An independent audit state and local officials in all 50 states must have done annually typically gets little media attention, but a sampling of the latest results suggests huge waste, fraud, and corruption problems in how blue and red jurisdictions alike manage federal social welfare and other benefit fund programs.

Known as the “Single Audit,” this process puts the accountant’s microscope on “a state or local government’s financial statements and its management of federal funds. In addition to verifying the accuracy of the financial statements, a Single Audit ensures that the government is following applicable state and federal laws and regulations and adhering to the terms of federal grant agreements. The goal is to ensure that taxpayer dollars are used appropriately, that federal programs are managed effectively, and that funds are spent in compliance with the rules that govern them,” said Truth-in-Accounting (TIA) President Sheila Weinberg in an email.

Weinberg heads a unique, Illinois-based nonprofit that analyzes spending by governments at all levels according to a proprietary methodology “to cut through politicization and accounting tricks to show the true fiscal condition of each state and city, including the health of pension plans.”

In its initial analysis of selected state Single Audit results, TIA found multiple signs of distress in California’s most recently published Single Audit (for 2024).

“Auditors found that the state had no procedures to ensure that certain child-care providers receiving subsidies were meeting federal health and safety requirements. These rules cover topics such as disease prevention, safe sleep practices, emergency preparedness, pediatric first aid, and CPR, all intended to safeguard against abuse and neglect of the children. The auditors classified this as a material weakness in internal control over compliance, highlighting a serious oversight gap that could put children at risk. And the taxpayer pays the tab,” TIA said in a January 8, 2026, statement.

Similarly, TIA said the California assessment of administration by the office of Governor Gavin Newsom (D) of federal Criminal Assistance Program funds “found that nearly all organizations receiving grants were reported late or not at all, despite federal rules requiring timely submissions. While the state had written policies, auditors concluded that internal controls were ineffective.”

The Single Audit also “highlighted serious reporting weaknesses in the state’s Unemployment Insurance program, run by the Employment Development Department. Independent auditors found that administrative expense reports submitted to the federal government did not match the state’s official accounting records, with a total variance of over $126 million. The state had no formal process for reconciling these reports, and the responsibilities for verifying accuracy were unclear.”

And in Illinois, TIA reported the Single Audit for the state government in 2024 turned up serious shortcomings.

“According to Illinois’ most recent audit of federal programs, independent auditors issued adverse opinions on compliance for two major federal programs, finding that required monitoring and risk assessments were not performed. In both cases, state agencies passed through large sums of federal funds without ensuring they were used for authorized purposes,” TIA said in a January 7, 2026, statement.

“The most serious finding involved the COVID-19 Homeowner Assistance Fund (HAF). Auditors reported that the Illinois Department of Human Services failed to conduct any of the federally required monitoring of the Illinois Housing Development Authority, the agency managing the funds. Approximately $177 million in HAF money was distributed without risk assessments or oversight, leading auditors to conclude the program did not comply with federal requirements in all material respects,” TIA continued.

California and Illinois are both deeply blue Democratic states. So, at the request of The Washington Stand, TIA’s analysts dug into the most recent Single Audit filings for Texas and Indiana, both solidly red Republican jurisdictions, as well as blue bastions Pennsylvania and Oregon.

The results for the red states are strikingly similar to those of the blue states.

In Texas, for example, the 2024 Single File audit found “Texas Health and Human Services Commission failed to accurately report over $1.07 billion in federal grants awarded to local governments, nonprofits, and other service providers. Programs affected included aging services, mental health, and opioid response. This long-standing problem hindered transparency and compliance with the Federal Funding Accountability and Transparency Act (FFATA), which informs federal oversight and future funding decisions,” according to Weinberg in an email to TWS.

And in Indiana, auditors turned up 30 material weaknesses, including eight so serious that too little evidence was available to make determinations of the full extent of the problems and exposed failures of officials to properly monitor compliance of local officials and other grant recipients of nearly $1.6 billion awarded under the COVID-10 Education Stabilization Fund, Title 1 education grants to local school districts, and Special Education grants.

In addition, Weinberg told TWS that “approximately $334 million in funds passed through to subrecipients were at risk of improper use, raising the likelihood of noncompliance and potential loss of future federal funding.”

In Pennsylvania, state human services officials failed to ensure proper procedures were followed by local governments issuing Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs valued in excess of $4.4 billion.

And in Oregon, Weinberg said auditors found the “Oregon Health Authority did not consistently identify or monitor subrecipients, including local governments, nonprofits, and service providers. This repeated a problem from prior years. Misclassification and lack of monitoring affected how funds were tracked, and approximately $4.2 million may have been misreported as passthrough instead of direct expenditures.”

The TIA analyses come as evidence continues to pile up of massive, deeply entrenched and long-standing waste, fraud, and corruption in multiple federal programs, as administered in Minnesota, one of the nation’s most reliably Democratic states for many decades. Independent internet-based journalists began reporting such problems in Minnesota nearly a decade ago and an FBI raid in 2015 of a fraudulently operated child care center there shows such problems were known in government more than a decade ago.