November 27, 2024
To the Honorable Mayor and City Council
City of Fresno, California
We have audited the financial statements of the Measure P Fund of the City of Fresno, California (the City), for the year ended June 30, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit. We have communicated such informat ion in our engagement letter pr eviously provided to you.
Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the select ion and use of appropriate accounting polic ies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2024. 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 sensit ive 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 estimate affecting the Measure P Fund of the City’s financial statements was:
Management’s estimate of interest income (use of money and property) is based on the Measure P Fund’s average daily cash balance, the Citywide total cash bala nce, and the related published pooled interest rates for every month during the fiscal year ended June 30 , 2024. We evaluated the me thods, assumptions, and data used to develop the interest income allocation in determining that it is reas onable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing 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. There were no corrected or uncorrected misstatements noted during the audit.
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 auditor’s 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 November 27, 2024.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with othe r accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consul tation involves application of an accounting principle to the Measure P Fund of the City’s financial statements or a determin ation of the type of auditor’s opinion that may be expressed on those statements, our professional standa rds 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 normal course of our professional relationship and our responses were not a condition to our retention.
In our audit engagement letter previously provided to you, we communicated the following significant risks of material misstatement (significant risks) as part of our audit planning:
Management override of controls
Improper revenue recognition due to fraud
During the course of the audit, we identified an additional significant risk:
Unallowable payments could be made from the Measure P Fund (nonconformance with Expenditure Plan) These risks were addressed within our audit procedures and we have no findings to report related to these risks.
Other Matters
We applied certain limited procedures to the Budgetary Co mparison Schedule, which is requi red supplementary information (RSI) that supplements the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information fo r consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the 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 Measure P Expenditure Plan and the Measure P Expenditure Plan – Project Status reports, 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.
Restriction on Use
This information is intended solely for the information and use of the Honorable Mayor, City Council and management of City of Fresno and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,