California's fraud exposure now exceeds losses uncovered in Minnesota, according to Rep. Kevin Kiley, R-Calif., who cited a new state audit on Newsmax Friday showing widespread mismanagement and soaring taxpayer losses under Democrat Gov. Gavin Newsom's administration.
"I mean, as bad as things are in Minnesota, it pales in comparison to what Gavin Newsom has done in California," Kiley told Newsmax's "Finnerty."
"And you don't need to take my word for that. You can take the word of California's own nonpartisan state auditor."
Kiley pointed to findings from the California state auditor showing a growing number of agencies classified as high-risk, a designation used for departments vulnerable to fraud, abuse, and mismanagement.
According to the audit, the number of high-risk agencies in California has doubled under Newsom's tenure, rising to eight.
"So this means the agencies are rife with fraud, abuse, and mismanagement," Kiley said. "They failed to take corrective steps, costing taxpayers billions and billions of dollars."
He cited several high-profile examples referenced in previous audits, including the state's high-speed rail project, which he said "has spent $18 billion in 17 years, has not built any track whatsoever."
Kiley also referenced spending on homelessness.
He said that "$24 billion that was spent on homelessness in the state audit also found that the state just lost track of that money as homelessness soared," he said.
Kiley said unemployment insurance programs were another major source of losses with "$32 billion lost to unemployment insurance fraud."
And he added, "A third of our community college applications are fraudulent."
The most recent audit expanded the state's high-risk list to include the California Department of Social Services, citing concerns over its administration of CalFresh benefits, the federally funded Supplemental Nutrition Assistance Program that provides food assistance to low-income Californians.
Because of recent changes to federal law, California will soon be required to cover a portion of those benefits, a cost that could reach as much as $2.5 billion in federal fiscal year 2028, based on the state's payment error rate.
The audit also provided updates on seven existing high-risk agencies and statewide issues that continue to pose significant concerns.
Persistent issues span Employment Development Department operations, COVID-19 fund management, Medi-Cal eligibility, financial accountability, information security, technology oversight, and water infrastructure risks.
California State Auditor Grant Parks said on Dec. 11 that the findings reflect persistent failures by state agencies to implement corrective actions, leaving taxpayer dollars exposed to continued fraud and mismanagement.
"The list goes on and on and on," Kiley said.
GET TODAY NEWSMAX+:
NEWSMAX is the fastest-growing cable news channel in America with more than 30 million people watching!
Reuters Institute reports NEWSMAX is one of the top news brands in the U.S.
You need to watch NEWSMAX today.
Get it with great shows from Rob Schmitt, Greta Van Susteren, Greg Kelly, Carl Higbie, Rob Finnerty – and many more!
Find the NEWSMAX channel on your cable system – Go Here Now
BEST OFFER:
Sign up for NEWSMAX+ and get NEWSMAX, our streaming channel NEWSMAX2 and our military channel World at War.
Find hundreds of shows, movies and specials.
Even get Jon Voight’s special series and President Trump’s comedy programs and much more!
Watch NEWSMAX+ on your smartphone or home TV app.
Watch NEWSMAX anytime, anywhere!
Start your FREE trial now: NewsmaxPlus.com
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
© 2025 Newsmax. All rights reserved.