California, long hailed by progressives as a model for the rest of the nation, is unraveling under the weight of its own corruption, mismanagement, and liberal excess. A bombshell 92-page audit from the state’s nonpartisan auditor has just exposed an astonishing scale of government dysfunction under Democrat Gavin Newsom’s administration, prompting sharp rebukes from watchdogs, lawmakers, and everyday Californians demanding accountability.
The report, first brought to public attention by Newsmax, reveals a staggering $76.5 billion in potentially fraudulent or wasted spending by the Golden State’s government.
President Donald Trump responded swiftly on Truth Social, calling the findings “INSANE,” and he’s right. This is not a case of clerical errors or bureaucratic hiccups. It is endemic, systemic, and deliberate negligence that has cost taxpayers billions.
California Representative Kevin Kiley didn’t mince words during a Newsmax interview. “This means the agencies are rife with fraud, abuse, and mismanagement,” Kiley said, comparing the damage under Newsom to recent fraud scandals in Minnesota and declaring California’s situation “worse by far.”
The audit placed eight major state agencies on a high-risk list, underscoring their vulnerability to fraud and inefficiency. This includes the Department of Social Services, the Employment Development Department, and various entities responsible for financial reporting and infrastructure management .
Of particular concern is the mismanagement of CalFresh, the state’s food assistance program. With an error rate nearing 11% in federal fiscal year 2024, California could be on the hook for up to $2.5 billion in extra costs if corrective measures are not taken by 2028 .
Despite state officials blaming federal law changes for the crisis, the audit clearly identified persistent failures in administration. This is not a new problem. It is a long-festering sore that Newsom and his bureaucrats have allowed to grow while deflecting blame at every turn.
Fraud within the state’s unemployment insurance program remains rampant. Despite nationwide outrage over pandemic-era payouts, California continues to bleed taxpayer funds, with $1.5 billion in improper unemployment payments across just two years, 2023 and 2024 .
Worse still, the Employment Development Department was caught paying $4.6 million in service fees for thousands of unused mobile devices. Meanwhile, another agency overpaid an employee for 15 months, racking up $170,000 in improper compensation .
Infrastructure, often touted by Newsom as a cornerstone of California’s future, is now a case study in waste. The state’s high-speed rail project, once hailed as revolutionary, has consumed $18 billion over 17 years without completing a single section of track .
Kiley blasted the rail boondoggle, calling it “a monument to failed governance,” and he’s not wrong. It stands as a visible, costly reminder of progressive overreach and incompetence masquerading as innovation .
Homelessness spending is another black hole. California has allocated $24 billion to address homelessness, yet the problem has only worsened. According to Kiley, the state “just lost track of that money,” a shocking admission that proves the absence of even basic financial oversight .
The state’s 911 emergency system is another failure. Funded by cellphone surcharges and consuming $650 million, the system was ultimately scrapped for being nonfunctional. “Completely wasted the money because the technology doesn’t work,” Kiley remarked in disbelief .
Equally alarming are the cybersecurity vulnerabilities that plague nearly every major state department. The auditor warned that most agencies fail to meet even the minimum baseline standards, despite California’s self-proclaimed status as a global tech leader.
The state’s financial reporting is a mess. Delays in submitting audited statements threaten federal funding and destroy public trust. The auditor specifically cited the FI$Cal accounting system as a source of these delays and inefficiencies.
Water infrastructure is also in dire condition. The audit identified 49 dams rated below “satisfactory” and labeled as “extremely high” hazard risks, meaning their failure could result in catastrophic loss of life and property damage.
This damning report comes on the heels of repeated calls by lawmakers for oversight and reform, all of which Newsom’s administration has routinely ignored. Instead of solutions, Californians get slogans and press conferences.
The fraud and waste are not accidental. They are the predictable outcomes of liberal governance that prioritizes ideology over effectiveness, equity over accountability, and narratives over numbers.
California’s descent into financial chaos is a warning to the nation. The progressive model is collapsing under its own weight, riddled with inefficiency, corruption, and a blatant disregard for taxpayer responsibility.
Rep. Kiley rightly noted that California’s problems did not emerge overnight. They are the result of years of failed leadership and an entrenched bureaucracy more interested in protecting itself than serving the public.
