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Page 1 December 23, 2024 Honorable Mayor and Members of the City Council City of Chandler, Arizona We have audited the financial statements of the governmental activities, the business‐type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of City of Chandler, Arizona 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 provided to you during the planning phase of the audit. Professional standards also require that we communicate to you the following matters related to our audit. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City of Chandler, Arizona 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 the year. 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 estimates affecting the financial statements were: Management’s estimate of the useful lives of depreciable capital assets is based on the length of time management estimates those assets will provide some economic benefit in the future. Management’s estimate of the allowance for uncollectible receivable balances is based on past experience and future expectation for collection of various account balances. Management’s estimate of the insurance claims incurred but not reported is based on information provided by the City’s third party administrators and subsequent claims activity. The assumptions used in the actuarial valuations of the pension and other postemployment benefits plans are based on historical trends and industry standards. The assumptions used in the actuarial valuations of the pension and other postemployment benefits plans are based on historical trends and industry standards. Page 2 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. Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit and communicate them to the appropriate level of management. A misstatement is defined as a difference between the reported amount, classification, presentation, or disclosure of a financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be presented fairly in accordance with the applicable financial reporting framework. During the course of the audit we did not identify any uncorrected misstatements which require communication. In addition, as part of the professional services we provided to the City we assisted with the preparation of the SEFA and related notes as well as the Data Collection Form submission to the Federal Audit Clearinghouse. 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 written representations from management, which are included in the management representation letter provided to us at the conclusion of the audit. 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 regarding auditing and accounting matters. Discussions with Management We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management throughout the course of the year. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention as the City’s auditors. Page 3 Compliance with Ethics Requirements Regarding Independence The engagement team, others in our firm, and as appropriate, our firm, have complied with all relevant ethical requirements regarding independence. Heinfeld, Meech & Co., P.C. continually assesses client relationships to comply with relevant ethical requirements, including independence, integrity, and objectivity, and policies and procedures related to the acceptance and continuance of client relationships and specific engagements. Our firm follows the “Independence Rule” of the AICPA Code of Professional Conduct and the rules of state boards of accountancy and applicable regulatory agencies. It is the policy of the firm that all employees be familiar with and adhere to the independence, integrity, and objectivity rules, regulations, interpretations, and rulings of the AICPA, U.S. Government Accountability Office (GAO), and applicable state boards of accountancy. Responsibility for Fraud It is important for both management and the members of the governing body to recognize their role in preventing, deterring, and detecting fraud. One common misconception is that the auditors are responsible for detecting fraud. Auditors are required to plan and perform an audit to obtain reasonable assurance that the financial statements do not include material misstatements caused by fraud. Unfortunately most frauds which occur in an organization do not meet this threshold. The attached document prepared by the Association of Certified Fraud Examiners (ACFE) is provided as a courtesy to test the effectiveness of the fraud prevention measures of your organization. Some of these steps may already be in place, others may not. Not even the most well‐designed internal controls or procedures can prevent and detect all forms of fraud. However, an awareness of fraud related factors, as well as the active involvement by management and the members of the governing body in setting the proper “tone at the top”, increases the likelihood that fraud will be prevented, deterred and detected. Additional Reports Issued In addition to the auditor’s report on the financial statements we will also issue the following documents related to this audit. These reports are typically issued within 60 days of the date of this letter. Single Audit Report Examination report on the Annual Expenditure Limitation Report Report on compliance for the Highway User Revenue Fund Landfill assurances report to the ADEQ Electronic submission of certain information to the U.S. Department of Housing and Urban Development, Real Estate Assessment Center (REAC) Other Important Communications Related to the Audit Attached to this letter are a copy of the signed engagement letter provided to us at the initiation of the audit, and a copy of the management representation letter provided to us at the conclusion of the audit. If there are any questions on the purpose or content of these letters please contact the engagement partner identified in the attached engagement letter. Page 4 Restriction on Use This information is intended solely for the use of the members of the City Council and management of City of Chandler, Arizona and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Heinfeld, Meech & Co., P.C. Scottsdale, Arizona Fraud Prevention Checklist The most cost‐effective way to limit fraud losses is to prevent fraud from occurring. This checklist is designed to help organizations test the effectiveness of their fraud prevention measures. 