Audit Reveals Potential To Alter Files, Payment Records; Jeopardizing Justice, More Than 4,000 Cases Closed In Error by Glen Richardson
Claiming it “is a separate branch of government,” Denver County Courts initially refused to grant Denver Auditor Timothy M. O’Brien authority to audit the County Court System. Despite hiring outside counsel to dispute the right to audit, the Denver City Attorney’s office ultimately granted permission. Now completed, the audit of court operations reveals weaknesses in the court’s management of case files, as well as other administrative problems, but the court is refusing to go along with the auditor’s plan to make improvements.
Keeping Courts Honest: Denver Auditor Timothy M. O’Brien goes to court to keep Denver City-County Courts honest and managed properly.
The audit, led by O’Brien, CPA, found more that 4,000 case files closed in error. Equally as disturbing, in the current system personnel can alter case file and payment records without detection. Court management responsibilities lie with Terrie Langham, Denver County Judicial District Administrator, and Theresa Spahn, Presiding Judge of the Denver District Court. Mayor Michael B. Hancock appointed both, Wood in July 2017 and Judge Spahn in January 2017.
Court management is also relying on erroneous performance measures to make decisions. Out of more than 200 metrics Denver County Court reported, the audit found more than 100 do not have an established standard or goal. Thus the court is wasting resources and time compiling data for metrics with no meaning for the organization. “Due to the misaligned and inaccurate performance metrics, Denver County Court management risks not making appropriate oversight decisions or having an accurate picture of its operations,” O’Brien warns.
Cantankerous Court Audit: Audit of the Denver City-County Court System by the Denver Auditor’s Office is shown getting underway on Denver 8 TV. The Court System hired outside counsel to dispute Auditor’s authority but Denver City Attorney ultimately granted permission.
Cantankerous Court
County Court management, nevertheless, disagrees with many of the audit team’s recommendations regarding best practices for internal controls. O’Brien answers in response: “Court management states current policies, procedures and practices are sufficient; however, if that were the case, our audit team would not have found the problems reported in the audit.”
O’Brien initially had to seek a District Court ruling to grant him the authority to audit the County Courts. Previous auditors — who traditionally haven’t been CPAs — have conducted reviews of past court operations. The auditor’s office also made it clear that “it is unusual for the courts to have independent legal counsel rather than relying on the City Attorney’s Office to make a decision.” Nonetheless, City Attorney Kristin Bronson — in accordance with her charter duties — ultimately gave the go-ahead to conduct the audit. The County Courts, O’Brien’s office notes, had been aware of the pending audit since October 2016.
The Denver County Courts receive a $24 million appropriation in the city budget and generate $23 million in revenue. Denver laws require the auditor to conduct financial and performance audits and grant the auditor’s office access to city records, officers, employees and property in performance of those duties.
Case File Concerns
The audit found incomplete documentation in case files and more than 4,000 case files closed in error. Court management may also be using inaccurate information from performance metrics to make decisions. As a result, Denver County Court is at risk of not fulfilling its mission to administer justice in a fair, efficient and effective manner.
Keeping The Law: In accordance with her charter duties, Denver City Attorney Kristin Bronson gave the go-ahead to conduct the audit of City-County Courts.
Case files are at the core of court operations as they are where all records and documents supporting actions related to a case should reside. The audit found Denver County Court case files contained inconsistent and incomplete information, hindering the audit team’s ability to perform audit procedures.
“It’s disturbing to me that the County Court is not keeping the consistent records they need to support case files and track actions taken in court,” Auditor O’Brien says. “We found several case files with missing documentation of key courtroom actions including the suspension of fines and penalties, the cancellation and reinstatement of a protection order, and defendants’ acknowledgments of the terms of probation.”
Courtroom Troubles: Audit finds case files with missing courtroom action records including suspension of fines, cancellation and reinstatement of protection orders and terms of probation.
County Court has agreed to create specific rules to determine what records must be kept in case files. Court management plans to regularly review those case files, as well.
Altering Files, Payment
The audit work also found problems with how the court reviews closed case files.
“During the audit, we identified more than 4,000 improperly closed case files with outstanding fines.”
Seventy-seven percent of these errors happened when cases were either dismissed or transferred. The fees assigned to these cases should have been manually removed but were not, resulting in an approximate $24,000 overstatement of accounts receivable as of the end of 2017.
