The District's auditor says the city's Department of Employment Services missed out on up to $15 million in federal funds by failing to reach performance goals.

D.C. Auditor Yolanda Branche identified eight separate findings, including instances of failed management and inadequate record-keeping.

The audit also found that the DC Workforce Investment Council, created in 1999 to advise the mayor, did not hold a single meeting during fiscal year 2011. Between February 2009 and September 2011, that council did not have an executive director.

Department of Employment Services Director Lisa Mallory on Monday laid much of the blame at the feet of then-Mayor Adrian Fenty's administration, which ended in January 2011. The audit examined the department's activities between Oct. 1, 2008 and Sept. 30, 2011.

"I'm not sure how they got away with not having [a council]," Mallory told The Washington Examiner. "I don't know how it was not active."

Mallory, who took over as the head of the Department of Employment Services in the spring of 2011, said the department has already resolved many of the issues raised by the auditor's report and said she expected other problems would be addressed by the end of next month.

"It's because of these very issues that I'm here in this agency," Mallory said. "We were failing in many areas of performance."

Although Mallory mostly agreed with the report's conclusions, she objected to the report's first finding, which faulted the department for failing to secure federal incentive grants, worth between $750,000 and $3 million a year. The department did not qualify for the grant between 2007 and 2011, meaning that altogether, the department missed out on up to $15 million.

But, Mallory said it's not fair to expect the department to obtain the federal incentive funds.

"If you exceed your performance [goals], you get this reward," she said. "That's not something you would assume you're going to get."

The auditor's report said the department failed to reach necessary performance targets, developed by the U.S. Department of Labor and the District, to receive the incentive grants. The report recommended the District "develop a corrective action plan" so that it meets the target scores in the future.

Councilman Marion Barry, who oversees the department, said he would follow up on the auditor's findings.

"We're going to go point by point and ask the department to submit written testimony," he said.