California state – A state audit has uncovered California Controller office employees working illegally from out-of-state and a failure to recover thousands in salary overpayments.
The state agency tasked with guarding California’s financial resources is under fire after a scathing audit revealed employees were secretly working from Idaho. Tennessee. and Alabama in direct violation of state law. The findings. released by the State Auditor’s Office. highlight a pattern of administrative failure that has already become a central issue in the race for state controller ahead of the Nov. 3 election.
Two staff services managers at the controller’s office circumvented telework policies that require employees to reside in California and remain within a commutable distance of their assigned work sites. One manager. who held the position for five years. admitted to auditors he worked from Idaho “just about every day” for that entire period. He had submitted a California address on official telework plans—which he later admitted belonged to a family member—to avoid losing his job. IP address logs. coupled with records showing he owned Idaho property and held an Idaho-issued driver’s license. confirmed he had been working from the state since late 2020.
A second employee. who logged into the office’s network from Alabama and Tennessee throughout the latter half of 2025. also used a California address on official paperwork. When confronted. she claimed she lived in California. though she acknowledged occasional work from Alabama and Tennessee—an explanation the audit explicitly labeled “not credible.” Both employees have since left the agency.
The same office struggled to manage its own internal finances. failing for more than a year to recover $33. 000 in salary overpayments distributed to two other workers. While one employee eventually reached a repayment agreement. the office failed to resolve the debt with the second. in violation of state law. Internal officials reportedly debated filing a claim against the state to argue the employees were not at fault for the errors rather than seeking the return of the funds.
The findings have provided political ammunition for Herb Morgan, the Republican challenger running against Controller Malia Cohen. “The office that is supposed to guard the public’s money could not collect what it had already handed out. and its answer was to look for a way to hand out more. ” Morgan said. “That is not oversight. That is the problem.”.
Beyond the controller’s office. the audit detailed a separate. alarming breach of public trust involving a high-ranking law enforcement officer. The official was found to have misused confidential databases to track vehicle information for over 60 cars. one of which was later purchased by a family member. The officer also searched for the home addresses and vehicle data of six other people. including a deputy district attorney and a local county supervisor. citing “threat assessments” that auditors found no documentation to support. While the officer was disciplined and the case was referred to a local district attorney. the prosecutor declined to pursue criminal charges.
Collectively, the audit documents nine cases of waste and misconduct across various state agencies. It serves as a stark reminder of the difficulty in maintaining institutional accountability when internal policies are opaque and enforcement lags. A spokesperson for Cohen’s office stated that all auditor recommendations were implemented prior to the report’s release and maintained that the office takes the protection of public funds seriously. Regarding the out-of-state workers. the spokesperson noted that the agency’s ability to identify the issue sooner was limited because the employees had provided false California addresses.
California Controller Malia Cohen state audit telework government waste Herb Morgan