HomeMy WebLinkAbout23-24 SAS Audit Letter �
October 18, 2024
To the Mayor and City Council Members
City of McHenry
McHenry, Illinois
We have audited the financial statements of City of McHenry (City) as of and for the year ended
April 30, 2024, and have issued our report thereon dated October 18, 2024. Professional standards
require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated May 21, 2024, our responsibility under generally
accepted auditing standards and, if applicable, Government Auditing Standards and Uniform Guidance,
is to form and express opinions about whether the financial statements that have been prepared by
management with your oversight are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America. Our audit of the financial
statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the City's internal control over financial
reporting. Accordingly, as part of our audit, we considered the internal control of the City of McHenry
solely for the purpose of determining our audit procedures and not to provide any assurance concerning
such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our
professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to
communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to
you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied
with all relevant ethical requirements regarding independence.
eccezion.com • 815-344-1300 — � •
. .
Significant Risks Identified
We have identified the following significant risks:
Management override of controls and improper revenue recognition due to fraud, both of which are
commonly identified as significant risks for audits. As both are common significant risk areas, both are
addressed by performing the following standard procedures:
• Incorporate an element of unpredictability in designing audit procedures: alternating test of controls
at least once every two years, vary sampling techniques for detailed transaction testing, and
interviewing different employees regarding fraud.
• Obtain an understanding of the process and related controls over journal entries and other
adjustments and test journal entries and other adjustments we believe to be of higher risk.
• Review significant accounting estimates for evidence of management bias.
• Obtain an understanding of the entity's rationale for significant and unusual transactions, if any.
Qualitative Aspects of the Organization's Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the
significant accounting policies adopted by City of McHenry are included in Note 1 to the financial
statements. As described in Note 21 to the financial statements, the City implemented GASB Statement
No. 96, Subscription-Based Information Technology Arrangements. There have been no changes in
existing significant accounting policies or their application during fiscal year 2024. No matters have come
to our attention that would require us, under professional standards, to inform you about (1) the methods
used to account for significant unusual transactions and (2)the effect of significant accounting policies in
controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates and Related Disclosures
Accounting estimates and related disclosures are an integral part of the financial statements prepared by
management and are based on management's current judgment. Those judgments are normally based
on knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ markedly from
management's current judgment. The most sensitive estimates affecting the financial statements are:
- Management's estimates regarding pension and OPEB liabilities were based on various actuarial
assumptions regarding projected salaries, market trends, and expected mortality.
- Management's estimates of allowances on receivables were based on historical collection rates.
- Management's estimates of lessor revenues, related to long-term leases, is based on the terms of
the specific lease agreement. The discount rate is either based on a rate stated/implied within the
lease agreement, if available, or an estimate based on similar type arrangements.
We evaluated the key factors and assumptions used to develop the above estimates and determined that
they are reasonable in relation to the financial statements taken as a whole and in relation to the
applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive
because of their significance to financial statement users. The most sensitive disclosures affecting the
City's financial statements relate to: Pension and OPEB liabilities.
Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to you significant
unusual transactions identified during our audit. The following significant unusual transactions identified
as a result of our audit procedures were brought to the attention of management: None Noted
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the
audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely
misstatements identified during the audit, other than those that we believe are trivial, and communicate
them to the appropriate level of management. Further, professional standards require us to also
communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of
transactions, account balances or disclosures, and the financial statements as a whole and each
applicable opinion unit. The paragraph below summarizes uncorrected financial statement
misstatements whose effects in the current and prior periods, as determined by management, are
immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
Uncorrected misstatement or matters underlying those uncorrected misstatements could potentially
cause future-period financial statements to be materially misstate even though the uncorrected
misstatements are immaterial to the financial statements currently under audit.
There were various contracts which were applicable under GASB 87 leases and GASB 96 SBITAs which
are being recorded, causing understated Right of Use assets and a related understated liability of less
than $100,000 each. The effect on the change in net position is assumed to be trivial as there are not
significant differences between the asset and liability amounts that would be recorded. We do not believe
these amounts to be material to the financial statements quantitatively and trivial in the qualitative sense.
In addition, professional standards require us to communicate to you all material, corrected
misstatements that were brought to the attention of management as a result of our audit procedures. The
attached misstatements that we identified as a result of our audit procedures were brought to the attention
of, and corrected by, management.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or audit matter,
which could be significant to the City's financial statements or the auditor's report. No such
disagreements arose during the course of the audit.
