Investigative Report: Red Flags in Huerfano County DHS Budget 2025
Huerfano County, Colo. – A deep dive into Huerfano County’s newly adopted 2025 budget has uncovered several red flags in the Department of Human Services (DHS) finances. The DHS, tasked with aiding vulnerable families and individuals, is showing spending patterns that raise serious questions about financial propriety and efficiency. Key findings from the budget include disproportionate administrative spending, unexplained funding surges, and opaque financial practices. These issues emerge against a backdrop of past oversight challenges for the county.
Key Budget Red Flags
- Overhead vs. Direct Aid: The DHS budget allocates nearly all funds to administrative or program costs, with only a small fraction for direct assistance to clients. For 2025, “Assistance Payments” are just $228,400, versus $2,738,644 for “Social Service Programs” . This suggests less than 8% of DHS spending goes to direct aid like food, cash, or medical assistance for residents, with over 92% spent on operations and services.
- Surge in Child Welfare Funding: The 2025 budget plans a major increase (over $500,000) in program spending compared to the previous year. Total Social Service Programs expenditures jump from about $2.24 million in 2024 to $2.74 million in 2025 – an abrupt boost largely attributed to child welfare and related services. This ~22% spike in funding lacks a clear public explanation.
- High Personnel Costs for a Small County: DHS staffing costs are strikingly high. The department has 24 full-time employees (FTE) with a combined personnel budget of $1,736,929 . That averages roughly $72,000 per employee, a significant sum in a county of only ~7,000 people. Personnel alone accounts for well over half of all Human Services expenditures in 2025.
- Opaque Transfers and Fund Imbalances: The DHS’s Public Welfare Fund is being managed in a way that obscures true balances. The fund carried a negative balance of -$272,291 into 2025 , essentially deficit spending. In 2023, the fund spent about $2.999 million while taking in only $2.377 million, a shortfall of $621,427 . Yet the budget does not clearly show how this gap was covered – there are no explicit inter-fund transfers noted to offset the deficit. The fund is budgeted to remain about $270,000 in the red by the end of 2025, raising transparency concerns.
- Oversight Challenges: These patterns occur in the context of previous financial management troubles for Huerfano County. County officials acknowledged “struggles with consistent financial management” and incomplete audits in recent years . Until now, DHS’s books were maintained on a separate system, a practice the county is trying to end by bringing Human Services into the main accounting system . A statewide audit has similarly criticized Colorado DHS oversight, finding “deficiencies in [state] oversight of and guidance for county departments of human/social services” . Locally, in mid-2024, county finance staff even discovered fraudulent checks totaling $15,000 in an apparent internal scam – an incident that, while not directly tied to DHS, underscores the risks of lax financial controls.
Administrative Costs Overshadow Direct Assistance
One of the most glaring issues in the Huerfano County DHS budget is the imbalance between administrative/program costs and direct aid to residents. According to the 2025 Public Welfare Fund summary, only $228,400 is set aside for “Assistance Payments,” which are direct benefits paid to qualifying clients . In contrast, a whopping $2.74 million is allocated to “Social Service Programs” – the broad category that includes operational costs, staff, and services. In percentage terms, roughly 92% of DHS expenditures are consumed by programs and overhead, with barely 8% reaching citizens as direct financial assistance .
These numbers are raising eyebrows. Huerfano County’s DHS administers programs like food stamps, Medicaid, child welfare, and other aid meant to help low-income families survive. Yet the budget data suggests that for every dollar DHS handles, only a few cents actually end up as benefits to families, while the rest funds the machinery of the department. This disproportionate overhead could indicate inefficiency – possibly too many administrative layers or high indirect costs siphoning resources away from those in need. By comparison, effective social service delivery is expected to maximize the aid that goes out directly to vulnerable residents, not absorb the bulk of funds in bureaucracy. County residents and watchdogs are likely to question why administrative spending is so high relative to tangible assistance. Is the department top-heavy, or are mandated program costs (like trainings, case management, and state reporting) driving the imbalance? Without further clarification, the budget paints a picture of a department where operational expenses dwarf the actual aid provided, potentially undermining DHS’s core mission.
Unexplained Surge in Child Welfare Funding
Digging further into the DHS budget reveals another red flag: a significant year-over-year increase in program funding that lacks a clear justification in the published documents. The line item for Social Service Programs jumps from about $2.24 million in 2024 to $2.74 million in 2025 – an increase of nearly half a million dollars. County officials have not publicly broken down this spike, but it is widely believed to reflect a boost in Child Welfare funding and related services. An infusion on the order of $500,000+ for a small county’s child welfare programs is unusual without a major new initiative or crisis to address.
