203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 January 6, 2022
To the Honorable Mayor and Members of the City Council
City of Pomona, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Pomona, California (the City) for the year ended June 30, 2020. Professional standards require th at we provide you with information about our responsibilities under generally accepted auditing standard s, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit.
We have communicated such information in our letter to you dated January 6, 2022. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings and Other Issues
Qualitative Aspects of Significant Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2020-2021. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consens us. All significant transactio ns have been recognized in the financial statements in the proper period
Accounting estimates are an integral part of the financial stat ements 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 se nsitive 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 estimates of its net pension liability and total o ther post-employment benefits liability based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liabili ty and net other post-employment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Significant Unusual Transactions
Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.
Attachment No.3
To the Honorable Mayor and Members of the City Council
City of Pomona, California
Corrected and Uncorrected Misstatements
Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. In addition, n one of the misstatements detected as a result of audit procedures and corrected by management were mat erial, either individually or in the aggregate, to the 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 auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Circumstances that Affect the Form and Content of the Auditor’s Report
New auditing standards were implemented in fiscal year 2020-202 1 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements , through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated January 6, 2022.
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 sit uations. 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 t hat the consultant has all the r elevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues Discussed with Management
We generally discuss a variety of matters, including the signif icant events or transactions that occurred during the year, business conditions affecting the City and bus iness plans and strategies that may affect the risks of material misstate ments, the application of account ing 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.
Other Matters
We applied certain limited procedures to the management’s discu ssion and analysis, the budgetary comparison schedules for the general fund and miscellaneous, th e schedules of changes in net pension liability and related ratios, the schedules of contributions, the schedule of changes in total other postemployment benefits and related ratios which are required s upplementary information (RSI) that supplements the basic financial statements. Our procedures cons isted of inquiries of management Attachment No.3
To the Honorable Mayor and Members of the City Council
City of Pomona, California
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 introductory section, combinin g and individual nonmajor fund financial statements and schedules, and statistical section, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made ce rtain inquiries of management and evaluated the form, content, and methods of preparing the infor mation to determine that the information complies with accounting principles generally accepted in the U nited States of America, the method of preparing it has not changed from the prior period, and the inf ormation 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 section and t he statistical section, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statemen ts, and accordingly, we do not express an opinion or provide any assurance on it.
The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit:
GASB Statement No. 84, Fiduciary Activities.
GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61.
GASB Statement No. 94, The Annual Comprehensive Financial Report.
The following GASB pron ouncements are effect ive in the followin g fiscal years’ audits and should be reviewed for proper implementation by management:
Fiscal year 2022
GASB Statement No. 87, Leases.
GASB Statement No. 89, Accounting for Interest Cost Incurr ed before the End of a Construction Period.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements.
Attachment No.3
To the Honorable Mayor and Members of the City Council
City of Pomona, California
Restriction on Use
This information is intended solely for the use of the City Cou ncil and management of the City of Pomona and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Brea, California
Attachment No.3