A recent report from California’s nonpartisan State Auditor, released in December 2025, has placed eight state agencies on a “high-risk” list due to vulnerabilities to waste, fraud, abuse, and mismanagement. This designation, which has doubled under Governor Gavin Newsom’s administration, highlights ongoing issues across programs like unemployment insurance (via the Employment Development Department), food assistance (CalFresh through the Department of Social Services), and financial reporting by the Department of Finance. The auditor warned that if improper payments in CalFresh are not reduced, the state could face an additional $2.5 billion annual cost to maintain federal benefits under new laws. Critics, including Rep. Kevin Kiley (R-CA), have pointed to these findings as evidence of systemic problems, with Kiley calling California the “fraud capital of America” and citing examples like estimated $32 billion in unemployment fraud during the pandemic.

Separate audits and reports have spotlighted massive spending with questionable outcomes in key areas. For homelessness, a 2024 state audit found California spent $24 billion over five years (2018–2023) on more than 30 programs, but lacked consistent tracking of effectiveness, contributing to persistent high rates of unsheltered individuals. The high-speed rail project, ongoing for over a decade, has consumed around $18 billion without completing operable track sections, facing delays, cost overruns, and recent threats to federal funding. Additionally, pandemic-era unemployment fraud estimates range from $20 billion (state figures) to over $32 billion (expert analyses), while critics aggregate these and other issues—such as infrastructure delays and a scrapped $650 million 911 upgrade component—to claim totals exceeding $76 billion in fraudulent or wasted funds.

While the $76.5 billion figure appears to be an aggregation of criticized spending across multiple programs rather than a single audited fraud amount, the State Auditor’s high-risk designations underscore real concerns about accountability. Proponents of the programs argue that rapid pandemic relief and ambitious infrastructure goals inherently carry risks, and efforts are underway to improve oversight and recover funds. However, the reports have fueled bipartisan calls for reforms to prevent further losses and ensure taxpayer dollars achieve intended results.