Who’s minding the store? Colorado housing money and a $158.5 million error

By Cory Gaines | Commentary, Colorado Accountability Project

Where will Colorado put its housing money –updated with a state audit

I wanted to share the RM Voice article linked first below because it provides an interesting update/corollary to something I wrote about earlier (“Where Will Colorado Put Its Housing Money”–the second link below).

There’s a lot going on in the report, which I’ll summarize in a bit, but the overarching theme is unfortunately not a new one to Colorado: our state fiddled around with COVID money, and we’re still dealing with that fiddling today.

The story begins back in 2024, quoting the RM Voice piece:

“Colorado wanted more control over its share of federal pandemic aid before the money hit its federal spending deadlines. So in 2024, the state moved it. It pulled hundreds of millions in American Rescue Plan money back out of four state programs, three of them tied to housing and homelessness, and replaced it with state general funds, so it could spend the federal dollars elsewhere before the deadlines ran out. Then the Department of Local Affairs set those funds up in the state’s accounting system as if they were still federal.”

Said another way, the federal COVID dollars had, as many federal and state monies do, an end date. I.e. spend by this date or it goes away. Colorado simply followed the tried and true government pattern of making sure they “spent” the money (even if it wasn’t needed immediately) so they didn’t lose it. 

Grants take time. They have to be set up. People have to apply. You have to judge winners. Then you have to disburse the money. If you don’t want to lose money waiting, you spend it now and pay the grant money out of a different account (reimbursed later).

If you’re curious, screenshot 1 is from the 2024 bill mentioned above. It shows where the federal money was supposed to go (with the state money going to housing grants for “affordability” I mention in my newsletter. The 2024 bill is linked third below for reference.

Knowing that context, the problem the RM Voice article details relates to how the state seems to have lost track of its own little bit of financial two-step. The state continued to mark state money spent on grants as awaiting federal repayment, a repayment never to come because the dollars got “reimbursed” ahead of spending them!

Quoting again:

“The $158.5 million [mistakenly listed as federal reimbursement] never reached the state’s published financial statements. The auditors flagged it, and the department [DOLA–Department of Local Affairs] fixed it. ‘The Department corrected these errors after we notified them of the issues we identified,’ the audit says. Colorado’s overall financial statements earned a clean opinion for the year. That is the department’s defense, and it is a real one. It is also the problem. The error was not caught by a supervisor, a reconciliation, or a year-end review inside DOLA. It was caught by outside auditors testing the books after the fact.”

As I’ve written before, who is minding the store? Relatively simple errors are not (repeat are not) getting caught until an audit finds them, not by any internal controls or processes within the state bureaucracy.

I’m glad the auditors caught it, but the repeated financial bunglings are more worrisome than a simple oopsie easily erased and fixed. What if the auditor missed them? What if policymakers were deciding future policy based on money which didn’t exist or was labeled wrong?

Lest you think that too far-fetched, I point you to the fourth link below, an article detailing a TABOR oopsie from 2024. 

Quoting the intro paragraph from that story:

“The state government owes Colorado taxpayers an extra $34 million in refunds it should have sent out years ago, legislative budget staff told lawmakers Friday, blowing a hole in the state’s budget with just days left in the 2024 legislative session.”

Yeah.

Perhaps trying to be clever and move money around to avoid living within our means has costs too. 

https://rockymountainvoice.com/2026/09/11/colorados-homelessness-and-housing-funds-recorded-153-million-in-phantom-federal-money-audit-finds/

https://coloradoaccountabilityproject.substack.com/p/where-will-colorado-put-its-housing?utm_source=publication-search

https://leg.colorado.gov/bills/hb24-1466

https://coloradosun.com/2024/05/02/colorado-tabor-taxpayer-refund-error/

READ THE FULL COMMENTARY AT COLORADO ACCOUNTABILITY PROJECT

Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.