Corrupt Courts? Citizen concern grows as court management continues to ignore recommendations to improve operations and ensure justice for the people of Denver.
In addition, more than 300 cases were prematurely closed and should have been reopened. In other cases, the court had to issue refund checks for duplicative and overpaid fines.
Escaping Punishment
Court officials said they reviewed and addressed each of these errors; however, they did not share individual case-level information with the audit team for verification until after audit testing work had concluded.
“The court could be perceived as unfair if it closes cases inconsistently,” Auditor O’Brien believes. “Closing a case incorrectly could allow individuals to escape punishment, such as probation, community service, or payment of fines or compensation for victims.”
The audit also found a potential for misuse and errors in payment records. In the current system, personnel can alter case file and payment records without detection because the people who authorize transactions are also the custodians of the cash. The County Court’s cashiering staff is small, making segregation of duties difficult. However, the audit recommends a management review of audit logs and transactions to avoid possible abuse of the system.
Administering Justice
County Court also needs to update ordinances related to its operations. New national best
practices say fines and fees should not fund primary court operations including salaries and benefits. Although fees are currently being used in accordance with the current ordinance through two special revenue funds, the court should adopt the new principles, according to O’Brien. He says the County Court also needs to update outdated language in city ordinances governing the courts.
Further, court management chose not to prioritize certain IT-related controls. While there are many projects for the court’s information technology team, the audit identified significant areas of concern that should receive immediate attention. “We make these recommendations as a way to mitigate risks,” Auditor O’Brien explains. “If they aren’t addressed, these risks could potentially threaten the achievement of the court’s organizational goals.”
To ensure justice for Denver City-County citizens, O’Brien concludes: “The court management should listen to our recommendations to help improve their operations and to ensure they can complete their goals to administer justice for the people of Denver.”
In the printed edition of the February, 2019 Chronicle, we incorrectly identified the Denver County Judicial District Administrator as Kristin Wood. It is Terrie Langham.
Denver City Council Votes Against Proposed 3-story Condominium Project On Holly Street by Mark Smiley
In a stunning turn of events, Hilltop residents, led by Lise Uhrich through an intricate petition process, were able to force the Denver City Council to require a super majority in order to approve a 3-story, 23 condominium project earmarked for Holly Street in between Alameda and Cedar in the Hilltop Neighborhood. On January 7, 2019, the project passed with an 8 to 5 vote, one vote shy of an approval.
One Vote Short: The site of proposed 3-story, 23-unit condominium project is immediately to the south of Park Burger and Novo Coffee on South Holly Street. On January 7, 2019, Denver City Council only carried 8 votes to pass the rezoning application, one vote short.
According to City of Denver, neighboring property owners who oppose the rezoning may file a protest petition with the City Council no later than seven days prior to the City Council public hearing to trigger a super-majority vote requirement (as opposed to a simple majority) at the public hearing. Protest petitions require signatures from owners of 20 percent of the total land area within 200 feet of the subject property.
The required number of signatures were collected by Uhrich and the neighbors and thus required the super majority of the City Council. Mary Beth Susman, who represents District 5 where this proposed project sits, voted in favor of the development.
In a Facebook post she has since removed, Susman stated: “Last night I voted to support a re-zoning proposal in my district that would have given the neighborhood more control on the scale and design of the project. However due to super majority requirements, even though it was supported 8-5, it failed. Now the area that has a use-by-right for denser housing can be built with no input required from neighborhood or council.”
Under Fire: Councilwoman Mary Beth Susman voted in favor of the development on South Holly Street in her district and has received blowback from her constituents.
Susman continues: “Providing a variety of housing opportunities so people of different incomes have access to all our neighborhoods is an important goal for 21st century communities. Inclusivity leads to a diversity of ideas and problem solving and a community knitted together by geography rather than separated by income.
“I also believe in neighborhoods having some say about scale and character. Now we’ve lost both by denying this re-zoning. But I have a renewed commitment to inclusive neighborhoods like we built at Lowry and Stapleton with the participation of all voices.”
