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redondo BEACH
Financial Services
July 20, 2023
This representation letter is provided in connection with your audit(s) of the financial stalements of City of Redondo Beach, which comprise the respective financial position ofthe governmental activities, the business{ype activities, each major fund, and the aggregate remaining fund information as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows for the year then ended, and the disclosures (collectively, the 'financial statements"), for the purpose of expressing opinions as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. llems are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on lhe information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors.
We confirm, to the best of our knowledge and belief, as of July 20,2023, the following representations made to you during your audit.
Financial Statements
1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 10,2022, including our responsibility for the preparation and fair presentation of the financial statements in accordance with U.S. GAAP and for preparation of the supplementary information in accordance with the applicable criteria.
2) The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government and all component units required by generally accepted accounting principles to be included in the financial reporting entity.
3) We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statemenls that are free from material misstatement, whether due to fraud or error.
4) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
5) Significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable.
415 Diamond Street, Door I
Redondo Beach, Ca llfo .nia 90277 -O27O
www.redondo.org
tel
fax
310 318-0583
310 937-6656
Lance, Soll & Lunghard, LLP
203 N. Brea Blvd.. Ste. 203
Brea, CA 92821
6) Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with U.S. GAAP. 7) Ad.iustments or disclosures have been made for all events, including instances of noncompliance, subsequent to the date of the financial stalements that would require adjustment to or disclosure in the financial statements.
8) The effects of uncorrected misstatements are immaterial, both lndividually and in the aggregate, to the financial statements as a whole for each opinion unit. A list ofthe uncorrected misstatements is attached to the representation letter.
9) The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
10) Guarantees, whether written or oral, under which the is contingently liable, if any, have been properly recorded or disclosed.
lnformation Provided
1 1) We have provided you with
a) Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as records (including information obtained from outside of the general and subsidiary ledgers), documentation, and other matters. b) Additional information that you have requested from us for the purpose of the audit. c) Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence.
d) Minutes of the meetings of the City Council or summaries of actions of recent meetings for which minutes have nol yet been prepared.
'12) All materialtransactions have been recorded in the accounting records and are reflected in the financial statements.
13) We have disclosed to you the results of our assessment ofthe risk that the financial statements may be materially misstated as a result of fraud.
'14) We have no knowledge of any fraud or suspected fraud lhat affects the City and involves:
. Management,
. Employees who have significant roles in internal control, or . Others where the fraud could have a material effect on the financial statements. 15) We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial statemenls communicated by employees, former employees, regulators, or others. '16) We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or waste or abuse, whose effects should be considered when preparing flnancial statements.
'17) We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. 18) We have disclosed to you the names of the City's related parties and all the related party relationships and transactions, including any side agreements.
Government€pecific
19) There have been no communications from regulatory agencies concerning noncompliance with, or defi ciencies in, financial reporting practices.
20) We have identified to you any previous audits, attestation engagements, and other studies related to the objectives of the audit and whether related recommendations have been implemented. 21) We have identified to you any investigations or legal proceedings that have been initiated with respect to the period under audit.
22) The City has no plans or intenlions that may materially affect the carrying value or classilication of assets, deferred oumows of resources, liabilities, deferred inflows of resources, and fund balance or net position.
23) We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracls, and legal and contractual provisions for reporting specific activities in separate funds. 24) We have identified and disclosed to you all instances of identified and suspected fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements that we believe have a material effect on the financial statements.
25) There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limlts, and any related debt covenants whose effects should be considered for disclosure in the financaal statements, or as a basis for recording a loss contingency, or for reporting on noncompliance.
26) As part of your audit, you assisted with preparation of the financial statements and disclosures and schedule of expenditures of federal awards. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for those financial statements and disclosures and schedule of expenditures ot federal awards. 27) The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
28) The City has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 29) The financial statements include all component units, appropriately present marority equity interests in legally separate organizations and.ioint ventures with an equity interest, anO property Oisciose all other joint ventures and other related organizations.
30) The financial statements include all fiduciary activities required by GASB statement No. 84, as amended.
31) The financial statements properly classify all funds and activities in accordance with GASB Statement No. 34, as amended.
32) All ,unds that meet the quantitative criteria in GASB Statement Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
33) Components of net position (net investment in capital assets; restricted; and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.
34) lnvestments, derivative instrument transactions, and land and other real estate held by endowments are properly valued.
35) Provisions for uncollectible receivables have been properly identified and recorded. 36) Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 37) Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
44) With respect to the combining and individual fund statements and schedules (supplementary information):
a) We acknowledge our responsibility for presenting the supplementary information in accordance with accounting principles generally accepted in the united states of Ameica, and we believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the supplementary information have not changed from those used in the prior period, and we have disclosed to you any signiflcant assumptions or interpretations underlying the measurement and presentation of the supplementary information. b) lf the supplementary information is not presented with the audited financial statements, we will make the audited financial statemenls readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon.
38) lnterfund, internal, and intra-entity activity and balances have been appropriately classified and reported.
39) Deposits and investment securities transactions are properly classified as to risk and are properly disclosed.
40) Capital assets, including infrastructure and intangible assets, and right-to-use lease assets are properly capitalized, reported, and, if applicable, depreciated or amortized. 41)We have appropriately disclosed the City's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net positaon is available and have determined that net position is properly recognized under the policy.
42) We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned, or unassigned) are considered to be spent lirst for expenditures for which more than one resource classification is available. That policy delermines the fund balance classifications for financial reporling purposes.
