Audit Report

Chandler Health Care Benefits Trust 
Financial Statements and 
Report on Internal Control and on Compliance 
Year Ended December 31, 2022

CHANDLER HEALTH CARE BENEFITS TRUST 
 
DECEMBER 31, 2022 
 
 
 
 
 
 
Contents 
Page 
 
Independent Auditor’s Report 
1 
 
 
Management’s Discussion and Analysis (MD&A) 
5 
 
 
Statement of Net Position 
10 
 
 
Statement of Revenues, Expenses and Changes in Net Position 
11 
 
 
Statement of Cash Flows 
12 
 
 
Notes to Financial Statements 
13 
 
 
Report on Internal Control and on Compliance 
20

Independent Auditor’s Report 
 
 
Board of Trustees 
Chandler Health Care Benefits Trust 
 
Report on Audit of Financial Statements 
 
Opinion 
We have audited the accompanying financial statements of the Chandler Health Care Benefits Trust (Trust), 
an internal service fund of the City of Chandler, Arizona, as of and for the year ended December 31, 2022, 
and the related notes to the financial statements, as listed in the table of contents. 
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial 
position of the Chandler Health Care Benefits Trust, as of December 31, 2022, and the changes in financial 
position and cash flows thereof for the year then ended in accordance with accounting principles generally 
accepted in the United States of America. 
 
Basis for Opinion 
We conducted our audit in accordance with auditing standards generally accepted in the United States of 
America and the standards applicable to financial audits contained in Government Auditing Standards, 
issued by the Comptroller General of the United States. Our responsibilities under those standards are 
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our 
report. We are required to be independent of the Chandler Health Care Benefits Trust and to meet our other 
ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We 
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 
audit opinion. 
 
Emphasis of Matter 
As discussed in Note 1A, the financial statements of the Chandler Health Care Benefits Trust, an internal 
service fund of the City of Chandler, Arizona, are intended to present the financial position, the changes in 
financial position, and the cash flows of only that portion of the City of Chandler, Arizona, that is 
attributable to the transactions of the Chandler Health Care Benefits Trust. They do not purport to, and do 
not present fairly the financial position of the City of Chandler, Arizona, as of December 31, 2022, the 
changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity 
with accounting principles generally accepted in the United States of America. Our opinion is not modified 
with respect to this matter.  
 
Responsibilities of Management for the Financial Statements 
Management is responsible for the preparation and fair presentation of the financial statements in 
accordance with accounting principles generally accepted in the United States of America, and 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. 
 
 
Page 1

Auditor’s Responsibilities for the Audit of the Financial Statements 
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free 
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes 
our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore 
is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and 
Government Auditing Standards will always detect a material misstatement when it exists. The risk of not 
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud 
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal 
control. Misstatements are considered material if 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. 
In performing an audit in accordance with generally accepted auditing standards and Government Auditing 
Standards, we: 
 
Exercise professional judgment and maintain professional skepticism throughout the audit. 
 
Identify and assess the risks of material misstatement of the financial statements, whether due to 
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures 
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial 
statements. 
 
Obtain an understanding of internal control relevant to the audit in order to design audit procedures 
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 
effectiveness of the Trust’s internal control. Accordingly, no such opinion is expressed. 
 
Evaluate the appropriateness of accounting policies used and the reasonableness of significant 
accounting estimates made by management, as well as evaluate the overall presentation of the 
financial statements. 
 
We are required to communicate with those charged with governance regarding, among other matters, the 
planned scope and timing of the audit, significant audit findings, and certain internal control related matters 
that we identified during the audit. 
 
Other Matters 
Required Supplementary Information 
Accounting principles generally accepted in the United States of America require that the Management’s 
Discussion and Analysis, as listed in the table of contents, be presented to supplement the financial 
statements.  Such information is the responsibility of management and, although not a part of the financial 
statements, is required by the Governmental Accounting Standards Board, who considers it to be an 
essential part of financial reporting for placing the financial statements in an appropriate operational, 
economic, or historical context. We have applied certain limited procedures to the required supplementary 
information in accordance with auditing standards generally accepted in the United States of America, 
which consisted of inquiries of management about the methods of preparing the information and comparing 
the information for consistency with management’s responses to our inquiries, the financial statements, and 
other knowledge we obtained during our audit of the financial statements.  We do not express an opinion 
or provide any assurance on the information because the limited procedures do not provide us with sufficient 
evidence to express an opinion or provide any assurance. 
 
