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Honorable City Council <br /> City of Santa Ana <br /> Page 2 <br /> • The other postemployment benefits (OPEB) expense and total OPEB liability, and <br /> corresponding deferred outflows of resources and deferred inflows of resources for the <br /> City's OPEB plan are based on an actuarial valuation provided by a third-party actuary. <br /> • The claims liability for workers' compensation and general liabilities are based on certain <br /> actuarial assumptions and methods prepared by an outside consultant. <br /> We evaluated the key factors and assumptions used to develop these accounting estimates in <br /> determining that it is reasonable in relation to the financial statements taken as a whole. <br /> Financial statement disclosures <br /> Certain financial statement disclosures are particularly sensitive because of their significance to <br /> financial statement users. There were no particularly sensitive financial statement disclosures. <br /> The financial statement disclosures are neutral, consistent, and clear. <br /> Difficulties encountered in performing the audit <br /> We encountered no significant difficulties in dealing with management in performing and completing our <br /> audit. <br /> Uncorrected misstatements <br /> Professional standards require us to accumulate all misstatements identified during the audit, other <br /> than those that are clearly trivial, and communicate them to the appropriate level of management. The <br /> attached schedule summarizes uncorrected misstatements of the financial statements. Management <br /> has determined that their effects are immaterial, both individually and in the aggregate, to the financial <br /> statements taken as a whole. <br /> Corrected misstatements <br /> None of the misstatements detected as a result of audit procedures and corrected by management <br /> were material, either individually or in the aggregate, to the financial statements taken as a whole. <br /> Disagreements with management <br /> For purposes of this letter, a disagreement with management is a financial accounting, reporting, or <br /> auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial <br /> statements or the auditors' report. No such disagreements arose during our audit. Management <br /> representations <br /> We have requested certain representations from management that are included in the management <br /> representation letter dated December 8, 2021. <br /> Management consultations with other independent accountants <br /> In some cases, management may decide to consult with other accountants about auditing and <br /> accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation <br /> involves application of an accounting principle to the entity's financial statements or a determination of <br /> the type of auditors' opinion that may be expressed on those statements, our professional standards <br /> require the consulting accountant to check with us to determine that the consultant has all the relevant <br /> facts. To our knowledge, there were no such consultations with other accountants. <br /> City Council 9 — 11 1/18/2022 <br />