1. Is ongoing anti‐fraud training provided to all employees of the organization? Do employees understand what constitutes fraud? Have the costs of fraud to the company and everyone in it — including lost profits, adverse publicity, job loss and decreased morale and productivity — been made clear to employees? Do employees know where to seek advice when faced with uncertain ethical decisions, and do they believe that they can speak freely? Has a policy of zero‐tolerance for fraud been communicated to employees through words and actions? 2. Is an effective fraud reporting mechanism in place? Have employees been taught how to communicate concerns about known or potential wrongdoing? Is there an anonymous reporting channel available to employees, such as a third‐party hotline? Do employees trust that they can report suspicious activity anonymously and/or confidentially and without fear of reprisal? Has it been made clear to employees that reports of suspicious activity will be promptly and thoroughly evaluated? Do reporting policies and mechanisms extend to vendors, customers and other outside parties? 3. To increase employees’ perception of detection, are the following proactive measures taken and publicized to employees? Is possible fraudulent conduct aggressively sought out, rather than dealt with passively? Does the organization send the message that it actively seeks out fraudulent conduct through fraud assessment questioning by auditors? Are surprise fraud audits performed in addition to regularly scheduled audits? Is continuous auditing software used to detect fraud and, if so, has the use of such software been made known throughout the organization? 4. Is the management climate/tone at the top one of honesty and integrity? Are employees surveyed to determine the extent to which they believe management acts with honesty and integrity? Are performance goals realistic? Have fraud prevention goals been incorporated into the performance measures against which managers are evaluated and which are used to determine performance‐related compensation? Has the organization established, implemented and tested a process for oversight of fraud risks by the board of directors or others charged with governance (e.g., the audit committee)? 5. Are fraud risk assessments performed to proactively identify and mitigate the company’s vulnerabilities to internal and external fraud? 6. Are strong anti‐fraud controls in place and operating effectively, including the following? Proper separation of duties Use of authorizations Physical safeguards Job rotations Mandatory vacations 7. Does the internal audit department, if one exists, have adequate resources and authority to operate effectively and without undue influence from senior management? 8. Does the hiring policy include the following (where permitted by law)? Past employment verification Criminal and civil background checks Credit checks Drug screening Education verification References check 9. Are employee support programs in place to assist employees struggling with addictions, mental/ emotional health, family or financial problems? 10. Is an open‐door policy in place that allows employees to speak freely about pressures, providing management the opportunity to alleviate such pressures before they become acute? 11. Are anonymous surveys conducted to assess employee morale? Page 1 April 16, 2024 Honorable Mayor, Members of the City Council and Management City of Chandler MS 702/P. O. Box 4008 Chandler, AZ 85244‐4008 We are pleased to confirm our understanding of the services we are to provide for City of Chandler, Arizona (City) for the year ended June 30, 2024. We encourage you to read this letter carefully as it includes important information regarding the services we will be providing to the City. If there are any questions on the content of the letter, or the services we will be providing, we would welcome the opportunity to meet with you to discuss this information further. Audit Scope and Objectives We will audit the financial statements of the governmental activities, business‐type activities, each major fund, and the aggregate remaining fund information, including the disclosures, which collectively comprise the basic financial statements of City of Chandler, Arizona as of and for the year ended June 30, 2024. We have also been engaged to report on supplementary information that accompanies the City’s financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America, and we will provide an opinion on it in relation to the financial statements as a whole: 1. Schedule of expenditures of federal awards 2. Combining and individual fund financial statements and schedules 3. Financial Data Schedules (FDS) for HUD reporting Accounting standards generally accepted in the United States provide for certain required supplementary information (RSI) to supplement the City’s basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the City’s RSI in accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist 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. Page 2 We will 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. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited: 1. Management’s discussion and analysis 2. Budgetary comparison schedules 3. GASB‐required pension and other post‐employment benefits schedules In connection with our audit of the basic financial statements, we will read the following other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 1. Other information included with the audited financial statements such as the transmittal letter and statistical data In addition, we will perform the necessary procedures to issue the applicable report for the following. 