For context, Huerfano County’s population is under 7,000, and its child welfare caseload (children in protective services, foster care, etc.) is limited. A jump of roughly 22% in the Social Services budget suggests one of a few scenarios: either state/federal sources granted a big increase for child welfare, or the county is budgeting for higher costs (such as more foster placements, new staff hires, or a large one-time expense). However, no specific explanation is provided in the budget message or notes. The absence of an explanation is a transparency concern. Taxpayers deserve to know why, for example, Child Welfare programs are slated to receive an extra $500k – especially if that money is diverted from other services or requires additional local match. Is Huerfano anticipating more child abuse cases, implementing a new family services program, or simply correcting an under-budgeting from the prior year?
The lack of clarity recalls past issues in Colorado where oversight bodies failed to notice budgetary anomalies in human services. Indeed, a prior performance audit found shortcomings in the state’s guidance for county human services departments . Unexplained budget surges like this one can be a warning sign of planning errors or funds being reallocated behind the scenes. In an era when government accountability is paramount, any half-million-dollar budget change – especially tied to something as sensitive as child welfare – merits public explanation. Without it, the community is left guessing whether this boost truly benefits children or masks some form of financial adjustment from earlier missteps.
$1.73 Million in Personnel Expenses for 24 Staff
Another major component of the DHS budget drawing scrutiny is the personnel expenditure. Huerfano County DHS is authorized for 24 full-time equivalent (FTE) employees, and the 2025 budget allocates $1,736,929 to cover their salaries and benefits . This figure is substantial: it means over $1.7 million yearly just to staff the department. To put it in perspective, that is about 59% of the entire Human Services spending plan (since total DHS expenditures are budgeted at $2.967 million ). It also averages to roughly $72,000 per employee annually.
For a small rural county, the question is whether this level of staffing cost is justified. Twenty-four employees dedicated to human services in a county of ~7,000 people works out to one DHS worker for every 290 residents. Given that not every resident is a client of DHS, the ratio of workers to clients would be even higher. Certainly, some staff positions are mandated – child protection caseworkers, adult protective services, benefits technicians, etc., often required by law and funded partly by state grants. However, $1.73 million for personnel still stands out. It raises the issue of salary scales, administrative bloat, or overlapping roles. Are managers and directors drawing disproportionately high pay? Is the department over-staffed relative to its caseload? Or could it be that benefits (like healthcare and retirement) are driving costs up?
The budget document doesn’t detail individual pay, but it does highlight that Human Services has one of the larger payrolls in the county. In fact, DHS’s personnel budget is nearly half that of the entire General Fund’s payroll (the General Fund covers 53.5 FTE with about $3.99 million) . County officials did note they faced rising health insurance costs, but also claimed to have found savings with a new insurance plan – savings presumably passed to all departments. If those savings applied, one might expect personnel costs to level off, not loom so large. The community and county commissioners will likely probe whether Human Services’ staffing is optimized. In a small community, every dollar spent on an administrator’s salary is a dollar not going to, say, an extra home-delivered meal for a senior or an additional childcare stipend for a working family. The balance between a capable staff and prudent spending is at issue here, and right now the balance in Huerfano DHS’s budget looks tilted towards a costly bureaucracy.
Opaque Fund Transfers and Deficit Spending
Perhaps the most technically troubling aspect of the DHS budget is how the finances are structured across funds – specifically, the Public Welfare Fund (the dedicated fund that accounts for Human Services revenues and expenses) is unbalanced and relies on opaque practices to appear “balanced.” By law, Colorado counties must adopt balanced budgets, yet Huerfano’s Public Welfare Fund shows a persistent negative fund balance that isn’t fully remedied in the budgeting process.
At the start of 2024, the Public Welfare Fund had an accumulated deficit of -$131,114 carried over . By the end of 2024, that deficit is projected to deepen to -$272,291 . In other words, the Human Services department spent more money than it had available, dipping into the red. Indeed, looking at 2023 actuals: DHS expenditures were $2,629,651 against revenues of $2,600,332, and by 2023’s end the shortfall grew when some anticipated funds didn’t materialize, resulting in $621,427 more spent than received . This wiped out the fund’s prior reserves and pushed it negative. Normally, one would expect a transfer from the county’s General Fund or another source to cover such a gap (since running a deficit is not sustainable). However, the 2025 budget document does not explicitly show any inter-fund transfer or bailout to erase the negative balance. Instead, the county has budgeted a very slight surplus for 2025 ($1,504) – essentially just enough to keep the deficit from growing, but not enough to restore the fund to positive territory (ending 2025 still at -$270,788).
