EXCLUSIVE: California Lawmakers Request State Controller’s Audit Records of Failed and Corrupt Projects

WHERE ARE THE AUDITS?

Lawmakers Put California Controller Malia Cohen on a 14-Day Clock

By Chris Bish – The Bish Report

Eight Republican Assembly members are demanding that State Controller Malia Cohen produce records showing how her office audits state spending before taxpayer money leaves the Treasury. Assemblyman Carl DeMaio summed it up in four words: “WHERE ARE THE AUDITS?” Republican Controller candidate Herb Morgan followed with: “Follow the money. Verify the payment. Make the receipts public.” The questions come as California pours billions into projects whose costs have exploded, while the state still lacks a reliable final accounting of its COVID-era unemployment debacle.

The September 14 letter, signed by Assembly Republican Leader Alexandra Macedo and Assembly members Carl DeMaio, Stan Ellis, Tri Ta, Kate Sanchez, David Tangipa, Natasha Johnson and Leticia Castillo, gives Cohen 14 days to respond.

The lawmakers want the number of claims California paid during fiscal years 2023-24 through 2025-26, how many received a field or detailed audit, and Controller audit records involving EDD, DMV, homelessness programs, Medi-Cal payments and nonprofit recipients of state funds. They are also asking whether the Controller allows an agency, vendor or grantee’s own attestation to substitute for additional Controller review.

California’s Controller does conduct audits. Cohen’s public audit page lists dozens involving payroll, state agencies and grant programs. But the controversy is over which major programs she chose to audit – and which she did not.

The Capitol Annex: $543 Million Became $1.1 Billion

The new Capitol Annex will house California’s 120 legislators, the Governor and Lieutenant Governor and their staffs next to the historic State Capitol.

A 2018 proposal estimated replacement of the Annex, relocated parking and a visitor center at approximately $543 million. The project’s current allocation is $1.1 billion. As of July 2026, the Legislature reports $668 million already spent – more than the entire original estimate – with completion expected in fall 2027.

Project officials point to nearly four years of litigation, pandemic-era construction inflation and supply-chain disruptions, delays and additional security requirements following January 6 as contributors to the increase.

$543 million became $1.1 billion.

So what financial scrutiny occurred as those hundreds of millions of dollars were paid?

High-Speed Rail: About $33 Billion Became $126 Billion

California’s High-Speed Rail project presents an even bigger question.

The 2008 plan put the San Francisco-to-Los Angeles/Anaheim backbone at roughly $33 billion. The Authority’s 2026 Business Plan now estimates the complete Phase 1 system at $126.08 billion. The figures are expressed in different-year dollars and therefore are not a perfect inflation-adjusted comparison, but the increase in projected cost is enormous.

Meanwhile, the Authority reports $15.041 billion in capital expenditures through February 2026.

This is not simply outside criticism. The California State Auditor concluded years ago that flawed decision-making and poor contract management at the Authority had contributed to billions in cost overruns and delays.

And yet the Controller’s current public State Agency Audits page lists its High-Speed Rail-specific audit from March 2020, focused on travel reimbursements.

That does not mean other financial controls or audits do not exist. It does make the lawmakers’ request straightforward: show what the Controller reviewed.

Employment Development Department (EDD): California Still Doesn’t Have a Clean COVID Fraud Number

Then there is EDD.

During the pandemic, EDD said approximately $20 billion in unemployment benefits were likely fraudulent. Later, EDD developed estimates reaching $55 billion in ineligible payments – a broader category than fraud – but the California State Auditor found that estimate unreliable because EDD could not adequately substantiate it.

Years later, the problem is not entirely historical. The State Auditor still classifies EDD as a high-risk agency, reporting approximately $1.5 billion in estimated improper payments during 2023 and 2024 and estimating more than $500 million in fraudulent payments in 2024 alone.

That matters because Cohen told CalMatters while running for Controller in 2022 that she intended to scrutinize EDD, DMV and California’s homelessness programs.

In 2026, Cohen told the Los Angeles Times her office had not audited EDD because the Legislature was already reviewing it, and had not audited DMV because the Legislature and State Auditor were doing reviews.

On the Controller’s current public audit list, the latest DMV-specific audit shown is an accounts-receivable audit from June 2020 – before Cohen became Controller.

Now Produce the Records

The question is not whether anyone in California government has ever conducted an audit. Numerous audits exist.

The question raised by the lawmakers’ letter is much narrower:

What did the State Controller’s Office itself review, what problems did it find, what payments did it question, and where are those records?

A Capitol project that grew from $543 million to $1.1 billion.
A high-speed rail project now estimated at $126 billion.
Billions in EDD fraud and improper payments without a reliable final pandemic accounting.
EDD and DMV audits Cohen said in 2022 she wanted to pursue but later acknowledged her office did not perform.

The lawmakers have asked Cohen to produce the records.