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Staff Report 2509-5172
CITY OF PALO ALTO Policy & Services Committee Special Meeting Tuesday, August 11, 2026 6:00 PM Agenda Item 1.Office of the City Auditor Presentation of the Junior Museum & Zoo Audit. CEQA Status – Not a project. Supplemental Report Added, Staff Presentation 8 1 4 9 Policy & Services Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Auditor Meeting Date: August 11, 2026 Report #:2509-5172 TITLE Office of the City Auditor Presentation of the Junior Museum & Zoo Audit. CEQA Status – Not a project. RECOMMENDATION The Office of the City Auditor recommends the Policy & Services Committee accept the results of the Junior Museum & Zoo (JMZ) Audit Report. BACKGROUND Baker Tilly Advisory, in its capacity serving as the Office of the City Auditor (OCA), performed a citywide risk assessment that evaluated a wide range of risk areas, including strategic, financial, operational, compliance, technological, and reputational risks. The purpose of the assessment was to identify and prioritize risks to develop the annual audit plan. During the FY24 risk assessment, the OCA identified operations at the JMZ as a potential area of risk and included this topic in the FY25 Audit Plan. ANALYSIS The objective of the JMZ Audit was to determine if the program is operating effectively and efficiently to fulfill the program’s mission. The JMZ is a City-operated children’s science museum and zoological facility managed by the City’s Community Services Department (CSD). Rebuilt and reopened in November 2021 following a major renovation supported by approximately $25 million in fundraising from the Friends of the JMZ, the facility housed more than 65 species and approximately 85 animals. Education is a core component of the JMZ’s mission, with approximately 20 educators, delivering more than 2,700 inquiry-based science lessons annually to over 24,000 students at 168 schools and community centers. In addition, the JMZ operates popular and in demand summer camp programs. 8 1 4 9 The JMZ is funded primarily through the City’s General Fund, supplemented by admissions, program fees and ongoing support from the Friends of the JMZ, which has promoted accessibility, inclusion, and facility enhancement for mor than 50 years. During the audit period, the JMZ also achieved accreditation from the Association of Zoos and Aquariums (AZA) through September 2030, reflecting its compliance with the profession’s highest standards and enabling participation in species exchange programs and other key operational benefits. 8 1 4 9 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: July 2, 2026 City of Palo Alto Office of the City Auditor Junior Museum and Zoo Audit Contents network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. EXECUTIVE SUMMARY .............................................................................................1 INTRODUCTION .........................................................................................................4 AUDIT RESULTS ........................................................................................................6 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted an audit of the Junior Museum and Zoo (JMZ) based on approved Task Order 4.31 as part of the City’s FY25 Audit Plan. The objective of this audit was to determine if the City’s Junior Museum and Zoo is operating effectively and efficiently to fulfill the program’s mission. Report Highlights (Page 6) community demand, including near-weekly sellouts, high program participation, and improved ticketing efficiency through the ACME system. However, JMZ does not yet have a recurring, consolidated performance measurement framework to assess overall program impact, demand, utilization, customer experience, staffing capacity, revenue, and administrative workload. As a result, the City has useful data in certain areas but limited visibility into whether JMZ is meeting community demand, using resources efficiently, and supporting budget and staffing decisions with complete performance information. • The ACME ticketing system improved operations and reportedly reduced daily entrance duties by about 30%. • JMZ has useful data in some areas, but does not consistently consolidate key metrics across attendance, utilization, guest experience, event demand, revenue, staffing, and workload. • Some demand indicators are not fully tracked, including birthday party requests, member no-shows, and guest feedback. • Staffing and administrative capacity challenges limit JMZ’s ability to track, analyze, and use data for broader management decisions. The City and JMZ should establish a recurring framework to measure the JMZ's demand, results, and operating performance and to inform budget and staffing decisions. This framework can be built largely by consolidating existing data, since systems like ACME already capture attendance, ticket sales, and time-slot activity. At a minimum it should cover visitor demand and access, guest experience, revenue by source against costs where feasible, program and event demand, and staffing and administrative workload, with JMZ and Community Services Department (CSD) leadership reviewing it at least quarterly. As it implements the framework, the City can also weigh whether dedicated business operations support is warranted, given the Executive Director's stated future need for a business or analyst role and the already- stretched administrative capacity. EXECUTIVE SUMMARY Finding 2: (Page 9) JMZ’s education program is an area that continues to grow, serves many students and adults, and receives strong customer satisfaction ratings. However, staffing, supplies, financial reporting, funder tracking, and program evaluation practices have not kept pace with this growth. Without stronger resource planning, financial reconciliation, and performance measurement, management has limited ability to determine whether the program is financially sustainable, adequately resourced, and achieving broader outcomes beyond participant satisfaction. • The education program expanded in FY2025, generating more than $980,000 in revenue, delivering more than 2,700 programs or lessons, and serving more than 24,000 children and students. • Staffing and supplies have not kept pace with growth due to part-time turnover, slow hiring, vacancies, limited administrative capacity, and a supplies budget that has increased only modestly while participation has more than doubled. • Financial reporting does not clearly connect program activity to revenue, expenses, and fiscal year timing, limiting management’s ability to assess cost recovery and sustainability. • Survey results show strong satisfaction, but low response rates and limited outcome-based evaluation make it difficult to determine whether feedback is representative or whether the program is achieving broader educational goals. Key Recommendation: JMZ should develop an integrated education program dashboard linking program activity, staffing, supplies, revenues, expenses, subsidies, funding sources, and evaluation results. The dashboard should include workload-based staffing and supply assumptions, budget-to-actual reporting by program type, reconciliation between service/revenue reports and financial records. In addition, it should track Friends of the Museum-funded programs from planning through payment. Finally, survey response rates and comment trends, and outcome measures tied to curriculum goals should be consistently tracked and monitored. This would better enable the JMZ to keep expanding successful programs while better demonstrating whether they are financially sustainable, adequately staffed, and achieving intended results. EXECUTIVE SUMMARY Finding 3: (Page 14) regulatory compliance systems, including earning Association of Zoos and Aquariums (AZA) accreditation, finalizing a veterinary services agreement, and maintaining daily animal-care reporting. However, OCA identified opportunities to improve consistent execution and documentation of key safety and compliance controls, including emergency drills, animal transport, and recordkeeping. Strengthening documentation and oversight in these areas would help JMZ demonstrate ongoing compliance with AZA standards and better ensure that safety and animal welfare controls are operating as intended. • Emergency drills were not always completed or documented as required, though JMZ has since developed a checklist to capture drill results, lessons learned, and corrective actions. • Animal transport practices should be formalized, including documented vehicle use expectations, safety training, and procedures for transporting animals, staff, and education materials. • Recordkeeping is spread across daily reports and multiple files, making it difficult to verify that required actions were completed and retained consistently. • The City should evaluate whether the semi-open elevator / lift shaft presents a safety risk and determine whether additional safeguards, such as a full-height door, gate, or barrier, are needed. Key Recommendation: The City and JMZ should establish a centralized safety and compliance tracking process to document and monitor required animal care, safety, and regulatory compliance activities, including responsible staff, completion frequency, required evidence, reviewer sign-off, and corrective actions. The process should include emergency drill tracking and evaluation, consistent use of the Emergency Drill/Incident Review Checklist, documentation of lessons learned and follow-up actions, and a written animal transport policy addressing vehicle use, staff training, animal containment, trip documentation, and emergency procedures. JMZ and CSD management should review the tracker at least quarterly to confirm that required activities are completed, documentation is retained, and corrective actions are addressed, helping JMZ demonstrate compliance with AZA documentation expectations and assess whether key controls are operating as intended. Introduction 1 Friends of the Palo Alto Junior Museum & Zoo – Friends of the Palo Alto Junior Museum & Zoo Objective effectively and efficiently to fulfill the program's mission. Background the City. The facility was entirely rebuilt and reopened in November 2021, following a major renovation supported in large part by the Friends of the JMZ 1, which raised approximately $25 million for the project. The JMZ operates under the City’s CSD, and the collection includes over 65 species and approximately 85 individual animals, including a live bald eagle held under a U.S. Fish and Wildlife Service