This approach lacks transparency. If there were internal arrangements to cover the deficit – for example, using leftover funds from a contingency reserve or a loan from the General Fund – those moves were not plainly detailed in the public budget. The only hints are small “County Revenues” in the Welfare Fund (about $41,500 for 2025) , which could be the local matching funds the county contributes. But $41k is nowhere near enough to backfill a quarter-million-dollar hole. The absence of a clear plan to eliminate the deficit raises compliance questions with Colorado’s budget law, which prohibits spending more than available funds. It’s possible the county expects additional state reimbursements or has quietly re-designated some prior expenses, but without explicit documentation, citizens are left in the dark.
Moreover, there’s mention that late adjustments by auditors altered the financial position of some funds – this likely refers to the Human Services fund given the large 2023 swing. If an audit found that certain revenues were overstated or expenses underreported, it could explain the sudden deficit. Yet again, how the county corrected that is not transparent in the budget. Accountability would call for an open explanation: Did the state demand repayment of some funds? Were there unspent grant monies that had to be returned? Or did the county simply roll the deficit forward, hoping to gradually earn it back in future years? Any of these scenarios would be important for the public to know. The current documentation, however, glosses over it, simply presenting the negative balances and moving on. This kind of fuzzy financial practice undermines trust – the public welfare fund should not operate like a slush account with undefined ins and outs. Clarity is needed on whether inter-fund transfers, reappropriations, or other fixes are being used to prop up the DHS budget.
Broader Oversight Implications
The pattern of spending and budgeting in Huerfano County’s DHS is not happening in isolation – it echoes broader oversight issues that have plagued the county and state in the past. Huerfano’s 2025 budget message candidly admits that the county has faced “consistent financial management” challenges . In fact, as the budget was being adopted, the county’s 2023 audit was still incomplete and auditors’ late adjustments had already affected fund balances . This is a red flag in itself: timely audits are crucial for catching mistakes or malfeasance. The delay and corrections suggest that financial oversight in prior years was weak, and only now is being trued up.
Crucially, the county is taking steps to improve controls – notably by integrating the Department of Human Services’ accounting with the county’s main system . Historically, many Colorado counties operated their human services finances somewhat separately (often because state systems handle parts of the funding). In Huerfano, keeping DHS “books” separate may have contributed to less scrutiny and coordination with the rest of the county’s budget. The decision to adopt new internal controls and a unified system indicates that officials recognized the oversight failures and risk of errors under the old approach . It’s essentially an admission that DHS financial practices needed reining in.
These local troubles tie into a bigger picture. Colorado’s state Department of Human Services oversees and funds many county-level programs, but it relies on counties to manage day-to-day operations. There have been instances where this model faltered. A previous audit of Colorado’s child welfare system, for example, found deficiencies in state oversight of county departments – meaning some counties could mishandle funds or cases without immediate detection. While Huerfano’s situation has not risen to a scandal on that scale, the ingredients for problems are evident: high spending on administration, confusing fund movements, and until recently, insufficient internal oversight.
Community members and advocates may rightly worry whether DHS dollars are being used as intended. At best, the issues point to inefficiency – money tied up in administration or lost in accounting limbo instead of serving families. At worst, they could hint at misallocation or improper use of funds (though no direct evidence of fraud in DHS has been made public). The county’s brush with a fraudulent check scheme in 2024 – where $15,000 in fake payments snuck through the finance system – underscores that financial controls haven’t been as tight as they should be. If two bogus checks could get cashed, one has to ask: What about the far larger DHS budget transactions? Are there sufficient checks and reconciliations in place to prevent and detect problems?
For Huerfano County, the stakes are high. DHS programs like child protection, food assistance, and elder care directly affect the well-being of some of the county’s most vulnerable residents. Every dollar lost to inefficiency or misuse is a dollar not reaching a family that needs help. The Board of County Commissioners (sitting also as the Board of Human Services) is responsible for this stewardship. Moving forward, they will need to demand greater transparency and accountability in the DHS budget. This could include detailed public reports on how new child welfare funds are being used, plans to eliminate the fund deficit, and justification for the department’s overhead costs. It may also involve closer state monitoring; the state DHS can step in if a county department consistently fails in its fiduciary duties or if misconduct is suspected (state law provides mechanisms to address “misconduct, incompetence, or neglect of duty” in county human services leadership).
In summary, the 2025 Huerfano County budget shines a light on concerning patterns in the Department of Human Services. The disproportionate administrative expenses, unexplained funding increases, high personnel costs, and murky financial maneuvers all point to a department that warrants careful scrutiny. Given past issues with oversight, both county and state officials should be paying close attention. The public, for its part, now has the information to ask tough questions. Is the DHS budget serving the people, or the system itself? This investigative look suggests it might be the latter – and that is a narrative Huerfano County residents deserve to see addressed with honest answers and corrective action.