Circumstances that Affect the Form and Content of the Auditor's Report
For purposes of this letter, professional standards require that we communicate any circumstances that
affect the form and content of our auditor's report. None Noted.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached
letter.
Management Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a"second opinion"on certain situations. If a consultation involves application
of an accounting principle to the City's financial statements or a determination of the type of auditor's
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. Management
informed us that, and to our knowledge, there were no consultations with other accountants regarding
auditing and accounting matters.
Other Significant Matters, Findings or Issues
In the normal course of our professional association with the City, we generally discuss a variety of
matters, including the application of accounting principles and auditing standards, significant events or
transactions that occurred during the year, operating and regulatory conditions affecting the City, and
operating plans and strategies that may affect the risks of material misstatement. However, none of the
matters discussed resulted in a condition to our retention as the City's auditors.
Other Matters
We applied certain limited procedures to the required information, which is required supplemental
information (RSI)that supplement the basic financial statements (as listed on the table of contents in the
audit report). Our procedures consisted of inquiries of management regarding the methods of preparing
the information and comparing the information for consistency with managemenYs responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We did not audit the RSI and do not express an opinion or provide any assurance
on the RSI.
We were engaged to report on supplemental information which accompany the financial statements but
are not RSI. With respect to the supplemental information, we made certain inquiries of management
and evaluated the form, content, and methods of preparing the information to determine that the
information complies with accounting principles generally accepted in the United States of America, the
method of preparing it has not changed from the prior period, and the information is appropriate and
complete in relation to our audit of the financial statements. We compared and reconciled the
supplemental information to the underlying accounting records used to prepare the financial statements
or to the financial statements themselves.
Restriction on Use
This report is intended solely for the information and use of the City Council and management of City of
McHenry and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
��J
���
Eccezion
Strategic Business Solutions
Client: City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Workpaper: General Fund AJEs Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
DO NOT MAKE PROVIDED BY CLIENT-Adjust AP
100-05-5110 CONTRACTUAL SERVICES 11,317.00
100-2100 ACCOUNTS PAYABLE 11,317.00
Total 11,317.00 11,317.00
Adjusting Journal Entries JE#2
Record Oakwood Drive Bridge Project State Reimbursement Receivable
100-1180 DUE FROM OTHER GOV'T UNITS 15,246.00
100-01-3886 REIMB-STATE 15,246.00
Total 15,246.00 75,246.00
Adjusting Journal Entries JE#3
Record City Hall Parking Lot Donated Assets
100-01-8900 PUBLIC IMPROVEMENTS 18,000.00
100-22-3815 DONATIONS 18,000.00
Total 18,000.00 18,000.00
Adjusting Journal Entries JE#4
Reclass Adjustment for Allowance for Uncollectible-DO NOT RECORD, ECC
ENTRY ONLY
100-03-6999 BAD DEBT EXPENSE 65,320.00
100-22-3537 POLICE-VEHICLE IMP. FEES 14,336.00
100-22-6999 BAD DEBT EXPENSE 45,633.00
100-41-6999 BAD DEBT EXPENSE 5,478.00
100-03-3890 MISCELLANEOUS INCOME 65,320.00
100-22-3536 POLICE-BAIL/BOND PROC. FEE 1,100.00
