California’s High-Speed Rail Authority paid nearly $600,000 in unallowable travel expenses to questionable locations, including visits to a nightclub, a tiki bar, gyms, an escape room, and a cigar lounge over a two-year period, according to an investigation released on Tuesday. The Office of the Inspector General found that the agency routinely reimbursed outside consultants for trips that lacked basic justification or violated established state policies.
State Audit Reveals Misused Public Funds
According to the Office of the Inspector General report, the agency spent public money on travel that had no clear connection to state business. Investigators reviewed $1.15 million out of more than $2 million in travel reimbursements issued to four major consulting firms between 2024 and 2026. Those firms include KPMG LLP, Nossaman LLP, AECOM-Fluor Joint Venture, and SYSTRA/TYPSA Joint Venture, as reported by CalMatters.
The investigation detailed multiple instances of policy breaches. One consultant flew a private plane from Washington, D.C., to California and received reimbursement for a premium fare. Others booked first-class flights without facing any internal questioning, directly violating state travel regulations.
“Paying for travel when it is not necessary or when it exceeds what is allowed by state regulations or the contract terms is waste of public funds and is behavior inconsistent with the Authority’s role as the steward of public resources,” the Office of the Inspector General stated in the report.
Lack of Oversight and Unauthorized Invoices
The audit revealed that roughly 60% of the reviewed travel expenses—totaling at least $685,000—were greenlighted by the authority without prior approval. In several cases, agency staff learned of the trips only after receiving the final invoices.
Even when trips received formal approval, the authority failed to vet the requests adequately. Staff accepted vague justifications such as “typical M-F week” trips or approved travel directly at the behest of executives without asking why meetings could not take place remotely. The report highlighted one consultant who traveled to California from Denver 20 times over two years merely to attend executive meetings.
Matt Rocco, spokesperson for the high-speed rail authority, stated that the agency takes the findings seriously and plans to collaborate with the inspector general’s office to correct the deficiencies. According to Rocco, the agency will strengthen internal controls, enforce stricter documentation rules, and recover any improper costs identified in the audit.
Project History and Escalating Costs
Voters originally approved the high-speed rail project in 2008 with the goal of connecting San Francisco to Los Angeles by 2020 at an estimated cost of $33 billion. Since then, project planners have significantly scaled back the route, and the projected cost has ballooned to at least $126 billion. To date, no tracks have been laid.
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