Local relator Denice Reich, who has been vocal in her opposition, disagrees with Susman’s assessment: “. . .the development lost 15,630 sq. ft. of space when its zoning change was voted down,” said Reich. “The developer will now only build on 10,209 sq. ft. This allows the other 15,630 sq. ft. to remain single family and allows the area to maintain some of its green space and keeps another unnecessary concrete monstrosity from being built.”
Denver City Council District 5 candidate Amanda Sawyer, who is opposing incumbent Mary Beth Susman in the May election, also sided with the Hilltop neighbors: “Community members expressed their concerns that the development would have towered over the single-family homes and one-story businesses on the block, and that it would have been out of character for the neighborhood,” said Sawyer. “Not to mention the safety and traffic issues at one of the main entrances to the Hilltop and Crestmoor neighborhoods. Because of community involvement, now what will be built on that property is 15-20 smaller condos that will provide housing opportunities for the ‘missing middle’ price point but add less density and — hopefully — fit better with neighborhood character.”
Other critics say this kind of project does not belong in the neighborhood, especially along Holly Street where 20,000 cars pass by each day according to a 2014 study. This study was done before the building that contains Park Burger was built.
So, a plan that was hatched early last year and moved through the process through most of 2018 is now off the board. Jason Lewinston, the developer for the project, will have his resilience put to the test. Currently, it does not appear he has enough support from the neighbors or the City Council to propose another project.
Investigative couple, Denver City Councilman Kevin Flynn and his wife, uncovered evidence that put the brakes on Denver’s plans to install more controversial red-light cameras at city intersections. “We’re such a fun couple,” he quips about their recent “investigative date night.”
Councilman Investigates: Denver City Councilman Kevin Flynn is a former Rocky Mountain News reporter who used his investigative skills to turn up new evidence raising questions about plans to expand the red light camera program.
Last month, the Denver City Council was poised to spend $1.2 million on a plan to expand its red-light camera program. It first launched in 2008 and the city sends tickets to drivers who go through a red light or stop in the crosswalk at those intersections. Currently there are red-light cameras at four Denver intersections: West 8th Avenue and Speer Blvd, Quebec Street and East 36th Avenue, 6th Avenue and Kalamath and East 6th Avenue and Lincoln Street. The new proposal would have moved the 6th and Lincoln camera to Alameda Avenue and Santa Fe and added two new red-light cameras at 13th Avenue and Lincoln and 18th Avenue and Lincoln.
Flynn is an award-winning former reporter with the Rocky Mountain News and was the transportation reporter when Denver first installed the red-light cameras more than a decade ago.
He and his wife armed with a stopwatch app and phone camera discovered that the timing of the yellow lights at two of the intersections in question is so short it’s virtually impossible to get through them before the light switches to red. He says. “The laws of traffic cannot trump the laws of physics. It takes a certain amount of time to stop a moving vehicle, so you always have to take into account the real-world situation.” Flynn found the yellow light at 13th and Lincoln is just three seconds long, the minimum allowed by federal law and the 18th and Lincoln yellow light is 3.5 seconds long. Flynn points out, “That’s just trapping people.”
With the support of Denver Police and City traffic engineers, Flynn wrote a memo to other Councilmembers proposing they postpone the contract adding red-light cameras and try lengthening the timing of the yellow lights.
Traffic Laws Can’t Trump Physics: Councilman Flynn discovers yellow lights at some Denver intersections are so short it’s virtually impossible to get through before the light turns red.
While some argue red-light cameras improve safety, many feel red-light cameras are just cash cows for cities like Denver. The City raked in more than a million dollars in 2017 from the thousands of tickets generated by the red-light cameras. The money goes into the City’s General Fund. In November 2018, Aurora residents overwhelmingly voted to get rid of red-light cameras at 10 intersections in that city. Data from Aurora showed that accidents had actually increased at the red-light camera intersections. A 2011 audit by then Denver City Auditor Dennis Gallagher concluded Denver’s photo radar system did little to show it had any other purpose other than bringing in revenues.
Councilman Flynn says lengthening the yellow light times should address the safety issues without unfairly ticketing drivers. “We don’t need the 75 bucks per driver that badly that you have to induce violations that don’t have to occur, “Flynn says noting the Denver City budget is in fine shape. “The point is, you have to specifically engineer the traffic at each intersection on its own. There can’t be a blanket rule.”
