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The California State Auditor is the correct contact for reporting improper governmental activity because this office is specifically tasked with overseeing the operations of state agencies and ensuring accountability and transparency in government activities. The State Auditor has the authority to investigate allegations of misconduct, fraud, or waste in state government, making them the appropriate agency to handle such reports.

In contrast, while local law enforcement agencies might address illegal activities, they are not directly involved in governmental oversight or managing internal state agency issues. Reporting to the office of the governor may not be effective since the governor's office is focused on executive management rather than investigative functions. Although an employee's supervisor might be a starting point for reporting internal issues, they may not have the authority or procedural capability to address serious allegations of improper activity that require an independent review. Thus, the California State Auditor is positioned to take appropriate actions in these matters.