100-22-3890 MISCELLANEOUS INCOME 58,869.00
100-41-3636 GENERAL PROGRAM REVENUE 5,478.00
Total 130,767.00 730,767.00
Adjusting Journal Entries JE#5
Record April Interest on CLB&T CD#9812
100-1100 INVESTMENTS-CERTIFICATES OF DEPO 3,649.00
100-00-3220 CD INTEREST 3,649.00
Total 3,649.00 3,649.00
I have reviewed and agree with the adjustments above:
Client Signature
Date
9/19/2024
2:20 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 200-Tourism Fund
Workpaper: 200-Tourism Fund AJE's Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Adjust loan principal
200-00-7610 LOAN PRINCIPAL PAYMENT 198.00
200-00-7600 LOAN INTEREST 198.00
Total 198.00 198.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
9/19/2024
2:27 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 260-Annexation Fund
Workpaper: 260-Annexation Fund AJE's Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Adjust Interfund Transfer Through Pooled Cash-TIF Transfer Was Paid Through
Annexation Fund in December
260-1990 CASH IN POOL 18,253.00
260-00-9904 TRANSFER DEBT SERVICE 18,253.00
Total 18,253.00 18,253.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
10/17/2024
2:53 PM
Client: CityofMcHenry-CityofMcHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 270-Motor Fuel Tax Fund
Workpaper: 270-Motor Fuel Tax Adjusting Journal Entries Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Adjust MFT Revenue to Match PY MFT High Growth Receivable
270-1180 DUE FROM OTHER GOV'T UNITS 99.00
270-00-3150 MFT-ALLOTMENTS FROM STATE 99.00
Total 99.00 99.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
9/19/2024
2:32 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 290-TIF Fund
Workpaper: 290-TIFAJE's Report
Account Description WIP Ref Debit Credit
Adjusting Journal Entries JE#1
Correct Fund Balance Rollforvvard for PY Voided Check Issue
290-2500 FUND BALANCE 10,000.00
290-00-8900 PUBLIC IMPROVEMENTS 10,000.00
Total 10,000.00 10,000.00
Adjusting Journal Entries JE#2
Adjust Interfund Transfer Through Pooled Cash-TIF Transfer Was Paid Through Annexation Fund
in December
290-00-9904 TR4NSFER DEBT SERVICE 18,253.00
290-1990 CASH IN POOL 18,253.00
Total 18,253.00 18,253.00
Adjusting Journal Entries JE#3
Adjust retainage payable PDW client
290-00-8900 PUBLIC IMPROVEMENTS 6,082.00
290-2103 RETENTION PAYABLE 6,082.00
Total 6,082.00 6,082.00
I have reviewed and agree with the adjustments above:
Client Signature
Date
1of1
9/19/2024
2:53 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 510-Wafer/Sewer Fund
Workpaper: 510-Wafer SewerAdjusting Journal Entries Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Record GASB 75 OPEB Activity
510-2451 DEFERRED INFLOWS-OPEB 83,785.00
510-2449 DEFERRED OUTFLOWS-OPEB 25,923.00
510-2450 NET OPEB LIABILITY 32,760.00
510-99-9930 OPEB EXPENSE 7,424.00
510-99-9940 OPEB CONTRIBUTIONS 17,678.00
Total 83,785.00 83,785.00
Adjusting Journal Entries JE#2
Record GASB 68 IMRF Activity
510-2443 IMRF NET PENSION LIABILITY 449,064.00
510-2448 IMRF-DEFERRED INFLOWS 40,373.00
510-2444 IMRF DEFERRED OUTFLOWS-ACT EVAL 267,472.00
510-2445 IMRF DEFERRED OUTFLOWS-CONT AFTER 522.00
510-31-4420 EMPLOYER CONTRIBUTION-IMRF 56,441.00
510-32-4420 EMPLOYER CONTRIBUTION-IMRF 98,429.00
510-35-4420 EMPLOYER CONTRIBUTION-IMRF 66,573.00
Total 489,437.00 489,437.00
Adjusting Journal Entries JE#3
Fixed Asset Entry Correction-PBC
510-32-8300 EQUIPMENT 26,148.00
510-32-8400 VEHICLE 585,818.00
510-32-8400 VEHICLE 26,148.00
510-32-8500 UTILITY SYSTEM 585,818.00
Total 611,966.00 611,966.00
Adjusting Journal Entries JE#4
Reclass Negative Expense
510-32-8400 VEHICLE 1.00
510-32-3890 MISCELLANEOUS INCOME 1.00
Total 1.00 1.00
Adjusting Journal Entries JE#5
Adjust for GASB 87 Lessor Lease-AT&T
510-31-3845 RENTAL INCOME 4,293.00
510-2530 DEFERRED REVENUE 4,293.00
Total 4,293.00 4,293.00
Adjusting Journal Entries JE#6
Adjust Xylem Water Solutions-not shipped until 5/2024.