Flynn points out that lengthening yellow light times has worked elsewhere. In Loma Linda, California, Flynn says an intersection with a red-light camera was averaging 249 tickets a month. They added 7-tenths of a second to the red-light camera and now hand out only one ticket every five days. “That’s the kind of safety I want to bring to Denver, “Flynn says.
City Council members voted unanimously to put off adding red-light cameras while City staff tries out longer yellow lights. That process could take up to nine months.
One other problem with the proposed new red-light camera contract, it listed the wrong intersections, so Flynn says they were going to have to postpone it anyway.
Diogenes, a Greek philosopher, was said to have wandered the streets of Athens with a lantern in broad daylight saying he was looking to find an honest man. If he were to come to Denver today and went to Denver City Hall, he would have an equally tough time. It has just become more difficult as Denver City Councilman Rafael Espinoza has decided not to run for a second term as the representative of the 1st District, which includes Denver Highlands.
Four years ago, he became the first person to defeat an incumbent councilperson since the mid-1980s. Moreover, he won in a landslide, garnering 70% of the vote. He came into office hoping to accomplish great things and, in particular, helping to arrest the destruction of Denver neighborhoods by high-density developers. He declared at the time: “I will not be beholden to developers, special interests, the mayor’s office, or even fellow council members.”
He has been true to his word. He even tried to join a lawsuit against the mayor to stop the flood control project at City Park Golf Course. Unfortunately, a majority of his fellow councilpersons were and are, in fact, beholden to the same including developer hacks and Hancock toadies Mary Beth Susman and Kendra Black. Espinoza, during his short tenure, was able to accomplish some important goals including eliminating bump stocks in Denver and imposing new requirements on keeping neighborhoods informed about proposed real estate developments.
But he was unable to stop the onslaught of solely-profit driven, poorly conceived real estate developments. Nor was he able to rein in the absolute control over Denver City Council by the office of Mayor Hancock. Of course, Hancock himself is too busy working out and chasing women in not only Denver but also in Atlanta and Washington, D.C. to control anything.
But that does not mean that his chief of staff, Alan Salazar, in connivance with the Brownstein law firm and the boys and girls at Colorado Concern, doesn’t have time to destroy the city for fun and profit.
There was nothing more shameful in the last four years than the City Council’s craven capitulation to the harassment of Denver Police Officer Leslie Branch-Wise and subsequent payoff for her silence with taxpayer funds. Espinoza tried to hold the mayor accountable as outlined in a letter that went public, but he was one of the few voices on city council willing to take a stand and the heinous conduct of the mayor went unheeded.
Espinoza points to the three-part series in The Denver Post by Bruce Finley titled “The Densification of Denver” which has become one of the cities with the least open space and parks per resident almost anywhere in the country. This for a town that was planned in the early 20th century as a “city within a park.”
But as a councilman he found himself powerless to do anything about it. He believes he can accomplish more as a private citizen outside of government. He has endorsed his top aide Amanda Sandoval to replace him. He indicates the 1st District is really getting two for one. His aide will be working inside of City Hall while he, as a private citizen, can work on key items such as preparing neighborhood design standards that he, as an architect, is particularly well qualified to undertake.
We have not always agreed with Councilman Espinoza. For example, we are incredulous that he voted for Albus Brooks’ Mexican drug cartel backed legislation to essentially legalize and subsidize heroin use in the City and County of Denver under the rubric of “safe injection sites.”
But overall there has been no more principled, hard working and industrious city councilperson. The fact that being a city councilperson in Denver is so worthless and unimportant that it is not even worth being one, is deeply disturbing. What does that say about the majority of the City Council who are there to pick up a six-figure salary and perks and do not care about what they are doing to the city and the citizens of Denver? God help us.
Revenue, Cost, Liabilities Not Fully Accounted For; City
Pays From Agency Funds Rather Than Workers’ Comp
According to a new audit released in late October by Denver
Auditor Timothy M. O’Brien, CPA, the city is not reporting up to 10% of its
workers’ compensation costs — approximately $3 million during the three-year
audit period — in the proper fund. More: Because the actuaries do not have all
the cost information, some of the liabilities associated with workers’
compensation are not recorded at all.
“The city should account for all workers’ compensation costs
in the designated fund, so we know what the self-insured program is actually
costing the people of Denver,” Auditor O’Brien makes clear.
