In March 2022, GASB issued Statement No. 99, Omnibus 2022, to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (I) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Implementation of this Statement did not have a significant effect to the City's financial statements for the fiscal year ended June 30, 2023 No other new accounting policies were adopted and the application of existing policies was not changed during 2023.
We noted no transactions entered into by the City 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 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 City's financial statements were:
• Management's estimate of the investment fair market value is based on information provided by U.S. Bank, the custodian of the investments based on interactive data. We evaluated the key factors and assumptions used to develop the investment fair market value in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the depreciation and amortization on capital assets is based on the industry standard and past experience on actual useful life of the asset groups. We evaluated the key factors and assumptions used to develop the depreciation on capital assets in determining that it is reasonable in relation to the financial statements taken as a whole. • Management's estimate of the net pension liabilities is based on the actuarial valuation on total miscellaneous pension liability, the proportionate share of actuarial valuation on total safety plan pension liability and based on audited financial statements on fiduciary net position for Ca!PERS plans. We evaluated the key factors and assumptions used to develop the net pension liability in determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
• Note l - Summary of Significant Accounting Policies
• Note 8 Defined Benefit Pension Plans
• Note l O Net Position and Fund Balances
• Note 11 - Restatement of Beginning Net Position
• Note 12 Other Required Fund Disclosures
• Note 14 - Commitments and Contingencies
The financial statement disclosures are neutral, consistent, and clear.
To the Honorable Mayor and Members of the City Council
of the City of Anderson
Anderson, California
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in perfonning and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report.
We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated August 29, 2024.
Management Consultations with Other Independent 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 detennination 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. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the nonnal course of our professional relationship and our responses were not a condition to our retention.
To the Honorable Mayor and Members of the City Council
of the City of Anderson
Anderson, California
Other Matters
We applied certain limited procedures to the Management's Discussion & Analysis, Budgetary Comparison Schedules for General Fund and Major Special Revenue Funds, the Schedule of Changes in Net Pension Liability and Related Ratios, and the Schedule of Contributions - Pensions, which are Required Supplementary Information ("RSI") that supplement the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's 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 the Combining and Individual Fund Financial Statements, which accompany the financial statements but are not RSI. With respect to this supplementary 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 supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and the Statistical Sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Santa Ana, California
City of Anderson
Anderson, Calif omia
Independent Accountants' Report on
Applying Agreed-Upon Procedures to
Appropriations Limit Schedule
For the Year Ended June 30, 2023
TIIE II
PUN GROUP
INDEPENDENT ACCOUNTANTS' REPORT ON
APPL YING AGREED-UPON PROCEDURES
To the Honorable Mayor, City Council and Citizens
of the City of Anderson
Anderson, California
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
www.pungroup.cpa
We have perfonned the procedures enumerated below on the appropriation limit of the City of Anderson, California (the "City") for the year ended June 30, 2023. The City's management is responsible for the Appropriations Limit Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose in meeting the requirements of Section 1.5 of Article Xlll-B of the California Constitution, which was agreed to by the City and the League of California Cities (as presented int eh publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings are as follows:
I. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ended June 30, 2023, and verified that the limit and annual calculation factors were adopted by resolution of the City Council. We also verified that the population and inflation options were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Schedule, we added the prior year's limit to the total adjustments, and agreed the resulting amount to the current year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We verified the current year infonnation presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.
Finding: No exceptions were noted as a result of our procedures.
4. We verified the appropriations limit presented in the accompanying Appropriations Limit Schedule matched the appropriation limit adopted by the City Council.
Finding: No exceptions were noted as a result of our procedures.
ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX To the Honorable Mayor, City Council and Citizens
of the City of Anderson
Anderson, California
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Schedule.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and the management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Santa Ana, California
August 29, 2024
2 City of Anderson
Appropriations Limit Schedule
For the Year Ended June 30, 2023
Amount
A. Appropriations Limit FY 2021-2022 $ 18,915,034
B. Calculation Factors:
I) Population increase %
2) Inflation increase %
3) Total adjustment %
C. Annual Adjustment Increase
D. Other Adjustments:
1) Loss responsibility (-)
2) Transfer to private(-)
3) Transfer to fees(-)
4) Assumed responsibility(+)
E. Total Adjustments
F. Appropriations Limit FY 2022-2023
See Accompanying Notes to the Appropriations Limit Schedule. $
3 0.9918
1.0755
1.0667
1,261,271
10,000
1,271,271
20,186,305
Source
Prior year appropriations
limit adopted by the City
California Department of Finance
California Department of Finance
(Bl x 82)
{(83-1) x A}
NIA
NIA
NIA
Fees
(C + D)
(A + E)
City of Anderson
Notes to the Appropriations Limit Schedule
For the Year Ending June 30, 2023
Note 1 - Purpose of Limited Procedures Review
Under Artic1e XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July I, 1990, under Section 1.5 of Article XlllB, the annual calculation of the appropriations limit is subject to an agreed upon procedures review in connection with the annual audit.
Note 2 - Method of Calculation
Under Section I 0.5 of Article XIJIB, for fiscal years beginning on or after July 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.
Note 3 - Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction's own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the Ciiy for the year ending June 30, 2023, represents the annual percentage change in population of the County; and calculated the change in population based off the population conversion ratio.
Note 4 - Inflation Factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the California Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for the year ending June 30, 2023, represents the correct annual percentage change for per capita personal income.
Note 5 - Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had one adjustment in the amount of$ 10,000 fees, for the year ending June 30, 2023. 4