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(CNN) -- A $54.5 million program meant to cut gang violence in Chicago left out some of the most violent communities and failed to account for how the money was spent, according to a critical audit report released this week.
The Neighborhood Recovery Initiative, or NRI, which was highly touted by Illinois Gov. Pat Quinn, suffered from what the state auditor general's report calls "pervasive deficiencies" in "planning, implementation and management" of the program.
The NRI was supposed to be overseen by the Illinois Violence Prevention Authority, or IVPA. The report, which was publicly released Tuesday, criticized the state agency for poor oversight and said the program was rolled out too soon.
"We noted a significant number of internal control weaknesses and instances of noncompliance related to grant awarding, administration and monitoring including missing documentation, incomplete and untimely application review or approvals ... untimely and incomplete monitoring reports lacking approval dates, lack of site visits, unapproved budget reallocations and untimely recovery of unspent grant funds," the audit report said.
Illinois set up the NRI program with 23 lead agencies, which contracted with smaller community groups to provide services. As of January, the audit had found $2 million in unspent funds that the state could not explain.
Examining a sample of the agencies participating in the program, state auditors "questioned 40 percent of the NRI expenses," the report said. In many cases, there was missing documentation and receipts that did not match the amounts submitted by the state for reimbursement.
A CNN investigation in December 2012 found that the NRI program paid at-risk teens to hand out fliers promoting inner peace, take field trips to museums, march in a parade with the governor and even attend a yoga class to learn how to handle stress.
Critics said the program was a way for Quinn to boost his gubernatorial race in 2010 since he announced the anti-violence initiative just one month before the election. Two years after the program was implemented, there was a 20% increase in murders in Chicago. The number of murders went down last year.
Supporters said the program kept teens off the streets of Chicago's most dangerous neighborhoods. But the audit found that the communities selected by the program "were not all the most violent in terms of total crime in the Chicago area."
Of the 20 most violent neighborhoods in Chicago, seven were excluded from the program, the report found.
In an e-mail to CNN, a spokesman for the Illinois governor wrote that the issues raised in the audit were resolved more than a year ago.
"When the governor's office became aware of the issues with IVPA in 2012, the administration acted quickly and, working with the Attorney General's Office and the General Assembly, passed legislation to have ICJIA (the Illinois Criminal Justice Information Authority) take over the authority," the e-mail said.
"The ICJIA has taken major steps to ensure responsible management of this critical violence prevention program and this issue has since been resolved. We are committed to providing effective work and educational opportunities for our youth to help prevent violence in communities across Illinois."
But that isn't enough for some Republican lawmakers. They have asked for further review of the NRI program as well as freezing any unspent money, which they said could be as much as $33 million.
"I've spent 32 years in law enforcement, and the information I'm looking at is the kind of information indictments are made of," said Illinois state Sen. Tim Bivins, R-Dixon. "This warrants, in my estimation, a criminal investigation."
Calling the NRI program a "shameful waste of taxpayers' dollars," state Sen. Matt Murphy said there was "no documentation, no monitoring, no attempt to recover funds. We need to get this information to the appropriate law enforcement authorities and freeze the spending."
Most of the funding for the program was from the governor's discretionary fund, with the remainder from general reserve funds.
Quinn told CNN in a 2012 interview that he had to do something because of the crime rate.
"It does work when you intervene when you keep people on a positive path, doing good things for their community instead of getting involved with gangbangers and drug dealers that afflict many communities, and use violence to kill children in particular," Quinn said.