The State - News from Dec. 22, 1986

A bookkeeping error has left Palo Alto $2 million short in its budget, forcing the City Council to begin deciding Monday which programs must be reduced or eliminated. The error shocked city officials who had earmarked the money for capital improvements. Finance Director Mark Harris said the mistake was made by the city’s outside auditor, Deloitte, Haskins & Sells, hired by the city in 1985 to help its newly created Finance Department. Auditors finished with the books for 1984-85 in January, but the error was not discovered by the city until this month. “This is no subtle detail,” Harris said. “We have asked the auditors to explain how this could have happened, but they have not been able to shed much light on it. Their recollections are not clear and their work papers are not good.”