510-2101 Accounts Payable 995 Pool 9,673.00
510-32-5375 REPAIR&MAINTENANCE-EQUIPMENT 9,673.00
Total 9,673.00 9,673.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
9/19/2024
2:57 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 620-Information Techno/ogy Fund
W orkpaper: 620-Information Techno/ogy Fund AJE Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Correct Fund Balance for PY Prepaid Entry Recorded Backwards
620-00-5110 CONTRACTUAL SERVICES 7,343.00
620-2500 FUND BALANCE 7,343.00
Total 7,343.00 7,343.00
Adjusting Journal Entries JE#2
Record GASB 75 OPEB Activity
620-2449 DEFERRED OUTFLOWS-OPEB 4,364.00
620-2450 NET OPEB LIABILITY 58.00
620-00-9930 OPEB EXPENSE 1,089.00
620-00-9940 OPEB CONTRIBUTIONS 2,591.00
620-2451 DEFERRED INFLOWS-OPEB 742.00
Total 4,422.00 4,422.00
Adjusting Journal Entries JE#3
Record GASB 68 IMRF Activity
620-2443 IMRF NET PENSION LIABILITY 39,428.00
620-2445 IMRF DEF OUTFLOWS-CONTR MADE AFTER MEAS DATE 1,765.00
620-2448 IMRF-DEFFERED INFLOWS 2,285.00
620-00-4420 EMPLOYER CONTRIBUTION-IMRF 34,302.00
620-2444 IMRF DEFERRED OUTLFOWS-ACTUARIAL REPORT 9,176.00
Total 43,478.00 43,478.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
9/19/2024
3:02 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 740-Retained Personne/Escrow Fund
Workpaper: 740-Retained Personne/Escrow AJEs Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Reclass Expenses to Correct Accounts
740-00-5230 LEGAL SERVICE 5,828.00
740-00-6960 MISCELLANEOUS EXPENSES 340.00
740-00-5220 ENGINEERING FEES 6,168.00
Total 6,168.00 6,168.00
I have reviewed and agree with the adjustment(s)above:
Client Signature
Date
1 of 1
9/19/2024
3:03 PM
Client: City of McHenry-City of McHenry
Engagement: City of McHenry
Period Ending: 4/30/2024
Trial Balance: 760-Police Pension Fund
Workpaper: 760-Police Pension AJE's Report
Account Description W/P Ref Debit Credit
Adjusting Journal Entries JE#1
Duplicate pension payment paid back
760-00-3882 REIMB-MISC 6,310.00
760-00-5110 CONTRACTUAL SERVICES 6,310.00
Total 6,310.00 6,310.00
Adjusting Journal Entries JE#2
Reclass May IPOPIF Valuation Adjustment
760-00-3882 REIMB-MISC 11,206.00
760-00-3837 UNREALIZED GAIN/LOSS 11,206.00
Tota I 11,206.00 11,206.00
I have reviewed and agree with the adjustment(s)made above:
Client Signature
Date
1 of 1
City of McHenry
333 S. Green Street
McHenry, IL 60050
Eccezion
5400 West Elm Street
Suite 203
McHenry, Illinois 60050
This representation letter is provided in connection with your audit of the financial statements of City
of McHenry (City), which comprise the respective financial position of the governmental activities,
the business-type activities, each major fund, and the aggregate remaining fund information as of
April 30, 2024, and the related statements of activities and,where applicable, cash flows for the year
then ended, and the related notes to the financial statements, for the purpose of expressing an
opinion on whether the financiai statements of the various opinion units are presented fairiy, in alI
material respects, in accordance with accounting principles generally accepted in the United States
of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. Items
are considered material, regardless of size, if they involve an omission or misstatement of accounting
information that, in the light of surrounding circumstances, there is a substantial likelihood that,
individually or in the aggregate,they wouid influence the judgment made by a reasonable user based
on the financial statements.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we
considered necessary for the purpose of appropriately informing ourselves as of the date of the
auditor's report, the following representations made to you during your audit:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter
dated May 21, 2024, for the preparation and fair presentation of the financial statements of the
various opinion units referred to above in accordance with U.S. GAAP and for preparation of
the supplementary information in accordance with the applicable criteria.
2. The financial statements referred to above have been fairly presented in accordance with U.S.
GAAP and include all properly ciassified funds, required supplementary information, and notes
to the basic financial statements.
3. We acknowledge our responsibiiity for the design, implementation, and maintenance of internai
control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
4. We acknowledge our responsibility for the design, implementation,and maintenance of internal
control to prevent and detect fraud.
5. We acknowledge our responsibility for compliance with the laws, regulations, and provisions of
contracts and grant agreements.
6. We have reviewed, approved, and taken responsibility for the financial statements and related
notes.
7. We have identified and communicated to you all previous audits,attestation engagements,and
other studies related to the audit objectives and whether related recommendations have been
implemented, if any.
8. The methods, data, and significant assumptions used by us in making accounting estimates
and their related disclosures, are appropriate to achieve recognition, measurement, or
disclosure that is reasonable in the context of the applicable financial reporting framework.