permit. The JMZ’s education program is one of its largest program areas. It employs approximately 20 educators and instructors who provide over 2,700 inquiry- based science lessons across 168 schools and community centers, serving more than 24,000 students annually. During the summer, staff operate week-long camp sessions across nine content areas, with a majority selling out in the first round of applications. The JMZ is primarily funded through the City’s General Fund, supplemented by ticket revenue, education program fees, and fundraising by the Friends of the JMZ, a support organization that has existed for over 50 years and focuses on accessibility, inclusion, and fundraising for facility improvements and special programs. During the audit period, the JMZ successfully obtained accreditation from the AZA through September 2030. AZA accreditation represents the highest standard for zoological institutions and enables the JMZ to participate in species exchange programs, streamline permitting processes, and demonstrate adherence to leading professional practices. Scope covering FY 2024 through 2025. The audit included assessing the following areas: educational activities, financial and program data, staffing and administrative processes, guest services and cash handling, animal care and wellbeing, veterinary coverage, emergency preparedness, safety and security, selected wildlife permits, and governance/oversight considerations. Methodology • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to JMZ operations. INTRODUCTION 2 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Senior Audit Manager in Baker Tilly’s Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2026. It should be noted that Baker Tilly’s most recent firmwide peer review was completed in November 2024 with a rating of “Pass”. The scope of that peer review includes projects completed under government auditing standards. regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness. • Conducted an on-site visit to evaluate animal care and veterinary records, financial management controls, and safety and security practices, including animal health and wellbeing records, necropsy reports, daily animal care reports, veterinary documentation, cash handling procedures, P-card usage, budgeting practices, ticket revenue management, emergency drill records, education, facility access controls, and incident reporting systems. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Compliance Statement accepted government auditing standards, except for the requirement of an external peer review2. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings, observations, and conclusions based on our audit objectives. Organizational Strengths across all program areas. The education program is a standout asset, serving tens of thousands of students with high-quality, inquiry-based science instruction. The JMZ’s successful attainment of AZA accreditation demonstrates its commitment to operational excellence, industry best practices, and continuous improvement. The modern facility, rebuilt in 2021, is a valued asset to the Palo Alto community. We appreciated the participation of JMZ staff in interviews and their responsiveness to follow-up requests throughout the audit. The OCA greatly appreciates the support of the CSD in conducting this audit activity. Thank you! Audit Results JMZ delivers high- demand mission- driven programs, and the City has an opportunity to further develop a formal performance measurement framework to assess impact, demand, and operating results. live-animal zoo, public attraction, event venue, and community -serving facility. The JMZ is valued by the community and offers a distinctive experience within the City. Available operational information indicates strong demand for JMZ services. Based on OCA’s review of ticket sales, education program participation counts, and other program data, JMZ has indicators of strong demand across both general admission and education programming. Guest Services staff reported that JMZ implemented paid ticketing in 2021, using the ACME ticketing system, and sells out nearly every weekend. Staff also reported that ACME has saved approximately 30% of staff time in daily museum entrance duties. The graph below shows the number of admissions in FY24 and FY25 with total admissions of 128,006 and 120,822 respectively. Figure 1: JMZ General Admission by Month, FY2024 vs. FY2025 Source: OCA analysis of JMZ general admission data, FY2024–FY2025. FY2025 includes a mid-year transition to the ACME ticketing system in FY2025. While JMZ has increased use of operational data for decision-making, there are additional opportunities to improve performance reporting. JMZ has begun using operational data and business analysis in selected areas. For example, Guest Services staff can use the ticketing system to track tickets sold by day or date range, and CSD leadership reported that the City performed an analysis of staffing models and ticket pricing, which led to an increase in ticket prices. However, JMZ does not yet have a formal, recurring performance measurement - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 At t e n d a n c e Month (fiscal year: July-June FY 2024 FY 2025 AUDIT RESULTS facilities, and administrative workload. As a result, the City has useful operational data in specific areas but no recurring, consolidated view of how the JMZ's programs are performing overall. Through the ACME system, Guest Services tracks ticket sales by day and date range, but other demand and utilization signals are not captured. Staff reported that members book admission up to eight weeks ahead and often do not attend. Roughly 75% to 80% of booked guests attend, which reduces availability for non-members, however this pattern is not formally measured. According to the Assistant Director for CSD, the JMZ also lacks a structured process for collecting customer feedback, though staff are working to implement one. Another area where more information would be helpful is in special programming such as parties and events. According to Guest Services staff, birthday programming is capped at 16 bookings per month and demand exceeds that capacity. However, at the time of the audit management reported that they were not consistently tracking the number of requests for birthday parties so demand for this service remains unknown. According to birthday party reports from FY24 to 25 there was reduction in the number of parties from 29 in FY24 to 18 in FY25. This represented a 36.2% decrease in party-guest attendance and a 63.5% decrease in revenue from $25,148 to $9,170. Guest Services staff indicated this was due to staffing and software issues, which have since been resolved. Finally, staff noted that marketing efforts are not tracked and monitored and social media and website information is not consistently or regularly updated. Increasing such efforts could help the JMZ continue to expand its services and reach. According to Guest Services staff, a single position handles contracts, scheduling, guest services, and program coordination and described the workload as overwhelming, and staffing has consistently been a challenge. The Executive Director stated that hiring takes eight months to a year and that the City’s Human Resources Department often cannot accommodate hiring requests timely. The Executive Director also identified a future need for a management analyst or director of business to manage budgets, HR, and contracts and to "acquire, review and present data to inform strategies JMZ-wide" indicating no dedicated data-analysis function exists today. Without a recurring framework consolidating indicators such as attendance, ticket utilization, customer experience, event demand, revenue, staffing capacity, and administrative workload, the City has limited ability to tell whether the JMZ is meeting community demand, using resources efficiently, and achieving intended outcomes, or supporting informed budget and staffing decisions. Recommendation to track the JMZ's mission impact, demand, and operating results and to support budget and staffing decisions. Much of the underlying data already exists in current systems, the ACME ticketing system, for example, captures attendance, ticket sales, and time-slot activity, so the framework can be built largely by consolidating and regularly reviewing existing data rather than acquiring new systems. At a minimum the framework should include: AUDIT RESULTS •Visitor demand and access measures Track attendance, ticket sales, sold-out periods, no-show rates, member reservation activity, non-member ticket availability, walk-ins, time-slot utilization, and peak versus underutilized periods. • Guest experience measures Implement a guest services survey or other structured feedback process to measure visitor satisfaction, ease of ticketing, accessibility, customer service, complaints, response times, and recurring service themes. • Revenue and cost measures Report revenue by major source, including admissions, memberships, facility rentals, birthday parties, events, donations, and other earned revenue. Where feasible, compare revenue to direct costs and staffing requirements. • Program and event demand measures Track demand for birthday parties, rentals, special events, animal encounters, accessibility programs, and other public-facing services, including waitlists, declined requests, cancellations, and unmet demand. • Staffing and administrative workload measures Track vacancies, time to fill positions, part-time staffing reliance, overtime or coverage gaps, administrative workload, contract volume, customer response times, and major bottlenecks. • Quarterly management review JMZ leadership and CSD management should review the performance framework at least quarterly and document key trends, decisions, follow-up items, responsible parties, and target completion dates. The City should also evaluate whether JMZ needs dedicated business operations support, such as a management analyst or business manager, to help maintain the framework, analyze results, support budget development, coordinate contracts and administrative requirements, and provide JMZ-wide data for decision-making. Management Response Responsible Department(s):Community Services Concurrence: Agree Target Date: Q4, FY 2027 Action Plan: made significant progress in expanding the use of operational data through implementation of the ACME ticketing system, program participation tracking, and revenue reporting. Management agrees that consolidating these existing data sources into a recurring performance dashboard will strengthen