Auditor flags gaps in Denver's AI oversight, nine days after the Council voted down the chatbot contract

Denver's auditor says the city is using artificial intelligence faster than it is setting rules for it. The finding lands just after the City Council turned down more money for the city's best-known AI tool, the Sunny chatbot on denvergov.org.

For residents, this is about how the city answers your questions and handles your information. Sunny is one of the ways people reach 311, and the audit found the city could not show it watches every AI system the way it watches Sunny.

What the audit found

Auditor Timothy O'Brien released the audit on Oct. 22, according to the Auditor's Office. Its main findings:

• Technology Services monitors Sunny for accuracy, but auditors found no evidence that all city AI systems get the same monitoring. The city also has no single inventory of its AI systems.
• Sensitive data: Auditors entered false, prohibited information into a public AI tool from a city computer and got no alert. Staff blamed a "deployment issue" that kept security updates from reaching every city computer.
• Denver International Airport has no AI governance framework. Its approved tool, Microsoft Copilot, is only the eighth most used AI tool on the airport network, behind seven tools that were not reviewed or approved.

Both agencies agreed with every recommendation, and the office plans a follow-up audit, according to the full report page. Denver's chief information security officer, Merlin Namuth, told the Denver Gazette that keeping up with fast-changing AI is difficult and that the city is improving its practices.

What our records add

The Council already said no to more chatbot money. Council Resolution 26-1373 would have added $3,889,784.94 to the city's contract with Citibot, Inc., the company behind Sunny, bringing it to $4,339,784.94 and extending it five years to Oct. 1, 2031. Council member Flor Alvidrez called it out for a one-week delay on Oct. 5 (video). On Oct. 13, it failed 3-9.

• Yes: Kevin Flynn, Darrell Watson, Chris Hinds
• No: Amanda Sandoval, Jamie Torres, Diana Romero Campbell, Amanda Sawyer, Paul Kashmann, Flor Alvidrez, Shontel Lewis, Stacie Gilmore, Serena Gonzales-Gutierrez

The debate covered much of what the audit later raised. Sawyer said the money would be better spent restoring 311 staff (video at 36:38). Gonzales-Gutierrez said the chatbot's accuracy is not tracked directly (video at 40:04). Kashmann called AI "a nightmare unfolding before our eyes" and said he would oppose AI contracts until the administration opens a broader discussion of city AI policy (video at 41:01).

Torres pressed staff on why the original three-year contract had already lapsed on Oct. 1 before reaching the Council (video at 46:12). A Technology Services official said the one new, unfunded piece was a voice assistant for city call centers, at roughly $600,000 a year (video at 53:49). Hinds, who voted yes, said many residents prefer self-service to a phone call (video at 49:21).

An earlier AI contract passed. In March the Council approved 26-0105, a $4,591,740 contract with ComplyAI, Inc. for AI-guided review of building plans, 10-1. Alvidrez was the no vote; Sandoval and Gilmore were absent.

What's next

The audit sets no Council vote. Technology Services has to decide whether to bring Sunny back in another form, since the extension failed. You can follow the Governance and Intergovernmental Relations committee, which handled both contracts, and search what was said in Council meetings.

For more on the auditor's other fight with the mayor's office this month, see our earlier story: Denver's auditor says the mayor's office is stalling his budget audit.