The uncomfortable part isn’t who’s at fault, but what kind of system produces this outcome reliably.
California now governs with a tolerance for failure that would be unacceptable in any private system of comparable size. The State Auditor’s high-risk list reads less like a warning and more like an inventory of how modern administration functions when scale outpaces control. Programs continue, money moves, and accountability follows later — if at all.
The updated State High-Risk Audit Program added the Department of Social Services to a list that already included familiar problem children: the Employment Development Department, Medi-Cal eligibility systems, major IT project oversight, information security, late financial reporting, water infrastructure, and the handling of massive inflows of federal funds. The immediate hook was CalFresh. Under changes to federal cost-sharing rules, California’s persistent payment error rate could translate into as much as $2.5 billion in additional state liability by fiscal year 2028. Not fraud, necessarily. Just arithmetic catching up to administration.
That’s the part most people glide past, because arithmetic lacks villains. But arithmetic is how systems tell the truth when language has learned to lie.
The phrase “high risk” sounds accusatory, which is why it is immediately absorbed into partisan reflex. Republicans treat it as proof of corruption. Democrats dismiss it as bureaucratic noise or weaponized oversight. Both reactions miss the more unsettling implication: the state is not failing in isolated programs. It is failing consistently, across domains that share little except scale, complexity, and institutional insulation.
When everything is high risk, nothing is urgent.
This is where California’s governing culture quietly inverts itself. Instead of treating dysfunction as a signal to stop, simplify, or retrench, the system treats dysfunction as background radiation. Programs expand despite broken controls. Oversight produces new process layers rather than constraint. The state grows in ambition while losing the ability to describe, in plain terms and on reasonable timelines, what its programs are actually doing.
The Auditor’s report reads less like an indictment than a wiring diagram. It doesn’t allege malice. It doesn’t speculate about intent. It documents repeated breakdowns in control, eligibility determination, financial reporting, project management, and security — the unglamorous machinery that determines whether laws translate into outcomes. When those failures stack up across unrelated agencies, the question stops being who messed up and becomes what kind of organism this government now is.
That question is politically inconvenient because it points away from personalities and toward structure.
Rep. Kevin Kiley seized on the report to argue that eight major areas of California governance are now formally designated high risk, many of them deteriorating on the current administration’s watch. His rhetoric is sharper and his conclusions political, but he is working from the same underlying findings. The disagreement is not over the data. It is over what the data implies.
Other coverage focused on improper spending and misuse, with lawmakers calling the documented figures “the tip of the iceberg” and urging deeper audits into homelessness spending, high-speed rail, and other billion-dollar programs. That instinct is predictable. Once a state admits it cannot reliably account for what it already runs, suspicion naturally spreads to everything else it touches.
At that point, intent becomes almost irrelevant. Whether money is lost to fraud or incompetence produces the same external effect: resources leave, accountability arrives late, and the public is asked to trust a process that has not earned that trust. Over time, citizens stop distinguishing between corruption and mismanagement. Both feel like indifference wearing a different badge.
California’s real vulnerability is not that it is uniquely dishonest. It is that it has become comfortable governing through context rather than clarity. Inside the system, failure is explained as complexity. Outside the system, it feels like evasion. That gap corrodes legitimacy. People do not need perfection from government, but they do need legibility — a basic sense that someone knows where the money went and whether the program worked.
What makes the high-risk list unsettling is not the dollar figure attached to any single line item. It is the realization that “high risk” has become a stable operating category rather than a temporary warning. A state that budgets around error, rather than eliminating it, treats dysfunction as an input.
That is not a scandal.
It is a confession.
Sources
- California State Auditor — “2025-601 State High-Risk Audit Program: The California State Auditor’s Updated Assessment of Issues and Agencies That Pose a High Risk to the State” (2025)
- KABC-AM — “State Auditor Adds Gov. Newsom’s Administration, 8 State Agencies to High-Risk List” (2025)
- Courthouse News Service — “California auditor finds millions of dollars in waste, misuse in state departments” (2025)
- Congressional Record — “House Section: Remarks by Rep. Kevin Kiley referencing California State Auditor high-risk report” (2025)