strategic decision- making and support future budget, staffing, and operational planning. During FY2027, JMZ will formalize a recurring performance measurement framework by consolidating existing operational data into a management dashboard. The ACME ticketing system already captures many key performance indicators, including attendance, ticket sales, sold-out periods, member reservation activity, no-show AUDIT RESULTS visitation periods. JMZ will incorporate these existing metrics into a recurring dashboard while continuing to expand performance measures as additional data becomes available. JMZ is also implementing new visitor and birthday party survey tools to better measure guest experience and customer satisfaction. Existing waitlists will continue to be used to assess demand for programs where applicable, and additional tracking methods will be developed for programs and services where unmet demand is not currently captured. Together, these enhancements will provide a more comprehensive understanding of visitor demand, customer experience, operational performance, and resource needs. Management also recognizes the value of potential enhanced business and analytical support. Any future staffing additions will be evaluated and proposed during the City's annual budget development process and based on organizational priorities and available resources. AUDIT RESULTS Finding 2: Educational program offerings continue to increase but staffing challenges and budget constraints limit the program’s ability to meet demand. The JMZ education program is expanding and receives strong customer satisfaction ratings, but the available evidence indicates that its staffing, supply budget, financial reporting, funder tracking, and program evaluation practices have not kept pace with that growth. As a result, management has limited ability to determine whether the program is financially sustainable, sufficiently resourced, and achieving program-wide outcomes beyond participant satisfaction. The JMZ education program is a core mission-delivery function and one of the organization’s major public-facing services. The program continues to expand, generating more than $980,000 in FY2025 revenue while delivering more than 2,700 programs or lessons across schools and community centers. In FY2025, the program served more than 24,000 children and students and more than 2,100 adults. This growth reflects a broader year-over-year increase in education activity almost every year for the past decade. From FY2024 to FY2025, reported programs/sessions increased from 2,510 to 2,710, children/students served increased from 23,197 to 24,525, and revenue increased from $918,356 to $980,553. Adult participation also increased, rising from 656 adults served in FY2024 to 2,157 in FY2025. Overall, these changes represent increases of approximately 8.0% in programs/sessions, 5.7% in children/students served, and 6.8% in revenue. Figure 2: Children and Students Served by JMZ Programs Source: OCA analysis of Service Reports FY16, FY17, 18, 23, 24, 25 *OCA was not provided with FY19, 20, 21, and 22 However, according to the Director of Education and our analysis, the program’s staffing and supplies have not kept pace with this growth. The program has 18 science teachers, three are full-time and the remainder are part-time. The program experiences high turnover in part-time positions and a slow hiring process resulting in vacancies that remain unfilled for extended periods. Once hired, the Education Director estimated that new staff take approximately six months to become fully efficient. In addition, OCA noted that the supplies budget has increased by approximately $2,000 over 16 years while the number of students served has more 17,911 17,760 12,853 20,927 23,197 24,525 - 5,000 10,000 15,000 20,000 25,000 30,000 FY 2016 FY2017 FY 2018 FY 2023 FY 2024 FY 2025 # o f S t u d e n t s Fiscal Year* AUDIT RESULTS demand, but the current budget does not provide the additional staffing needed to support that growth. Figure 3: JMZ Education Program Earned Revenue by Year, 2020–2025 Source: OCA analysis of JMZ financial performance data (earned revenue by program, 2020–2025). Based on the available information provided to the OCA there does not appear to be a way to clearly connect program activity to budget and actual results. The FY2024 service and revenue report identifies $918,356 in education program revenue. Additional documentation provided to the OCA shows $789,739 in total actual revenues in the Service and Revenue 2024 report and $1,403,711 in total actual expenses in the Budget Performance FY2009-25 report for 2024, across the combined Outreach, Camp, and Baylands cost centers. OCA noted that neither the 2024 service and revenue report nor the Budget Performance FY2008-24 file provides a complete breakdown that ties education revenue and expense to program category. According to the Education Director, staff do not have the capacity to reconcile these figures, in part because payment receipts sometimes miss a fiscal year's cutoff and are recorded in the following year. The FY2025 Budget Performance file reflects this, noting that FY2025 revenue includes some FY2024 payments that were not received or processed until FY2025, which further complicates year-over-year comparison. Available financial data also shows that education-related activity requires ongoing subsidy or budget-variance management. Available budget information shows annual losses of $494,456 in 2020, $750,607 in 2021, $661,057 in 2022, $431,572 in 2023, $621,346 $312,694 $554,341 $687,645 $789,739 $990,072 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 2020 2021 2022 2023 2024 2025 Re v e n u e Year AUDIT RESULTS temporary salaries of $520,542 compared with a temporary salary budget of $349,148. Figure 4: Education Programs — Actual Revenues vs. Actual Expenses (Outreach, Camp, and Baylands Combined) Source: OCA analysis of JMZ education program financial data, 2020–2024. Labels show the annual operating deficit. The program also relies on Friends-funded support to provide programming for underserved youth, but the delivery plan has little margin for error. According to management, Friends of the JMZ provides $163,000 annually for school programs, after-school programs, and camp scholarships. The Friends-funded Program Delivery Plan shows a Total Plan of 578 programs, with $160,176 in planned expense against $163,250 in total funding available, leaving $3,074, or about 1.9%, between planned expenses and available funding. Management should assess whether this margin is adequate. OCA’s analysis of program survey information found strong customer satisfaction ratings, but response rates could be improved to ensure greater feedback is obtained for making program adjustments. According to the Director of Education, the program uses electronic evaluations completed by participants and teachers to assess and improve program quality. Survey exports for Fall 2024, Winter 2025, and Spring 2025 family programs show many satisfaction and likelihood-to-recommend ratings of 5, with positive comments about instructors and program content. Based on the provided family program survey export, there were 37 satisfaction responses, with an average satisfaction score of 4.84 out of 5. Based on the 2025 summer camp survey export, there were 119 satisfaction responses, with an average satisfaction score of about 4.92 out of 5. However, the survey exports do not show how many participants were asked to respond, response rates, or whether the responses are representative of all school, camp, and family program participants. FY2025 service -$494,456 -$750,607 -$661,057 -$431,572 -$697,561 -$608,162 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 2020 2021 2022 2023 2024 2025 Re v e n u e & E x p e n s e s Year Total Actual Revenues Total Actual Expenses AUDIT RESULTS 3 What is a Good Survey Response Rate? | SurveyMonkey response rate could help the JMZ better understand which program elements are working well and which need improvement. OCA’s assessment of survey comments found many positive comments and identified some specific service-improvement opportunities. Family program respondents requested more hands-on science, noted that some children were too young to fully participate, and asked for programming after noon so transitional kindergarten children could attend. Camp survey respondents requested expanded offerings for older children or tweens, additional weeks of Zoo Camp, and more communication tools such as photos or take-home materials to help families understand what children did during their camp experience. While educational programming has continued to expand, the absence of an integrated management framework linking service growth with staffing capacity, hiring timelines, supplies, program costs, funding commitments, revenue recognition, and performance outcomes limits the program’s ability to manage growth effectively. Staff interviews highlighted growth expectations without corresponding staffing budget increases, slow hiring, high part-time turnover, supply budget constraints, and insufficient administrative support. Without stronger resource planning, financial reconciliation, and performance measurement, JMZ management cannot determine whether or not education program growth is sustainable, program costs and revenues are being reported in the correct categories and fiscal years, subsidies align with management’s intent, Friends-funded programs are delivered as planned, or high satisfaction ratings reflect program-wide effectiveness. Although the program continues to provide valued services, management lacks the information needed to assess cost recovery, staffing adequacy, customer demand, access goals, and educational outcomes. Recommendation ties program activity to staffing, supplies, full program costs, revenues, subsidies, funder commitments, and evaluation results, so management can determine whether program growth is financially sustainable, sufficiently resourced, and achieving outcomes beyond participant satisfaction. Much of the underlying data already exists, in the service and revenue reports, the Budget Performance files, the Friends-funded Program Delivery Plan, and the program's electronic evaluations, so the framework can be built largely by consolidating and reconciling existing data rather than acquiring new systems. At a minimum the framework should include: • Staffing and supply measures Establish workload-based staffing and supply assumptions tied to the number of programs and students served, and track hiring timelines, vacancies, part- time