This occurred at a time when thousands rely on groundwater laced with nitrates and other contaminants.
The U.S. Environmental Protection Agency issued a letter of noncompliance with the Safe Drinking Water Act to the state on Friday. It shows California failed to spend the money from the Safe Drinking Water State Revolving Fund, the largest unspent sum in the nation.
The EPA also says the state gave out grants and loans to projects that were not shovel-ready and lacked adequate staffing to administer and track the fund.
According to federal regulators, California needs $39 billion in capital improvements through 2026 for water systems to continue providing safe drinking water to the public.