Counties audit $150M spent to help disabled

15-year review will focus on Developmental Pathways

Arapahoe and Douglas counties will audit the community agency that manages benefit money for people with disabilities, a response to a longstanding request from parents whose children receive services.

The audit will focus on about $150 million in mil levy dollars the two counties have raised for Developmental Pathways since voters approved the levy in 2001. The community-centered board, one of 20 in the state, assigns case managers to help people with intellectual and developmental disabilities set up therapy, group-home placement and in-home care.

Arapahoe County’s decision to move forward with an audit is a reversal from four months ago, when Commissioner Nancy Sharpe told parents an audit was not needed. Douglas County commissioners decided in October to pursue an audit of that county’s funds supporting the disabilities agency, and Arapahoe County commissioners then revisited their earlier decision.

“It just seemed to make sense at this time,” Sharpe said last week. As in August, she said again that county officials have no reason to think there has been any misspending. “I think they do a good job today. But if things come up we can improve, we want to do it.”

The financial audit is expected to start in December, with a final report due in early 2017.

Douglas County has been scrutinizing its agreement with Developmental Pathways over the past year, and officials determined they wanted more detail about how the mill levy funds are spent. “Were we asking for the right information?” said Barbara Drake, deputy county manager. “Were we asking them to keep track of the right things? It’s all tied to a sense of transparency and accountability that we are trying to put forth as a county.”

The key concern, Drake said, is that funds collected in Douglas County are serving county residents with disabilities. “We just wanted assurance that the money was following the people and was going in the right proportion for service delivery,” she said.

A recently updated agreement between Douglas County and Developmental Pathways says 85 percent of funds must go toward providing services, while no more than 15 percent can go toward administrative costs. The audit will provide “more depth behind those percentages” and make sure the disabilities agency is properly coding administrative costs versus services, Drake said.

Douglas County officials plan to continue with regular audits and include more detailed financials about the disability agency on its website. “That is the expectation from taxpayers — that when we collect tax dollars, we are able to show where they go,” Drake said.

Since 2001, both counties have relied on financial statements and an annual review done by an auditor hired by Developmental Pathways. Denver officials did the same for years until the city auditor scrutinized Rocky Mountain Human Services, the community-centered board serving Denver residents with disabilities. That December 2015 audit uncovered misspending of tax money and extraordinary benefits for its CEO and other employees.

The Denver audit brought increased scrutiny to the state’s 20 disability boards, and the legislature this year passed a law requiring state audits of the boards every five years. But the counties’ audit of Developmental Pathways is independent of that requirement.

The auditing firm that contracts with Arapahoe County will handle the audit for both counties, producing separate, countyspecific reports.The counties will split the cost, which has not yet been determined.

Developmental Pathways determines who is eligible for state and federal Medicaid dollars as well as the county mill levy funds. A business that Pathways created employs therapists and caregivers who are sent to families’ homes.

The mill levy was approved by voters in Arapahoe and Douglas counties in 2001. Pathways has received $53 million from Douglas County and $98 million from Arapahoe County in the past 13 years, according to county officials.

Developmental Pathways executive director Melanie Worley did not respond to a request for comment.