turnover, and time for new staff to reach full efficiency. Flag where service volume outpaces current staffing and supply capacity, including the recurring supplies-budget overage. • Budget-to-actual and cost measures AUDIT RESULTS subsidy or deficit for each program area. • Financial reconciliation measures Reconcile the service and revenue reports to the financial records, tie education revenue and expense to program category, and account for payments that cross fiscal-year cutoffs so activity can be compared consistently from year to year. • Funder and Friends-funded program tracking Track Friends-funded programs from planned to schedule, delivered, invoiced, and paid, and monitor the delivery plan's remaining margin and any unresolved implementation items. • Program evaluation and outcome measures Capture survey response rates and the share of participants represented, trend-analyze survey comments to identify recurring service-improvement themes and add outcome measures tied to curriculum goals , so program quality is assessed beyond satisfaction ratings. • Quarterly management review JMZ leadership and CSD management should review the framework at least quarterly and document key trends, decisions, follow-up items, responsible parties, and target completion dates. Using the information the framework produces, JMZ and CSD management should evaluate whether current staffing levels, supply budgets, and subsidy levels are adequate to sustain program growth, and whether adjustments to program scope, fees, or resources are warranted to align the program's growth with its budget and mission. Management Response Concurrence: Agree Target Date: Q4, FY 2027 Action Plan: Management concurs with the recommendation. The Junior Museum & Zoo's Education Program has experienced significant growth in recent years, expanding both the number of participants served, Educators employed, and earned revenue while maintaining high levels of customer satisfaction. Management agrees that as the program continues to grow, strengthening performance reporting and resource planning will better support long-term operational and financial decision-making. JMZ is already implementing many of the recommended practices by expanding the use of service reports, financial data, participant evaluations, and Friends -funded program tracking to better monitor program performance. During FY2027, these existing data sources will be consolidated into a more integrated education program management framework that provides improved visibility into staffing capacity, supply needs, program activity, revenues, expenditures, funding sources, and overall program performance. AUDIT RESULTS and the Friends of the Junior Museum & Zoo to improve financial reporting and reconciliation while recognizing the timing differences that can occur between program delivery and revenue recognition across fiscal years. JMZ will also continue evaluating staffing needs, supply budgets, and program demand to help ensure resources remain aligned with the continued growth of the Education Program. Resource needs identified as part of this evaluation will be proposed as part of the annual budget development process. Participant feedback will continue to be an important component of program evaluation. JMZ will implement strategies to increase survey participation and further enhance outcome-based performance measures to support continuous improvement and demonstrate the educational impact of its programs. Finding 3: JMZ has strengthened animal care and regulatory compliance systems earning accreditation this past year; but some safety, animal welfare and documentation controls could be improved safety, and regulatory compliance systems as evidenced by the AZA Accreditation, OCA identified several areas where controls should be more consistently executed and documented. During the audit period, the JMZ earned AZA accreditation and continued to strengthen its animal care and safety practices, including finalizing a signed veterinary services agreement and maintaining daily animal-care reporting. OCA identified a few opportunities for management to more consistently document processes and support required reporting. Emergency Drills According to the Zoo Director, the JMZ conducts emergency drills twice a year, more often than the once-a-year minimum in AZA Standard 11.2.5, but OCA found that some scheduled drills were not completed. OCA also found drills noted but without the evaluation record the standard requires. AZA Standard 11.2.5 requires that the four basic emergency drills be recorded and their results evaluated. The JMZ has since developed an Emergency Drill/Incident Review Checklist that captures key drill elements. Completing drills as scheduled and retaining the checklist, lessons learned, and corrective actions will meet this requirement. Animal Transport and Vehicle Safety OCA found documentation gaps related to animal transport too. According to the JMZ Director, animals taken to off-site educational programs are moved in built, mobile habitats and transported in employees' personal vehicles, as the JMZ shares a single City vehicle with other facilities. It appears that education staff do not receive safety training for City vehicle use, and OCA did not identify a documented policy governing animal transport. Because the education program operates at scale, more than 24,000 students across 150 schools and community centers in FY25, a documented transport policy and related training would help ensure the safe and consistent transport of animals, staff, and materials. Overall Recordkeeping AZA standards emphasize the importance of documentation, providing that an AUDIT RESULTS and multiple separate files, and several assessment and documentation practices are new or recently implemented, so evidence of completed actions may be hard to track across different documents. When actions are taken but not consistently documented, the JMZ has limited ability to demonstrate compliance with AZA standards or to evaluate whether its controls are operating as intended, even where the underlying practices are sound. Finally, during the onsite visit, OCA observed a semi-open elevator/lift shaft in the zoo area. While OCA did not identify any standards or best practices related to these types of lifts other than regular maintenance, the opening at the top of the lift when it is on the ground floor could present a safety risk. According to the JMZ Director, the JMZ has not experienced any incidents and has a maintenance agreement for the lift. In addition, the Zoo Director stated that staff check the lift each morning to confirm it is locked. Given the location, the City may wish to evaluate whether additional safeguards, such as enclosing the lift area or installing a full-height door, gate, or barrier, are warranted. Recommendation The City and JMZ should establish a centralized safety and compliance tracking process to support consistent execution, documentation, and follow-up of animal care, safety, and regulatory compliance controls. The process should identify each required activity, responsible staff member, frequency, required documentation, completion date, reviewer sign-off, and any corrective action: • Emergency Drill Tracking The process should include annual emergency drill tracking and evaluation, use of the Emergency Drill/Incident Review Checklist, documentation of lessons learned and corrective actions, and follow-up for drills that are postponed or not completed. • Animal Transport Policy JMZ should also develop a written animal transport policy for off-site education programs and other animal movements, including requirements for approved vehicles, personal vehicle use, insurance expectations, animal containment, temperature or life-support needs, staff training, trip documentation, and emergency procedures. • Quarterly Review of T racker JMZ and CSD management should review the tracker at least quarterly to confirm that required activities are completed, documentation is retained, and corrective actions are addressed. This would help JMZ demonstrate compliance with AZA documentation expectations and provide management with a more complete view of whether key controls are operating as intended. AUDIT RESULTS Management Response Responsible Department(s): Community Services Concurrence: Agree Target Date: Q2, FY 2027 Action Plan: Management concurs with the recommendation. The Junior Museum & Zoo has made significant investments in strengthening its animal care, safety, and regulatory compliance programs, culminating in the successful achievement of Association of Zoos and Aquariums (AZA) accreditation in 2025. Management agrees that continued standardization of documentation and compliance tracking will further strengthen existing practices and support ongoing compliance. Since completion of the audit fieldwork, JMZ has implemented an Emergency Drill/Incident Review Checklist and completed all required emergency drills. The checklist provides standardized documentation of drill activities, lessons learned, and any follow-up actions to support ongoing compliance with AZA standards. Documentation of these completed drills and review checklists has been provided to the Office of the City Auditor. JMZ currently maintains written procedures for the transport of animals for off-site educational programs. Management will review and enhance the existing policy to incorporate the additional elements identified in the audit to further strengthen consistency and documentation. JMZ will also implement a centralized compliance tracking process and conduct quarterly management reviews to ensure required animal care, safety, and regulatory compliance activities are completed, documented, and retained, and that any corrective actions are identified and addressed in a timely manner. Item No. 1 Page 1 of 1 1 0 4 0 8 Policy & Services Committee Supplemental Report From: Kate Murdock, City Auditor Meeting Date: August 11, 2026 Item Number: 1 Report #:2608-6605 TITLE Office of the City Auditor Presentation of the Junior Museum & Zoo Audit. CEQA Status – Not a project. ANALYSIS This Supplemental Report and the attached amended JMZ Audit Report are issued to update financial information presented in one section of the report. The Office of the City Auditor (OCA) received revised financial information from Junior Museum & Zoo Management for Educational Programming activities covering FY 2023 through FY 2025. OCA reviewed the revised information and updated the applicable figures and related narrative in the report accordingly. The revised financial information is reflected in Figures 3 and 4 and the accompanying report text on pages 11 and 12 of the attached amended audit report. These revisions do not materially affect the report's findings, conclusions, or recommendations. ATTACHMENTS Supplemental Attachment A: Junior Museum & Zoo Audit Report (Revised) APPROVED BY: Kate Murdock, City Auditor August 6, 2026 City of Palo Alto Office of the City Auditor Junior Museum and Zoo Audit Contents network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. EXECUTIVE SUMMARY .................................................................................................. 