An audit by Supervisor Myrna Melgar found the SF Zoo spent $12 million without approval, while running on a deficit and misrepresenting finances, though new leadership has begun making improvements over the past year.

District 7 Supervisor Myrna Melgar’s audit found that the San Francisco Zoo and its nonprofit operator, the San Francisco Zoological Society, spent roughly $12 million on construction and improvement projects between 2019 and 2025 without obtaining approval from the city, which is required under its lease agreement with the Recreation and Park Department, as the Chronicle reports.

The audit, prompted by the Chronicle’s scathing October 2024 report on the outdated and inhumane conditions at the SF Zoo, found the zoo repeatedly failed to submit work plans or seek authorization for projects exceeding $50,000, including the zoo’s $7.5 million Madagascar Center. According to the audit, the zoo only sought approval for one improvement project over the six-year period reviewed.

Per the Chronicle, the report also described broader problems within the zoo’s operations, including ongoing budget deficits, poor financial oversight, and management failures. Auditors found the zoo misrepresented its financial condition while continuing to operate under mounting financial strain.

The findings come as the city prepares to finalize up to $8.5 million in loans for the San Francisco Zoo as part of a broader restructuring effort aimed at stabilizing the zoo’s finances and improving operations, while tying the funding to performance benchmarks and oversight requirements.

The agreement follows a major leadership change after Mayor Daniel Lurie pushed former zoo CEO Tanya Peterson to step down amid mounting controversy, as previously reported. Peterson was replaced by CEO Cassandra Costello.

The zoo has faced growing scrutiny since the Chronicle’s 2024 investigations uncovered repeated problems involving animal welfare, worker safety, and management practices. At the same time, zoo officials have reportedly continued efforts to secure funding to acquire a giant panda from the Chinese government.

“What is apparent to me is that this was a very poorly run nonprofit organization that didn’t have modern accounting controls in the way that we expect our contractors to have as a city,” Supervisor Myrna Melgar told the Chronicle.

In a statement, Costello said she welcomed the audit’s recommendations and said the zoo had already begun implementing operational changes.

“Many improvements are already underway, and we are committed to implementing the remaining recommendations,” Costello said. “We are grateful to the Mayor, Supervisor Melgar, and Rec and Park for working with us on a responsible loan structure that gives the Zoo the ability to continue this progress and fully deliver on the audit’s recommendations.”

In an interview Friday, Supervisor Myrna Melgar said she was encouraged that the audit did not identify any major safety concerns involving animals at the San Francisco Zoo.

“I was most worried about that, so I’m glad the animals are okay,” Melgar told the Chronicle.

Melgar also said she believes the zoo’s new leadership is beginning to address longstanding workplace culture problems identified in the audit, pointing to employee survey results that suggested morale had improved.

According to Melgar, zoo leadership received the audit recommendations before publication and agreed to implement them.

Previously: SF Zoo Leader Resigns Amid Mounting Pressure and Financial Questions From the City