A nonprofit that serves Denver residents with disabilities was $6.3 million in the red last year as its former chief executive was earning nearly $500,000 and workers were receiving free home Internet and Costco memberships.
Rocky Mountain Human Services, berated in a city audit four months ago for misspending mill levy funds, has released its own audit that reveals it overspent its $48 million budget by $4.4 million. Nearly $2 million in losses were due to discontinued programs.
The community-centered board is one of 20 statewide that manages services for people with intellectual and developmental disabilities. It receives $20 million from the state Medicaid department, $5.4 million from the state general fund and $10 million in city mill levy funds.
The former executive director was put on leave last May, and interim director Shari Repinski has since cut spending by 17 percent.
Repinski has reduced the number of employees by 25 percent, including 65 workers who were laid off. Staff decreased from 348 to 253.
“The first thing we had to do was respond to this financial crisis,” she said.
Repinski also reduced employee benefits, including the Costco memberships, food and meeting expenses, and the executive salary and benefits package. Rocky Mountain restructured its health insurance plan and ended its retirement fund contribution for employees.
“Our employees have come to work every day with a strong focus on providing quality services despite the financial challenges we have faced,” Repinski said. “Being transparent with our staff has been an important factor in turning things around.
“The receipt of the audit is the final step in closing out a difficult year. I am proud of the work of dedicated staff to rebound and improve our finances over the past year,” she said.
The community board, which served 6,700 people with disabilities last year, revamped its budgeting process and now informs directors about cash flow at the end of each month. Rocky Mountain was in a cash-flow crisis last summer.
The nonprofit reported losses the two previous years, but those were less than $500,000.
The Denver audit released in December found Rocky Mountain overcharged the city $650,000 for administrative expenses and spent $48,000 on meetings, including an employee going-away party at a Lone Tree restaurant.
The city audit looked at only mill levy funds. Proposed legislation at the state Capitol calls for state audits of Colorado’s community-centered boards at least every five years.