Hidden Camera Reveals California’s Audit Scandal

A top California state official has admitted on hidden camera that audits designed to catch fraud are not being performed, while acknowledging that fraud exists “everywhere” across the Golden State’s government programs.

Story Snapshot

California Controller’s press secretary admits on undercover video that required audits are not getting done due to funding cuts
Official acknowledges widespread fraud exists throughout California but says auditing teams keep getting cut instead of funded
Revelation comes as state requests $1 billion for homelessness programs with no statewide accountability plan
State agencies reportedly resist audits while legislators allegedly underfund oversight to avoid discovering mismanagement

State Official Caught on Hidden Camera

Bismarck Obando, press secretary and Acting Deputy Controller of Public Affairs for California State Controller Malia Cohen, admitted in undercover footage released April 7, 2026, that the Controller’s Office is not conducting audits at the state agency level. Obando told an undercover journalist that the office has completed only “some of them that are required” but lacks resources for proactive auditing. The admission raises serious questions about fiscal oversight in a state managing hundreds of billions in taxpayer dollars.

Budget Cuts Undermine Accountability

Obando revealed that California’s legislature has systematically defunded the audit function. “Instead of funding us, they cut us. They keep cutting our auditing teams,” Obando stated on camera. The press secretary suggested legislators deliberately avoid discovering fraud, saying they “don’t want to find out what the deal is.” This creates a troubling dynamic where those responsible for oversight lack the tools to perform their statutory duties, leaving billions in public funds vulnerable to waste and abuse.

Fraud Exists Everywhere, Official Confirms

When asked about the prevalence of fraud in California government, Obando acknowledged it exists “everywhere.” The admission is particularly concerning given that California counties and cities are currently requesting $1 billion in homelessness funding without a statewide plan for accountability. Obando further noted that even when fraud is discovered, “there’s not much you can do because you can’t really track the money.” This suggests systemic failures extend beyond inadequate auditing to include fundamental tracking mechanisms for public expenditures.

Institutional Resistance to Transparency

The investigation revealed that state agencies actively resist being audited. Obando indicated agencies “don’t want” audits conducted, creating institutional barriers to accountability that complement the legislature’s budget cuts. This alignment between legislative underfunding and bureaucratic resistance creates an environment where fraud can flourish unchecked. The California Controller’s Office, statutorily responsible for protecting the state’s financial resources, appears unable to fulfill its core mission of identifying mismanagement and protecting taxpayer interests.

Broader Pattern of California Mismanagement

The audit admission emerged during O’Keefe Media Group’s broader investigation into California’s “homeless industrial complex.” That investigation uncovered allegations of fraud in voter registration and petition signature collection, with undercover footage showing homeless individuals being paid to register voters using fake addresses. The convergence of audit failures, homelessness fraud, and election irregularities suggests deep systemic problems in how California manages public programs. California taxpayers fund massive social programs while the very mechanisms designed to ensure accountability are deliberately starved of resources.

No official response from State Controller Malia Cohen or California legislative leadership has been documented following the video’s release. O’Keefe stated he sent Obando a message referencing the investigation and received confirmation that Obando read it, but the Controller’s Office has not issued a public statement. The silence from state leadership underscores a disturbing reality: those who control California’s purse strings appear uninterested in addressing acknowledged fraud or restoring audit capacity that might expose uncomfortable truths about how billions in taxpayer dollars are actually spent.