1. Examination report on the Annual Expenditure Limitation Report 2. Examination report on compliance for highway user revenue fund monies in accordance with ARS §9‐481(B)(2) 3. Agreed‐upon procedures report on compliance with the local government financial test (“LOGO”) requirements under Municipal Solid Waste Landfill Criteria 4. Agreed‐upon procedures related to the electronic submission and related hard copy documents required by the U.S. Department of Housing and Urban Development The objectives of our audit 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 issue an auditor’s report that includes our opinions about whether your financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment of a reasonable user made based on the financial statements. The objectives also include reporting on: Internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and award agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. Internal control over compliance related to major programs and an opinion (or disclaimer of opinion) on compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Page 3 An important aspect to our expression of opinions on the financial statements is understanding the concept of materiality. Our determination of materiality is a matter of professional judgment and is affected by our perception of the financial information needs of users of the financial statements. For purposes of determining materiality we may assume that reasonable users – 1. have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information in the financial statements with reasonable diligence; 2. understand that financial statements are prepared, presented, and audited to levels of materiality; 3. recognize the uncertainties inherent in the measurement of amounts based on the use of estimates, judgment, and the consideration of future events; and 4. make reasonable judgements based on the information in the financial statements. Auditor’s Responsibilities for the Audit of the Financial Statements and Single Audit We will conduct our audit in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of the Uniform Guidance, and will include tests of accounting records, a determination of major programs in accordance with Uniform Guidance, and other procedures we consider necessary to enable us to express such opinions. As part of an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We will evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management. We will also evaluate the overall presentation of the financial statements, including the disclosures, and determine whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the City or to acts by management or employees acting on behalf of the City. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to perform specific procedures to detect waste or abuse in the financial statements nor do they expect auditors to provide reasonable assurance of detecting waste or abuse. Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is an unavoidable risk that some material misstatements may not be detected by us, even though the audit is properly planned and performed in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements or major programs. However, we will inform the appropriate level of management of any material errors, fraudulent financial reporting, or misappropriation of assets that comes to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. We will include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Page 4 We will also conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts. Our procedures will also include, as deemed necessary, tests of the physical existence of inventories, and direct confirmation of receivables and certain assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will also request, if deemed necessary, written representations from the City’s attorneys as part of the engagement, and they may bill you for responding to this inquiry. Audit Procedures – Internal Control We will obtain an understanding of the City and its environment, including internal control relevant to the audit, sufficient to identify and assess the risks of material misstatement of the financial statements, whether due to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence that is sufficient and appropriate to provide a basis for our opinions. 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, misrepresentation, or the override of internal control. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. As required by the Uniform Guidance, we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to the Uniform Guidance. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. Accordingly, we will express no such opinion. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, Government Auditing Standards, and the Uniform Guidance. Audit Procedures – Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the City’s compliance with applicable laws, regulations, contracts, and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. Page 5 The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about whether the City has complied with federal statutes, regulations and the terms and conditions of federal awards applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the OMB Compliance Supplement for the types of compliance requirements that could have a direct and material effect on each of the City’s major programs. For federal programs that are included in the OMB Compliance Supplement, our compliance and internal control procedures will relate to the compliance requirements that the OMB Compliance Supplement identifies being subject to audit. The purpose of these procedures will be to express an opinion on the City’s compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to the Uniform Guidance. Reporting We will issue written reports upon completion of our Single Audit. Our reports will be addressed to the Governing Board of the City. Circumstances may arise in which our reports may differ from expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add a separate section, or add an emphasis‐of‐matter or other‐matter paragraph to our auditor’s report, or if necessary, withdraw from this engagement. If our opinions are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or issue reports, or we may withdraw from this