The nonprofit that serves Denver residents with intellectual and developmental disabilities misused millions of dollars from taxpayers with few inquiries by the city, an audit released Thursday indicated.

Denver’s new city auditor, Tim O’Brien, called Rocky Mountain Human Services’ treatment of public dollars “shameful.”

Among the findings:

• Between January 2014 and June, RMHS overcharged the city $650,000 for administrative expenses above its 15 percent cap.

• RMHS spent $48,000 on meetings in 2014, with most of that money going to meals for staff members, including, for example, a going-away party for an employee at a bar and restaurant in Lone Tree.

• RMHS reimbursed its 250-member staff for home Internet services and provided them annual Costco memberships for their personal use.

• RMHS sought to expand its services outside of Denver and used city tax money for fundraising, rent and aid to non-Denver residents as far away as the Pacific Northwest.

• RMHS continued to collect $1.34 million annually from the city to be used for state matching funds, although the state program has not issued Denver a match since 2007. “RMHS does not know how this money was spent,” according to the audit findings.

• Former RMHS CEO Stephen Block, who was put on leave this year and eventually fired, received $478,974 in pay and benefits in 2014, more than double the next-highest executive of a comparable taxpayer-funded service nonprofit in Colorado.

RMHS has had Denver’s contract since city voters passed a property tax levy in 2003 to support services for those with intellectual and developmental disabilities.

Since then, RMHS has received $121 million from city taxpayers, including $11.5 million for 2015 and a projected $14.5 million next year. The city provides 27 percent of the nonprofit’s roughly $47 million budget, with 50 percent coming from federal sources and 15 percent from the state.

The program serves more than 3,000 city residents.

In addition to removing its top executive and former chief financial officer, RMHS has cut back perks and brought its budget — which was running a deficit — into balance by reducing overall expenses by 17 percent, interim CEO Shari Repinski told the city audit committee Thursday morning.

The organization also has cut salaries and laid off employees, she said.

“I’m confident those actions we’ve taken have moved us from a place of crisis to a place of stability,” she said.

Don Mares, a former city auditor who in July was named to lead the city Department of Human Services, ordered the audit. He made reform and closely monitoring the contract the conditions under which he would take the job, he said after the audit hearing Thursday.

“I knew there were a lot of problems there,” he said.

The audit put blame for the misuse of taxpayers’ money on the city for not doing a better job of monitoring RMHS before Mares’ demand for accountability. The mismanagement was bad for the clients, taxpayers and city government’s credibility, the audit states.

“The lack of monitoring could negatively impact service delivery for individuals with intellectual and developmental disabilities, as well as taxpayer confidence regarding the city’s ability to effectively monitor and safeguard public funds,” according to the audit.

The city said reforms and transparency will be a big factor in determining whether the contract with RMHS is renewed in 2017.

O’Brien said he expected the audit to lead to immediate and meaningful changes.

“Few nonprofit organizations are fortunate enough to have a dedicated taxpayer-funded revenue stream,” he said in a statement. “The profligacy with which RMHS treated this privilege is shameful. I expect the result of this audit to be better treatment of Denver residents with intellectual or developmental disabilities, and better stewardship of Denver’s tax dollars.”

Joey Bunch: 303-954-1174, jbunch@denverpost.com or @joeybunch