October 4, 2024
To the City Council of the
City of Ripon, California
We have audited the modified-cash basis financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Ripon, 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, 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 engagement letter previously 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 selection and use of appropriate accounting policies. 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 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 estimate affecting the City’s financial statements was:
Management’s estimate of the indirect cost allocation is based on actual costs incurred in each fund. We evaluated the methods, assumptions, and data used to develop the indirect cost allocation in determining that it is reasonable 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. Management has corrected all such misstatements. The attached schedule reflects all material misstatements detected as a result of audit procedures that were corrected by management.
2024.06.30 RIPON Audit Committee Letter
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.
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 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 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 additional significant risks:
Failure to record material advances between funds
Fund balance is not properly classified in accordance with GASB 54. Interfund payment activity is improperly recorded as a transfer or otherwise reported as revenue/expenses instead of a reduction of the interfund balance.
Misclassification of transfers in/out (commingling of transfers in/out in same account).
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 management’s discussion and analysis, which is required supplementary information (RSI) that supplements 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 non-major fund statements and additional information on the Successor Agency Trust Fund, 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 the modified cash basis of accounting, 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. 2024.06.30 RIPON Audit Committee Letter
Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City of Ripon and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
2024.06.30 RIPON Audit Committee Letter
Client: RIPON, CITY OF
Engagement: 6-30-2024 Audit
Current Period: 06/30/2024
Workpaper: Attachment: Corrected Material Audit Adjustments Account Description
Workpaper
Reference Debit Credit Net Income Effect Workpaper ID
AJE04 RE405
To correct fund balance for mitigation loan.
900-40001 OPERATING TRANSFERS 0.00 5,695,402.45
900-30000 FUND BALANCES 5,695,402.45 0.00
100-99998 Transfers Out (PPC Account) 5,695,402.45 0.00 100-30000 FUND BALANCES 0.00 5,695,402.45
Total 11,390,804.90 11,390,804.90 0.00
AJE07 N100
To reconcile fund balance to prior year audited financial statements. 200-40001 OPERATING TRANSFERS 169,761.00 0.00
900-99999 Transfers Out (PPC Account) 0.00 169,761.00
200-30000 FUND BALANCES 0.00 169,761.00
900-30000 FUND BALANCES 169,761.00 0.00
451-30000 FUND BALANCES 16,493.71 0.00
451-10200 CASH - BOND PROCEEDS 0.00 16,493.71
900-30000 FUND BALANCES 0.00 16,493.71
900-10100 CASH IN COMBINED FUND 16,493.71 0.00
100-10100 CASH IN COMBINED FUND 0.00 8,102.45
100-30000 FUND BALANCES 8,102.45 0.00
900-10100 CASH IN COMBINED FUND 8,102.45 0.00
900-30000 FUND BALANCES 0.00 8,102.45
Total 388,714.32 388,714.32 0.00
2024.06.30 RIPON Audit Committee Letter