We completed a capacity review of the County of Riverside’s (County) Neighborhood Stabilization Program (Program). We performed the audit because Housing and Economic Recovery Act of 2008 reviews are part of the Office of the Inspector General’s annual audit plan and the program was identified as high risk. In addition, the County was awarded significant Program funds of $48.6 million. Our objective was to determine whether the County had sufficient capacity and the necessary controls to manage and administer the Program. We found the County generally had sufficient capacity to administer its allocation of Program funds. The County has applied for additional funding under the American Recovery and Reinvestment Act of 2009 to continue its Program activities and based on our review, its procedures and controls should be adequate to administer the continuation of the program. However, the County could improve internal controls for Program activities by developing separate, specific, and well-documented policies and procedures for acquisition, rehabilitation, and resale/rental activities. We recommend that the Director of the Los Angeles Office of Community Planning and Development require the County to create and maintain policies and procedures specific to Program acquisition activities.