By Brian Maass

DENVER (CBS4)– Following a CBS4 Investigation, the City of Denver has decided it will no longer co-mingle donations made to help the homeless.

“I certainly think maybe it wasn’t the best idea and we reversed course”, said Julie Smith, communications director for Denver’s Department of Human Services.

Last March, the city conducted a “sweep” moving the homeless and their belongings out of encampments in downtown Denver.

A CBS4 Investigation later revealed that portions of that sweep were paid for by donations made by members of the public who intended the money to help the homeless with food, shelter and counseling.

In an email obtained by CBS4, the City of Denver’s Chief Financial Officer, Brendan Hanlon, wrote, ”We can charge off these costs to the homeless donations fund.”

Jose Cornejo, executive director of Denver Public Works, emailed back, ”Sounds like a plan.”

But when CBS4 revealed the financing of the sweep, homeless advocates were outraged and the city used public works funds to pay for the sweep.

“It doesn’t look good because it wasn’t good”, said Nathan Woodliff-Stanley, Executive Director of the ACLU of Colorado.

Denver Mayor Michael Hancock told CBS4 what happened was an “administrative snafu.”

City officials explained that public donations to help the homeless had been placed in the same fund- the homeless donations fund- as monies from the federal government.

Now, Denver’s new budget calls for the homeless donation fund to be split into two funds, with public donations held in a stand-alone fund, and other sources of money to assist the homeless being housed in a separate fund. The change was first reported by the website Denverite.com.

“This is just a way to increase transparency and accountability for how we’re using the money,” said Smith.

Woodliff-Stanley said he doesn’t believe the Mayor’s explanation that what happened was an “administrative snafu. I don’t think it was accounting error in the first place.”

”It was intentional on the part of city leaders to do what they did. It was an intentional and callous decision on the part of city leaders. People were told ‘put money in the meters’ and don’t give it to the homeless because they can’t be trusted with it. Instead it was the city you couldn’t trust with the money,” said Woodliff-Stanley.

CBS4 Investigator Brian Maass has been with the station more than 30 years uncovering waste, fraud and corruption. Follow him on Twitter @Briancbs4.