 
Page 2

Other Reporting Required by Government Auditing Standards 
In accordance with Government Auditing Standards, we have also issued our report dated May 31, 2023, 
on our consideration of the Chandler Health Care Benefits Trust’s internal control over financial reporting 
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant 
agreements and other matters. The purpose of that report is solely to describe the scope of our testing of 
internal control over financial reporting and compliance and the results of that testing, and not to provide 
an opinion on the effectiveness of the Chandler Health Care Benefits Trust’s internal control over financial 
reporting or on compliance. That report is an integral part of an audit performed in accordance with 
Government Auditing Standards in considering the Chandler Health Care Benefits Trust’s internal control 
over financial reporting and compliance. 
Heinfeld, Meech & Co., P.C. 
Tucson, Arizona 
May 31, 2023
Page 3

MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
(Required Supplementary Information) 
Page 4

CHANDLER HEALTH CARE BENEFITS TRUST 
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
DECEMBER 31, 2022 
As management of the Chandler Health Care Benefits Trust (Trust), we offer readers of the Trust’s 
financial statements this narrative overview and analysis of the financial activities of the Trust for 
the year ended December 31, 2022. The management’s discussion and analysis is presented as 
required supplementary information to provide additional explanation to the financial statements. 
FINANCIAL HIGHLIGHTS 

The Trust’s total net position increased approximately $697,000 to $12.0 million, primarily
due to a contribution of $5.0 million that was transferred in from the City’s General Fund.

Operating revenues of $22.8 million included $18.2 million in employer premiums, $2.1
million in employee premiums and $2.3 million in retiree premiums.

The Trust had approximately $26.9 million in operating expenses, consisting primarily of
$23.5 million of claims expense.
OVERVIEW OF FINANCIAL STATEMENTS 
This discussion and analysis are intended to serve as an introduction to the Trust’s financial 
statements.   
The statement of net position presents information on all of the Trust’s assets, liabilities, and 
deferred inflows/outflows of resources with the difference reported as net position. Over time, 
increases or decreases in net position may serve as a useful indicator of whether the financial 
position of the Trust is improving or deteriorating. 
The statement of revenues, expenses and changes in net position presents information showing 
how the Trust’s net position changed during the most recent fiscal year.  All changes in net position 
are reported as soon as the underlying event giving rise to the change occurs, regardless of the 
timing of related cash flows.  Thus, revenues and expenses are reported in this statement for some 
items that will only result in cash flows in future fiscal periods. 
Page 5

CHANDLER HEALTH CARE BENEFITS TRUST 
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
DECEMBER 31, 2022 
OVERVIEW OF FINANCIAL STATEMENTS 
The statement of cash flows outlines the cash inflows and outflows related to the operation of the 
Trust for the year ended.  As discussed more thoroughly in Note 1 to the financial statements, the 
operations of the Trust are accounted for as an element of the City of Chandler’s internal service 
funds.  As a result, only the financial statements required for the financial activity of the Trust are 
presented. 
Notes to the financial statements.  The notes provide additional information that is essential to a 
full understanding of the data provided in the financial statements.  The notes to the financial 
statements can be found immediately following the financial statements. 
FINANCIAL ANALYSIS 
Net position may serve over time as a useful indicator of a government’s financial position.  In the 
case of the Trust, assets exceeded liabilities by $12.0 million at the current fiscal year end. 
The following table presents a summary of the Trust’s net position for the fiscal years ended 
December 31, 2022 and 2022. 
 
