(The Center Square) – A new report released by the California State Auditor’s Office found more than $5.1 million of waste, misuse or improper spending of taxpayer funds.
The report comes just weeks after the Legislative Analyst’s Office released its own report that the state faces an $18 billion shortfall for the 2026-27 budget.
According to the auditor’s report, the Employment Development Department used more than $4.6 million in taxpayer funds to pay for mobile devices that were not being used. Monthly service fees for more than 6,200 mobile devices assigned to the unemployment insurance branch of the department were unused for at least four consecutive months between November 2020 and April 2025, the period investigated in the auditor’s report.
Some of those mobile devices went unused for two or more years and sat in storage during that time, according to the report.
Many of those cell phones were given to employees of the department’s unemployment insurance branch during the COVID-19 pandemic when employees started working remotely. That branch of the department increased the number of call representative staff members by more than 3,800 during the height of the pandemic, according to the report, to help process the increased number of unemployment claims.
Representatives from the Employment Development Department did not respond Thursday to The Center Square’s request for comment.
Also identified in the auditor’s report was wasteful spending by the California Air Resources Board, which paid an employee for extended leave hours for months after his allocation of extended leave hours had been used. The board overpaid the employee for 15 months of extended leave from June 2023 to August 2024, totaling $171,446, according to the report.
Employees from the California Air Resources Board didn’t respond Thursday to The Center Square.
Additional instances of waste or improper spending were detailed in the report, including more than $400,000 in taxable housing benefits by the Yountville Veterans Home, which is owned by the California Department of Veterans Affairs. CalVet, according to the report, did not disclose to the State Controller’s Office taxable fringe benefits that some employees of the Yountville Veterans Home received when the home charged them less than fair market rent from 2023 to 2025. Because of the oversight, the employee-tenants who lived at the home may have unpaid tax liabilities that are significant, according to the report.
Employees with the California Department of Veterans Affairs did not respond Thursday to The Center Square.
Additionally, managers who work for the California Department of Alcoholic Beverage Control were found to have used department-owned vehicles for personal reasons. According to the report, clear rules exist around government employees using government-owned cars. They can only be driven for work-related reasons.
Some managers at the Department of Alcoholic Beverage Control drove the cars home at the end of the day and drove them again the next time they needed to get from home to work, according to the report.
In total, use of the department’s cars for personal reasons cost more than $16,000, the report noted.
Employees from the department did not respond to The Center Square on Thursday.
One last example of improper or wasteful spending occurred at the California Department of Parks and Recreation, which identified two employees who changed or altered receipts they submitted for reimbursement. One of those employees allowed co-workers to make purchases with an employee credit card, called a CAL-Card, which was issued by the department. More than $40,000 was identified by the auditors office in changed or altered receipts that the two employees created. More than $6,500 was spent on one employee’s CAL-Card by other department employees.
Employees from the department and the California State Auditor’s Office were not immediately available before press time on Thursday.
