The Office of the Inspector General for the California High-Speed Rail Authority has identified more than $2 million in consultant travel-related payments that failed to comply with state regulations and contract requirements.

The findings, published in an investigative report on allegations of wasteful and unallowable travel expenses for contracted consultants, arrive while the authority confronts a financial crisis. A separate OIG review dated July 31 concluded the authority may run out of money by December 2027.

The questioned expenditures cover several categories. The inspector general flagged travel to destinations that appeared unrelated to state business, travel originating from locations other than a consultant's approved office location, and upgraded ride-share rides and upgraded flights.

The spending has drawn political attention. Republican lawmakers in the state legislature sent a letter dated September 22 to California Attorney General Rob Bonta demanding "an investigation of wasteful spending." The letter goes further than the OIG report itself: "We also ask that you investigate whether executives at the High-Speed Rail Authority violated any criminal statutes in ordering these payments, including misappropriation of public funds," it states.

Cash flow pressure and the cap-and-invest ask

The authority has asked the California Department of Finance to find a mechanism to borrow against the expected $20 billion the state's cap-and-invest program is due to deliver, the Fresno Beereported. Those funds are scheduled for disbursement at $1 billion per year through 2046 — a pace far slower than the authority's construction obligations.

Authority CEO Ian Choudri framed the borrowing request in schedule terms at the board's June 24 meeting. "If we don't solve the cash issue to bring cash in advance and go back to a billion dollar a year construction, the project is not going to be on the schedule that we have today," Choudri said.

Scope cuts on the Merced–Bakersfield segment

To reduce costs, the authority has trimmed the scope of the Merced–Bakersfield segment, the first section planned for passenger service. The revised 2026 business plan would relocate the Merced station away from the city's downtown, prompting a formal objection from the city and county of Merced.

"Moving the station would eliminate the planned combined downtown connection among high-speed rail, Amtrak and [the Altamont Corridor Express], while creating substantial new infrastructure and connectivity needs," the Merced letter states. The relocation would therefore remove a planned interchange between the state's high-speed network and two existing passenger operators serving the northern San Joaquin Valley and the Bay Area.

The operating economics of the segment remain projection-dependent. When the Merced–Bakersfield segment enters service, passenger revenue would cover approximately 45% to 74% of operation and maintenance costs, according to the authority's 2025 Supplemental Project Update report. The remainder would require subsidy or other funding sources.

What is measured and what is projected

The $2 million in questioned consultant expenses is a documented audit finding, itemized in the OIG's investigative report. By contrast, the December 2027 funding-exhaustion date is a projection based on the authority's current cash position and spending trajectory, and the 45%–74% revenue coverage figure is a forecast contingent on ridership assumptions that the authority has not yet tested in revenue service.

The criminal referral request from Republican lawmakers remains pending with the attorney general. The authority, meanwhile, continues to pursue the Department of Finance borrowing arrangement, and its next moves on both the station relocation in Merced and the consultant expenditure findings will shape the credibility of the 2026 business plan on which the December 2027 deadline assessment rests.