Financial Condition Audit Response

At a glance

What: The City Auditor's report on Berkeley's financial condition for FY 2016 to FY 2025, titled "Structural Deficit Poses Risk to Financial Sustainability."
Where it stands: On April 28, 2026 Council approved the Auditor's recommendation that the City Manager report back by Fall 2026, and annually after that, on the status of the audit's recommendations.
Next: The City Manager's first status report on the 9 recommendations, due by Fall 2026.

Item 9 on the April 28, 2026 agenda, from the Auditor. Contact: Jenny Wong, Auditor. The City Auditor also gave a presentation at the start of the meeting.
The audit makes 9 recommendations to formalize more sustainable budget strategies, ensure funds withdrawn from the Section 115 Trust are replenished, improve financial reporting, and develop a capital financing plan that proposes future funding mechanisms beyond existing sources for the City's growing unfunded capital needs.
City management agreed or partially agreed with the recommendations; the full response is in the audit report.
Reports are to continue until the Finance Department, Budget Office and other departments report the recommendations fully implemented.
Action: approved the recommendation. The minutes record it as part of the Consent Calendar adopted in one motion (Blackaby/Humbert), all ayes.
Supplemental material: the Auditor's presentation, and a letter from three residents (Ray Yep, Margo Schueler and Larry Henry).

Auditor's financial condition report presented and approved; City Manager to report back on audit recommendations by Fall 2026 and annually.