1 INTRODUCTION ............................................................................................................... 4 AUDIT RESULTS.............................................................................................................. 6 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted an audit of the Junior Museum and Zoo (JMZ) based on approved Task Order 4.31 as part of the City’s FY25 Audit Plan. The objective of this audit was to determine if the City’s Junior Museum and Zoo is operating effectively and efficiently to fulfill the program’s mission. Report Highlights (Page 6) community demand, including near-weekly sellouts, high program participation, and improved ticketing efficiency through the ACME system. However, JMZ does not yet have a recurring, consolidated performance measurement framework to assess overall program impact, demand, utilization, customer experience, staffing capacity, revenue, and administrative workload. As a result, the City has useful data in certain areas but limited visibility into whether JMZ is meeting community demand, using resources efficiently, and supporting budget and staffing decisions with complete performance information. • The ACME ticketing system improved operations and reportedly reduced daily entrance duties by about 30%. • JMZ has useful data in some areas, but does not consistently consolidate key metrics across attendance, utilization, guest experience, event demand, revenue, staffing, and workload. • Some demand indicators are not fully tracked, including birthday party requests, member no-shows, and guest feedback. • Staffing and administrative capacity challenges limit JMZ’s ability to track, analyze, and use data for broader management decisions. The City and JMZ should establish a recurring framework to measure the JMZ's demand, results, and operating performance and to inform budget and staffing decisions. This framework can be built largely by consolidating existing data, since systems like ACME already capture attendance, ticket sales, and time-slot activity. At a minimum it should cover visitor demand and access, guest experience, revenue by source against costs where feasible, program and event demand, and staffing and administrative workload, with JMZ and Community Services Department (CSD) leadership reviewing it at least quarterly. As it implements the framework, the City can also weigh whether dedicated business operations support is warranted, given the Executive Director's stated future need for a business or analyst role and the already- stretched administrative capacity. EXECUTIVE SUMMARY Finding 2: (Page 9) JMZ’s education program is an area that continues to grow, serves many students and adults, and receives strong customer satisfaction ratings. However, staffing, supplies, financial reporting, funder tracking, and program evaluation practices have not kept pace with this growth. Without stronger resource planning, financial reconciliation, and performance measurement, management has limited ability to determine whether the program is financially sustainable, adequately resourced, and achieving broader outcomes beyond participant satisfaction. • The education program expanded in FY2025, generating more than $980,000 in revenue, delivering more than 2,700 programs or lessons, and serving more than 24,000 children and students. • Staffing and supplies have not kept pace with growth due to part-time turnover, slow hiring, vacancies, limited administrative capacity, and a supplies budget that has increased only modestly while participation has more than doubled. • Financial reporting does not clearly connect program activity to revenue, expenses, and fiscal year timing, limiting management’s ability to assess cost recovery and sustainability. • Survey results show strong satisfaction, but low response rates and limited outcome-based evaluation make it difficult to determine whether feedback is representative or whether the program is achieving broader educational goals. Key Recommendation: JMZ should develop an integrated education program dashboard linking program activity, staffing, supplies, revenues, expenses, subsidies, funding sources, and evaluation results. The dashboard should include workload-based staffing and supply assumptions, budget-to-actual reporting by program type, reconciliation between service/revenue reports and financial records. In addition, it should track Friends of the Museum-funded programs from planning through payment. Finally, survey response rates and comment trends, and outcome measures tied to curriculum goals should be consistently tracked and monitored. This would better enable the JMZ to keep expanding successful programs while better demonstrating whether they are financially sustainable, adequately staffed, and achieving intended results. EXECUTIVE SUMMARY Finding 3: (Page 14) regulatory compliance systems, including earning Association of Zoos and Aquariums (AZA) accreditation, finalizing a veterinary services agreement, and maintaining daily animal-care reporting. However, OCA identified opportunities to improve consistent execution and documentation of key safety and compliance controls, including emergency drills, animal transport, and recordkeeping. Strengthening documentation and oversight in these areas would help JMZ demonstrate ongoing compliance with AZA standards and better ensure that safety and animal welfare controls are operating as intended. • Emergency drills were not always completed or documented as required, though JMZ has since developed a checklist to capture drill results, lessons learned, and corrective actions. • Animal transport practices should be formalized, including documented vehicle use expectations, safety training, and procedures for transporting animals, staff, and education materials. • Recordkeeping is spread across daily reports and multiple files, making it difficult to verify that required actions were completed and retained consistently. • The City should evaluate whether the semi-open elevator / lift shaft presents a safety risk and determine whether additional safeguards, such as a full-height door, gate, or barrier, are needed. Key Recommendation: The City and JMZ should establish a centralized safety and compliance tracking process to document and monitor required animal care, safety, and regulatory compliance activities, including responsible staff, completion frequency, required evidence, reviewer sign-off, and corrective actions. The process should include emergency drill tracking and evaluation, consistent use of the Emergency Drill/Incident Review Checklist, documentation of lessons learned and follow-up actions, and a written animal transport policy addressing vehicle use, staff training, animal containment, trip documentation, and emergency procedures. JMZ and CSD management should review the tracker at least quarterly to confirm that required activities are completed, documentation is retained, and corrective actions are addressed, helping JMZ demonstrate compliance with AZA documentation expectations and assess whether key controls are operating as intended. Introduction 1 Friends of the Palo Alto Junior Museum & Zoo – Friends of the Palo Alto Junior Museum & Zoo Objective effectively and efficiently to fulfill the program's mission. Background the City. The facility was entirely rebuilt and reopened in November 2021, following a major renovation supported in large part by the Friends of the JMZ 1, which raised approximately $25 million for the project. The JMZ operates under the City’s CSD, and the collection includes over 65 species and approximately 85 individual animals, including a live bald eagle held under a U.S. Fish and Wildlife Service permit. The JMZ’s education program is one of its largest program areas. It employs approximately 20 educators and instructors who provide over 2,700 inquiry- based science lessons across 168 schools and community centers, serving more than 24,000 students annually. During the summer, staff operate week-long camp sessions across nine content areas, with a majority selling out in the first round of applications. The JMZ is primarily funded through the City’s General Fund, supplemented by ticket revenue, education program fees, and fundraising by the Friends of the JMZ, a support organization that has existed for over 50 years and focuses on accessibility, inclusion, and fundraising for facility improvements and special programs. During the audit period, the JMZ successfully obtained accreditation from the AZA through September 2030. AZA accreditation represents the highest standard for zoological institutions and enables the JMZ to participate in species exchange programs, streamline permitting processes, and demonstrate adherence to leading professional practices. Scope covering FY 2024 through 2025. The audit included assessing the following areas: educational activities, financial and program data, staffing and administrative processes, guest services and cash handling, animal care and wellbeing, veterinary coverage, emergency preparedness, safety and security, selected wildlife permits, and governance/oversight considerations. Methodology • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to JMZ operations. INTRODUCTION 2 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Senior Audit Manager in Baker Tilly’s Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2026. It should be noted that Baker Tilly’s most recent firmwide peer review was completed in November 2024 with a rating of “Pass”. The scope of that peer review includes projects completed under government auditing standards. regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness. • Conducted an on-site visit to evaluate animal care and veterinary records, financial management controls, and safety and security practices, including animal health and wellbeing records, necropsy reports, daily animal care reports, veterinary documentation, cash handling procedures, P-card usage, budgeting practices, ticket revenue management, emergency drill records, education, facility access controls, and incident reporting systems. