Agenda Packet_2022-01-18 - Laserfiche WebLink

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EXHIBIT 3 Clifton LarsonAllen LLP 4TV1, CLAconnect.com Honorable City Council City of Santa Ana Santa Ana, California We have audited the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Santa Ana (the City) as of and for the year ended June 30, 2021, and have issued our report thereon dated December 8, 2021. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit. Significant audit findings Qualitative aspects of accounting practices Accounting policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note I to the financial statements. As described in Notes 1.E and 4.1, the City implemented the Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in fiscal year 2020-2021 by reclassifying agency funds to custodial funds and moving funds that did not meet the criteria of a fiduciary fund to appropriate funds. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Changes in Fiduciary Net Position as an increase in net position of $11,836,011 and in the Statement of Revenues, Expenditures and Changes in Fund balances as an increase in fund balances of General Fund and Capital Projects Streets Construction Fund of$251,850 and $11,584,161, respectively. We noted no transactions entered into by the entity during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's 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 significantly from those expected. The most sensitive estimates affecting the financial statements were: • The annual required contributions, pension expense, net pension liability, and corresponding deferred outflows of resources and deferred inflows of resources for the City's agent multiple employer defined benefit pension plans are based on actuarial valuations provided by California Public Employee Retirement System actuaries and for the City's single employer defined benefit pension plan are based on an actuarial valuation provided by a third-party actuary. Ame NC7Cli! CounCULA is an independent member of Nexia Internation 9 _ 1 0,,,global network of independer 1/18/2022 International accounting and consulting firms.See nexia.com/men,:, Aisclaimer for details.