Denver audit requires extra oversight of tax fund for faculty scholarships

A Denver tax initiative meant to assist school scholarships wants extra oversight to higher observe its knowledge and improve safeguards to hedge in opposition to inaccurate reporting, in line with a metropolis audit launched this week.

The nonprofit Prosperity Denver Fund administers the town’s School Affordability Fund created after a 2018 poll initiative. It started reimbursing native nonprofits for the scholarships and school assist companies they supply. The voter-approved school fund units apart .08% gross sales tax to extend increased schooling assets for Denver college students, particularly those that are low-income.

The audit says the Prosperity Denver Fund has struggled to maintain correct and full data of scholars, had some points verifying if college students had been eligible for scholarships, and lacked applicable documentation to assist reimbursements to nonprofits. 

The nonprofit and the Denver Workplace of Youngsters’s Affairs, which oversees the nonprofit’s work, have agreed with metropolis auditors’ suggestions. Prosperity Denver CEO Matt Jordan stated modifications, together with bettering its knowledge administration and assortment, are both underway or are deliberate. 

“In knowledge assortment and administration, these steps took longer than we’d have needed initially,” Jordan stated. “However we’re assured now that we’ve got what we have to extra shortly tackle these points.”

This system has already undergone different modifications since its begin in 2018. 

Tax cash obtainable for the fund has elevated from $8.9 million in 2019 to $14.5 million in 2022. To this point, the fund has collected about $46.4 million, however solely spent about $21 million to reimburse nonprofits for over 7,500 scholarships.

The pandemic made it exhausting to provide out all the cash inside the fund, Jordan stated.

In Could, Denver metropolis council members accepted broadening the factors for college students. The nonprofit can now reimburse scholarships or companies reminiscent of school or profession counseling, for college students as much as age 30, and for college students who’ve graduated from a Denver highschool or lived in Denver for six months previous to commencement.

“We expect that the ordinance modifications that had been just lately accepted will enable us to serve extra college students that had been initially supposed to be coated by the fund,” Jordan stated.

The audit says that Prosperity Fund Denver didn’t create figuring out info for particular person college students. Whereas the fund reimburses about 1,800 scholarships a yr, Jordan stated, a few of these college students may get school cash for a number of years.

The group lacked some info that included residency, monetary want, educational progress, gender, and ethnicity. Prosperity Denver stated it adopted up with nonprofits to substantiate any lacking particulars.

The nonprofit additionally bumped into points confirming nonprofits might be reimbursed for scholar scholarships, in line with the audit. 

Of the 7,570 scholarships metropolis auditors reviewed, about 155 funds lacked the info wanted to find out if the scholar was eligible.

Jordan stated points stem from nonprofit teams by no means having recorded among the knowledge that the fund requires. The up to date eligibility necessities ought to assist with this challenge, he stated.

The audit says for ineligible college students, Prosperity Denver and the town ought to search refunds. Jordan stated that work is already underway.

The fund must also create clear paperwork for nonprofits to make use of that assist observe reimbursements, the audit says.

“Prosperity Denver has no complete database of its reimbursements for scholarships and associated assist companies that might assist it handle this system and higher guarantee knowledge integrity and transparency to Denver residents,” the audit says.

For its half, the town plans so as to add a workers member assigned to higher oversee the fund and assist with points, together with with the administration of information.

Jason Gonzales is a reporter protecting increased schooling and the Colorado legislature. Chalkbeat Colorado companions with Open Campus on increased schooling protection. Contact Jason at jgonzales@chalkbeat.org.