State law requires employers to provide medical care and
treatment needed at the time of the injury or occupational disease and during
the disability. The city’s workers’ compensation activity is accounted for
primarily in a dedicated fund.
Salary Deemed Benefit
However, the audit found revenues, costs and liabilities are
not fully accounted for in the dedicated fund. Specifically, salary
continuation costs are not paid out of the dedicated fund. Instead, these costs
are paid directly by the agency without recording all related liabilities in
any fund.
Salary continuation is when the city provides paid
disability leave to eligible employees if the employee has a disability due to
an on-the-job injury or disease and is unable to perform the duties of the
position or any other position. Salary continuation begins after an employee
misses three days and files a workers’ compensation claim.
The city considers salary continuation to be a benefit and
pays for it out of individual agency funds rather than the Workers’
Compensation Fund. This matters because it means the city is underreporting the
total cost to the city of workers’ compensation in the city’s Comprehensive
Annual Financial Report. The city has agreed to add disclosure of salary
continuation costs and related liability to the 2018 financial statements.
Lacks Formal Plan
The city also lacks a formal strategic plan process for the
workers’ compensation program. Without comprehensive and targeted measures tied
to well-documented strategy, the city cannot determine if the self-insured
program is cost-effective and achieving strategic goals. More evaluation of
different workers compensation models could help ensure that the city has
identified all available cost savings opportunities.
“While the program’s performance has improved in many
aspects, the city is not fully analyzing the total cost of the workers
compensation program,” Auditor O’Brien said. “Without reviewing performance,
how can the city know it’s getting the best deal? Reducing unwarranted costs is
a primary goal.”
Finally, the balance policy for the city’s workers’ comp
claim fund does not match the actuary’s recommendation. The city uses a
third-party firm to calculate the fund’s liability and to make a recommendation
on how much above that liability the city should be able to pay due to the
uncertainty of claims. The workers’ comp fund has a target funding range $1
million below the actuary’s recommended level.
Puzzling City Decision
Auditor O’Brien questions this decision because the city has
more funds on hand than the recommended levels, but the agency disagrees and
chooses not to consider a policy to require the funds stay at the recommended
level.
“Given that the funding levels have greatly improved, I find
it puzzling for the city to have more money on hand than needed but not
consider making it policy to keep at least the actuarial recommended amount
available,” Auditor O’Brien said.
The audit also found room for improvement in updated polices
and in efficiency and effectiveness of the risk management information system.
City’s Watchful Eye: Denver City Auditor Timothy M. O’Brien,
CPA, is the watchdog keeping Denver business dealings straightforward and
trustworthy. His latest audit just released reveals the city is not reporting
up to 10% of its workers’ compensation costs — approximately $3 million during
the three-year audit period — in the proper fund.
Workers’ Comp Costs: City considers salary continuation to
be a benefit and pays for it out of individual agency funds rather than the
Workers’ Compensation Fund.
Paid Disability Leave: Salary continuation begins after an
employee misses three days and files a workers’ compensation claim.
Brilliant Young Minds Ages 12-29 Dream Up New Products In
Science, Energy, Retail And Food
by Glen Richardson
A 29-year-old who makes funny, cute T-Shirts for geeks,
nerds and pop culture lovers and a 22-year-old who makes non-dairy, high
protein, low sugar bars and cookies have made Forbes’ 2019 “30 Under 30”
feature that annually draws attention to the top young entrepreneurs in the
U.S. and Canada.
Ramy Badie’s Denver-based TeeTurtle — whose apparel, toys
and games are licensed characters for Disney and Marvel — was expected to
generate $20 million in 2018 revenue. Daniel Katz’s high-protein and low-sugar
No Cow candy bars are in 15,000 stores nationwide and recorded $10 million in 2017
revenue.
Also making the list is Joel Jean, a cofounder of Swift
Solar, a startup manufacturing lightweight solar panels that are cheaper and
more efficient than conventional panels. Finally, the list includes Denver
student Gitanjali Rao, winner of the 2017 Discovery Education 3M Young
Scientist Challenge. Now 12, she invented a quick, low-cost test to detect
lead-contaminated water.
