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Audit finds flaws in Compton housing program

August 23, 2011 | 10:36 am

HUD Secretary Shaun Donovan The city of Compton failed to properly administer federal housing funds for low income residents and may have to pay back more than $2.2 million it withdrew to cover undocumented expenditures, according to an audit report published Tuesday by the U.S. Department of Housing and Urban Development, or HUD.

The audit was launched last November, following a citizen’s complaint to HUD’s inspector general’s complaints hotline. The citizen alleged general misuse of funds from the HOME Investment Partnerships Program by Compton’s Community Redevelopment Agency.

The review focused on Compton’s HOME-funded First Time Homebuyers Program which provides loans for low- and moderate-income homebuyers, and on the Residential Rehabilitation Programs, which provide grants and loans for home repairs. Between 2009 and 2010, Compton was awarded $1.7 million in HOME funds, according to HUD.

The agency’s audit did not find evidence supporting the charges of missing funds, but did find failures to abide by HUD’s requirements for administering the HOME program, the report said.

Completion data was not always entered in a timely manner to show closure of funded program activities, and sufficient documentation to back up costs and salaries and wages was missing, the audit found. In addition, the eligibility of homebuyers was not correctly determined, properties being purchased did not always meet HOME’s affordability standards, and funds weren’t always used within the required time frame, according to the review.

As well as repaying more than $2.2 million in HOME money spent on unsupported activities, wages and salaries, officials in HUD’s inspector general’s office have recommended that Compton be required to repay $193,420 for two home-buyers who weren’t eligible to receive assistance. The city should also refund $100,000 in HOME funds used for a property that did not meet the home-buying program’s affordability standards, and $72,397 drawn for a canceled action, the federal inspectors said.

It was not the first time that federal investigators had thrown the spotlight on Compton. Last year, a HUD audit of the city's Section 8 low-income housing program, which is run by the city's local housing authority, found that the program had been operating at a deficit, putting tenants at risk of losing assistance.


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Photo: HUD Secretary Shaun Donovan. Credit: Mark Wilson / Getty Images