El Cerrito’s Financial Position Confirmed by California State Auditor

El Cerrito, California – An Audit Report released today by the California State Auditor confirms that the City of El Cerrito has made major improvements in its fiscal health and financial management practices and declares the City’s General Fund to be stable.

The Audit Report, which served as a follow-up to a report issued by the State Auditor in March 2021, removed the City’s designation as “High Risk” under the California State Auditor’s High Risk Local Government Agency Audit Program.

As stated in the Audit Report, “[I]n recent years, El Cerrito has made a concerted effort to control its finances and has stabilized the condition of its general fund.” The Report outlines numerous actions the City has taken since March 2021 to improve the City’s financial health and resulting in the City growing its General Fund reserves to $23 million by the end of Fiscal Year 2022-2023. Actions the City has taken include reducing personnel costs by eliminating positions and temporarily freezing salaries, developing a formal financial recovery plan, and completing a Classification and Compensation Plan to evaluate salaries of all employees Citywide.

“The City is extremely proud of our accomplishments and how well we’ve improved the City’s financial health,” said outgoing Mayor Tessa Rudnick. “The remarkable turnaround in the City’s financial position, addressing all of the recommendations identified by the State Auditor, and being removed from the High Risk Local Government Program in just three years is the result of a great deal of hard work on the part of the City Council, City staff, and our community.”

The Audit Report documented how the City has improved its budget development and monitoring practices to enhance the information being provided to the City Council and to the public and to ultimately inform decision-making. Actions undertaken include doing comprehensive budget updates to City Council on a quarterly basis, expanding the information presented in the City’s adopted budgets, and enhancing and expanding financial forecasting and budget trend analysis. Reaching a similar conclusion, on September 24, 2024, the Government Finance

Officers Association (GFOA) presented the City with the Distinguished Budget Presentation Award for the Fiscal Year 2024-2025 and Fiscal Year 2025-2026 Biennial Budget. This was followed by the Certificate of Achievement for Excellence in Financial Reporting awarded by the GFOA on October 1, 2024, in relation to the City’s Fiscal Year 2022-2023 Annual Comprehensive Financial Report.

“We are committed to maintaining the City’s overall fiscal health moving forward,” said incoming Mayor Carolyn Wysinger. “We will continue to consider additional strategies to ensure our long-term sustainability, while making sure we provide services equitably to our community.”

The Audit Report outlined steps the City of El Cerrito is continuing to undertake now, with a continued focus on ensuring the organization’s long-term financial health. Activities underway and in development include completing a cost allocation plan and fee study, which the City anticipates being completed this fiscal year, as well as a service delivery study to be completed prior to the development of the next biennial budget.

“We are resolved to continue right-sizing the budget,” said City Manager Karen Pinkos, “Engaging these studies will allow the City to objectively look at operational protocols to streamline processes and ensure costs are effectively recovered.”

City Manager Pinkos elaborated, “The City is grateful to have had the opportunity provided by the State Auditor to embark on a concerted effort to improve our financial policies and address our structural financial issues. The accomplishments made by the City over the last five years have created a strong foundation of financial health for a bright future ahead.”

To review the full report from the California State Auditor, including past reports and responses from the City, please visit el-cerrito.org/StateAuditorsReport


State of California Auditors Office

  • 2024-801 Local High Risk Program: The State Auditor Is Removing Its High-Risk Designation From Four Cities and Retaining the Designation for Three Others. This audit report updates the status of the cities of Blythe, El Cerrito, Lindsay, Lynwood, Montebello, San Gabriel, and West Covina as high‑risk entities as part of our office’s high‑risk local government agency audit program. Our prior audits of these cities identified areas of high-risk related to the cities’ financial conditions, financial stability, and oversight of city contracts, among other issues.

Background:

State Auditor’s Report

In December 2024, the California State Auditor issued a report, “The City of El Cerrito Has Taken Corrective Action to Address Its Risk Areas, and the State Auditor Is Removing Its High‑Risk Designation.”

Read the full report at: https://www.auditor.ca.gov/reports/2024-801/#El-Cerrito

The California State Auditor completed a follow-up audit from June 2024 to October 2024 to assess the City’s status with respect to the risk areas identified in its Audit Report issued in March 2021. The State Auditor confirmed that the City of El Cerrito has made major improvements in its fiscal health and financial management practices and declared the City’s General Fund to be stable. As a result, the State Auditor removed the City’s designation as “High Risk” and the City of El Cerrito will no longer be reviewed under the California State Auditor’s High Risk Local Government Agency Audit Program. Read the City’s Press Release here.

The initial audit conducted under the Local High Risk Program took place from October 2020 to March 2021. Following the issuance of the report, the City was required to prepare a Corrective Action Plan that addressed the high risk areas identified in the report and updated the State Auditor every six months.

Archived Reports:


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