In May, members of Menlo Park's City Council commended the city for being one of the few in the region to balance its budget in the midst of a recession.

As it turns out, the city may have more in common with its peers than it thought.

City management has discovered a major accounting error in the budget for the current fiscal year relating to employee compensation. As a result, it underestimated its general fund expenses by $320,000, and its expenses from other funds by $80,000.

City Manager Glen Rojas announced the snafu at the City Council meeting Tuesday, Oct. 6.

"Even though this is disappointing, I want to emphasize that our confidence in the finance department and in our budgeting process is extremely high," Rojas told the council. He said the city is trying to figure out how the mistake happened, and working to prevent it from happening again.

The city will now look to make additional budget cuts to cover the difference between its previous and current projections.

"A few people out there have conspiracy theories, and there will probably be some swirling around this incident, but it was an honest mistake," Mayor Heyward Robinson said at the meeting.

Menlo Park expects to spend about $38 million from its general fund in the current fiscal year.