Like Minnesota, California faces serious concerns in child care oversight and other federally funded programs. The state’s 2024 Single Audit, issued in December 2025, reviews how California manages and reports on billions in federal funds. In that audit, 10 programs received qualified opinions, meaning independent auditors identified weaknesses in how the programs were run and whether federal rules were followed. These problems have led to federal payment freezes and ongoing investigations, illustrating the real-world consequences of monitoring failure.

Auditors found that the state had no procedures to ensure that certain child care providers receiving subsidies were meeting federal health and safety requirements. These rules cover topics such as disease prevention, safe sleep practices, emergency preparedness, pediatric first aid, and CPR, all intended to safeguard against abuse and neglect of the children. The auditors classified this as a material weakness in internal control over compliance, highlighting a serious oversight gap that could put children at risk. And the taxpayer pays the tab.

In the Crime Victim Assistance program, administered by the Governor’s Office of Emergency Services, auditors found that nearly all organizations receiving grants were reported late or not at all, despite federal rules requiring timely submissions. While the state had written policies, auditors concluded that internal controls were ineffective. The audit did not identify any specific dollars that must be repaid and did not conclude that funds were misspent. However, the lack of required reporting undermines transparency and accountability, making it harder for federal agencies and the public to verify who received the money, how much they received, and whether funds were used as intended.

The Single Audit also highlighted serious reporting weaknesses in the state’s Unemployment Insurance program, run by the Employment Development Department. Independent auditors found that administrative expense reports submitted to the federal government did not match the state’s official accounting records, with a total variance of over $126 million. The state had no formal process for reconciling these reports, and the responsibilities for verifying accuracy were unclear. Because of these gaps, auditors could not obtain enough reliable evidence to form an opinion on the Unemployment Programs Fund. As a result, the state’s Annual Comprehensive Financial Report issued a disclaimer of opinion for this fund. While this finding does not prove that any money was spent improperly, it shows that weak internal controls and reporting errors can create serious uncertainty about how taxpayer dollars are tracked and managed.

In addition to these major findings, auditors also noted other significant weaknesses in internal controls across several programs. These findings may not involve outright misuse of funds, but they point to gaps in reporting and monitoring that could reduce transparency and make it harder for taxpayers and federal agencies to ensure our tax dollars are serving our most vulnerable, not fraud.

Overall, these findings show that weaknesses in oversight and reporting are more than clerical errors. When transparency rules are ignored, confidence in how taxpayer dollars are managed is weakened, and federal scrutiny is likely to increase.