California Controller Malia M. Cohen Turns to Annual Audit

July 1, 2026

California State Controller Malia Cohen addressed lawmakers at a UC economic forum, advocating for careful financial management by highlighting the state's Annual Comprehensive Financial Report as a crucial accountability measure. The report, which was completed ahead of schedule for the first time since 2019 and received a clean audit opinion, revealed California had approximately $13 billion in surplus after recording $595. 5 billion in revenue against $582.

Who is affected

California Legislature/lawmakers
Gov. Gavin Newsom
State Controller Malia M. Cohen
California state departments
Department of Finance
High-income taxpayers in California
State employees and vendors dependent on state funding
The general public of California
Bond investors and creditors lending to California

What action is being taken

The Controller's Office is compiling the Annual Comprehensive Financial Report
State departments are reconciling their financial records with year-end figures submitted to the Department of Finance
The Controller's office is issuing monthly cash reports detailing actual General Fund revenues and expenditures
The Legislature is working to pass a balanced budget (as of the June 9 forum, with the June 15 deadline approaching)

Why it matters

The ACFR is critical for California's fiscal accountability and creditworthiness, functioning like a credit score that determines the state's ability to borrow money and secure favorable bond ratings. Having audited financial data rather than projections grounds budget negotiations in financial reality, helping lawmakers make more informed decisions. The state's dependence on high-income taxpayers and revenue volatility creates risks for long-term budget stability, making fiscal discipline essential to avoid future shortfalls. Additionally, timely completion of a clean audit report ensures California can maintain its financial credibility with investors and continue uninterrupted state operations and payments.

What's next

The governor must sign a final budget by June 30 to ensure the state can continue funding operations, employee salaries, and vendor payments without interruption.

Read full article from source: The San Diego Voice & Viewpoint