LOMPOC, Calif. -

The City of Lompoc is defending itself amid criticism from the Santa Barbara County Grand Jury that its not doing enough to protect taxpayer money.

The scrutiny comes in the aftermath of the multi-million dollar collapse of a local non-profit group that the city supported.

The City of Lompoc was among several public and private entities on the losing end of the financial meltdown of the non-profit Lompoc Housing and Community Development Corporation.

The LHCDC developed or owned affordable housing units in the city as well as other real estate investments like the historic Lompoc Theater.

The demise of the LHCDC came amid the the collapse of the local real estate market.

"The economic collapse of 2008 started a chain reaction", Lompoc Mayor John Linn says, "they didn't react to it quick enough and it took them down."

In 2012 the Santa Barbara County Grand Jury called on the City of Lompoc to require all non-profits receiving loans and grants from the City in excess of $50,000 to file an annual audit prepared by an independent auditor.

In a recent follow-up letter,  the Grand Jury said the City of Lompoc has failed to live up to a pledge to adopt a non-profit audit policy to protect taxpayer funds.

"We've been doing it all along", says Lompoc Mayor John Linn, "obviously we've had some other challenges because its not the only thing we're working on, but we also chose to expand it to cover more areas so it's a better document, brought a lot of comment in from the community and the non-profits so we didn't create something that was burdensome to them."

Mayor Linn says the new non-profit audit ordinance will include organizations that also receive state and federal funding.

"I think its very unlikely that something like that (LHCDC) will come along again", Mayor Linn, "because there is no redevelopment money for housing, and this is what the council talked about, there's no more CDBG money for housing, what we're liable to see in the future would be funds for another purpose outside of housing and that's why we chose to make this a much more broad ordinance."

Mayor Linn says the city's non-profit audit ordinance could be adopted as early as next month.