Truth in Accounting’s Financial Transparency Score 2026 evaluates how effectively each state government discloses its true financial condition through audited financial reports. 

Undercover journalist Nick Shirley just released a bombshell 40-minute video exposing over $170 million in fraud across California, including fake daycares and abandoned hospices where fraudsters are living in luxury with zero consequences. As he put it: “Minnesota was big, but California is even bigger.” The fraudsters have been defrauding hardworking taxpayers for years, enabled by weak oversight and bad policies.

Like Minnesota, California faces serious concerns in child care oversight and other federally funded programs. The state’s 2024 Single Audit, issued in December 2025, reviews how California manages and reports on billions in federal funds. In that audit, 10 programs received qualified opinions, meaning independent auditors identified weaknesses in how the programs were run and whether federal rules were followed. These problems have led to federal payment freezes and ongoing investigations, illustrating the real-world consequences of monitoring failure.

States face a significant loss of federal dollars as temporary pandemic-related programs that were initiated in 2020 come to an end and national fiscal pressures rise.

Our sixteenth annual Financial State of the States (FSOS) report provides a comprehensive analysis of the fiscal health of all 50 states. 

At Truth in Accounting, we are wrapping up our annual Financial State of the States report—an in-depth look at each state’s financial condition based on their audited financial statements. This year, as in years past, we are relying on each state’s 2024 Annual Comprehensive Financial Report (ACFR).

But here’s the problem: several states have yet to issue their ACFRs, and time is running out.

California’s inability to provide timely financial data is legendary. As TIA’s earlier report noted, as of August 31, 2024, California had not released its fiscal year 2023 annual financial report, making it the fifth year in a row California has been late submitting critical information. 

In the spirit of promoting clear and accurate fiscal information, Truth in Accounting has once again assessed the transparency of state governments’ financial reporting. While state budgets receive most of the public and media’s attention, their outcomes are detailed in each government's Annual Comprehensive Financial Report (ACFR), which is audited annually by certified public accountants. Our transparency score is based on key criteria outlining best practices, offering government officials and citizens a roadmap to enhance fiscal transparency and accountability.

Truth in Accounting believes the California wildfires are a horrific tragedy that highlights the real-life impact of public policy. As a nonpartisan organization, we look at the numbers. But as people, we see the human toll, and our hearts go out to the people's suffering.

There are two ways California could use some truth in accounting. First, with the extraordinary level of waste, fraud and abuse in this state, it is indisputable we need more fiscal discipline and oversight.  Second, and in furtherance of the first, Truth in Accounting (TIA) is a highly reputable think tank that analyzes government financial reports. Its conclusions about California are disturbing to say the least. 

Our fifteenth annual Financial State of the States (FSOS) report provides a comprehensive analysis of the fiscal health of all 50 states.

Of course, progressives in The City by the Bay will blame the post-pandemic downturn for the abysmal state of its finances. However, Truth in Accounting already sounded alarm bells in January 2018 when it warned that the jurisdiction was drowning in debt, requiring $7.5 billion to pay its bills. In the short term, officials are trying to keep essential services running. In the long-term, according to the think tank promoting fiscal transparency, San Francisco is grappling with approximately $6 billion in unfunded pension promises and about $4 billion in unfunded retiree health care benefits.

California — a state whose officials love to tout it as the world’s fifth largest economy — is late producing a report on its own financial health for the sixth year in a row.

This impending crisis may lack the recent drama that the balanced budget requirement periodically imposes. But if the growing problem of Californians paying too much money for sub-par government services is left unaddressed, the foundations for a prosperous economy will be undermined.

When arguing about whether the Treasury needed to take urgent action to deal with soaring federal debt in the 1980s, the late former chairman of the Council of Economic Advisers Herb Stein coined Stein’s Law. It was simple and obvious: “If something cannot go on forever, it will stop.”

California’s shortcomings in transparency have not gone unnoticed outside the state. An organization called Truth in Accounting, which monitors financial information management across the nation, just issued a 50-state score card on transparency and California scored third from the bottom.

Truth in Accounting has once again created a transparency score for the financial reporting by state governments to encourage the publication of transparent and accurate government financial information.

"Another scorecard ranked California one of the worst states financially. Truth in Accounting’s 14th annual Financial State of the States report scored California 42nd among the 50 states.

"In fiscal 2022, 28 states didn’t have enough revenue to pay all of their bills, according to the 14th annual Financial State of the States report, published by the Chicago-based nonprofit Truth in Accounting.

The report provides a comprehensive analysis of the fiscal health of all 50 states based on the latest available data from states’ fiscal year 2022 annual comprehensive financial reports.

New Jersey ranked last for having the worst fiscal health and the greatest taxpayer burden. Not far behind was Connecticut, followed by Illinois, Massachusetts, Hawaii, Kentucky, Delaware, Louisiana, California and Vermont in the bottom ten.

By contrast, 22 states reported surpluses, the majority of which are led by Republican governors."

"(The Center Square) - The city of Los Angeles' controller had a message for city officials: you aren’t spending enough.

The controller put out a recent report for 2023 that said while spending has increased 35% over the past six years, the city isn’t spending all of its revenues.

"The City is not spending what it is budgeting for which means less services, resources, and infrastructure are being provided for Angelenos," the controller’s October report stated."