A recent report from the California State Auditor revealed that multiple state agencies mismanaged or failed to account for over $5 million in taxpayer funds, highlighting ongoing oversight challenges during Gov. Gavin Newsom’s (D) administration.
The Employment Development Department (EDD) accounted for the majority of the reported losses, spending at least $4.6 million on service fees for thousands of inactive cell phones over the past five years.
The department has since implemented a system to deactivate lines unused for three months to prevent future waste.
Other agencies were also flagged: the California Air Resources Board overpaid a former employee nearly $200,000 due to errors in tracking leave, the Department of Veterans Affairs neglected to report over $400,000 in taxable housing benefits and state vehicles were reportedly misused at the Department of Alcoholic Beverage Control, KPBS reports.
Critics emphasized the need for accountability.
Susan Shelley, representing the Howard Jarvis Taxpayers Association, said, “It’s frustrating that so many California agencies don’t take these kinds of things seriously… We’d like to see more attention paid, more accountability for even the smallest details when taxpayers’ dollars are involved.”
David Kline of the California Taxpayers Association warned that the mismanagement comes at a critical time, as the state faces a projected $18 billion budget deficit next year.
Lawmakers from both parties acknowledged the severity of the findings.
Democratic Assemblymember John Harabedian called any loss of taxpayer money “inexcusable,” while Democratic Sen. John Laird attributed some issues to rapid program expansions during the COVID-19 pandemic.
Republican Sen. Suzette Valladares stressed that leadership failures have contributed to mismanagement and emphasized the need for closer monitoring of agency spending.
The audit also highlighted systemic high-risk issues.
Delays in financial reporting by the Department of Finance, persistent problems with Medi-Cal eligibility at the Department of Health Care Services and cybersecurity weaknesses at the California Department of Technology were all identified as ongoing concerns, the California Globe reports.
Water infrastructure emerged as another major area of concern, with nearly 50 dams rated as extremely high hazard and below satisfactory condition.
Projections suggest that delivery capabilities for state water projects could decline by up to 23 percent by 2043.
Concerns over financial mismanagement extend beyond official audits.
Political commentator Carl DeMaio accused Newsom of overseeing widespread welfare and unemployment fraud, arguing that the scale of the alleged misconduct dwarfs similar issues in other states, including Minnesota, according to LifeZette.
DeMaio claimed that Newsom’s administration allowed tens of billions of dollars in fraudulent payments, with small businesses now bearing the financial burden through higher payroll taxes.
He further alleged that California’s food stamp program has a fraud rate of 13.4 percent, or roughly three out of every 20 benefits, and criticized national media outlets for largely ignoring the issue.
While the state auditor’s report stops short of directly blaming Newsom, it underscores that these issues occurred under his administration and emphasizes the need for strengthened oversight.
The findings recommend immediate steps to ensure taxpayer funds are properly managed, including tighter controls over spending, improved reporting systems and better monitoring of high-risk agencies.
From inactive EDD cell phones to mismanaged water infrastructure, the report paints a picture of widespread inefficiencies across California state government.
Lawmakers and executive leadership face mounting pressure to implement reforms that safeguard public resources and ensure the effective delivery of critical services to residents.
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