Audit: California agency failing to oversee housing funds

LOS ANGELES - A California agency isn't adequately monitoring housing grants aimed at helping low-income residents and failed to implement more than a dozen recommendations stemming from an investigation, according to a report released Thursday.

The latest audit found the Department of Housing and Community Development doesn't perform required on-site monitoring and can't be sure funds are being used properly, the state auditor's office said.

The auditors investigated the handling of nearly $5 billion in bonds that voters passed in 2002 and 2006 to help low-income people become or remain homeowners. It's the fifth time auditors have looked into how the Department of Housing and Community Development, or HCD, manages bonds since 2007.

"Although HCD previously asserted to us that it implemented all 28 recommendations we made in our first four reports, it has not followed through on half of the recommendations," the report said.

A centralized database launched by the department to monitor housing programs is unreliable, auditors concluded. In addition, the agency has repeatedly exceeded its administrative spending, the report said.

It recommends that lawmakers require the department to report to the state Legislature annually "on its monitoring of certain programs and to include performance metrics to demonstrate that recipients have issued loans to eligible homeowners."

The agency should immediately develop plans to deal with overspending and to "perform on-site visits of program recipients," the report recommended.

The department has 60 days to respond to the auditor's office.

In a statement Thursday, the department said it has already implemented new monitoring procedures and reorganized the staff members who manage the database.

"The staff and leadership at HCD also look forward to implementing the balance of measures recommended by the state auditor," the statement said.