43) We acknowledge our responsibility for the required supplementary information (RSt). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation otthe RSl. 45) Wth respect to federal award programs:
a) We are responsible for understanding and complying with and have complied with, the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Pad200, lJnifom Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including requirements relating to preparation of the schedule of expenditures of federal awards. b) We acknowledge our responsibility for preparing and presenting the schedule of expenditures of federal awards (SEFA) and related disclosures in accordance with the requirements ofthe Uniform Guidance, and we believe the SEFA, including its form and content, is fairly presented in accordance with the Uniform Guidance. The methods of measurement or presentation of the SEFA have not changed from those used in the prior period and we have disclosed to you any significant assumptions and interpretations underlying the measurement or presentation of the SEFA. c) lf the SEFA is not presented with the audited linancialstatements, we willmake the audited financial statements readily available lo the intended users of the SEFA no later than the date we issue the SEFA and the auditor's report thereon.
d) We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance compliance audit, and have included in the SEFA, expenditures made during the audit period for all awards provided by federal agencies in the form of federal awards, federal cost-reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other direct assistance. e) We are responsible for understanding and complying with, and have complied with, the requirements of federal statutes, regulations, and the terms and conditions of federal awards related to each of our federal programs and have identified and disclosed to you the requirements of federal statutes, regulations, and the terms and conditions of federal awards that are considered to have a direct and material effect on each major program. f) We are responsible for establishing, designang, implementing, and maintainang, and have established, designed, implemented, and maintained, effective intemal control over compliance for federal programs that provides reasonable assurance that we are managing our federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended.
g) We have made available to you all federal awards (including amendments, if any) and any other correspondence with federal agencies or pass{hrough entities relevant to federal programs and related activities.
h) We have received no requests from a federal agency to audit one or more specific programs as a major program.
i) We have complied with the direct and material compliance requirements (except for noncompliance disclosed to you), including when applicabte, those set forth in the oMB compliance suppiement, relating to federal awards and confirm that there were no amounts questioned and no known noncompliance with the direct and material compliance requirements of federal awards. j) We have disclosed any communications from federal awarding agencies and pass{hrough entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end ofthe period covered by the compliance audit to the date of the auditor's report.
k) We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor's report. l) Amounts claimed or used for matching were determined in accordance with relevant guidelines in OMB'S Uniform Guidance (2 CFR part 200, subpart E).
m) We have disclosed to you our interpretation of compliance requirements that may have varying interpretations.
n) We have made available to you all documentation related to compliance with the direct and material compliance requiremenls, including information related to federal program financial reports and claims for advances and reimbursements.
o) We have disclosed to you the nature of any subsequent evenls that provide additional evidence about conditions that existed at the end of the reporting period atfecting noncompliance during the reporting period.
p) There are no such known instances of noncompliance with direct and material compliance requirements that occurred subsequent to the period covered by the auditor's report. q) No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any conective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the period covered by the auditor's report.
r) Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the financial statements have been prepared. s) The copies of federal program financial reports provided you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass-through entity, as applicable.
t) We have monitored subrecipients, as necessary, to determine that they have expended subawards in compliance with federal statutes, regulations, and the terms and conditions of the subaward and have met the other pass{hrough entity requirements of the Uniform Guidance. u) We have charged costs to federal awards in accordance with applicable cost principles v) We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all tindings required to be included by the Uniform Guidance, and we have provided you with all information on the status of the follow-up on prior audit findings by federal awarding agencies and pass{hrough entities, including all management decisions. w) We are responsible for and have ensured the repo(ing package does not contain protected personally identifiable information.
x) We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance.
y) We are responsible for taking corrective action on each audit finding of the compliance audit and have developed a correclive action plan that meets the requirements ofthe Uniform Guidance. 46) With respect to the Housing Successor Fund:
a) We are responsible for establishing and maintaining an effective internal control structure over compliance with laws, regulations and administrative requirements of the Health and Safety Code of the State of California.
b) We have performed an evaluation of our compliance with laws. regulations and administrative requirements of SB 341 and the Health and Safety Code of the State of California. c) With the exception of items listed below, we have complied in all material respects with laws, regulations and administrative requirements of SB 341 and the Health and Safety Code of the State of California.
None Noted.
d) We have disclosed to you the following known areas of noncompliance with SB 341 and the Health and Safety Code of the State of California:
None Noted.
e) We have made available to you all documentation related to the City's compliance with laws, regulations and administrative requirements of SB 341 and the Health and Safety Code of the State of California.
f) We have disclosed to you the following communications from regulatory agencies, internal auditors and other practitioners concerning possible noncompliance with laws, regulations and administrative requirements of SB 341 and the Health and Safety Code of the State of California.
This would include any communication between the date of this representation as to compliance and the date of your report:
None Noted.
g) We will disclose to you any noncompliance which comes to our attention subsequent to the date of this representation.
Signature: ____________ _ Signatu0-:5fs
Title: _h_· f'\_t-_\"_c_�_D __ , ,_e_c.._i _D_-__ _
Name of Governmental Unit: Citv of Redondo Beach
Date of Combined Balance Sheet: June 30.2022
Opinion Unit, Fund Type or Fund: All Funds
Unadjusted Audit Difierences Cause
Cunent Year O\,er
(Under) Re\€nues and
Expenditures/Expenses
and Changes in Fund
Balance/Equity
None Noted N/A $
Cumulati\,e efiect (bebre eflect of prior year differences) Efuct of unadjusted audit difference - prior year
Cumulati\€ effect (after effect of prior year difierences) $ Summary of Audit Differences