Gavin Newsom Blows $20 Million on Insider Consultants to ‘Cut Waste’

California’s exposure to fraud, waste, and improper payments totals roughly $435 billion over recent years; Boston Consulting Group might deliver $810 million in savings

In yet another masterclass in Sacramento-style “reform,” Governor Gavin Newsom has handed up to $20 million to the Boston Consulting Group — the same elite firm that now employs his former Cabinet Secretary and Department of Finance Director Ana J. Matosantos — to play detective on government bloat.

This is the same Gavin Newsom who loves to brag that California was “cutting waste and improving efficiency long before Elon Musk.” If that were the case, the number of government agencies flagged as “high risk” by the state auditor wouldn’t have doubled under his tenure. 

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The target? Not the entire sprawling state bureaucracy. Not the fraud epidemic documented across California’s major programs. Not the eight state agencies flagged as “high risk.” Just three giant agencies: the Department of Corrections and Rehabilitation, Social Services, and Health Care Services. 

The bold promise? Deliver $2 billion in savings by fiscal year 2028-29. 

The embarrassing reality? Just $810 million projected now — less than half the target — with legislative analysts already signaling it could shrink even more.

Republican Assemblyman Tom Lackey captured the growing frustration perfectly: “This whole Boston Consulting Group contract has me mystified… We were told that’s what we were going to get, but we haven’t even come close to that.” 

Even Democratic Assemblyman Nick Schultz admitted the bad optics: “At a time when we might be asked to cut part of the social safety net back, I think everyone’s rightfully looking at saying, ‘What are we getting for $20 million?’”

What are we getting, Nick? Rearranged deck chairs on the $435 billion Titanic. 

California’s exposure to fraud, waste, and improper payments totals roughly $435 billion over recent years. That’s nearly identical to the entire GDP of Colombia (approximately $438 billion in 2025) and equivalent to about 1.42% of the entire U.S. economy — enough money to run an entire mid-sized country for a year, yet Sacramento treats it like spare change.

Here’s how the staggering total  breaks down across major programs (according to our extensive reporting):

• Medi-Cal: $95–$146 billion (because when you hand out hundreds of billions in healthcare dollars with minimal or zero verification, overbilling, ineligible recipients, and kickback schemes tend to flourish).
• Unemployment Insurance (EDD): $31–$55 billion (including $20–$32.6 billion in confirmed fraudulent claims during the pandemic funneled to prison inmates, out-of-state scammers, and imaginary claimants — all while real Californians waited months for a check).
• Homelessness & Housing Programs: $25–$37 billion (billions flushed into the homelessness industrial complex with little to show except more tents, more excuses, and persistent questions about where the money actually went).
• CalFresh (Food Stamps): $20–$25 billion (high error rates that risk billions in federal matching funds because eligibility checks are apparently optional in Sacramento).
• Capital Projects & Infrastructure: $30–$50 billion (cost overruns, mismanagement, and good old-fashioned waste in megaprojects — because why build efficiently when you can just keep spending?).
• Other health care, welfare, and miscellaneous programs: The rest of the rotting pile that brings the grand total to a jaw-dropping $312–$435 billion.

As the California Globe has chronicled for years, this staggering figure has turned the Golden State into the undisputed Fraud Capital of America, or in U.S. Attorney Bill Essayli’s words, California is the “Kingdom of Fraud.”

Instead of aggressive internal reforms or full-scale accountability, Newsom’s answer is another pricey consultant report limited to just three departments — all while the state grapples with a $2.9 billion projected deficit for 2026-27 (per the Governor’s own proposal) and looming multiyear structural shortfalls estimated as high as $20–$35 billion annually in the years ahead.

While federal prosecutors under Bill Essayli aggressively pursue fraud rings in hospice, homelessness funds, and beyond, Sacramento’s alleged fiscal watchdogs are out to lunch.

California’s State Controller Malia Cohen (D) “has the sole power to audit state agencies and local governments receiving state funds, investigate waste and fraud, and ensure proper disbursement before a single warrant is issued. No other office is uniquely endowed with this combination of independence, auditing authority, and day-to-day fiscal oversight.”