California State Capitol (Photo: Kevin Sanders for California Globe)
CA State Controller: The Most Powerful and Consequential of California’s Constitutional Offices—and the Key to Fixing California
California hemorrhages billions to fraud, waste, and mismanagement
By Herb Morgan, February 10, 2026 5:00 am
California boasts the fourth-largest economy on Earth (GDP exceeding $4.1 trillion, behind only the U.S., China, and Germany), yet the state hemorrhages billions to fraud, waste, and mismanagement. In this broken system, the California State Controller stands as the most powerful and consequential of the constitutional offices—not in succession order, but in sheer ability to wield influence, enact reforms, expose theft, and reshape fiscal policy.
Elected every four years as a constitutional officer (California Constitution, Article 5, Section 11), the Controller operates with rare independence from the Governor and Legislature. No other statewide office combines:
- Direct veto-like control over disbursing every state dollar,
- Sole independent audit authority over spending entities,
- Seats on boards overseeing hundreds of billions in pensions and tax enforcement.
This immensely powerful toolkit gives the Controller unique leverage to root out corruption, demand accountability, and force systemic change—if led by someone with the skill and fortitude to use it. In a state with annual budgets topping $325 billion, this office could be the decisive force to restore the public trust.
Core Powers
- Chief Fiscal Gatekeeper: Controls statewide accounting, approves all claims/payments, administers payroll for state/CSU employees, and disburses funds—no state money moves without his or her say-so.
- Independent Auditor: Sole power to audit any agency/local entity spending state funds, probing waste, fraud, and mismanagement.
- Local Oversight: Sets uniform standards and monitors fiscal health for thousands of counties, cities, and schools.
- Board Influence: Serves on 70+ bodies, including chairing the Franchise Tax Board (tax enforcement), sitting on the Board of Equalization, and boards of CalPERS/CalSTRS (managing ~$750 billion in pensions).
This unique combination—no fragmentation, no subordination—makes the Controller the most powerful and consequential constitutional office for influencing real-world outcomes, from stopping improper payments to steering massive investments.
California’s Financial Crisis: Billions Lost to Fraud and Waste
The state faces chronic high-risk problems: pandemic-era unemployment fraud cost $25 to $55 billion (with EDD overpayments rampant and fraud risks still high). Homelessness programs spent $24 billion (2019-2024) while the homeless population skyrocketed, with audits revealing no reliable metrics, wasted grants, and fraud (e.g., schemes in major cities). Other waste includes millions on unused cellphones at EDD, improper payments across programs, and ignored audit recommendations costing billions more. Agencies stay on the State Auditor’s high-risk list for waste/fraud/abuse for up to 18 years.
This isn’t accidental—it’s enabled by weak oversight. Special interests (primarily labor unions) back pliable candidates who treat the office as ceremonial or a stepping stone, avoiding fights that threaten their access to big campaign donations.
Why Recent Controllers Have Fallen Short—and Audits Reveal Decades of Ignored Deficiencies
Under recent officeholders like Malia Cohen (current) and Betty Yee, results have been weak: delayed reports, persistent FI$Cal accounting flaws, billions in unchecked fraud (e.g., unemployment overpayments), and insufficient follow-through on homelessness/grant waste. Audits uncover issues, but aggressive enforcement rarely follows—letting inefficiencies and special interests thrive.
The California State Auditor’s 2025-601 High-Risk Audit Program report (December 11, 2025) exposes the depth of the problem: several high-risk agencies and issues have lingered for 18+ years (since 2007), including:
- Medi-Cal eligibility determinations at the Department of Health Care Services—ongoing discrepancies in eligibility records have led to billions in questionable payments (e.g., at least $4 billion flagged in prior reports, with problems persisting into 2025 despite some partial fixes).
- Information technology oversight at the California Department of Technology—insufficient progress in overseeing state IT projects, risking costly failures, waste, and security breaches.
Information security (a related statewide issue) has been high-risk since 2013. These long-standing deficiencies—plus others like water infrastructure (since 2013) and financial reporting delays—demonstrate a pattern of chronic inaction, with recommendations ignored for decades. The State Auditor flags these as posing serious risks of waste, fraud, abuse, or mismanagement, yet progress remains inadequate. This systemic failure underscores why the Controller must step up as the independent enforcer—no more letting problems fester while billions vanish.
My Plan for Radical Transparency: The Path to Real Reform
As a candidate running to run the office at its maximum potential, my plan unleashes its full power through radical transparency—making finances visible, traceable, and accountable to every Californian. The best part: the technology already exists and is inexpensive to implement via simple API’s already commercially available.
- Near Real-Time Open Data Portals: A public dashboard will track every expenditure, contract, grant, and audit in near real-time—down to the penny—using existing cloud-based tools and open data standards. This slashes fraud risks by making data instantly searchable and analyzable, with no need for massive new builds. It’s highly preventative.
- Mandatory Daily-Level Transaction Reporting: Using my legal authority as Controller to prescribe uniform accounting and reporting standards, I will mandate direct, automated connections between the Controller’s office and any entity that touches state money (agencies, locals, vendors, grantees). Daily transaction-level data will flow straight to the office—no excuses, no delays. Don’t want to hook up to my provided secure connection? No problem—you don’t get a dime of state funds, even if the Legislature authorized it. This leverages the office’s existing gatekeeper power to enforce compliance.
- Citizen-Powered Connection Tools: Citizens will have access to advanced, user-friendly tools (already available in open-source and commercial platforms) to draw connections between contract/grant awarders and recipients. These include network analysis for familial ties, geographic clusters, donor-based patterns, lobbying links, or any other red flags. Transparency tech makes it easy to spot cronyism, conflicts, or suspicious patterns—empowering taxpayers, journalists, and watchdogs to hold everyone accountable.
- Aggressive Tech Audits: Use AI/big data for automated fraud detection; to flag suspicious patterns and draw connection – bringing it all to the attention of human enforcement officers.
This isn’t optional or expensive—it’s essential, feasible now, and transformative.
Broader Reforms for Fellow Elected Constitutional Officers & Legislators
The Controller’s influence doesn’t stop at agencies—I’ll extend accountability to my fellow elected constitutional officers and legislators. No more lavish foreign trips on the taxpayer dime. For example, Insurance Commissioner Ricardo Lara’s extended 2024 trip to South Africa (Cape Town) drew widespread criticism: what started as a short insurance conference ballooned into a multi-week stay, with taxpayer-funded security costs reportedly exceeding $33,000 (including for the safari portion), luxury hotels, fine dining, and other perks—while California faced wildfires and insurance crises at home. Investigations by ABC7, the Los Angeles Times, and others revealed missing receipts, ethics probes by the Fair Political Practices Commission, and calls for resignation over unclear funding and questionable justifications for such extravagance.
Under my watch, I’ll ban unnecessary lavish overseas travel for elected officers—focusing resources on California’s real needs. All executive office spending (including travel, security, events, and perks) will be routed through the Controller’s office for approval and published in near real-time on public dashboards. No more hidden expenses or sweetheart deals—every dollar will be transparent and accountable.
With bold leadership, the Controller becomes the consequential force California needs: exposing theft, saving billions, and driving reforms in a state too wealthy to be this broken.




