6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
March 26, 2026
To the Honorable Mayor and the Members of the City Council of the City of Rialto
Rialto, California
We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Rialto, California (the “City”) for the year ended June 30, 2025. Professional standards require that we pr ovide 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 a udit. We have communicated such info rmation in our letter to you dated July 30, 2025. Professional standards also require that we communicate the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of 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 Note 1 to the basic financial statements.
New Accounting Standards
GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certa in previously required disclosures. Implementation of this Statement results in a restatement of the beginning net position as of July 1, 2024.
GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures.
The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certa in concentrations or constraints which may limit a government's ability to acquire resources or control spending. Application of this statement did not have a significant effect on the City’s financial reporting for the year ended June 30, 2025.
No other new accounting policies were adopted and the app lication of existing policies was not changed during 2025.
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 financ ial statements prepared by management and are based on management’s knowledge and experience about past and current events and assum ptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financia l statements and because of the possibility that future events affecting them may differ significantly from those expected.
To the Honorable Mayor and the Members of the City Council of the City of Rialto
Rialto, California
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 Wells Fargo, 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 amor tization 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 ass ets in determining that it is reasonable in relation to the financial statements taken as a whole.
Management’s estimate for compensated absences is based on the outstanding balance of paid time off that more likely than not will be used or paid. We evalua ted the key factors and assumptions used to develop the compensated absences liability 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 pension liability and based on audited financial statements on fiduciary net position for CalPERS 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.
Management’s estimate of the net other postemployment benefits (“OPEB”) liability is based on the actuarial valuation on total OPEB liability and financial statem ents on fiduciary net position. We evaluated the key factors and assumptions used to develop the OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sen sitive because of their signifi cance to financial statement users. The most sensitive disclosures affecting the financial statements were:
Note 1 – Summary of Significant Accounting Policies
Note 2 – Stewardship, Compliance and Accountability
Note 11 – Defined Benefit Pension Plans
Note 12 – Other Postemployment Benefits (“OPEB”)
Note 16 – Restatement of Beginning Net Position and Fund Balances Note 18 – Contingencies
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 accumu late 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 de tected as a resu lt 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.
To the Honorable Mayor and the Members of the City Council of the City of Rialto
Rialto, California
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, repo rting, or auditing matter, whether or not resolved to our satisfaction, that could be si gnificant 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 manageme nt that are included in the management representation letter dated March 26, 2026.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other acc ountants 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 determina tion of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the c onsulting 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 a pplication 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.
Other Matters
We applied certain limited procedures to the Budgetary Comparison Schedules, the Schedule of Changes in Net Pension Liability and Related Ratios – Mi scellaneous and Safety Plans, the Sc hedules of Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Bene fits Liability and Related Ratios, and the Schedule of Contributions – Other Postemployment Benefits, which are Required Supplementary Information (“RSI”) that supplement the basic financial statements. Our procedur es 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 know ledge 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 not engaged to report on th e Combining and Individual Fund Fina ncial Statements, which accompany the financial statements but are not RSI.
With respect to this supplementary info rmation, we made certain inquiries of management and evaluated the form, c ontent, and methods of preparing the information to determine that the information complies with accounting principles generally accep ted in the United States of America, the method of preparing it has not changed from the prior period, and the in formation is appropriate and complete in relation to our audit of the financial statements. We compared and r econciled the supplementary in formation to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
To the Honorable Mayor and the Members of the City Council of the City of Rialto
Rialto, California
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