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Compliance Statement accepted government auditing standards, except for the requirement of an external peer review 2. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings, observations, and conclusions based on our audit objectives. Organizational Strengths across all program areas. The education program is a standout asset, serving tens of thousands of students with high-quality, inquiry-based science instruction. The JMZ’s successful attainment of AZA accreditation demonstrates its commitment to operational excellence, industry best practices, and continuous improvement. The modern facility, rebuilt in 2021, is a valued asset to the Palo Alto community. We appreciated the participation of JMZ staff in interviews and their responsiveness to follow-up requests throughout the audit. The OCA greatly appreciates the support of the CSD in conducting this audit activity. Thank you! Audit Results JMZ delivers high- demand mission- driven programs, and the City has an opportunity to further develop a formal performance measurement framework to assess impact, demand, and operating results. live-animal zoo, public attraction, event venue, and community-serving facility. The JMZ is valued by the community and offers a distinctive experience within the City. Available operational information indicates strong demand for JMZ services. Based on OCA’s review of ticket sales, education program participation counts, and other program data, JMZ has indicators of strong demand across both general admission and education programming. Guest Services staff reported that JMZ implemented paid ticketing in 2021, using the ACME ticketing system, and sells out nearly every weekend. Staff also reported that ACME has saved approximately 30% of staff time in daily museum entrance duties. The graph below shows the number of admissions in FY24 and FY25 with total admissions of 128,006 and 120,822 respectively. Figure 1: JMZ General Admission by Month, FY2024 vs. FY2025 Source: OCA analysis of JMZ general admission data, FY2024–FY2025. FY2025 includes a mid-year transition to the ACME ticketing system in FY2025. While JMZ has increased use of operational data for decision-making, there are additional opportunities to improve performance reporting. JMZ has begun using operational data and business analysis in selected areas. For example, Guest Services staff can use the ticketing system to track tickets sold by day or date range, and CSD leadership reported that the City performed an analysis of staffing models and ticket pricing, which led to an increase in ticket prices. However, JMZ does not yet have a formal, recurring performance measurement - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 At t e n d a n c e Month (fiscal year: July-June FY 2024 FY 2025 AUDIT RESULTS facilities, and administrative workload. As a result, the City has useful operational data in specific areas but no recurring, consolidated view of how the JMZ's programs are performing overall. Through the ACME system, Guest Services tracks ticket sales by day and date range, but other demand and utilization signals are not captured. Staff reported that members book admission up to eight weeks ahead and often do not attend. Roughly 75% to 80% of booked guests attend, which reduces availability for non-members, however this pattern is not formally measured. According to the Assistant Director for CSD, the JMZ also lacks a structured process for collecting customer feedback, though staff are working to implement one. Another area where more information would be helpful is in special programming such as parties and events. According to Guest Services staff, birthday programming is capped at 16 bookings per month and demand exceeds that capacity. However, at the time of the audit management reported that they were not consistently tracking the number of requests for birthday parties so demand for this service remains unknown. According to birthday party reports from FY24 to 25 there was reduction in the number of parties from 29 in FY24 to 18 in FY25. This represented a 36.2% decrease in party-guest attendance and a 63.5% decrease in revenue from $25,148 to $9,170. Guest Services staff indicated this was due to staffing and software issues, which have since been resolved. Finally, staff noted that marketing efforts are not tracked and monitored and social media and website information is not consistently or regularly updated. Increasing such efforts could help the JMZ continue to expand its services and reach. According to Guest Services staff, a single position handles contracts, scheduling, guest services, and program coordination and described the workload as overwhelming, and staffing has consistently been a challenge. The Executive Director stated that hiring takes eight months to a year and that the City’s Human Resources Department often cannot accommodate hiring requests timely. The Executive Director also identified a future need for a management analyst or director of business to manage budgets, HR, and contracts and to "acquire, review and present data to inform strategies JMZ-wide" indicating no dedicated data-analysis function exists today. Without a recurring framework consolidating indicators such as attendance, ticket utilization, customer experience, event demand, revenue, staffing capacity, and administrative workload, the City has limited ability to tell whether the JMZ is meeting community demand, using resources efficiently, and achieving intended outcomes, or supporting informed budget and staffing decisions. Recommendation to track the JMZ's mission impact, demand, and operating results and to support budget and staffing decisions. Much of the underlying data already exists in current systems, the ACME ticketing system, for example, captures attendance, ticket sales, and time-slot activity, so the framework can be built largely by consolidating and regularly reviewing existing data rather than acquiring new systems. At a minimum the framework should include: AUDIT RESULTS •Visitor demand and access measures Track attendance, ticket sales, sold-out periods, no-show rates, member reservation activity, non-member ticket availability, walk-ins, time-slot utilization, and peak versus underutilized periods. • Guest experience measures Implement a guest services survey or other structured feedback process to measure visitor satisfaction, ease of ticketing, accessibility, customer service, complaints, response times, and recurring service themes. • Revenue and cost measures Report revenue by major source, including admissions, memberships, facility rentals, birthday parties, events, donations, and other earned revenue. Where feasible, compare revenue to direct costs and staffing requirements. • Program and event demand measures Track demand for birthday parties, rentals, special events, animal encounters, accessibility programs, and other public-facing services, including waitlists, declined requests, cancellations, and unmet demand. • Staffing and administrative workload measures Track vacancies, time to fill positions, part-time staffing reliance, overtime or coverage gaps, administrative workload, contract volume, customer response times, and major bottlenecks. • Quarterly management review JMZ leadership and CSD management should review the performance framework at least quarterly and document key trends, decisions, follow-up items, responsible parties, and target completion dates. The City should also evaluate whether JMZ needs dedicated business operations support, such as a management analyst or business manager, to help maintain the framework, analyze results, support budget development, coordinate contracts and administrative requirements, and provide JMZ-wide data for decision-making. Management Response Responsible Department(s):Community Services Concurrence: Agree Target Date: Q4, FY 2027 Action Plan: made significant progress in expanding the use of operational data through implementation of the ACME ticketing system, program participation tracking, and revenue reporting. Management agrees that consolidating these existing data sources into a recurring performance dashboard will strengthen strategic decision- making and support future budget, staffing, and operational planning. During FY2027, JMZ will formalize a recurring performance measurement framework by consolidating existing operational data into a management dashboard. The ACME ticketing system already captures many key performance indicators, including attendance, ticket sales, sold-out periods, member reservation activity, no-show AUDIT RESULTS visitation periods. JMZ will incorporate these existing metrics into a recurring dashboard while continuing to expand performance measures as additional data becomes available. JMZ is also implementing new visitor and birthday party survey tools to better measure guest experience and customer satisfaction. Existing waitlists will continue to be used to assess demand for programs where applicable, and additional tracking methods will be developed for programs and services where unmet demand is not currently captured. Together, these enhancements will provide a more comprehensive understanding of visitor demand, customer experience, operational performance, and resource needs. Management also recognizes the value of potential enhanced business and analytical support. Any future staffing additions will be evaluated and proposed during the City's annual budget development process and based on organizational priorities and available resources. AUDIT RESULTS Finding 2: Educational program offerings continue to increase but staffing challenges and budget constraints limit the program’s ability to meet demand. The JMZ education program is expanding and receives strong customer satisfaction ratings, but the available evidence indicates that its staffing, supply budget, financial reporting, funder tracking, and program evaluation practices have not kept pace with that growth. As a result, management has limited ability to determine whether the program is financially sustainable, sufficiently resourced, and achieving program-wide outcomes beyond participant satisfaction. The JMZ education program is a core mission-delivery function and one of the organization’s major public-facing services. The program continues to expand, generating more than $980,000 in FY2025 revenue while delivering more than 2,700 programs or lessons across schools