees complete race and social justice training.

Because OSEI exists only by executive order, it remains at risk of change or closure by future mayors.