engagement. The Government Auditing Standards report on internal control over financial reporting and on compliance and other matters will state that (1) the purpose of the report is solely to describe the scope of testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance, and (2) the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. The Uniform Guidance report on internal control over compliance will state that the purpose of the report on internal control over compliance is solely to describe the scope of testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Both reports will state that the report is not suitable for any other purpose. Responsibilities of Management for the Financial Statements and Single Audit Our audit will be conducted on the basis that you acknowledge and understand your responsibility for (1) designing, implementing, establishing and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, including internal controls over federal awards, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring that there is reasonable assurance that government programs are administered in compliance with compliance requirements; and (4) ensuring that management is reliable and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You are also responsible for the selection and application of accounting principles; for the preparation and fair presentation of the financial statements, schedule of expenditures of federal awards, and all accompanying information in conformity with accounting principles generally accepted in the United States of America; and for compliance with applicable laws and regulations (including federal statutes) and the provisions of contracts and grant agreements (including award agreements). Your responsibilities also include identifying significant contractor relationships in which the contractor has responsibility for program compliance and for the accuracy and completeness of that information. Page 6 Management is also responsible for making drafts of financial statements, schedule of expenditures of federal awards, all financial records, and related information available to us; for the accuracy and completeness of that information (including information from outside of the general and subsidiary ledgers); and for the evaluation of whether there are any conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for the 12 months after the financial statement date or shortly thereafter (for example, within an additional three months if currently known). You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, identification of all related parties and all related‐party relationships and transactions, and other matters; (2) access to personnel, accounts, books, records, supporting documentation, and other information as needed to perform an audit under Uniform Guidance; (3) additional information we may request for the purpose of the audit; and (4) and unrestricted access to persons within the City from whom we determine it necessary to obtain audit evidence. At the conclusion of our audit, we will require certain written representations from you about the financial statements; the schedule of expenditures of federal awards; federal award programs; compliance with laws, regulations, contracts, and grant agreements; and related matters. Management’s responsibilities also include adjusting the financial statements to correct material misstatements and confirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements of each opinion unit taken as a whole. Management is responsible for the design and implementation of programs to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the City involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the City received in communications from employees, former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the City complies with applicable laws, regulations, contracts, agreements, and grants. You are also responsible taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements that we report. Additionally, as required by the Uniform Guidance, it is management’s responsibility to evaluate and monitor noncompliance with federal statutes, regulations, and the terms and conditions of federal awards; take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; promptly follow up and take corrective action on reported audit findings; and prepare a summary schedule of prior audit findings and a separate corrective action plan. The summary schedule of prior audit findings should be available for our review prior to issuance of our reports. Management is responsible for identifying all federal awards received and understanding and complying with the compliance requirements and for preparation of the schedule of expenditures of federal awards (including notes and noncash assistance received, and COVID‐19 related concepts, such as lost revenues, if applicable) in conformity with the Uniform Guidance. You agree to include our report on the schedule of expenditures of federal awards in any document that contains and indicates that we have reported on the schedule of expenditures of federal awards. You also agree to include the audited financial statements with any presentation of the schedule of expenditures of federal awards that includes our report thereon or make the audited financial statements readily available to intended users of the schedule of expenditures of federal awards no later than the date the schedule of expenditures of federal awards is issued with our report thereon. Page 7 Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the schedule of expenditures of federal awards in accordance with the Uniform Guidance; (2) you believe the schedule of expenditures of federal awards, including its form and content, is fairly presented in accordance with the Uniform Guidance; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the schedule of expenditures of federal awards. Management is responsible for the preparation of the other supplementary information, which we have been engaged to report on, in conformity with accounting principles generally accepted in the United States of America. You agree to include our report on the supplementary information in any document that contains, and indicates that we have reported on, the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or to make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in a written representation letter that (1) you are responsible for presentation of supplementary information in accordance with accounting principles generally accepted in the United States of America; (2) you 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; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of supplementary information. