We audited the Naomi Gardens housing project (project) in response to a congressional request from Representative David Dreier of the 26th District of California. The request to review the project was based on a constituent’s complaint that alleged the possible misuse of U.S. Department of Housing and Urban Development (HUD) funds, including the award of work to the family members of project employees without seeking proposals from other companies. The constituent later added concerns over waiting list violations and families occupying multiple units. Our objective was to determine whether the project was operated in accordance with HUD rules and regulations; specifically, whether HUD funds were misused as alleged. We found that the project’s expenses were properly authorized and necessary for its operation; however, the project did not adequately support that it conducted procurement activities in accordance with HUD requirements. As a result, it did not ensure that it paid at least $170,916 to contractors and suppliers at a reasonable cost and in accordance with HUD rules and regulations. The project also did not properly maintain and administer its waiting list. It skipped over eligible applicants on its waiting list to accommodate other applicants without proper justification, allowed applicants to remain on the waiting list longer than HUD rules and regulations allowed, and improperly allowed household member to transfer to additional units. Therefore, the project provided no assurance that tenants were properly admitted to the project in a fair and equitable manner. Therefore, we recommend that the Director of HUD’s Los Angeles Office of Multifamily Housing, require the project to (1) implement additional procurement procedures and controls to ensure compliance with HUD handbook requirements, (2) follow and enforce its tenant selection plan and submit documentation to HUD showing that future waiting list pulls have been conducted according to its tenant selection plan, (3) maintain a transfer waiting list for current tenants, and (4) amend the tenant selection plan to clarify and address the transfer of household members into additional units.