A report from California's State Auditor has classified eight state agencies as 'high-risk' due to issues of waste, fraud, abuse, or mismanagement, which could cost taxpayers billions. This report has been highlighted by Representative Kevin Kiley, who argues that it underscores systemic failures in governance under Governor Gavin Newsom.

The auditor's findings indicate that four of the eight agencies were designated as high-risk during Newsom's administration, including the Department of Social Services, which has been implicated in substantial payment errors related to food assistance benefits, potentially costing the state $2.5 billion in federal funds. Additionally, the report notes that California has missed six consecutive financial reporting deadlines, jeopardizing its credit rating and federal funding.

Kiley has pointed out that the California Air Resources Board continued to pay an employee a significant salary for 15 months after their departure, exemplifying the alleged mismanagement. The California High-Speed Rail Authority has also faced scrutiny, particularly after the U.S. Department of Transportation withdrew $4 billion in federal funding, which Newsom's administration contested through legal action. However, California has since dropped the lawsuit against the federal government, citing a lack of reliability in federal partnership.

The auditor's report has raised questions about the effectiveness of state governance and the management of public funds, particularly in light of California's ongoing budget deficit, which stands at $18 billion. Critics argue that these issues reflect broader concerns about accountability and transparency in state operations, especially as the state prepares for future political contests, including the 2028 presidential election.