2022 
 
2021
Current assets 
$    17,687,847 
$    17,001,383 
Total assets 
 
17,687,847 
17,001,383 
Current liabilities 
5,315,041 
5,442,829 
Noncurrent liabilities 
342,800 
226,000
Total liabilities 
 
5,657,841 
5,668,829 
Net position: 
Unrestricted
12,030,006 
11,332,554
Total net position 
$    12,030,006 
$    11,332,554 
At the end of the current and prior year, the Trust reported a positive net position.  The Trust’s 
financial position is the product of several financial transactions, including the net results of 
activities. The change in total assets is primarily due to an increase in amounts due from the City 
at year end. The change in total liabilities was less than one percent. 
Page 6

CHANDLER HEALTH CARE BENEFITS TRUST 
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
DECEMBER 31, 2022 
 
 
 
 
FINANCIAL ANALYSIS 
 
Changes in net position.  The Trust’s total revenues for the current fiscal year were $27.6 million. 
The total expenses were $26.9 million.  The following table presents a summary of the changes in 
net position for the years ended December 31, 2022 and 2021. 
 
 
 
2022 
 
2021 
Revenues: 
 
 
Contributions and premiums 
 
$  22,584,456 
$ 21,999,044 
Investment income 
 
(255,392)
(65,166)
Other 
 
230,280 
258,384 
City funding 
 
5,000,000 
Total revenues 
 
27,559,344 
22,192,262 
Expenses: 
 
Claims 
 
23,530,166 
22,438,970 
HSA and FSA contributions 
 
212,450 
225,050 
Administrative fees 
 
2,595,348 
1,987,229 
Other 
 
523,928 
797,214 
Total expenses 
 
26,861,892 
25,448,463 
Changes in net position 
 
697,452 
(3,256,201)
Net position, beginning 
 
11,332,554 
14,588,755 
Net position, ending 
 
$  12,030,006 
$ 11,332,554 
 
 
 
Claims
87%
HSA and FSA 
contributions 
1%
Administration fees
10%
Other
2%
Expenses - Fiscal Year 2022
Page 7

CHANDLER HEALTH CARE BENEFITS TRUST 
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
DECEMBER 31, 2022 
 
 
 
 
FINANCIAL ANALYSIS 
 
The following are significant current year transactions that have had an impact on the change in 
net position. 
 
 An increase in contributions and premiums of $585,412 (2.7%). 
 An increase in total revenue of $5.4 million primarily due to a one-time contribution from 
the City’s General Fund, in the amount of $5.0 million. This contribution was approved by 
the Board to keep up with recent spending trends of the Trust. 
 An increase in claims expenses of $1.1 million primarily due to the increased incurred but 
not reported (IBNR) liability. 
 
 
CLAIMS PAYABLE 
 
As of December 31, 2022, the Trust had $5.6 million in claims payable.  Additional information 
on the Trust’s claims payable can be found in Note 3. 
 
 
ECONOMIC FACTORS, RESERVE LEVELS AND NEXT YEAR’S RATES 
 
An actuarial analysis is completed annually and updated throughout the plan year to help ensure 
the Trust is funded at an appropriate level and to monitor economic impacts that will affect future 
rate setting and reserves. The Trust’s goal is to maintain a minimum end of year reserve equal to 
the IBNR plus two months of costs. For the year ended December 31, 2022, the actuary estimated 
a minimum reserve of $8,314,000 (IBNR as of December 31, 2022 of $3,428,000 + 2023 two 
months of Incurred Claims and Administration of $4,886,000), and the Trust’s net position at 
December 31, 2022 was $12,030,006. Based on end of year results, it was determined that 
contributions were adequate to maintain the appropriate reserve level as of December 31, 2022.  
 
During the process of developing the contribution rates for the year ended December 31, 2023, 
many factors are considered by the Trust’s administration. The primary factors taken into 
consideration are threefold:  attempt to keep rates affordable, while staying within industry pricing; 
ensure reserves are sufficient to maintain the financial health of the Trust; and address current and 
future implications of the Affordable Care Act. Due to recent spending trends, it is projected that 
the City’s General Fund will provide a $5.0 million contribution in fiscal year 2023-24. 
Additionally, a rate increase of 8.0% in calendar year 2024 is projected as well.  
 
