Press Release - City of Fullerton Releases Independent Financial Audit Results; Announces Dates for Community Budget Workshops

For Immediate Release
June 16, 2026

Media Contact
Kim Chaudhry
Senior Administrative Analyst
[email protected]
(714) 738-6317

City of Fullerton Releases Independent Financial Audit Results;

Announces Dates for Community Budget Workshops

Audit did not find indicators of fraud or intentional misconduct

FULLERTON, CA (June 16, 2026) - Tonight, the City of Fullerton released the results of an independent financial audit, marking a significant step in its ongoing commitment to transparency and stewardship of public funds.

The audit was conducted by Grant Thornton Risk Advisory Services and covered the City's budgeting process and communications to City Council for the fiscal year ending June 30, 2025, for potential errors or miscommunication. Specifically, the analysis focused on:

• A $2.9 million audit adjustment recorded in FYE 2025; and
• The use of approximately $10 million in unassigned fund balance in FYE 2025.

The audit did not identify indicators of fraud or apparent intentional misconduct.

Key takeaways found that the $2.9 million adjustment reflected accounting errors in how a transaction was recorded, not issues with the underlying transaction or its purpose. The $10 million decline in unassigned fund balance was primarily driven by a planned budget deficit, along with transfers, accounting adjustments and changes in fund balance classifications.

It concluded that financial governance and oversight, accounting treatment, financial reporting and budget presentation issues limited transparency and contributed to a misunderstanding of the City's financial position.

"Through the audit, we have identified several internal operational challenges that must be addressed to build a stronger, more sustainable future for the Fullerton we all love. I am committed to working closely with City Council and our staff to implement stronger financial controls, protect taxpayer funds and give the City Council clarity to make decisions for the future," said City of Fullerton City Manager Eddie Manfro.

While there is resolution around the audit findings, the City is still addressing how to close a structural budget deficit caused by rising City expenses outpacing stagnant revenues.

The City is exploring every option to maintain service levels. That includes reviewing operational efficiencies, strategic use of reserves, potential new revenue sources and community input on priorities.

To support informed decision-making, the City will host two community conversations designed to provide residents with clear, factual information about the City's fiscal outlook and gather meaningful input regarding community priorities.

Budget Community Meeting #1
Tuesday, July 7, 2026, at 5:30 p.m.

Main Library Conference Center

353 West Commonwealth Avenue

Fullerton, CA 92832

Budget Community Meeting #2
Thursday, July 9, 2026, at 5:30 p.m.

Hunt Branch Library

201 South Basque Avenue

Fullerton, CA 92833

Learn more about Fullerton's finances here.

About the City of Fullerton

The City of Fullerton is a public entity located in Orange County, serving a population of approximately 140,000 residents and is celebrated for its historic downtown, vibrant arts scene, top-ranked educational institutions, and thriving small-business community.

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