Last month, as required by law, State Auditor Grant Parks published an annual report on state programs and agencies that his office deems to be at “high risk” of costly inefficiency, waste or fraud.
The report reiterated concerns about seven situations, two of which have been on the list since 2007, including the bureaucracy’s chronic inability to successfully employ information technology — embarrassing for a state that is the global center for digital tools.
Parks has added a new program in his latest overview, the Department of Social Service’s food aid for poor families, once called food stamps but now known as CalFresh.
The federal government primarily finances supplemental food benefits, but the state’s share is determined, in part, by its management, as indicated by its rate of error when determining people’s eligibility.
President Donald Trump’s One Big Beautiful Bill tightens the error rate thresholds. Thus, Parks notes, California’s 11% error rate, if not improved, could require the state to “spend about $2 billion annually to maintain CalFresh benefits.”
The most disturbing item on Parks’ list is the continuing inability of the Employment Development Department to effectively manage unemployment insurance benefits, which first came to light during the COVID-19 pandemic. Billions of dollars in fraudulent benefit claims were approved, almost all of which came in a federally financed expansion of the program.
By happenstance, the high risk report was released just as a scandal was erupting in Minnesota over widespread fraud in a program meant to keep children fed during the pandemic.
Dozens of people, mostly in Minnesota’s substantial Somali population, have been charged with looting the program by setting up companies that billed the state for supplying food that was never delivered.
Minnesota Gov. Tim Walz, whom Kamala Harris chose as her running mate in her campaign for president in 2024, felt the political fallout from the scandal — generated mostly in right-leaning media outlets — and this week dropped his bid for re-election.
Meanwhile, those same outlets — blogs, podcasts and YouTube videos — have been making an accusatory connection between the Minnesota scandal and the Parks report, suggesting the report proves the same kind of fraud was even more rampant in California and laying the blame on Gov. Gavin Newsom, who’s a likely 2028 candidate for president.
This week, Steve Hilton, a Republican candidate for California governor, and Herb Morgan, a Republican running for state controller, cited the Parks report, their own research and tips from whistleblowers in a broad assertion, dubbed “CALIFRAUDIA,” that “California’s exposure to fraud, waste, and abuse across major state programs is likely to reach $250 billion,” adding that it “underscores the urgent need for formal investigation and audit, as a matter of basic fiscal responsibility.”
However, the allegations of widespread fraud and mismanagement during Newsom’s governorship is not confined to those on the starboard side of the political balance beam.
Ro Khanna, a progressive Democratic member of Congress from Silicon Valley who could be a rival to Newsom in the 2028 presidential sweepstakes, issued a similar blast in a posting on X, albeit with a smaller $72 billion pricetag, citing Parks’ report and other data.
Khanna told Politico, “I don’t know what the specific number is” of dollars lost to fraud or mismanagement. “It’s not particular to any person,” Khanna said. “It’s making government more effective. Tackling the mismanagement and waste and some fraud will build more credibility for asking for higher taxes.”
Newsom’s staff responded by accusing Khanna of making a “MAGA made-up claim.”
There’s a reason why veterans of political wars refer to election years as the “silly season,” when political figures seeking media attention are prone to convert anthills of fact into mountains of rhetorical fantasy.
Dan Walters is a CalMatters columnist.
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