 
Page 8

CHANDLER HEALTH CARE BENEFITS TRUST 
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 
DECEMBER 31, 2022 
CONTACTING THE TRUST’S FINANCIAL MANAGEMENT 
This financial report is designed to provide our citizens, taxpayers, and investors and creditors 
with a general overview of the Trust’s finances and to demonstrate the Trust’s accountability for 
the resources it receives.  If you have questions about this report or need additional information, 
contact the Management Services Department, Chandler Health Care Benefits Trust; 175 South 
Arizona Avenue, 4th Floor; Chandler, Arizona  85225, 480-782-2333. 
Page 9

Assets
Current assets:
Cash and investments
14,832,677
$    
Accrued investment income
66,310
 
Accounts receivable
90,758
 
Due from City
2,698,102
 
Total assets
17,687,847
 
Liabilities
Current liabilities:
Accounts payable
7,921
 
Accrued payroll
10,764
 
Compensated absences payable
44,792
 
Employee claims payable, due to Blue Cross Blue Shield
1,537,326
 
Retiree claims payable, due to Blue Cross Blue Shield
628,888
 
COBRA claims payable, due to Blue Cross Blue Shield
150
 
Claims payable, incurred claims but not reported
3,085,200
 
Total current liabilities
5,315,041
 
Noncurrent liabilities:
Claims payable, incurred claims but not reported
342,800
 
Total noncurrent liabilities
342,800
 
Total liabilities
5,657,841
 
Net position
Unrestricted
12,030,006
$    
CHANDLER HEALTH CARE BENEFITS TRUST
STATEMENT OF NET POSITION
DECEMBER 31, 2022
The notes to the financial statements are an integral part of this statement.
Page 10

Operating revenues:
Contributions:
Employer premiums
18,181,137
$    
Employee premiums
2,087,082
 
Retiree premiums
2,277,877
 
COBRA premiums
38,360
 
Other:
Recovery of medical claims
50,280
 
Wellness programs
125,000
 
Administrator contribution
55,000
 
Total operating revenues
22,814,736
 
Operating expenses:
Claims paid - employees
18,114,513
 
Claims paid - retirees
4,185,801
 
Claims paid - COBRA
61,852
 
Claims incurred but not reported
1,168,000
 
Health savings and flexible spending account contributions
212,450
 
Personnel services
442,415
 
Contractual services
14,274
 
Self-insurance administrative fees
2,595,348
 
Wellness programs
24,279
 
Comparative effectiveness fee
9,267
 
Audit fees
8,340
 
Bank fees
382
 
Promotional
5,055
 
Operating supplies
14,386
 
Total operating expenses
26,856,362
 
Operating income (loss)
(4,041,626)
       
Nonoperating revenues (expenses):
Payments to City
(5,530)
              
City funding
5,000,000
 
Investment income (loss)
(255,392)
          
Total nonoperating revenues (expenses)
4,739,078
 
Change in net position
697,452
 
Net position, beginning of year
11,332,554
 
Net position, end of year
12,030,006
$    
CHANDLER HEALTH CARE BENEFITS TRUST
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED DECEMBER 31, 2022
The notes to the financial statements are an integral part of this statement.
Page 11

Increase/Decrease in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received for premiums and other operating purposes
18,889,502
$    
Cash payments for claims
(22,399,925)
     
Cash payments to suppliers for other services
(2,865,939)
       
Cash payments to employees for services
(452,287)
          
Net cash provided by/used for operating activities
(6,828,649)
       
Cash flows from noncapital financing activities:
Cash paid to City for technology replacement
(5,530)
              
City funding
5,000,000
        
Net cash provided by/used for non-capital financing activities 
4,994,470
        
Cash flows from investing activities:
Investment income
(703,064)
          
Proceeds from sales of investments
23,984,626
      
Purchases of investments
(21,447,383)
     
Net cash provided by/used for investing activities 
1,834,179
        
Net increase/decrease in cash and cash equivalents
-
                   
Cash and cash equivalents, beginning of year
-
                   
Cash and cash equivalents, end of year
-
$                 
Reconciliation of operating income/loss to cash provided by/used for operating activities:
Operating income/loss
(4,041,626)
$     
Adjustments to reconcile operating income/loss to net cash provided by/used for
  operating activities:
Changes in assets and liabilities:
Increase/decrease in accounts receivable
(90,758)
            
Increase/decrease in due to/from City
(3,834,476)
       
