04-04-2025
Oakland's Kids First! children's fund owes city $7.2 million, audit finds
(KRON) — The Oakland Kids First! children's fund owes the City of Oakland's general fund more than $7.2 million due to continuous errors committed by the City of Oakland's Finance Department between 2018 and 2024, an audit conducted by the City Auditor shows.
The City of Oakland exceeded spending requirements by spending about $401 million on children and youth services during the six-year period, or an average of $67 million per year, the audit shows. The City of Oakland Human Services Department manages the Kids First! fund by awarding grants to nonprofits, the Oakland Unified School District and other agencies that provide children and youth programs.
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According to the Office of the City Auditor, the city's Finance Department did not always deposit the correct amount into the Kids First! fund during this period. These incorrect payments caused the city to spend $7,270,352 more than it was supposed to on the fund.
'For example, for one year, instead of correcting an overpayment from the [general purpose fund] to the Kids First! Fund, Finance mistakenly transferred an amount nearly equal to the overpayment to the Kids First! fund, giving the Kids First! fund nearly double the amount it was owed by the Act, at the expense of the GPF,' the Office of the City Auditor said.
The City Auditor recommended that the Finance Department address the budget issue by making a one-time adjustment of $3.1 million from the Kids First! Fund for transfer errors committed in the 2019-2020 fiscal year, and an adjustment of $4.2 million for overpayment during the 2023-24 fiscal year.
The City Auditor also recommended that the Finance Department adopt formal guidance for adjusting and calculating spending on eligible expenses. This was the second audit recommending that Oakland's Finance Department develop policies and procedures for the Kids First! Fund.
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Oakland City Auditor Michael Houston said in a statement that ongoing budget cuts may affect his office's ability to audit city programs and services in the future.
'I want the City Auditor's Office to regularly conduct audits of the Kids First! Fund and the other 10 audits that the city charter and city ordinances require us to conduct on a recurring basis, as well as our charter responsibility to conduct operational audits of areas that present the greatest risk to the city and are most important to city residents, businesses, and leaders,' Houston said.'
Houston added that: 'unfortunately, the City Auditor's Office currently has several frozen positions and is challenged to fulfill its city charter-mandated responsibilities.'
'Resourcing the City Auditor's Office so it can fulfill its charter-mandated responsibilities ultimately helps us to achieve our goal of identifying ways that the city can perform more efficiently and effectively for Oakland residents and businesses, reduce expenses, and safeguard city assets,' he said.
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