California’s Auditor Proves State Government is Too BIG and Unaccountable

“Waste, Improper Payments, Misuse of State Resources, and Other Improper Governmental Activities,” is the subtitle of the California State Auditor’s latest “Investigations of Improper Activities by State Agencies and Employees.”

There are some real doozies.

I have for years recommended cutting the size of California’s state government in half – except for the State Auditor’s office. It needs more funding, more employees and the autonomy to be California’s own DOGE – Department of Government Efficiency.

“This report details five substantiated allegations involving several state agencies. Our investigations found waste, improper payments, misuse of state resources, and other improper governmental activities. Our findings include more than $5 million that state agencies have either wasted, misused, or failed to report,” the Auditor explains.

“The Employment Development Department wasted more than $4.6 million in state funds when it paid for monthly service fees on more than 6,200 mobile devices that were not used for four or more consecutive months from November 2020 through April 2025. In some cases, it paid the service fees for mobile devices that remained unused for more than four years,” the latest Improper Governmental Activities audit reports.

This is the same agency which allowed rampant and large scale Covid pandemic unemployment assistance fraud, exposed in November 2020 – upwards of $31-$54 billion dollars in unemployment claims was fraudulently sent to prison inmates in California’s county jails, and state and federal prisons, out of state, and even out of the country, while legitimate claimants were been stiffed for months, or received late payments. Death row inmates, life and life without possibility of parole inmates, rapists, child molesters, human traffickers, and other violent criminals received California unemployment benefits.

The State auditor continues: “Agency management stated that it was unaware that the agency was paying for so many unused devices, but it had access to nonusage reports and invoices that should have identified the problem much sooner. Another case involves an agency that continued to pay an employee who was on extended leave and preparing for retirement for an additional 15 months beyond when his leave hours were fully depleted. The agency did not accurately track the leave hours the employee used and overpaid him more than $170,000. In another example, an agency did not report approximately $400,000 in taxable fringe housing benefits received by employees who rented state-owned housing at below market value. As a result, the affected employees may have significant unpaid tax liabilities.”

Here are a few more examples of Improper Governmental Activities by state employees:

The California Air Resources Board did not accurately track an employee’s leave hours, continuing to pay the employee for many months after he had fully depleted his leave hours and was no longer working. It consequently overpaid the employee by $171,446 for nearly 15 months from June 2023 through August 2024.

The Yountville Veterans Home operated by the California Department of Veterans Affairs did not report more than $400,000 in taxable housing benefits for employees who rented state-owned housing on the facility grounds from 2023 through 2025. The affected employee-tenants may face significant unpaid tax liabilities.

The Auditor reported, “We determined that since 2023, CalVet Human Resources has not reported to the SCO $400,538 in taxable fringe housing benefits because Yountville has not informed CalVet personnel of these housing benefits.”

“Its Employee-Tenants Have Earned More Than $400,000 in Taxable Fringe Housing Benefits That Yountville Has Not Reported to the SCO Through CalVet Human Resources.”

A manager at the Department of Alcoholic Beverage Control misused state vehicles by using them to commute and for other personal business, such as taking a child to and from school. This manager also stored the vehicles at home without the required storage permit and did not accurately document trips in travel logs as required. We found that the supervisor condoned this manager’s and other managers’ commuting in state vehicles even when no work-related purpose existed for taking vehicles home.

The State Auditor also reported that The Manager’s Supervisor Condoned the Misuse of State Vehicles by Several Managers Under the Supervisor’s Regular Supervision.

The estimated cost of the misuse of a state vehicle: $16,217.53

Two employees at the Department of Parks and Recreation (State Parks) submitted altered receipts to support purchases they made with a state purchasing card. They also failed to record some purchases into State Parks’ inventory and did not follow the proper separation of duties during the purchasing process as state policy requires. One of the employees also allowed other employees to use his state purchasing card.

Even worse, the auditor reported, “A CAL-Card Holder Allowed Other State Parks Employees to Use His CAL-Card to Make Purchases.”

The auditor concludes:

“In general, the evidence we collected for this investigation indicates an attitude of disregard for controls designed to protect the State and its assets. This is particularly concerning, given the potentially high-value items that Employees A and B purchased that could potentially be adapted for personal use and were not in State Parks’ inventory list. Given our findings, a reasonable risk exists that employees will misuse or waste state resources or even that state-owned assets may become lost or stolen.”

Other. People’s. Money.

While the Auditor recommends corrections, and then requires the state agencies to follow up within 60 days, that’s about as far as anything gets.

As we said the last time we covered the State Auditor’s report on Waste, Improper Payments, Misuse of State Resources, and Other Improper Governmental Activities, “Gross incompetence, anyone? Who cares?”

While these examples of corruption or incompetence, or corruption and incompetence are egregious, we can be grateful that there are good and ethical state employees who became whistleblowers and worked with the California State Auditor to expose and correct these situations.

And, we are equally thankful for the California State Auditor.

These agencies wouldn’t survive for one week in the private sector, which should make taxpayers livid.

Last week, Gubernatorial Candidate Steve Hilton launched CAL DOGE, “to expose corruption, fraud, waste, and abuse in California government and to implement long-overdue reforms to cut bureaucracy, eliminate duplication, and reduce the cost and burden of government.”

As Hilton explains, “It operates as part of a coordinated reform effort led by Steve Hilton alongside Herb Morgan, Gloria Romero, and Michael Gates, all of whom joined the launch to signal a unified push for accountability across state offices.”

Hilton explains that CAL DOGE’s mission goes beyond uncovering fraud, waste and abuse. “A key focus will be government reform, including identifying every opportunity to reduce or eliminate the size and scope of state agencies, end duplication across state, regional, county, and local governments, and roll back bureaucratic and regulatory structures that drive up costs for families and businesses.”

The State Auditor’s office is equipped to do all of this, and with a new governor and actual enforcement, would be a complete DOGE.