California Controller's Office Under Fire for Staff Overpayments, Remote Work Violations

California's State Controller's Office has been criticized by a state audit for failing to adequately monitor staff and for instances of waste and abuse, including managers working remotely from out of state and an attempt to use public funds to obscure employee overpayments.

The audit, conducted by State Auditor Grant Parks, identified two managers within Controller Malia Cohen's office who worked from states including Idaho, Alabama, and Tennessee for extended periods without proper authorization. One manager reportedly worked from Idaho for five years, while another split time between Alabama and Tennessee over multiple years. The office's telework policy at the time lacked explicit requirements for employees to work within California and did not consistently monitor employee locations.

Payroll and Overpayment Issues

Beyond the remote work concerns, the audit also detailed how senior officials in the Controller's Office "purposefully" delayed the recovery of over $33,000 in employee overpayments. The report states that officials attempted to have the state cover the losses, a move the auditor deemed "poorly conceived" and a potential "gift of public funds."

The Controller's Office disputed the finding that it violated state law, arguing that collection efforts were initiated within the legally allowed timeframe. However, the auditor rejected this, citing that required payroll deductions were canceled without adequate justification.

Both managers involved in the out-of-state telework violations have since left the office. The Controller's Office has stated that it is finalizing a revised telework policy that will include periodic location monitoring.

Broader Audit Findings

The issues within the Controller's Office were part of a larger audit that examined nine substantiated cases of misconduct across various state agencies. These cases resulted in approximately $885,000 in documented financial waste, misspent funds, or improper distributions.

Other findings from the audit included:

• A CAL FIRE employee used a state vehicle for personal commuting for approximately five years, billing the time as work, which cost taxpayers an estimated $69,000.
• A CalRecycle employee rented and drove state vehicles for over a year with a suspended license, incurring nearly $22,000 in rental and fuel costs, including rentals on days the employee was not scheduled to work.
• Caltrans bypassed required competitive bidding processes for nearly $624,000 in purchases.
• The Student Aid Commission expedited a $30,000 contract, choosing the most expensive vendor without clear justification, before the funds expired.

State Auditor Grant Parks' report covered allegations investigated between July 2025 and June 2026. Malia Cohen, currently up for reelection, oversees an office responsible for managing billions in state funds.

Her office did not respond to requests for comment from The Post. Governor Gavin Newsom's office, which has faced criticism regarding its efforts to combat waste, fraud, and abuse, also declined to comment.