HomeMy Public PortalAbout2022.03.11 FY20 Audit Letter to Eide Bailly LLP
March 11, 2022
Eide Bailly LLP
877 W. Main St, Suite 800
Boise, ID 83702
This representation letter is provided in connection with your audit of the financial statements of
the City of McCall, Idaho (the City), which comprise the statement of financial positions of the
governmental activities, the business-type activities, the discretely presented component unit,
each major fund, and the aggregate remaining fund information as of September 30, 2020, and
the respective changes in financial position and, where applicable, cash flows for the year then
ended, and the related notes to the financial statements, for the purpose of expressing an opinion
on whether the financial statements of the various opinion units are presented fairly, in all
material respects, 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 that, in the light of surrounding circumstances, makes it probable that the
judgment of a reasonable person relying on the information would be changed or influenced by
the omission or misstatement.
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 March 11, 2022:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement
letter dated March 2, 2021, for the preparation and fair presentation of the financial
statements of the various opinion units referred to above in accordance with U.S. GAAP.
2. We acknowledge our responsibility for the design, implementation, and maintenance 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.
3. We acknowledge our responsibility for the design, implementation, and maintenance of
internal control to prevent and detect fraud.
4. We acknowledge our responsibility for compliance with the laws, regulations, and
provisions of contracts and grant agreements.
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5. We have reviewed, approved, and taken responsibility for the financial statements and
related notes.
6. We have a process to track the status of audit findings and recommendations.
7. We have identified and communicated to you all previous audits, attestation
engagements, and other studies related to the audit objectives and whether related
recommendations have been implemented.
8. Significant assumptions used by us in making accounting estimates, including those
measured at fair value, are reasonable.
9. There are no related party relationships and transactions that should have been
appropriately accounted for and disclosed in accordance with the requirements of U.S.
GAAP.
10. 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.
11. You have proposed adjusting journal entries, reclassifying entries, and fund-level
reporting to government-wide reporting entries that have been posted to the City’s
accounts and financial statements as presented in the attachment to this document. We are
in agreement with those adjustments.
12. The effects of corrected and 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.
13. We are not aware of any pending or threatened litigation, claims, or assessments, or
unasserted claims or assessments that are required to be accrued or disclosed in the
financial statements 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 (FASB Accounting Standards
Codification (ASC) 450, Contingencies), and we have not consulted a lawyer concerning
litigation, claims, or assessments.
14. The financial statements include the Urban Renewal Agency which is a component unit.
We have determined that the Friends of the McCall Public Library and the McCall Public
Library Foundation entities are not component units of the primary government. There
are no joint ventures with an equity interest or other related organizations.
15. All funds and activities are properly classified.
16. 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, and GASB Statement No. 37, Basic Financial Statements—and
Management’s Discussion and Analysis—for State and Local Governments: Omnibus,
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.
17. All net position components and fund balance classifications have been properly reported
and, if applicable, approved.
18. Our policy regarding whether to first apply restricted or unrestricted resources wen an
expense is incurred for purposes for which both restricted and unrestricted net
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position/fund balance are available is appropriately disclosed and net position/fund
balance is properly recognized under the policy.
19. 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.
20. 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.
21. All interfund and intra-entity transactions and balances have been properly classified and
reported.
22. Deposit and investment risks have been properly and fully disclosed.
23. Capital assets, including infrastructure assets, are properly capitalized, reported, and if
applicable, depreciated.
24. All required supplementary information is measured and presented within the prescribed
guidelines.
25. With regard to items reported at fair value:
a. The underlying assumptions are reasonable, and they appropriately reflect
management’s intent and ability to carry out its stated courses of action.
b. The measurement methods and related assumptions used in determining fair value
are appropriate in the circumstances and have been consistently applied.
c. The disclosures related to fair values are complete, adequate, and in conformity
with U.S. GAAP.
d. There are no subsequent events that require adjustments to the fair value
measurements and disclosures included in the financial statements.
26. With respect to the nonattest services provided including financial statement preparation
and conversion entries, completion of the auditee portion of the Data Collection Form,
and maintenance of depreciation schedules, we have performed the following:
a. Made all management decisions and performed all management functions;
b. Assigned a competent individual to oversee the services;
c. Evaluated the adequacy of the services performed;
d. Evaluated and accepted responsibility for the result of the service performed; and
e. Established and maintained internal controls, including monitoring ongoing
activities.
27. With regard to pensions:
a. We believe that the actuarial assumptions and methods used to measure pension
liabilities and costs for financial accounting purposes are appropriate in the
circumstances.
b. Increases in benefits, elimination of benefits and all similar amendments have
been disclosed in accordance with U.S. GAAP and are included in the most recent
actuarial valuation or disclosed as a subsequent event.
28. With respect to the Management’s Discussion and Analysis (MD&A) and other Required
Supplementary Information (RSI) accompanying the financial statements:
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a. We acknowledge our responsibility for the presentation of the Required
Supplementary Information in accordance with requirements of the Governmental
Accounting Standards Board.
b. We believe the Required Supplementary Information, including its form and
content, is measured and fairly presented in accordance with the requirements of
GASB.
c. The methods of measurement or presentation have not changed from those used in
the prior period.
d. 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.
