An audit by the Office of the Special Inspector General for the Troubled Asset Relief Program (TARP) found the state Housing Finance Agency had misused federal funds. Through its Hardest Hit Fund, the TARP program issued funds to states worst affected by the subprime mortgage crisis, to help people avoid foreclosure. Funds were to be spent on “necessary expenses,” but the report identified over $3 million in “wasteful spending” across the country. The Agency was faulted for misusing $107,000; and while its spending was not as profligate as that of some states, the report faulted its business culture for using TARP funds like an ATM card. Listed abusive purchases included dinners, gift cards, party favors, crew shirts with the agency’s insignia, gym memberships, $5000 cash bonuses, and litigation. The Agency’s executive director, Scott Farmer, disputes the findings, says the funds were miscategorized, not misused, and assures that amounts are already being repaid.