RA
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
MS
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T
909 889 5361 F February 28, 2025
PARTNERS
Scott W. Manno, CPA, CGMA To the Honorable City Council Leena Shanbhag, CPA. MST. CGMA 290 N. D Stetardino
Bradferd A. Welebir. CPA, MBA. CGMA
Jenny W. Liu, CPA, MST San Bernardino, CA 92401
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CGMA
Brenda L. Odle, CPA. MST (Partner Emeritus) We have audited the financial statements of the City of San Bernardino (the Terry P. Shea, CPA (Partner Emeritus) entity) as of and for the year ended June 30, 2024, and have issued our report thereon dated February 28, 2025. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
MANAGERS / STAFF
Seong-Hyea Lee, CPA, MBA As communicated in our engagement letter dated June 10, 2024, our Evelyn Morentin-Barcena, CPA responsibility, as described by professional standards, is to form and express Veronica Hernandez, CPA
opinions about whether the financial statements that have been prepared by Laura Arvizu, CPA
management with your oversight are presented fairly, in all material respects, John Maldonado, CPA, MSA in accordance with accounting principles generally accepted in the United Julia Rodriguez Fuentes. PA, MA States of America. Our audit of the financial statements does not relieve you Demi Hite, CPA
or management of your respective responsibilities.
Jeffrey McKennan. CPA
Monica Wysocki, CPA
Our responsibility, as prescribed by professional standards, is to plan and Jacob Weatherbie. CPA, MSA
perform our audit to obtain reasonable, rather than absolute, assurance about Bolim Han, CPA, MAcc
whether the financial statements are free of material misstatement. An audit Anny Gonzalez, CPA
of financial statements includes consideration of the system of internal control over financial reporting as a basis for designing audit procedures that are MEMBERS appropriate in the circumstances, but not for the purpose of expressing an American Institute of opinion on the effectiveness of the entity's internal control over financial Certified Public Accountants reporting. Accordingly, as part of our audit, we considered the system of PCPS The AICPA Alliance internal control of the entity solely for the purpose of determining our audit for CPA Firms procedures and not to provide any assurance concerning such internal Governmental Audit
Quality Center
e are also responsible for communicating significant matters related to t California Society of dit that are, in our professional judgment, relevant to your responsibiliti Certified Public Accountants
n overseeing the financial reporting process. However, we are not require communicate to dures for the purpose of identifying other matters t Planned Scope and Timing of the Audit
Proud Member of le conducted our audit consistent with the planned scope and timing AlliottGlobalAlliance™ eviously communicated to yo
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STABILITY. ACCURACY. TRUST.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence.
We have evaluated whether certain nonattest services performed by our firm during the audit have created a significant threat to our independence in relation to the entity. We have identified a threat to our independence (preparation of the entity's financial statements, creating a self-review threat) that if not reduced to an acceptable level, would impair our independence. In order to reduce the threat to an acceptable level, we have applied the following safeguard:
Prior to the issuance of the entity's financial statements, another partner or manager, independent of the engagement, will review the financial statements.
Significant Risks Identified
We have identified the possibility of the following significant risks:
Management's override of internal controls over financial reporting - Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.
Revenue recognition - Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.
These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.
Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the (1) the methods used to account for significant unusual transactions and (2) the effect of significant anouming Policies in controversial or emerging areas for which there is a lack of authoritative sudance or Significant Accounting Estimates and Related Disclosures Accounting estimates and related disclosures are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments.
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The most sensitive accounting estimates affecting the entity's financial statements are:
Management's estimate of the net pension liability and related deferred inflows and outflows of resources are based on actuarial reports by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users.
The most sensitive disclosures affecting the entity's financial statements relate to:
The disclosure of fair value of investments in the basic financial statements represents amounts susceptible to market fluctuations.
The disclosure of capital assets (and related accumulated depreciation) in the basic financial statements is based on historical information which could differ from actual useful lives of each capitalized item.
The disclosure of net pension liability and related deferred inflows and outflows of resources in the basic financial statements is based on actuarial assumptions. Actual future liabilities and actuarial deferred inflows and outflows may vary from disclosed estimates.
The disclosure of claims payable in the basic financial statements is based on claims loss reports from third party claims management companies. Actual future liabilities may vary from disclosed estimates.
The disclosure of leases and subscription liabilities, right-to-use assets, and asset amortization in the basic financial statements is based on certain terms and assumptions in the agreements which could differ from actual amounts.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no uncorrected misstatements noted.
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. Attachment A reflects all material misstatements that we identified as a result of our audit procedures that were brought to the attention of, and corrected by, management.
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Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the entity's financial statements or the auditor's report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated February 28, 2025.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, they have had consultation with other accountants regarding auditing and accounting matters. Our opinion is not modified regarding this matter.
Other Significant Matters, Findings, or Issues
transton a come in an er orgain and rulery canan a ding in any and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the entity's auditors.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the entity's annual reports, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.
However, in accordance with such standards, we have:
Read the transmittal letter and statistical section and considered whether a material inconsistency existed between the other the information and the basic financial statements, or the other information otherwise appears to be materially misstated. Our opinion on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation appearing in the financial statements.