9. All related party relationships and transactions have been appropriately accounted for and
disclosed in accordance with the requirements of U.S. GAAP.
10. All events subsequent to the date of the financial statements and for which U.S. GAAP requires
adjustment or disclosure have been adjusted or disclosed.
11. The effects of uncorrected misstatements related to GASB 87 Leases and GASB 96 SBITAs
for understated Right of Use assets of less than $100,000 and related understated liabilities of
less than $100,000 are believed to be immaterial, both quantitatively and qualitatively (even
trivial qualitatively), to the applicable opinion units and to the financial statements as a whole.
Any changes to net position for these adjustments is considered to be trivial.
12. The effects of all known actual or possible litigation, claims, and assessments have been
accounted for and disclosed in accordance with U.S. GAAP.
13. AII component units, as well as joint ventures with an equity interest, are included and other
joint ventures and related organizations are properly disclosed.
14. All funds and activities are properly classified.
15. All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial
Statements—and Managemenf's Discussion and Analysis—for State and Local Governments,
GASB Statement No. 37, Basic Financial Statements-and ManagemenYs Discussion and
Analysis-for State and Local Governments: Omnibus as amended, and GASB Statement No.
65, Items Previously Reported as Assets and Liabilities,for presentation as major are identified
and presented as such and all other funds that are presented as major are considered
important to financiai statement users.
16. Ail components of net position, nonspendable fund balance, and restricted, committed,
assigned, and unassigned fund balance are properly classified and, if applicable, approved.
17. Our policy regarding whether to first apply restricted or unrestricted resources when an
expense is incurred for purposes for which both restricted and unrestricted net position are
available is appropriately disclosed and net position/fund balance is properly recognized under
the policy.
18. Our policy regarding whether to first appiy restricted, committed, assigned, or unassigned
resources when an expense is incurred for purposes for which more than one resource of fund
balance is availabie is appropriately disclosed and fund balance is properly recognized under
the policy.
19. All revenues within the statement of activities have been properly classified as program
revenues, general revenues, contributions to term or permanent endowments, or contributions
to permanent fund principal.
20. All expenses have been properiy ciassified in or allocated to functions and programs in the
statement of activities, and allocations, if any, have been made on a reasonable basis.
21. AII interfund and intra-entity transactions and balances have been properly classified and
reported.
22. Deposit and investment risks have been properly and fully disclosed.
23. Capital assets, including infrastructure and intangible assets,are properly capitalized, reported,
and if applicable, depreciated or amortized.
24. With regard to investments and other instruments reported at fair value:
a. The underlying assumptions are reasonable and they appropriately reflect management's
intent and ability to carry out its stated courses of action.
b. The measurement methods and related assumptions used in determining fair value are
appropriate in the circumstances and have been consistently applied.
c. The disclosures related to fair values are complete, adequate, and in accordance with U.S.
GAAP.
d. There are no subsequent events that require adjustments to the fair value measurements
and disclosures included in the financiai statements.
25. With respect to preparation of financial statements, preparation of comptroller's annual financial
report, preparation of IDOI report, and present value lease calculations and tracking, we have
performed the following:
a. Made alI management decisions and performed ail management functions;
b. Assigned a competent individual to oversee the services;
c. Evaluated the adequacy of the services performed;
d. Evaluated and accepted responsibility for the result of the service performed; and
e. Established and maintained internal controls, including monitoring ongoing activities.
Information Provided
26. We have provided you with:
a. Access to all information, of which we are aware, that is relevant to the preparation and fair
presentation of the financial statements of the various opinion units referred to above, such
as records, documentation, and other matters.
b. Additional information that you have requested from us for the purpose of the audit.
c. Unrestricted access to persons within the City from whom you determined it necessary to
obtain audit evidence.
d. Minutes of the meetings of the City Council or summaries of actions of recent meetings for
which minutes have not yet been prepared.
27. All transactions have been recorded in the accounting records and are reflected in the financial
statements.
2F3. We have disclosed to you the results of our assessment of the risk that the financial statements
may be materiaily misstated as a result of fraud.
29. We have no knowledge of any fraud or suspected fraud that affects the City and involves:
a. Management,
b. Employees who have significant roles in internal control, or
c. Others where the fraud could have a material effect on the financiai statements.
30. We have no knowledge of any allegations of fraud or suspected fraud affecting the City's
financial statements communicated by employees, former employees, vendors, regulators, or
others.
