The U.S. Office of the Inspector General is seeking records that show how Veterans First, a housing charity, spent $530,808 in federal funds and other donations, The Orange County Register reports.
The audit came about after a hotline complaint alleged that the nonprofit's employees were directed to prepare false accounting documents. The Inspector General also said the group must also repay shelter residents who were overcharged $15,435.
The nonprofits's president, Deanne Tate, called the audit unfair and blamed the group's problems on bad bookkeepers.
The group is one of the city’s largest nonprofits and among only a few big local organizations that hasn’t filed its annual tax disclosures in the past two years. Groups that don't file tax returns for three consecutive years lose their tax-exempt status.