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05-28-24-R
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05-28-24-R
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7/9/2024 10:02:52 AM
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SIGNIFICANT ACCOUNTING POLICIES <br />Management is responsible for the selection and use of appropriate accounting policies. The significant <br />accounting policies used by the City are described in Note 1 of the notes to basic financial statements. No <br />new accounting policies were adopted, and the application of existing policies was not changed during the <br />year. <br />We noted no transactions entered into by the City during the year for which there is a lack of authoritative <br />guidance or consensus. All significant transactions have been recognized in the financial statements in the <br />proper period. <br />ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS <br />Accounting estimates are an integral part of the financial statements prepared by management and are <br />based on management's knowledge and experience about past and current events and assumptions about <br />future events. Certain accounting estimates are particularly sensitive because of their significance to the <br />financial statements and because of the possibility that future events affecting them may differ <br />significantly from those expected. The most sensitive estimates affecting the financial statements were: <br />• Depreciation — Management's estimates of depreciation expense are based on the estimated <br />useful lives of the assets. <br />• Pension Benefits — The City has recorded liabilities and activity for pension benefits. Actuarial <br />estimates of the net pension balances are calculated using actuarial methodologies described in <br />Governmental Accounting Standards Board Statement No. 68. The actuarial calculations include <br />significant assumptions, including projected changes, investment returns, retirement ages, <br />proportionate share, and employee turnover. <br />Compensated Absences — Management's estimate is based on current rates of pay, unused <br />compensated absence balances, and the likelihood that unused balances will ultimately be paid <br />out at termination. <br />We evaluated the key factors and assumptions used by management to develop these accounting estimates <br />in determining that they are reasonable in relation to the basic financial statements taken as a whole. <br />Certain financial statement disclosures are particularly sensitive because of their significance to financial <br />statement users. The disclosures included in the notes to the basic financial statements related to pension <br />benefits are particularly sensitive, due to the materiality of the liabilities, and the large and complex <br />estimates involved in determining the disclosures. <br />The financial statement disclosures are neutral, consistent, and clear. <br />DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT <br />We encountered no significant difficulties in dealing with management in performing and completing our <br />audit. <br />CORRECTED AND UNCORRECTED MISSTATEMENTS <br />Professional standards require us to accumulate all known and likely misstatements identified during the <br />audit, other than those that are clearly trivial, and communicate them to the appropriate level of <br />management. Management has corrected all such misstatements. In addition, none of the misstatements <br />detected as a result of audit procedures and corrected by management were material, either individually or <br />in the aggregate, to each opinion unit's financial statements taken as a whole. <br />-2- <br />
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