31. We have disclosed to you all known actual or possible litigation, claims, and assessments
whose effects should be considered when preparing the financial statements.
32. We have disclosed to you the identity of the City's related parties and all the related party
relationships and transactions of which we are aware.
33. There have been no communications from regulatory agencies concerning noncompliance
with or deficiencies in accounting, internal control, or financial reporting practices.
34. The City has no plans or intentions that may materialiy affect the carrying value or classification
of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fund
balance or net position.
35. We have disclosed to you all guarantees, whether written or oral, under which the City is
contingently liable.
36. We have disclosed to you all significant estimates and material concentrations known to
management that are required to be disclosed in accordance with GASB Statement No. 62,
Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,
1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the Statement
of Net Position date that could change materially within the next year. Concentrations refer to
volumes of business, revenues, available sources of supply, or markets or geographic areas
for which events could occur that would significantly disrupt normal finances within the next
year.
37. We have identified and disclosed to you the laws, regulations, and provisions of contracts and
grant agreements that could have a direct and material effect on financial statement amounts,
including legal and contractual provisions for reporting specific activities in separate funds.
38. There are no:
a. Violations or possible violations of laws or regulations, or provisions of contracts or grant
agreements, whose effects should be considered for disclosure in the financial statements
or as a basis for recording a loss contingency, including applicable budget laws and
regulations.
b. Unasserted claims or assessments that our lawyer has advised are probabie of assertion
and must be disclosed in accordance with GASB 62.
c. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed
by GASB 62.
d. Continuing disclosure consent decree agreements or filings with the Securities and
Exchange Commission and we have filed updates on a timely basis in accordance with the
agreements (Rule 240, 15c2-12).
39. The City has satisfactory title to alI owned assets, and there are no liens or encumbrances on
such assets nor has any asset or future revenue been pledged as collateral except the assets
listed in Note 5.
40. We have complied with alI aspects of grant agreements and other contractual agreements that
would have a material effect on the financial statements in the event of noncompliance.
41. We acknowledge our responsibility for the required supplementary information (RSI). All RSI
is measured and presented within the prescribed guidelines and the methods of ineasurement
and presentation have not changed from those used in the prior year. We have disclosed to
you any significant assumptions and interpretations underlying the measurement and
presentation of the RSI.
42. We have identified and disclosed to you alI instances that have occurred or are likely to have
occurred, of abuse that could be quantitatively or qualitatively materiai to the financial
statements or other financial data significant to the audit objectives.
43. Investments, derivative instruments, and land and other real estate held by endowments are
properly valued.
44. Provisions for uncoliectible receivables have been properly identified and recorded.
45. We are not aware of any current or anticipated losses in excess of our insurance coverage
for which we would be financially liable.
46. There have been no cybersecurity breaches or other cyber events whose effects should be
considered for disclosure in the financial statements, as a basis for recording a loss
contingency, or otherwise considered when preparing the financial statements.
47. With respect to the supplementai financial information, we acknowledge our responsibility for
presenting the supplemental financiai information in accordance with accounting principles
generally accepted in the United States of America, and we believe the supplemental financial
information, including its form and content, is fairly presented in accordance with accounting
principles generally accepted in the United States of America. The methods of ineasurement
and presentation of the supplemental financial information have not changed from those used
in the prior period, and we have disclosed to you any significant assumptions or interpretations
underlying the measurement and presentation of the supplemental information.
48. We acknowledge our responsibility to present the supplementary information with the audited
financial statements or, if the supplementary information will not be presented with the audited
financial statements, to make the audited financial statements readily available to the intended
users of the supplementary information no later than the date of issuance by the entity of the
supplementary information and the auditor's report thereon.
� 49. We agree with the findings of specialists in evaluating the City's accrued pension liability and
OPEB liability and have adequately considered the qualifications of the specialists in
determining the amounts and disciosures used in the financiai statements and underlying
accounting records. We did not give or cause any instructions to be given to specialists with
respect to the values or amounts derived in an attempt to bias their work, and we are not
otherwise aware of any matters that have had an impact on the independence or objectivity of
the specialists.
50. We believe that the actuarial assumptions and methods used to measure pension and OPEB
liabilities and costs for financial accounting purposes are appropriate in the circumstances.
Signed: '����Z�
Title: 1'l/�!/i/1 LPi lJ�Y�O'/D I'
Date: �D��'/�oay