Increase/decrease in prepaids
12,826
             
Increase/decrease in claims payable
1,130,240
        
Increase/decrease in accounts payable
5,017
               
Increase/decrease in accrued payroll
(7,051)
              
Increase/decrease in compensated absences payable
(2,821)
              
Net cash provided by/used for operating activities
(6,828,649)
$     
Reconciliation of Cash and Cash Equivalents to the Statement of Net Position:
Cash and cash equivalents
-
$                 
Investments
14,832,677
      
Cash and investments
14,832,677
$    
CHANDLER HEALTH CARE BENEFITS TRUST
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2022
The notes to the financial statements are an integral part of this statement.
Page 12

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
The financial statements of the Chandler Health Care Benefits Trust (Trust) have been prepared 
in conformity with accounting principles generally accepted in the United States of America 
as applied to government units. The Governmental Accounting Standards Board (GASB) is 
the accepted standard-setting body for establishing governmental accounting and financial 
reporting principles. 
The more significant of the Trust’s accounting policies are described below. 
A. Reporting Entity
The Trust is accounted for as an internal service fund of the City of Chandler, Arizona (City), 
and the ultimate financial accountability for the Trust remains with the City. General risk 
management is a responsibility of the City.  Additional information about the City is reported 
in the City’s Annual Comprehensive Financial Report. 
The Trust was organized in September 2010 for the purpose of funding payments to health 
care vendors who provide health care services to benefit-eligible participating City employees, 
elected officials, retirees, eligible dependents, and other eligible persons as determined by the 
City. The financial statements present only the Trust as one of the internal service funds of the 
City and are not intended to present the balances and activity of all City internal service funds 
or the City in its entirety. 
The Health Care Benefits Trust Board (Board) consists of five trustees.  No Trustee may be a 
member of the City Council and no more than one Trustee may be an employee of the City. 
No former member of the City Council or former employee of the City shall be a Trustee. 
B. Measurement Focus and Basis of Accounting
The financial statements are reported using the economic resources measurement focus and 
accrual basis of accounting.  Revenues are recorded when earned and expenses are recorded 
when incurred, regardless of the timing of related cash flows. Operating revenues and expenses 
are distinguished from nonoperating items. Operating revenues generally consist of employer 
and employee premiums and other related revenues, while operating expenses are primarily 
the payment of health claims and the administration of the Trust. All revenues and expenses 
not meeting this definition are reported as nonoperating revenues and expenses. 
C. Cash and Investments
For purposes of the Statement of Cash Flows, the Trust considers all highly liquid investments 
with a maturity of three months or less when purchased to be cash equivalents.  
The Board adopted a resolution to cause the assets of the Trust to be invested, consistent with 
the City’s investment policy. The Trust’s investments are stated at fair value. Fair value is 
based on quoted market prices as of the valuation date. 
Page 13

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
 
 
 
 
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
 
Arizona statute requires a pooled collateral program for public deposits and a Statewide 
Collateral Pool Administrator (Administrator) in the State Treasurer’s Office. The purpose of 
the pooled collateral program is to ensure that governmental entities’ public deposits placed in 
participating depositories are secured with collateral of 102 percent of the public deposits, less 
any applicable federal depository insurance. An eligible depository may not retain or accept 
any public deposit unless it has deposited the required collateral with a qualified escrow agent 
or the Administrator. The Administrator manages the pooled collateral program, including 
reporting on each depository’s compliance with the program. 
 
D. Prepaid Items 
 
Certain payments to vendors reflect costs applicable to future accounting periods and are 
recorded as prepaid items in the financial statements when applicable. 
 
E. Compensated Absences 
 
Vacation leave vests with the employee as it is earned dependent on accumulated time and the 
individual’s vacation benefits. All employees may carry-forward only the amount of vacation 
benefits equal to the maximum allowable earned credits for the preceding calendar year. Upon 
termination or retirement, an employee will be compensated for accumulated vacation leave 
dependent on accumulated time and the individual’s vacation benefits. Payment will be based 
on the individual’s rate of pay at termination or retirement. Upon death, the same benefits shall 
be paid to the employee’s beneficiary.  
 
