A federal audit say a Colorado sheriffs organization misspent about $700,000 in government grant money that should have been used for a program notifying victims of crimes about the status of criminals.

The U.S. Justice Department gave County Sheriffs of Colorado $1.5 million to develop a statewide program that tracks the custody status of offenders in jail and notifies victims when a convict is moved to prison, released on parole or discharged from his sentence.

The Office of the Inspector General audited how sheriff’s offices in Colorado spent the money and determined that most of the money was spent on unjustified things — including promotional sweatshirts and T-shirts and meals for spouses, according to a report released Friday.

The audit also found that the association did not seek bids for a $491,575 contract for a 2008 grant and failed to notify the Department of Justice. It likewise failed to seek permission for a related $1 million non-competitive bid in 2011, the audit says.

“The association made a mistake and didn’t administer the grant properly. I own up to that,” CSOC Executive Director Chris Johnson said Friday. “They were accounting errors. There’s no criminal intent.”

The audit identified $704,886 in unallowable and unsupported questioned costs, including $16,299 in duplicate costs that were questioned for more than one reason.

That resulted in net questioned costs of $688,587, which auditors recommended should be repaid to the federal government, the report said. If the Justice Department seeks repayment, the CSOC will correct accounting errors that should address issues raised in the audit, Johnson said.

“Questioned Costs are expenditures that do not comply with legal, regulatory, or contractual requirements; are not supported by adequate documentation at the time of the audit; or are unnecessary or unreasonable,” the report said. “Questioned costs may be remedied by offset, waiver, recovery of funds, or the provision of supporting documentation.”

DOCUMENT: See the Justice Department audit report.

“We found that CSOC did not comply with essential award conditions in the areas of expenditures, drawdowns, financial reporting, and performance,” the audit says.

The CSOC made advanced requests for drawdowns based on upcoming expenses, resulting in CSOC having excess cash on hand for more than 10 days.

“We also identified numerous instances where the federal and match expenditures reported … did not match CSOC’s accounting records,” the report says.

The audit demands a response from CSOC officials.

Johnson was not working for the association when the two grants in 2008 and 2011 were administered.

“As you can tell, there were a lot of errors that CSOC did in reporting on both of these grants, but without a lot of instruction and training, we did the best we could do,” says a response letter by Johnson.

The letter said CSOC concurred with the audit findings in each case, but added that the mistakes came only out of “ignorance.”

“At no point with either of these grants, was there any misuse of funds, as was established in the audit from your office,” the letter says.

The association failed to qualify for $620,000 of the federal funds for grant money in 2008 and 2011 because the amount had to be matched with CSOC money and wasn’t.

The CSOC had used the average wage of thousands of sheriff’s deputies from across the state to calculate “in-kind” training costs. The association is now determining the exact wages of deputies who were trained, the letter says.

The CSOC violated vendor payment policies, including paying a consultant $75,000 even before the consultant did the work, the audit says. The practice violated terms of the consulting agreement and “increased the risk of poor performance or non-performance.” Of the contracted amount, more than $30,000 in expenses were not documented properly.

The CSOC later provided documentation for more than $15,000 in material costs. But the dates indicated that the purchases happened after the grant ended and these costs must be repaid, the audit indicated.

The CSOC also paid consultant salaries that exceeded the government’s limit of $450 a day, resulting in overpayments totaling $34,297, the audit says. Another $28,692 was paid to consultants for work done after the grant period.

A total of $1,472 in grant money was improperly used to treat local sheriffs and their spouses to meals during training sessions and to buy promotional sweatshirts and T-shirts. Another $1,835 was improperly charged to cover CSOC overhead.

The CSOC also violated grant conditions by failing to get permission for contracts above $100,000 without first getting government approval.

Kirk Mitchell: 303-954-1206, denverpost.com/coldcases or twitter.com/kirkmitchell

Audit Highlights

The federal government audited the County Sheriffs of Colorado after it received a $1.5 million grant from the Justice Department. It found the association:

• Failed to obtain U.S. Justice Department permission before signing two no-bid contracts exceeding $100,000 – one for $491,575 in 2008 and a second for $1 million in 2011

• Did not submit qualifying matching funds for $620,000 of the federal grants

• Paid consulting fees at a rate above government contract limits of $450 a day totaling $34,297

• Improperly used $1,472 in grant money to treat local sheriffs and their spouses to meals during training sessions and to buy promotional sweatshirts and T-shirts.