Gov. Mark Dayton on Monday said that a Star Tribune report of a nonprofit using state funds to subsidize cruises, a director's car lease and spa treatments was very concerning and alarming.

"I was personally really appalled," Dayton said. "I take it very seriously."

The DFL governor met with his Human Services Commissioner Lucinda Jesson and others about Community Action on Monday to further delve into its spending. As a result, two state agencies, Human Services and Commerce will immediately develop an action plan to deal with Community Action.

The Star Tribune reported on Sunday that Community Action, which drew board members from high-profile Democratic ranks, that a Human Services Department audit found " the organization's longtime chief executive, Bill Davis, misspent hundreds of thousands of dollars from 2011 to 2013."

Jesson said her department saw red flags in the nonprofit's administrative spending and began looking into it months ago.

"I think we've been taking this very seriously. A step at a time," she said. Community Action was given an opportunity to respond by September 1. Those responses did not assuage the worry.

"What we have seen so far has not alleviated the serious concerns we had," she said.

Jesson said the department looks into state subsidized nonprofit spending and results and audits those that do not comply with best practices.

Jesson said that Dayton's budget two years ago included more funding for Human Services auditing.

Monday morning, Dayton did not say definitively whether Community Action would receive any more state funding.

"Give us an opportunity here to converse among ourselves," and the city of Minneapolis, he said. Dayton said he only became aware of the spending when the Star Tribune reported it on Sunday.

Community Action, which is supposed to help low-income city residents, included state Sen. Jeff Hayden, U.S. Rep. Keith Ellison, Minneapolis City Council President Barbara Johnson and City Council Member Robert Lilligren on its board. The Star Tribune reported that those elected officials sent others to board meetings in their stead.

Dayton said the party affiliation of the board members -- they are Democrats -- did not change his feelings about the nonprofit's spending.

"I would be very alarmed if there were Democrats involved, I would very alarmed if there were not Democrats involved," Dayton said. "The fact that there were people who were placed in positions of responsibility who allegedly...spent public funds inappropriately, particularly funds that were intended to help people get out of poverty, is very disturbing to me."