Designed To A Tee
During his first year in medical school, 29-year-old Ramy
Badie entered a T-shirt design contest to win money for tuition. He ended up
dropping out of school to found TeeTurtle. He is the winner in Forbes’ Under 30
Retail and Ecommerce category.
No matter what the product line, creator Badie’s
undertakings are always about the design. As an example, to fund production of
a card game about Unicorns he set out to raise $10,000 to fund production of
the game on Kickstarter. He reached his goal in just 71 minutes and collected
more than $1.8 million for the project. Support from more than 30,000 backers
was more than every other project on the fundraising website at the time.
On TeeTurtle’s website Badie explains the company this way:
“We are a bunch of kids at heart having a great time because every one of us is
passionate about what we do and we believe in the company and the product.”
A No Cow Footprint
When Daniel Katz dropped out of college after just three
months in 2013 to hawk his own line of energy drinks, his intense selling
schedule found him eating protein bars instead of real meals. But whey protein
upset his stomach, and gave him a new product idea: a high-protein but
low-sugar and non-dairy bar. The Denver-based company has raised $100,000 in
funding from blue chip investors like General Mills’ venture capital arm 301
Inc.
The rapidly growing distribution footprint of No Cow — with
offices on Blake St. in LoDo — has products in more than 15,000 stores across
the country including GNC, Vitamin Shoppe, CVS, Sprouts, and Wegmans.
After initially moving the business to his hometown of
Cincinnati, Katz relocated his growing startup to Denver, due to the physically
mindful attitudes of Colorado consumers. “People here are active, they’re
happy, they’re on trend,” says Katz. “And that’s who we represent as a brand.”
Solar Cells Shine
As a Ph.D. student at MIT, Joel Jean, was a member of a
research team that developed record-thin and lightweight solar cells. As a
co-founder of Swift Solar, he aims to develop lightweight, flexible, and
efficient solar panels using metal-halide perovskite materials.
Prior to joining Swift, he served as Executive Director of
the Tata-MIT GridEdge Solar research program, which focuses on scale-up of new
solar photovoltaic technologies for India and other developing countries.
As a researcher and NSF Fellow at MIT, he developed ultra-lightweight
and flexible solar cells that were recognized by the Katerva Award in 2017. He
co-authored the MIT Future of Solar Energy Study and has worked extensively on
emerging PV materials and devices, techno-economic analysis, and energy and climate
policy. Jean, 29, holds a PhD and SM in electrical engineering from MIT and a
BS with distinction from Stanford University.
Getting The Lead Out
As an 11-year old school girl Gitanjali Rao took the top
prize in the 2017 Young Scientist Challenge for her lead-detection device,
which is capable of finding lead in drinking water with the aid of a mobile
app. As the winner of the Young Scientist Challenge she won $25,000. Now 12,
she is using the prize money to refine the device so it can be sold commercially.
She was selected from 10 finalists who spent three months
collaborating with scientists to develop their ideas. Her device uses carbon
nanotubes to detect the presence of lead. Thousands of U.S. water systems are
reportedly contaminated by lead. Until now, testing reliably for lead was
expensive and meant sending away samples for analysis.
But Gitanjali’s portable invention — named Tethys, after the
Greek goddess for fresh water — allows a sensor linked to a mobile app to give
an accurate, almost immediate analysis via a mobile app. “If you take a shower
in contaminated water, you do get rashes and that can easily be studied by an
epidemiologist,” she explains. “And if somebody drinks lead in their water,
their children might have small, minor defects.”
Playing His Cards Right: Ramy Badie’s TeeTurtle was expected
to generate $20 million in 2018. To fund production of this Unicorns card game
he set out to raise $10,000 on Kickstarter. He reached his goal in 71 minutes
and collected more than $1.8 million for the project.
No Cow Candy Man:
Daniel Katz’s high-protein and low-sugar
No Cow candy bars are in 15,000
stores nationwide and recorded $10 million in 2017 revenue.
Bright Breakthrough: A cofounder of Denver’s Swift Solar,
Joel Jean was a member of the research team at MIT that developed record-thin
and lightweight solar cells.
Youthful Inventor: Gitanjali Rao’s lead-detection device
finds lead in drinking water with the aid of a mobile app. The Young Scientist
Challenge winner is using the $25,000 prize money to refine the device so it
can be sold commercially.
