The December 2025 report, an update to the State Auditor’s High-Risk List, details how systemic incompetence has plagued agencies responsible for everything from unemployment benefits to water safety. The investigation highlights a pattern of negligence that auditors suggest could have severe long-term consequences for the state.
The most glaring example of waste was uncovered at the Employment Development Department (EDD), which squandered $4.6 million in taxpayer funds by paying monthly service fees for thousands of mobile devices that sat unused—in many cases, for years. The audit found that the EDD paid for 6,285 mobile devices that had no activity for four or more consecutive months between November 2020 and April 2025. Shockingly, 99 of these devices were never used at all, yet the state continued to pay for them.
Despite the state’s COVID-19 stay-at-home order ending in February 2023, the EDD was still paying for 5,097 unused devices as of April 2025—a period when the department employed only 1,787 call center staff. Auditors discovered a storage room filled with hundreds of unused devices, some with notes indicating they had been in storage since 2022 or 2023.
The report dismissed EDD management’s claim that they were “unaware” of the waste as “implausible,” noting that Verizon had provided monthly non-usage reports to the department since 2017. The Auditor concluded that EDD should have recognized it was paying for significantly more devices than it had employees and taken action to cancel unnecessary lines.
The EDD waste represents just one component of a broader pattern of failure. The Auditor newly designated the California Department of Social Services as high-risk, warning that errors in CalFresh benefit calculations could cost the state up to $2.5 billion annually. Other agencies maintaining their high-risk status include the Department of Health Care Services (due to Medi-Cal eligibility discrepancies resulting in questionable payments) and the Department of Water Resources, which faces criticism over deteriorating dam infrastructure.
The report notes that 49 dams throughout California are rated as posing “extremely high hazard to life and property” while being in below-satisfactory condition. The number of dams with poor or unsatisfactory ratings has increased by 73% since 2023.
While the EDD has begun implementing corrective measures—terminating service for 2,825 devices and drafting a policy to cancel unused lines—the damage to public trust may be lasting. The audit serves as a stark indictment of an administration that critics say has prioritized political ambition over competent governance, leaving the next governor to confront a legacy of financial negligence and infrastructure decay.