A California High-Speed Rail Authority review found $592,900 in consultant travel costs that were not allowable under state regulations or project contracts, including rides to nightlife venues, a tiki bar and an escape room. The findings come as the Authority warns it could run out of money as soon as 2027, with no high-speed track yet laid along the planned Los Angeles-to-San Francisco route.
The Authority's Office of the Inspector General issued the report Tuesday after reviewing roughly half of the agency's nearly $2 million in travel costs for four consulting firms during fiscal years 2024-25 and 2025-26, according to FOX40 and Inside California Politics. Auditors found that $680,500, or about 60% of the expenses reviewed, lacked required prior approval. In many cases, they also found little or no documentation explaining why the consultants needed to travel.
The Authority's Office of the Inspector General report found that contract managers responsible for reviewing expenses had little actual authority to approve or deny consultant travel. They routinely paid reimbursements based on assumed direction from the CEO or executive team rather than documented authorization. Auditors also identified $81,000 in costs that had been approved but still violated state regulations, including flight upgrades and trips to unrelated locations.
Examples Flagged in the Review
The report identified a first-class flight from Los Angeles to Sacramento that was approved without justification, along with Uber or Lyft rides to destinations that did not appear connected to project work. One consultant billed premium rides to a restaurant, bar and nightclub between 9:40 p.m. and 2:30 a.m. Other rideshare expenses covered an escape room, a tiki bar, restaurants in Folsom, a sushi restaurant in Denver, a cigar lounge in Washington, D.C. and private residences, according to the California High-Speed Rail Authority Office of the Inspector General.
Earlier State Audit Found a Different Travel-Control Gap
California state agencies have faced related weaknesses in consultant travel controls before. In a separate July 1997 audit of Caltrans contracts, the California State Auditor found that clauses addressing compensation for expert witnesses' travel time were not consistently included. That audit involved Caltrans contracts, not the High-Speed Rail Authority's 2024-25 and 2025-26 expenses.
In one case, the article notes, a consultant suggested being reimbursed at the cost of a premium commercial fare while actually flying a private plane from Washington, D.C. to California. The prime contractors named in the report are KPMG LLP, Nossaman LLP, the AECOM-Fluor joint venture and the SYSTRA/TYPSA joint venture, according to the Inspector General's investigative report.
Agency Response and Political Fallout
An Authority spokesperson said the agency will strengthen internal controls, improve documentation and approvals, and recover improper costs, and the Authority plans to implement some corrective actions between January and March 2027, including enforcing requirements for allowable travel expenses and seeking reimbursements for unallowable costs. The Authority will only partially implement other recommendations and disagreed with a proposal requiring consultants to justify in-person work.
The political response was swift. California Assembly Republican Leader Alexandra Macedo called on Governor Gavin Newsom to claw back every improper dollar spent on unallowed travel, criticizing the agency for subsidizing lavish consultant lifestyles while failing to lay a single mile of high-speed track, according to the Van Nuys News Press.
A Project Already Running Out of Runway
The travel scandal compounds an already dire fiscal picture. Inspector General Ben Belnap warned in a July review of the Authority's 2026 Business Plan that the project faces a cumulative funding gap of $9.5 billion between fiscal years 2027-28 and 2031-32 to complete the Merced-to-Bakersfield segment, with available cash potentially running dry as early as December 2027, per a report from CBS News and as detailed by Edhat. To bridge near-term construction deficits, state officials are evaluating borrowing against California's annual $1 billion Cap-and-Invest allocation through 2046, an option that Smart Cities Dive reports could add between $3.6 billion and $6.6 billion in interest costs currently excluded from official project projections.
Congress and President Donald Trump cut all federal support for the project in 2026, deepening the funding squeeze. Facing budget constraints, the Authority also halved its initial rolling stock order from six high-speed trainsets down to three and eliminated federal Buy America requirements, according to Railway PRO.
Decades of Rising Costs, No Track Yet Laid
When voters approved Proposition 1A in 2008, authorizing $10 billion in bonds, the full San Francisco-to-Los Angeles line was projected to cost $33 billion and open by 2020. Current estimates instead range from $89 billion to $128 billion, and CalMatters reports no high-speed track has been laid anywhere along the 494-mile planned route. As of June 2026, 171 miles were under design and construction within the Merced-to-Bakersfield central segment, and the Authority expects to reach the milestone of laying high-speed track later this year.
The travel report also arrives amid separate leadership turmoil at the agency. CEO Ian Choudri took a brief leave of absence in February 2026 following an arrest, before the Sacramento County District Attorney's Office declined to prosecute Choudri and his fiancée, and he returned to work on March 5, 2026, as Hoodline previously reported in CHSRA CEO Arrested After Newsom Event in Folsom.
Federal Scrutiny and Legislative Push for Transparency
The travel findings also feed into broader federal scrutiny of the Authority's finances. U.S. Transportation Secretary Sean Duffy ordered the Federal Railroad Administration in February 2025 to review approximately $4 billion in federal grants awarded to the Authority, following an earlier federal compliance audit that highlighted a $7 billion funding shortfall and procurement delays, as Hoodline reported in its coverage of the federal funding review.
The Office of the Inspector General itself was created by state lawmakers under Senate Bill 198, with Belnap appointed as the inaugural Inspector General in 2023 to conduct independent fiscal audits, investigations and business plan evaluations, according to background material from the California State Senate Transportation Committee. California lawmakers have also debated Assembly Bill 1608 in 2026, which would require every completed Inspector General audit to be published while granting limited discretion to temporarily withhold sensitive investigative details, per CBS News.
