BILLINGS, Mont. (AP) — The state Auditor's Office is undertaking an internal audit after learning a former employee was charged with defrauding a federally funded low-incoming housing organization in Billings.

Deputy Director Adam Schafer tells The Billings Gazette ( ) it is also hiring a third party to review its records after learning former employee Christa Ann McClure faces federal fraud and theft charges from her time as executive director of Housing Montana in Billings.

McClure was hired by the auditor's office in October 2010 to manage three federal grants totaling $2.15 million to implement health care reform. Schafer says she left in April 2013 when the grants ended because the state decided not to create its own insurance exchange under the Affordable Care Act.

Schafer says the agency doesn't expect to find anything because it has strong checks and controls in place.