29. With respect to the supplementary information accompanying the financial statements:
a. We acknowledge our responsibility for the presentation of the supplementary
information in accordance with accounting principles generally accepted in the
United States of America.
b. 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.
c. The methods of measurement or presentation have not changed from those used in
the prior period.
d. We believe the 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.
30. We agree with the findings of specialists in evaluating the net pension liability 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.
Information Provided
31. 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 of the various opinion
units referred to above, such as records, documentation, meeting minutes, and
other matters;
b. Additional information that you have requested from us for the purpose of the
audit; and
c. Unrestricted access to persons within the City from whom you determined it
necessary to obtain audit evidence.
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32. All transactions have been recorded in the accounting records and are reflected in the
financial statements.
33. 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.
34. We have provided to you our analysis of the City’s ability to continue as a going concern,
including significant conditions and events present, and if necessary, our analysis of
management’s plans, and our ability to achieve those plans.
35. We have no knowledge of any fraud or suspected fraud that affects the City and involves:
a. Management;
b. Employees who have significant roles in internal control; or
c. Others where the fraud could have a material effect on the financial statements.
36. We have no knowledge of any allegations of fraud, or suspected fraud, affecting the
City’s financial statements communicated by employees, former employees, vendors,
regulators, or others.
37. We have disclosed to you all known actual or possible litigation, claims, and assessments
whose effects should be considered when preparing the financial statements, if any.
38. We have disclosed to you the identity of the City’s related parties and all the related party
relationships and transactions of which we are aware, if applicable.
39. There have been no communications from regulatory agencies concerning
noncompliance with or deficiencies in accounting, internal control, or financial reporting
practices.
40. The City has no plans or intentions that may materially affect the carrying value or
classification of assets and liabilities.
41. If applicable, we have disclosed to you all guarantees, whether written or oral, under
which the City is contingently liable.
42. There are no 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.
43. If applicable, 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.
44. 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.
45. There are no:
a. Violations or possible violations of laws or regulations, or provisions of contracts
or grant agreements whose effects should be considered for disclosure in the
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financial statements or as a basis for recording a loss contingency, including
applicable budget laws and regulations.
b. Unasserted claims or assessments that our lawyer has advised are probable of
assertion and must be disclosed in accordance with GASB-62.
c. Other liabilities or gain or loss contingencies that are required to be accrued or
disclosed by GASB-62
d. 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).
46. The City 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
made known to you and disclosed in the notes to the financial statements.
47. 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.
48. We have followed all applicable laws and regulations in adopting, approving, and
amending budgets.
Single Audit
49. With respect to federal award programs:
a. We are responsible for understanding and complying with and have complied
with the requirements of Title 2 CFR Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements of Federal Awards (the
Uniform Guidance), including requirements relating to preparation of the
schedule of expenditures of federal awards, or we acknowledge our responsibility
for presenting the schedule of expenditures of federal awards (SEFA) in
accordance with the requirements of the 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.
b. We have identified and disclosed to you all of our government programs and
related activities subject to the Uniform Guidance and included in the SEFA made
during the audit period for all awards provided by federal agencies in the form of
grants, 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.
c. We are responsible for understanding and complying with, and have complied
with, the requirements of laws, regulations, and the provisions of contracts and
grant agreements related to each of our federal programs and have identified and
disclosed to you the requirements of laws, regulations, and the provisions of
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contracts and grant agreements that are considered to have a direct and material
effect on the major program.
d. We are responsible for establishing and maintaining, and have established and
maintained, effective internal control over compliance requirements applicable to
federal programs that provides reasonable assurance that we are managing our
federal awards in compliance with laws, regulations, and the provisions of
contracts and grant agreements that could have a material effect on our federal
programs. We believe the internal control system is adequate and is functioning as
intended.
e. We have made available to you all contracts and grant agreements (including
amendments, if any) and any other correspondence with federal agencies or pass-
through entities relevant to federal programs and related activities
f. We have received no requests from a federal agency to audit one or more specific
programs as a major program.
g. We have complied with the direct and material compliance requirements,
including when applicable, those set forth in the OMB Compliance Supplement,
relating to federal awards and have identified and disclosed to you all amounts
questioned and all known noncompliance with the requirements of federal
awards, if any.
h. We have disclosed any communications from grantors and pass-through entities
concerning possible noncompliance with the direct and material compliance
requirements, including communications received from the end of the period
covered by the compliance audit to the date of the auditor’s report.
i. If applicable, amounts claimed or used for matching were determined in
accordance with relevant guidelines in the Uniform Guidance.
j. We have disclosed to you our interpretation of compliance requirements that may
have varying interpretations.
k. We have made available to you all documentation related to compliance with the
direct material compliance requirements, including information related to federal
program financial reports and claims for advances and reimbursements.
l. We have disclosed to you the nature of any subsequent events that provide
additional evidence about conditions that existed at the end of the reporting period
affecting noncompliance during the reporting period, if any.
m. 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.
n. No changes have been made in internal control over compliance or other factors
that might significantly affect internal control subsequent to the date as of which
compliance was audited.
o. 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.
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p. 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.
q. We have charged costs to federal awards in accordance with applicable cost
principles.
r. We are responsible for and have accurately prepared the auditee section of the
Data Collection Form as required by the Uniform Guidance.
Anette Spickard, City Manager
Linda Stokes, City Treasurer
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