F. Claims Payable 
 
The Trust establishes claims liabilities based on estimates of the ultimate cost of claims 
(including future claim adjustment expenses) that have been reported but not settled, and of 
claims that have been incurred but not reported.  Adjustments to claim liabilities are charged 
or credited to expense in the periods in which they are made. A provision for inflation in the 
calculation of estimated future claims costs is implicit in the calculation because reliance is 
placed both on actual historical data that reflect past inflation and on other factors that are 
considered to be appropriate modifiers of past experience. Given the inherent uncertainty in 
the nature of such estimates, future losses will likely deviate, perhaps materially, from those 
estimates. 
 
G. Deferred Outflows/Inflows of Resources 
 
In addition to assets, the statement of net position may report a separate section for deferred 
outflows of resources. This separate financial statement element, deferred outflows of 
resources, represents a consumption of net assets that applies to a future period and so will not 
be recognized as an outflow of resources (expense) until then.   
Page 14

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
In addition to liabilities, the statement of net position may report a separate section for deferred 
inflows of resources.  This separate financial statement element, deferred inflows of resources, 
represents an acquisition of net assets that applies to a future period and so will not be 
recognized as an inflow of resources (revenue) until that time.   
H. Contributions
The Trust agreement provides that each participating member and the City contribute a 
specified amount to the Trust.  The contribution rates are determined by the Board on an annual 
basis. 
I.
Investment Income
Investment income is composed of interest, dividends, and net changes in the fair value of 
applicable investments. 
J. Net Position Flow Assumption
In the financial statements the Trust applies restricted resources first when outlays are incurred 
for purposes for which either restricted or unrestricted amounts are available. 
K. Estimates
The preparation of the financial statements in conformity with accounting principles generally 
accepted in the United States of America requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements and accompanying 
notes. Actual results may differ from those estimates. 
L. Reinsurance
The Trust has entered into reinsurance contracts for health insurance coverage.  Reinsurance 
coverage is for specific losses in excess of $350,000, with a 125 percent aggregate limit. 
NOTE 2 – CASH AND INVESTMENTS 
Custodial Credit Risk – Deposits.  Custodial credit risk is the risk that in the event of bank 
failure, the Trust’s deposits may not be returned to the Trust. At year end, both the carrying 
amount of the Trust’s deposits and the bank balance were zero. 
Page 15

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
NOTE 2 – CASH AND INVESTMENTS  
The following summarizes amounts reported as investments in the accompanying financial 
statements: 
 
Investment Maturities 
Investment Type 
Category 
Fair Value 
Less than 1 
Year 
 
1-5
Years 
 
Concentration 
of Credit 
Risk % 
S&P / 
Moody's 
Rating 
Money Market Fund 
Level 1  $   
   10  $   
   10  $ 
0.00% AAAm/NR 
Custodial Money Market  
Level 1 
2,040,944 
2,040,944 
13.76% AAAm/NR 
Certificate of Deposit: 
    Credit Suisse New York 
Level 2 
138,648 
138,648 
0.93%
A-2/P-2
    Toronto Dominion Bank NY 
Level 2 
249,894 
249,894 
1.68%
A/A1 
U.S. Treasuries 
Level 1 
5,484,430 
434,629 
5,049,801 
36.98%
Municipal Bond 
    Scottsdale, AZ TXBL GO Bonds 
Level 2 
80,254 
80,254 
0.54%
AAA/Aaa 
U.S. Agencies: 
    Fannie Mae 
Level 2 
1,761,119 
1,393,846 
367,273 
11.87%
AA+/Aaa 
    Federal Home Loan Banks 
Level 2 
858,640 
858,640 
5.79%
AA+/Aaa 
    Freddie Mac 
Level 2 
1,856,289 
1,856,289 
12.51%
AA+/Aaa 
Corporate Bonds: 
    Adobe Inc Corporation 
Level 2 
99,657 
99,657 
0.67%
A+/A2 
    Amazon.com 
Level 2 
201,952 
98,180 
103,772 
1.36%
AA/A1 
    Apple Corp. 
Level 2 
255,908 
255,908 
1.73%
AA+/Aaa 
    Bank of America Corporation 
Level 2 
129,478 
129,478 
0.87%
A-/A2 
    Caterpillar Finl Service Corporation 
Level 2 
134,065 
134,065 
0.90%
A/A2 
    Cisco Systems Inc Corp 
Level 2 
223,872 
223,872 
1.51%
AA-/A1 
    Hershey Company 
Level 2 
164,065 
164,065 
1.11%
A/A1 
    JPMorgan Chase & CO Corporation 
Level 2 
208,140 
208,140 
1.40%
A-/A1 
    Merck & Co Inc Corp 
Level 2 
220,536 
220,536 
1.49%
A+/A1 
    Microsoft Corp  
Level 2 
254,872 
254,872 
1.72%
AAA/Aaa 
    Texas Instruments Inc Corp 
Level 2 
34,963 
34,963 
0.24%
A+/Aa3 
    Toyota Motor Credit Corporation 
Level 2 
131,864 
131,864 
0.89%
A+/A1 
    Wal-Mart Stores Inc Corporation 
Level 2 
303,077 
303,077 
2.04%
AA/Aa2 
 $14,832,677  $  6,795,274  $  8,037,403 
100.00%
Fair Value Measurements.  The Trust categorizes its fair value measurements within the fair 
value hierarchy established by generally accepted accounting principles. The hierarchy is 
based on the valuation inputs used to measure the fair value of the asset.  

