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John Seiler: Herb Morgan is running to revamp California’s accounting

April 6, 2026

Can a Republican win an election for California’s state controller? Herb Morgan is trying. He’s the chief investment officer of Efficient Market Advisers of La Jolla, an investment firm, and has served on the board of the San Diego City Employees’ Retirement System.

In the June 2 primary, he’ll run against Democratic incumbent Malia Cohen and Peace and Freedom Party candidate Meghann Adams, union president of SMART Local 1741. In California’s top-two system, Morgan and Cohen will certainly face off in the Nov. 3 runoff.

After Cohen took office on Jan. 2, 2023, on March 23 she filed an Annual Comprehensive Financial Report (ACFR), the state’s key audit, for the fiscal year which ended on June 30, 2021. Due to predecessor Betty Yee’s delinquency, that was almost a year after the March 31, 2022 expected filing.

A week later, I commended Cohen for achieving “what her predecessor, Betty Yee, failed to do.” Unfortunately, Cohen has not yet brought later ACFR filings up to snuff. Her last effort was the ACFR for June 30, 2024, released last Sept. 12, more than five months after the March 31, 2025 expected filing deadline. That meant it was useless when the Legislature and Gov. Gavin Newsom crafted the budget for fiscal year 2025-26, which he signed on June 30, 2025.

In that ACFR, her excuse was the “highly specialized and detailed accounting of over 1,000 total funds used throughout more than 200 state departments.” But other large and complex states like New York and Texas have filed on time.

Once again, Cohen has blown a deadline. California’s ACFR for the fiscal year ended June 30, 2025 was supposed to be submitted on March 31. Cohen’s press office told me, “We anticipate releasing the ACFR in Spring of 2026.” They wouldn’t be more precise. This year spring began on March 20 and ends on June 20. Unless the ACFR is delivered soon, it will be useless for the ongoing work on the budget for fiscal year 2026-27, which begins on July 1. The California Constitution requires a budget by June 15.

“The way you expedite the process is you start very early, in July, and very aggressively go after the entities that owe you data and reports, including in the governor’s office, like you would at any company,” Morgan told me.

With Newsom leaving in January, I asked how the next governor could prod state departments to file the reports in a timely fashion. “You go right to the department,” Morgan said. The state controller does not report to the governor and is an independent constitutional office. “The governor is not his boss.”

Morgan also noted auditing authority isn’t limited to the state auditor. The controller can audit government departments, including all state and local entities. He specifically called for performance audits, which look not only at ledgers, but at how effectively a department is performing its actual job. And he called for “spot audits and payroll audits.”

I asked if this wouldn’t cost a lot more money. He said, “You can take 10 years’ worth of financial transaction data, upload it into an AI agent, and within minutes it can come back and say, ‘Here’s 50 patterns that could be fraud and need to be investigated by a human.” He said five years ago it would have taken a roomful of 200 accountants to do the same.

Any Republican running statewide faces the hurdle of rising above 40% on election day. Losing to Cohen, 2022 Republican nominee Lanhee Chen achieved 44.65%. Morgan said Chen was a great candidate. The difference this time is “there’s just overall dissatisfaction with the operational output of the state of California, whether it’s high-speed rail, fire prevention or firefighting.” And he said the initiative calling for voter ID on the Nov. 3 ballot will boost Republican turnout.

Whoever wins for controller, the state sure could use those ACFR numbers on time.

John Seiler is on the SCNG Editorial Board.

Orange County Register

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John Seiler: Herb Morgan is running to revamp California’s accounting

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