Office of the City Auditor

 City of Berkeley
City Auditor Ann-Marie Hogan 
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The auditors, as well as other City staff, are working on how to protect our aging infrastructure and address unfunded postretirement costs.


Fiscal Sustainability: The City Manager reported on September 17 that all recommendations from our 2010 Employee Benefits: Tough Decisions Ahead audit have been implemented. Our audit outlined some first steps. We hope to see continuous improvement in informing the council, employees and the public about the difficult decisions ahead.


The City Manager's first Projections of Future City Liabilities report, issued February 19th, updates the 2010 audit information, includes infrastructure needs, and provides a look at what the cash layout for benefit costs will be over the next ten years. That information is already out of date because of recent changes by the statewide retirement system. CalPERS has decided to charge cities substantially more in the short term to help address the risks of long term liabilities, which are affecting intergenerational equity.   The result for Berkeley and most California cities will be some very painful and difficult choices to be made before approving the 2016 budget. The extent of the shortfall won't be known until this November. My office has continued to follow the issue closely. We added an audit of fiscal sustainability to the 2014 Audit Plan so that we can continue to improve information for decision making.


At the federal level, efforts to improve information resulted in new mandates from the Government Accounting Standards Board (GASB).   Local governments across the United States will change the way pension obligations are disclosed in the financial statements. Information previously provided in footnotes will now affect the bottom line when the audit of the June 30, 2015 financial statements is issued in December 2015. There is some controversy about whether this will affect bond ratings, but there is general agreement that members of the public may be very concerned about the new numbers.


Two recent publications do a good job of explaining the issues and the impact. The first is a one-pager: Books, Bonds and Budgets: Understanding New Public Pension Funding Guidelines and Calculations:


For a more in-depth explanation, see Pension Funding: A Guide for Elected Officials - Report from the Pension Funding Task Force 2013.


Fixing our Streets and Protecting the Bay: Plans for improvements recommended in our Streets audit were reported at the October 1 special Council meeting. Measure M, approved by voters in November 2012, provides funding for street and related watershed improvements. Our Streets Audit helped to identify what is needed over five years to achieve an average Pavement Condition Index (PCI) of "good". We demonstrated that data-driven decision making can save money by preventing escalating costs of delayed repairs. Council will vote on next steps on November 19.


San Francisco Bay is already cleaner because Public Works is using data-driven decision making to dramatically reduce Sanitary Sewer Overflows, as recommended by our Sewer Audit. The reduction in overflows, and completion of a five year inspection and cleaning plan in only three years, are impressive achievements. The City Manager will be reporting all recommendations implemented in a report to Council on November 12.  Public works staff expressed their appreciation of the help they received from Senior Auditor Frank Marietti, who completed this audit and continues to follow up.


Audit Follow Up: City Manager progress reports on implementation of recommendations in our  Lease audit, Permit Center Cash Count and Shelter Plus Care audit on November 12.


We currently have two performance audits in progress:

Permit Center

Objective:  Do the Planning Department's processes result in efficient and timely issuance of building permits and accurate charging and proper deposit of fees? Are the procedures over cash handling ensuring accuracy of collections and deposits? Have previous audit recommendations been addressed? 


Parks, Recreation & Waterfront Cash Handling

Objective:  Are procedures over cash handling ensuring accuracy of collections and deposits? 

We appreciate your continued support for our work to help Berkeley deliver services in a more efficient, effective, and equitable way.  Please contact me at (or at 981-6750) with your questions, comments, and ideas.  I look forward to hearing from you.

Ann-Marie Hogan, City Auditor

Audit News
from the City Auditor 
October 2013 
City Auditor Ann-Marie Hogan

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