and community centers. In FY2025, the program served more than 24,000 children and students and more than 2,100 adults. This growth reflects a broader year-over-year increase in education activity almost every year for the past decade. From FY2024 to FY2025, reported programs/sessions increased from 2,510 to 2,710, children/students served increased from 23,197 to 24,525, and revenue increased from $918,356 to $980,553. Adult participation also increased, rising from 656 adults served in FY2024 to 2,157 in FY2025. Overall, these changes represent increases of approximately 8.0% in programs/sessions, 5.7% in children/students served, and 6.8% in revenue. Figure 2: Children and Students Served by JMZ Programs Source: OCA analysis of Service Reports FY16, FY17, 18, 23, 24, 25 *OCA was not provided with FY19, 20, 21, and 22 However, according to the Director of Education and our analysis, the program’s staffing and supplies have not kept pace with this growth. The program has 18 science teachers, three are full-time and the remainder are part-time. The program experiences high turnover in part-time positions and a slow hiring process resulting in vacancies that remain unfilled for extended periods. Once hired, the Education Director estimated that new staff take approximately six months to become fully efficient. In addition, OCA noted that the supplies budget has increased by approximately $2,000 over 16 years while the number of students served has more 17,911 17,760 12,853 20,927 23,197 24,525 - 5,000 10,000 15,000 20,000 25,000 30,000 FY 2016 FY2017 FY 2018 FY 2023 FY 2024 FY 2025 # o f S t u d e n t s Fiscal Year* AUDIT RESULTS demand, but the current budget does not provide the additional staffing needed to support that growth. Figure 3: JMZ Education Program Earned Revenue by Year, 2020–2025 Source: OCA analysis of JMZ financial performance data (earned revenue by program, 2020–2025). Based on the available information provided to the OCA there does not appear to be a way to clearly connect program activity to budget and actual results. OCA could not entirely reconcile information from reports generated by the Education Program and the City’s SAP (Systems, Applications, and Products in Data Processing) System. According to the Education Director, staff do not have the capacity to reconcile these figures, in part because payment receipts sometimes miss a fiscal year's cutoff and are recorded in the following year. The FY2025 Budget Performance file reflects this, noting that FY2025 revenue includes some FY2024 payments that were not received or processed until FY2025, which further complicates year-over-year comparison. Available financial data also shows that education-related activity requires ongoing subsidy or budget-variance management. Available budget information shows annual losses of $494,456 in 2020, $750,607 in 2021, $661,057 in 2022, $509,477 in 2023, and $575,085 in 2024 and $392,787 in 2025. The FY2025 SAP report shows $1,004,829 in total actual revenues from Camp and Bayland Educational Programming and $1,397,616 in total actual expenses. $621,346 $312,694 $554,341 $687,645 $794,605 $1,004,829 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 2020 2021 2022 2023 2024 2025 Re v e n u e Year AUDIT RESULTS 3 What is a Good Survey Response Rate? | SurveyMonkey Figure 4: Education Programs — Actual Revenues vs. Actual Expenses (Outreach, Camp, and Baylands Combined) Source: OCA analysis of JMZ education program financial data, 2020–2024. Labels show the annual operating deficit. The program also relies on Friends-funded support to provide programming for underserved youth, but the delivery plan has little margin for error. According to management, Friends of the JMZ provides $163,000 annually for school programs, after-school programs, and camp scholarships. The Friends-funded Program Delivery Plan shows a Total Plan of 578 programs, with $160,176 in planned expense against $163,250 in total funding available, leaving $3,074, or about 1.9%, between planned expenses and available funding. Management should assess whether this margin is adequate. OCA’s analysis of program survey information found strong customer satisfaction ratings, but response rates could be improved to ensure greater feedback is obtained for making program adjustments. According to the Director of Education, the program uses electronic evaluations completed by participants and teachers to assess and improve program quality. Survey exports for Fall 2024, Winter 2025, and Spring 2025 family programs show many satisfaction and likelihood-to-recommend ratings of 5, with positive comments about instructors and program content. Based on the provided family program survey export, there were 37 satisfaction responses, with an average satisfaction score of 4.84 out of 5. Based on the 2025 summer camp survey export, there were 119 satisfaction responses, with an average satisfaction score of about 4.92 out of 5. However, the survey exports do not show how many participants were asked to respond, response rates, or whether the responses are representative of all school, camp, and family program participants. FY2025 service totals show 24,525 children/students served, resulting in a survey response rate of less than 1%. While survey response rates can vary significantly 3, increasing the response rate could help the JMZ better understand which program elements are working well and which need improvement. -$494,456 -$750,607 -$661,057 -$509,447 -$575,085 -$392,787 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 2020 2021 2022 2023 2024 2025 Year Total Actual Revenues Total Actual Expenses AUDIT RESULTS identified some specific service-improvement opportunities. Family program respondents requested more hands-on science, noted that some children were too young to fully participate, and asked for programming after noon so transitional kindergarten children could attend. Camp survey respondents requested expanded offerings for older children or tweens, additional weeks of Zoo Camp, and more communication tools such as photos or take-home materials to help families understand what children did during their camp experience. While educational programming has continued to expand, the absence of an integrated management framework linking service growth with staffing capacity, hiring timelines, supplies, program costs, funding commitments, revenue recognition, and performance outcomes limits the program’s ability to manage growth effectively. Staff interviews highlighted growth expectations without corresponding staffing budget increases, slow hiring, high part-time turnover, supply budget constraints, and insufficient administrative support. Without stronger resource planning, financial reconciliation, and performance measurement, JMZ management cannot determine whether or not education program growth is sustainable, program costs and revenues are being reported in the correct categories and fiscal years, subsidies align with management’s intent, Friends-funded programs are delivered as planned, or high satisfaction ratings reflect program-wide effectiveness. Although the program continues to provide valued services, management lacks the information needed to assess cost recovery, staffing adequacy, customer demand, access goals, and educational outcomes. Recommendation ties program activity to staffing, supplies, full program costs, revenues, subsidies, funder commitments, and evaluation results, so management can determine whether program growth is financially sustainable, sufficiently resourced, and achieving outcomes beyond participant satisfaction. Much of the underlying data already exists, in the service and revenue reports, the Budget Performance files, the Friends-funded Program Delivery Plan, and the program's electronic evaluations, so the framework can be built largely by consolidating and reconciling existing data rather than acquiring new systems. At a minimum the framework should include: • Staffing and supply measures Establish workload-based staffing and supply assumptions tied to the number of programs and students served, and track hiring timelines, vacancies, part- time turnover, and time for new staff to reach full efficiency. Flag where service volume outpaces current staffing and supply capacity, including the recurring supplies-budget overage. • Budget-to-actual and cost measures Report revenue and expense by program type, such as Outreach, Camp, and Baylands, compare actual results to budget, and identify the operating subsidy or deficit for each program area. • Financial reconciliation measures Reconcile the service and revenue reports to the financial records, tie AUDIT RESULTS consistently from year to year. • Funder and Friends-funded program tracking Track Friends-funded programs from planned to schedule, delivered, invoiced, and paid, and monitor the delivery plan's remaining margin and any unresolved implementation items. • Program evaluation and outcome measures Capture survey response rates and the share of participants represented, trend-analyze survey comments to identify recurring service-improvement themes and add outcome measures tied to curriculum goals, so program quality is assessed beyond satisfaction ratings. • Quarterly management review JMZ leadership and CSD management should review the framework at least quarterly and document key trends, decisions, follow-up items, responsible parties, and target completion dates. Using the information the framework produces, JMZ and CSD management should evaluate whether current staffing levels, supply budgets, and subsidy levels are adequate to sustain program growth, and whether adjustments to program scope, fees, or resources are warranted to align the program's growth with its budget and mission. Management Response Concurrence: Agree Target Date: Q4, FY 2027 Action Plan: Management concurs with the recommendation. The Junior Museum & Zoo's Education Program has experienced significant growth in recent years, expanding both the number of participants served, Educators employed, and earned revenue while maintaining high levels of customer satisfaction. Management agrees that as the program continues to grow, strengthening performance reporting and resource planning will better support long-term operational and financial decision-making. JMZ is already implementing many of the recommended practices by expanding the use of service reports, financial data, participant evaluations, and Friends-funded program tracking to better monitor program performance. During FY2027, these existing data sources will be consolidated into a more integrated