SAN DIEGO -- The city of San Diego failed to properly administer grants from the U.S. Department of Housing and Urban Development, according to an audit released Monday.

The audit requests the city pay back more than $1.8 million in Community Development Block Grant funds, and document or reimburse an additional $11 million in "unsupported costs."

The program is intended to benefit low- and moderate-income families and eliminate neighborhood blight.

The audit follows a complaint alleging that the city and its redevelopment agency were violating federal rules and regulations, according to the Department of Housing and Urban Development.

San Diego receives about $15 million in CDBG grants a year. A year ago, the City Council voted to overhaul how the pool of federal block grants is distributed. Following an earlier audit, HUD officials expressed concern over how the city handles the CDBG funds.

According to a statement from Mayor Jerry Sanders' office, many of the issues identified in the most recent audit were addressed when the city revamped its CDBG fund distribution procedures.

The projects surveyed in the audit were initiated under prior administrations, according to Sanders.

"This audit report documents problems in the administration of these funds that we discovered when the mayor took office and that he immediately took steps to resolve," said Jay Goldstone, the city's chief operating officer.

"The CDBG overhaul we started early in this administration is just one aspect of our ongoing reform of city management practices, which everyone is aware were sorely lacking when the mayor took office.

"All CDBG funds were used to aid in community development as the program intended, but it's critical that we also have documentation to support our achievements beyond the obvious physical improvements we made to blighted, underserved areas of our city."

According to Sanders' office, the city will work with HUD to determine the ultimate outcome of the audit findings. It's up to HUD to determine any repayment amounts and schedules.

Sanders plans to present the City Council with additional CDBG changes this year, according to Sanders' office.