Level 1 inputs are quoted prices in active markets for identical assets

Level 2 inputs are significant other observable inputs

Level 3 inputs are significant unobservable inputs
Page 16

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
 
 
 
 
NOTE 2 – CASH AND INVESTMENTS  
 
Valuation Techniques. U.S. Treasuries and Money Market Funds are classified in Level 1 of 
the fair value hierarchy are valued using prices quoted in active markets for identical securities. 
Governmental bonds, corporate bonds, and other fixed income instruments classified in  
Level 2 of the fair value hierarchy are valued based on significant other observable inputs, 
which may include, but are not limited to, quoted prices for similar assets or liabilities in 
markets that are active, quoted prices for identical or similar assets or liabilities in markets that 
are not active, inputs other than quoted prices that are observable for the assets or liabilities 
(such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks 
and default dates) or other market corroborated inputs. All investments in which the fair value 
hierarchy is applicable are measured at fair value on a recurring basis.  
 
Interest Rate Risk.  In accordance with the City’s investment policy, the Trust manages its 
exposure to declines in fair value by limiting the maturities of its investment portfolio to five 
years. 
 
Credit Risk.  In accordance with the City’s investment policy, the Trust allows for investments 
in obligations guaranteed by the full faith and credit of the United States of America, 
government sponsored enterprises, government bonds with minimum credit ratings of AA+ or 
Aaa, commercial paper with a minimum short term rating of A-1 or P-1, negotiable certificates 
of deposit, corporate bonds carrying a minimum credit rating of A-, and the Local Government 
Investment Pool. The Trust’s investments in U.S. Agencies, Corporate Bonds and Money 
Market Funds were rated no lower than AA+, BBB+ and AAAm by Standard & Poor's, 
respectively, as of year end. 
 
Custodial Credit Risk - Investments. The custodial credit risk for investments is the risk that, 
in the event of the failure of the counterparty to a transaction, the Trust will not be able to 
recover the value of its investments or collateral securities that are in the possession of an 
outside party. To limit its exposure and in accordance with the City's investment policy, the 
Trust requires all security transactions that are exposed to custodial credit risk to be processed 
on a delivery versus payment (DVP) basis with the underlying investments held by a third 
party acting as the Trust's agent separate from where the investment was purchased or by the 
trust department of the bank where purchased, in the Trust's name. 
 
Concentration of Credit Risk.  In accordance with the City’s investment policy, the Trust does 
not allow for an investment in any one issuer that is in excess of five percent of the total 
investments.  Securities issued by the United States of America or its agencies are exempt from 
this provision.  
 