education program management framework that provides improved visibility into staffing capacity, supply needs, program activity, revenues, expenditures, funding sources, and overall program performance. Management will continue to work collaboratively with our department budget analyst and the Friends of the Junior Museum & Zoo to improve financial reporting and reconciliation while recognizing the timing differences that can occur between program delivery and revenue recognition across fiscal years. JMZ will also continue AUDIT RESULTS Resource needs identified as part of this evaluation will be proposed as part of the annual budget development process. Participant feedback will continue to be an important component of program evaluation. JMZ will implement strategies to increase survey participation and further enhance outcome-based performance measures to support continuous improvement and demonstrate the educational impact of its programs. Finding 3: JMZ has strengthened animal care and regulatory compliance systems earning accreditation this past year; but some safety, animal welfare and documentation controls could be improved safety, and regulatory compliance systems as evidenced by the AZA Accreditation, OCA identified several areas where controls should be more consistently executed and documented. During the audit period, the JMZ earned AZA accreditation and continued to strengthen its animal care and safety practices, including finalizing a signed veterinary services agreement and maintaining daily animal-care reporting. OCA identified a few opportunities for management to more consistently document processes and support required reporting. Emergency Drills According to the Zoo Director, the JMZ conducts emergency drills twice a year, more often than the once-a-year minimum in AZA Standard 11.2.5, but OCA found that some scheduled drills were not completed. OCA also found drills noted but without the evaluation record the standard requires. AZA Standard 11.2.5 requires that the four basic emergency drills be recorded and their results evaluated. The JMZ has since developed an Emergency Drill/Incident Review Checklist that captures key drill elements. Completing drills as scheduled and retaining the checklist, lessons learned, and corrective actions will meet this requirement. Animal Transport and Vehicle Safety OCA found documentation gaps related to animal transport too. According to the JMZ Director, animals taken to off-site educational programs are moved in built, mobile habitats and transported in employees' personal vehicles, as the JMZ shares a single City vehicle with other facilities. It appears that education staff do not receive safety training for City vehicle use, and OCA did not identify a documented policy governing animal transport. Because the education program operates at scale, more than 24,000 students across 150 schools and community centers in FY25, a documented transport policy and related training would help ensure the safe and consistent transport of animals, staff, and materials. Overall Recordkeeping AZA standards emphasize the importance of documentation, providing that an institution that takes the proper steps but does not document them will not be considered in compliance. For the JMZ, recordkeeping is spread across daily reports and multiple separate files, and several assessment and documentation practices are new or recently implemented, so evidence of completed actions may be hard to track AUDIT RESULTS standards or to evaluate whether its controls are operating as intended, even where the underlying practices are sound. Finally, during the onsite visit, OCA observed a semi-open elevator/lift shaft in the zoo area. While OCA did not identify any standards or best practices related to these types of lifts other than regular maintenance, the opening at the top of the lift when it is on the ground floor could present a safety risk. According to the JMZ Director, the JMZ has not experienced any incidents and has a maintenance agreement for the lift. In addition, the Zoo Director stated that staff check the lift each morning to confirm it is locked. Given the location, the City may wish to evaluate whether additional safeguards, such as enclosing the lift area or installing a full-height door, gate, or barrier, are warranted. Recommendation The City and JMZ should establish a centralized safety and compliance tracking process to support consistent execution, documentation, and follow-up of animal care, safety, and regulatory compliance controls. The process should identify each required activity, responsible staff member, frequency, required documentation, completion date, reviewer sign-off, and any corrective action: • Emergency Drill Tracking The process should include annual emergency drill tracking and evaluation, use of the Emergency Drill/Incident Review Checklist, documentation of lessons learned and corrective actions, and follow-up for drills that are postponed or not completed. • Animal Transport Policy JMZ should also develop a written animal transport policy for off-site education programs and other animal movements, including requirements for approved vehicles, personal vehicle use, insurance expectations, animal containment, temperature or life-support needs, staff training, trip documentation, and emergency procedures. • Quarterly Review of Tracker JMZ and CSD management should review the tracker at least quarterly to confirm that required activities are completed, documentation is retained, and corrective actions are addressed. This would help JMZ demonstrate compliance with AZA documentation expectations and provide management with a more complete view of whether key controls are operating as intended. AUDIT RESULTS Management Response Responsible Department(s): Community Services Concurrence: Agree Target Date: Q2, FY 2027 Action Plan: Management concurs with the recommendation. The Junior Museum & Zoo has made significant investments in strengthening its animal care, safety, and regulatory compliance programs, culminating in the successful achievement of Association of Zoos and Aquariums (AZA) accreditation in 2025. Management agrees that continued standardization of documentation and compliance tracking will further strengthen existing practices and support ongoing compliance. Since completion of the audit fieldwork, JMZ has implemented an Emergency Drill/Incident Review Checklist and completed all required emergency drills. The checklist provides standardized documentation of drill activities, lessons learned, and any follow-up actions to support ongoing compliance with AZA standards. Documentation of these completed drills and review checklists has been provided to the Office of the City Auditor. JMZ currently maintains written procedures for the transport of animals for off-site educational programs. Management will review and enhance the existing policy to incorporate the additional elements identified in the audit to further strengthen consistency and documentation. JMZ will also implement a centralized compliance tracking process and conduct quarterly management reviews to ensure required animal care, safety, and regulatory compliance activities are completed, documented, and retained, and that any corrective actions are identified and addressed in a timely manner. 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City of Palo AltoOffice of the City Auditor (OCA) Policy & Services Committee Meeting Junior Museum & Zoo Audit Presenter: Kate Murdock, City Auditor, Baker Tilly August 11, 2026 2 Objective Determine if City’s Junior Museum & Zoo is operating effectively and efficiently to fulfill the program’s mission. 3 Background City-operated children’s science museum & zoo – reopened in November 2021 after a $25M renovation 65+ species and approximately 85 animals 20 educators and instructors deliver 2,700+ science lessons at 168 schools and community centers reaching 24,000+ students annually Primarily supported by the City’s General Fund and supplemented by admissions, education fees and fundraising efforts Friends of the JMZ provides significant support and been a partner organization for 50+ years AZA accreditation in fall of 2025 demonstrating adherence to leading zoological standards 4 Finding 1: JMZ delivers high-demand mission-driven programs, the City has an opportunity to further develop a formal performance measurement framework to assess impact, demand, and operating results. Finding Recommendation •Available operational information indicates a strong demand for JMZ services •JMZ has increased use of operational data •Opportunities to improve performance reporting Attendance rates Customer feedback Special programming demand Establish a recurring performance measurement framework including the following metrics: •Visitor Demand & Access •Guest Experience •Revenue & Cost •Program & Event Demand •Staffing & Administrative Workload Quarterly management review to document trends, decision and follow-up items. 5 Finding 2: Educational program offerings continue to increase but staffing challenges and budget constraints limit the program’s ability to meet demand. Finding Recommendation •Year-over-year increase in education activities almost every year for the past decade •Staffing and supplies have not kept pace with growth High turnover in part time positions Supply budget hasn’t grown •Program and financial reporting are not aligned •Customer satisfaction ratings are positive but response rates are low Develop an integrated education program management framework connecting program activities to staffing, supplies, program costs, revenues, subsidies, funder commitment, and evaluation results, including the following metrics: •Staffing and supply •Budget-to-actual and cost •Financial reconciliation •Funder and Friends-funded program tracking •Program evaluation and outcomes Quarterly management review to document trends, decision and follow-up items. 6 Finding 3: JMZ has strengthened animal care and regulatory compliance systems, but some safety, animal welfare and documentation controls could be improved Finding Recommendation •Emergency Drills some scheduled drills were not completed •Animal Transport and Vehicle Safety lack of formal policy and vehicle safety training •Overall recordkeeping lack of a centralized system to monitor compliance with standards and regulations Establish a centralized safety and compliance tracking process to support consistent execution, documentation and follow-up of animal care, safety and regulatory compliance requirements. 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