This report is intended solely for the information and use of the City Council and management of the entity and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
Rogers, Andercoa, Malody e leott, LLP.
San Bernardino, California
City of
San Bernardino
Finance Department
SOUNDED IN 181D
February 28, 2025
Rogers, Anderson, Malody & Scott, LLP
735 E. Carnegie Drive, Suite 100
San Bernardino, CA 92408
This representation letter is provided in connection with your audit of the basic financial statements of the City of San Bernardino (the entity) as of June 30, 2024 and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the entity in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information such that, in the light of surrounding circumstances, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of February 28, 2025:
Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated June 10, 2024, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility for the design, implementation, and maintenance of the system of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
• We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.
• We have reviewed, approved, and taken responsibility for the financial statements and related notes.
We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit obiectives and whether related recommendations have beer implemented.
• The methods, data and significant assumptions used by us in making accounting estimates and their related disclosures, are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of the applicable financial reporting framework. • All related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. • All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed.
Rogers, Anderson, Malody & Scott, LLP
• The effects of uncorrected misstatements summarized in the attached schedule and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole. • We have reviewed and approved the various adjusting journal entries that were proposed by you for recording in our books and records and reflected in the financial statements. • The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
• All component units, as well as joint ventures with an equity interest, if any, are included and other joint ventures and related organizations are properly disclosed.
All funds and activities are properly classified.
• All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, GASB Statement No. 37, Basic Financial Statements-and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users.
• All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved. • Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.
• All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
• All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported. • Special items and extraordinary items have been properly classified and reported. • Deposit and investment risks have been properly and fully disclosed. • Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.
• All required supplementary information is measured and presented within the prescribed guidelines.
• With regard to investments and other instruments reported at fair value:
- The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. - The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. - The disclosures related to fair values are complete, adequate, and in accordance with U.S. - There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements.
• With respect to preparation of the financial statements, we have performed the following:
- Made all management decisions and performed all management functions; - Assigned a competent individual to oversee the services; - Evaluated the adequacy of the services performed;
- Evaluated and accepted responsibility for the result of the service performed; and - Established and maintained internal controls, a process to monitor the system of internal • There have been no changes or updates to legal information disclosed to you by our attorney(s) since the date of such legal response and now.
Rogers, Anderson, Malody & Scott, LLP
Information Provided
• We have provided you with:
- Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters; - Additional information that you have requested from us for the purpose of the audit; and - Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
- A written acknowledgement of all the documents that we expect to issue that will be included in the annual report and the planned timing and method of issuance of that annual report;
- A final version of the annual report (including all the documents that, together, comprise the annual report) in a timely manner prior to the date of the auditor's report. • The financial statements and any other information included in the annual report are consistent with one another, and the other information does not contain any material misstatements.
All information provided in electronic form are true representations of the original documents. • All transactions have been recorded in the accounting records and are reflected in the financial statements.
• We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud
• We have provided to you our analysis of the entity's ability to continue as a going concern, including significant conditions and events present, and we believe that our use of the going concern basis of accounting is appropriate.
• We have no knowledge of any fraud or suspected fraud that affects the entity 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. • We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees, vendors, regulators, or • We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. • We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware.
• There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices. • The entity has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
• We have disclosed to you all guarantees, whether written or oral, under which the entity is contingently liable.
We have disclosed to you all nonexchange financial guarantees, under which we are obligated and have declared liabilities and disclosed properly in accordance with GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, for those guarantees where it is more likely than not that the entity will make a payment on any guarantee. • We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB- 62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.
Rogers, Anderson, Malody & Scott, LLP
• We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.
There are no:
- Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations. - Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.
- Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
- Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12).
• The entity has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
Use of a Specialist
We agree with the findings of specialists in evaluating the entity's net pension and net other post- employment benefit liabilities and related deferred amounts and have adequately considered the qualifications of the specialist in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists.
• We believe that the actuarial assumptions and methods used to measure pension and other postemployment benefit liabilities and costs for financial accounting purposes are appropriate in the circumstances
Cybersecurity
There have been no cybersecurity breaches or other cyber events whose effects should be considered for disclosure in the financial statements, as a basis for recording a loss contingency, or otherwise considered when preparing the financial statements.
Supplementary Information in Relation to the Financial Statements as a Whole With respect to supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America. • 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 or presentation have not changed from those used in the prior period.
We believe any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. • When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of Rogers, Anderson, Malody & Scott, LLP
the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.
• We acknowledge our responsibility to include the auditor's report on the supplementary informatio n any document containing the supplementary information and that indicates the auditor reporter on such supplementary information.
• We acknowledge our responsibility to present the supplementary information with the auditer inancial statements or, if the supplementary information will not be presented with the auditer financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.
Required Supplementary Information
With respect to the required supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the required supplementary information in accordance with U.S. GAAP.
and fairly presented in accordance with U.S. GAAP.
• The methods of measurement or presentation have not changed from those used in the prior period
• We believe the significant assumptions or interpretations underlying the measurement or presentation.
of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances.
Signature: _ - eanie
Title: Interim Director of Finance & Management Services