U.S. audits Compton housing programs

Federal officials have launched an audit of the use of government funds by two programs administered by the Compton’s Community Redevelopment Agency that have come under scrutiny before.

The audit is focused on federal funds to assist low-income residents through two programs administered by the city’s redevelopment agency, said Tanya E. Schulze, regional inspector general for audit with the U.S. Department of Housing and Urban Development. She did not disclose details on the scope or nature of the audit.

The audit was prompted by a tip to the inspector general’s complaints hotline.

Auditors are examining the city’s First Time Homebuyers Program, which provides loans of up to $100,000 for moderate-income homebuyers and up to $150,000 for low-income buyers, and the Residential Rehabilitation Programs, which provide grants and loans for home repairs.

The audit will examine the use of federal HOME funds. Compton receives about $800,000 in HOME funds annually for the programs, which are supplemented by state funds and local tax increment dollars. The two programs have provided more than $21 million in aid to 287 people since 2006, according to figures provided by the CRA.

Schulze cautioned that an audit in progress does not necessarily indicate wrongdoing.

“Whenever we get a complaint, we have a responsibility to look into it,” she said.

In the last six-month reporting period, the HUD inspector general’s national hotline received about 9,300 complaints, of which 534 were referred to the inspector general’s Offices of Audit and Investigation or to HUD program offices.

Compton’s redevelopment director, Kofi Sefa-Boakye, said the inspector general’s office had requested information, which the CRA provided. But Sefa-Boakye said that there have been no “justified, substantiated” concerns about misuse of federal funds and that the programs have been part of an ongoing economic revitalization in Compton.

“In the spirit of the city’s goal of birthing a new Compton, the agency has been instrumental in providing affordable housing and also attracting moderate-income residents to the community,” he said.

This is not the first time the homebuyers and rehabilitation programs have been targeted for review.

The Compton city attorney’s office launched a review of the programs in 2008 in response to citizens’ complaints of long waits for assistance and alleged preference being given to Latino applicants over African Americans. A report issued by the city found the allegations of racial bias to be unfounded but highlighted a number of other issues.

The report stated that about $2.17 million paid by the city to 16 people under the First Time Homebuyers Program was not backed up by the CRA’s list of beneficiaries. Sefa-Boakye said the discrepancy arose because some files were in the process of being inputted when the audit took place. He provided a copy of the response the CRA had submitted with an updated list of files, which included the 16 missing recipients.

The HUD inspector general’s office recently highlighted problems in another Compton program. An 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.

The city paid out more than $2.2 million of its own money to cover a funding shortfall, largely because of poor accounting and because the city had not collected reimbursements it was entitled to from other cities when new Section 8 tenants moved into Compton, the audit found.

A separate review of Compton’s use of federal funds conducted by HUD’s Los Angeles field office in June 2009 resulted in the city being required to reimburse $7,890 to the HOME program for an ineligible homeowner who received assistance and $60,831 to the Emergency Shelter Grant program for funding the city passed down to a nonprofit that could not provide program documentation and subsequently closed.

abby.sewell@latimes.com

ann.simmons@latimes.com