The state has failed to spend $455 million of federal money meant to improve water infrastructure in the state, while thousands of Californians rely on groundwater laced with nitrates and other contaminants, federal regulators said Friday.

According to a letter of noncompliance issued by the U.S. Environmental Protection Agency to the state's public health department, California has received money for the Safe Drinking Water State Revolving Fund over the past decade, but has failed to spend a large part of it in a timely manner. It is the program's largest unspent sum in the nation.

The sum includes money that has been committed to projects but has not been spent because the projects are not shovel-ready, said Jared Blumenfeld, regional administrator for the federal agency. But because it's already committed, other water systems that are in need cannot apply for the funds, he said.

The state also lacks a good system of financial oversight and accountability for the fund, Blumenfeld said. As a result, the state did not accurately account for revenue from ongoing loan repayments into the fund, he said, meaning an additional $260 million is available.

The fund finances drinking water infrastructure improvements, including water treatment infrastructure, pipes and other projects. California gets an estimated $80 million in federal money annually for the fund. The state provides a 20 percent match and manages the repayments.

"It's really unacceptable. It's not like there is a lack of projects," Blumenfeld said. "It's a lot of money in this day and age."

Officials with the state's Department of Public Health acknowledged they received the letter, but said they had no immediate comment.

Part of the problem, Blumenfeld said, is that the state prefers funding projects from medium and large water systems that are not ready to start for years. Loosening the money, he said, means more projects would be funded in smaller communities that are in immediate need — especially those struggling with contaminated drinking water.

More than half of California's population relies on a drinking water supply contaminated by arsenic, nitrates and other contaminants, though most communities blend or treat their water to make it safe, according to the State Water Resources Control Board.

Nitrate contamination of drinking water is one of the most pervasive problems, especially in California's agricultural heartland and will intensify in coming years, according to a University of California, Davis study released last March.

The study — covering the Salinas Valley and Fresno, Tulare, Kings and Kern counties — found that half of the 2.6 million people in those areas live in communities where raw drinking water sources have registered nitrate levels exceeding the standard.

While many of those communities blend or treat their water, drill a new well or provide another alternative source, one in 10 people in the study area rely on untreated groundwater that may exceed the nitrate standards. Most are residents of small, poor agricultural communities.

Scientists have linked high levels of nitrates to "blue baby syndrome," reproductive disorders and cancer. Infants who drink water that exceeds the nitrate standard could become seriously ill and die, according the EPA.

Many of the residents whose water is contaminated pay for their own bottled water for drinking and cooking, in addition to paying for the contaminated water.

Accessing this kind of funding means the difference between having safe drinking water or not in many communities, said Laurel Firestone, co-director of the Community Water Center, a nonprofit advocating for safe drinking water in the Central California.

"Many of the communities we work with have gone a decade or more trying to make their way through the funding bureaucracy to access these funds," she said. They "have lacked access to safe drinking water in their homes and schools. ... Their applications for funding seem to be in a never-ending game of Chutes and Ladders."

Last year, California was the first state to pass the Human Right to Water Act, which established as state policy that every Californian has a human right to safe, clean, affordable and accessible drinking water. The state, Firestone said, has a long way to go to making that a reality.

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. That includes both updating old infrastructure and building new infrastructure to deal with water contamination problems.

The state has 60 days to come up with an improvement plan — or the U.S. EPA may suspend payments to them.