San Antonio failed to properly spend funds approved by Congress to combat the housing crisis while President Barack Obama’s expected nominee to run the Housing and Urban Development Department was mayor of the city, according to a 2012 report from the agency’s inspector general.

The report could be a blemish on the record of San Antonio Mayor Julián Castro, a rising star in the Democratic party whose consideration for a spot in the cabinet is seen as a way to burnish his national political profile.

San Antonio was awarded $8.6 million from HUD in 2008 as part of the national Neighborhood Stabilization Program. The city used the money to buy, refurbish and resell homes left vacant after eviction and to also renovate large apartment complexes in the city that were rented out to lower-income tenants.

The HUD IG audited how the money was being spent from 2009 to 2011 and found that city officials had awarded $2.5 million in renovation contracts without a competitive bidding process. Castro, 39, became mayor in May 2009, a job he continues to hold.