Page 17

CHANDLER HEALTH CARE BENEFITS TRUST 
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2022 
NOTE 3 – CLAIMS PAYABLE 
As discussed in Note 1, the Trust establishes a liability for both reported and unreported claims 
costs, which includes estimates of both future claim payments and related claim adjustment 
expenses.  The following represents changes in those aggregate liabilities for the Trust during 
the year ended December 31, 2022 and 2021. 
2022
2021
Unpaid claims and claim adjustments, beginning 
$    4,464,123 
$    4,370,831 
Incurred claims and claim adjustment expenses: 
Provision for insured events of the current year
23,674,372 
21,405,686
Increase in provision for insured events of prior years 
(144,206)
1,033,282 
Total claims and claim adjustment expenses
23,530,166 
22,438,968
Payments: 
Claims and claim adjustment expenses attributable to insured 
events of the current year 
(19,071,428)
(18,863,232)
Claims and claim adjustment expenses attributable to insured 
events of prior years 
(3,328,497)
(3,482,444)
Total claims payments 
(22,399,925)
(22,345,676)
Unpaid claims and claim adjustments, ending 
$    5,594,364 
$    4,464,123 
Page 18

REPORT ON INTERNAL CONTROL 
AND ON COMPLIANCE
Page 19

Report on Internal Control Over Financial Reporting and on  
Compliance and Other Matters Based on an Audit of 
Financial Statements Performed in Accordance with 
Government Auditing Standards 
Independent Auditor’s Report 
Board of Trustees 
Chandler Health Care Benefits Trust 
We have audited, in accordance with the auditing standards generally accepted in the United States 
of America and the standards applicable to financial audits contained in Government Auditing 
Standards issued by the Comptroller General of the United States, the financial statements of the 
Chandler Health Care Benefits Trust, an internal service fund of the City of Chandler, Arizona, as 
of and for the year ended December 31, 2022, and the related notes to the financial statements, 
which collectively comprise Chandler Health Care Benefits Trust’s financial statements, and have 
issued our report thereon dated May 31, 2023. Our report included an emphasis of matter paragraph 
regarding the financial statements not representing the entire City of Chandler, Arizona. 
Report on Internal Control Over Financial Reporting 
In planning and performing our audit of the financial statements, we considered Chandler Health 
Care Benefits Trust’s internal control over financial reporting (internal control) as a basis for 
designing audit procedures that are appropriate in the circumstances for the purpose of expressing 
our opinion on the financial statements, but not for the purpose of expressing an opinion on the 
effectiveness of Chandler Health Care Benefits Trust’s internal control.  Accordingly, we do not 
express an opinion on the effectiveness of Chandler Health Care Benefits Trust’s internal control. 
A deficiency in internal control exists when the design or operation of a control does not allow 
management or employees, in the normal course of performing their assigned functions, to prevent, 
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or 
combination of deficiencies, in internal control such that there is a reasonable possibility that a 
material misstatement of the entity’s financial statements will not be prevented, or detected and 
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of 
deficiencies, in internal control that is less severe than a material weakness, yet important enough 
to merit attention by those charged with governance. 
Our consideration of internal control was for the limited purpose described in the first paragraph 
of this section and was not designed to identify all deficiencies in internal control that might be 
material weaknesses or significant deficiencies.  Given these limitations, during our audit we did 
not identify any deficiencies in internal control that we consider to be material weaknesses. 
However, material weaknesses or significant deficiencies may exist that have not been identified. 
Page 20

Report on Compliance and Other Matters 
As part of obtaining reasonable assurance about whether Chandler Health Care Benefits Trust’s 
financial statements are free from material misstatement, we performed tests of its compliance 
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with 
which could have a direct and material effect on the financial statements.  However, providing an 
opinion on compliance with those provisions was not an objective of our audit, and accordingly, 
we do not express such an opinion. The results of our tests disclosed no instances of 
noncompliance or other matters that are required to be reported under Government Auditing 
Standards.   
 
Purpose of this Report 
The purpose of this report is solely to describe the scope of our testing of internal control and 
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 
entity’s internal control or on compliance.  This report is an integral part of an audit performed in 
accordance with Government Auditing Standards in considering the entity’s internal control and 
compliance.  Accordingly, this communication is not suitable for any other purpose. 
 
 
 
 
Heinfeld, Meech & Co., P.C. 
Tucson, Arizona 
May 31, 2023 
Page 21