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CBS2 Investigation Prompts Audit Of LA’s Low-Income Housing Authority

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LOS ANGELES (CBS) — A CBS2 investigation into improper spending at L.A.’s low-income housing authority has prompted City Controller Wendy Greuel to order a thorough financial audit of the department.

CBS2’s investigative reporter David Goldstein found that some of the commissioners at the Housing Authority of Los Angeles used taxpayer money to fund fine dining and lavish traveling expenses. He also discovered that some employees were double dipping — getting a cash advance for meals on a trip and then charging hundreds of dollars at restaurants.

HACLA Commission Chair Mitchell Kamin supports Greuel’s intention to move forward with the expanded “top-to-botttom” financial review, the controller said.

“Given our city’s budget crunch, and the economic challenges facing all Angelenos, it is unfathomable that an agency dedicated to creating and maintaining affordable housing for the poorest families in Los Angeles spent taxpayer money on a golden parachute,” Greuel said.

A preliminary audit found board members and other staff spent $300,000 on travel expenses between 2009-2010, a 300 percent increase over 2006, Greuel said.

Former HACLA CEO Rudy Montiel was awarded a $1.2 million severance package after being ousted by the board in March, the Los Angeles Times reported.

Councilmen Dennis Zine and Tony Cardenas introduced a motion Tuesday to bring HACLA interim CEO Ken Simmons before the full council to account for the exorbitant spending on meals, meetings and travel, as well as Montiel’s severance package. The hearing could take place as early as next week.

Former City Controller Laura Chick criticized city officials Tuesday in an open letter to Los Angeles residents in which she expressed outrage over the revelations and called for immediate reforms at HACLA.

“Where are the calls for an overhaul of the Board of Commissioners? Where are the hearings to discuss the organization and oversight of the Housing Authority and how it could and should be reformed?” Chick wrote.

Chick criticized Mayor Antonio Villaraigosa for what she said was a lack of indignation, and she blasted Greuel for not taking stronger action after “SoCal Connected” first reported on questionable spending at HACLA in March.

“Just now, after eight months since KCET’s first expose, (Greuel) is finally releasing an audit that peeks at the tip of the iceberg already exposed,” Chick said.

Deputy Controller Shannon Murphy defended Greuel, saying she had successfully audited more than 40 city agencies and uncovered more than $100 million in wasteful spending, despite reduced resources.

“In addition Greuel has been able to audit outside agencies, including the Los Angeles Unified School District, the Coliseum and HACLA, with a singular focus of protecting taxpayers, which is something many of her predecessors were unable to accomplish,” Murphy said.

» RELATED: David Goldstein Investigates L.A. Housing Authority

(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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