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying and providing report copies of previous financial audits, attestation engagements, performance audits or studies related to the objectives discussed in the Audit Scope and Objectives section of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or studies. You are also responsible for providing management’s views on our current findings, conclusions, and recommendations, as well as your planned corrective actions for the report, and for the timing and format for providing that information. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, management understands that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. Page 8 Planned Scope and Timing of the Audit An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. Our tests will not include a detailed check of all transactions for the period. We have identified the following significant risks of material misstatement as part of our audit planning: 1. Management override of controls 2. Improper revenue recognition Our audit will include obtaining an understanding of the City and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the City or to acts by management or employees acting on behalf of the City. We will generally communicate our significant findings at the conclusion of the audit. However, some matters could be communicated sooner, particularly if significant difficulties are encountered during the audit where assistance is needed to overcome the difficulties or if the difficulties may lead to a modified opinion. We will also communicate any internal control related matters that are required to be communicated under professional standards. We expect to begin our audit in April 2024 and conclude audit procedures and date our report in December 2024. Our audit of the financial statements does not relieve you of your responsibilities outlined in the Responsibilities of Management for the Financial Statements section of this letter. Use of Third‐Party Service Providers We maintain internal policies, procedures, and safeguards to protect the confidentiality of your information. We may, depending on the circumstances, use third‐party service providers in providing our professional services. The following service providers may be utilized in the completion of our engagement: Capital Confirmation, Inc. – electronic bank and account balance confirmation service Citrix ShareFile – web‐based application service to transfer files CCH Engagement Organizer – web‐based application service to transfer files Harvest Investments, Ltd. – investment portfolio valuation service You hereby consent and authorize us to use the above service providers, if deemed necessary, to complete the professional services outlined in this letter. Page 9 Engagement Administration, Fees, and Other Joshua Jumper is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. We will provide copies of our reports to the City; however, management is responsible for distribution of the reports and the financial statements. At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management’s responsibility to electronically submit the reporting package (including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit findings, auditor’s reports, and corrective action plan) along with the Data Collection Form to the Federal Audit Clearinghouse. We will coordinate with you the electronic submission and certification. The Data Collection Form and the reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s reports or nine months after the end of the audit period. The audit documentation for this engagement is the property of Heinfeld, Meech & Co., P.C., and constitutes confidential information. However, we may be requested to make certain audit documentation available to a cognizant or oversight agency or its designee, a federal agency providing direct or indirect funding, the U.S. Government Accountability Office, or other authorized governmental agency for the purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Heinfeld, Meech & Co., P.C., personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of seven (7) years after the report release date, or for any additional period requested by a regulator, cognizant agency, oversight agency for audit, or pass‐through entity. Upon expiration of the seven year period, or any additional period, we will commence the process of destroying the contents of our engagement files. If we are aware that a federal awarding agency, pass‐through entity, or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. In the event we are required to respond to a subpoena, court order or other legal process for the production of documents and/or testimony relative to information we obtained and/or prepared during the course of this engagement, you agree to compensate us at our hourly rates, for the time we expend in connection with such response, and to reimburse us for all of our out‐of‐pocket costs incurred in that regard. Any disagreement, controversy, or claim (“dispute”) that may arise from any aspect of our services, including this engagement or any prior engagement, will be submitted to mediation. The parties will engage in the mediation process in good faith once a written request to mediate has been given by any party. Any mediation initiated as a result of this engagement shall be administered by The American Arbitration Association, according to its mediation rules before resorting to litigation. The results of any such mediation shall be binding only upon agreement of each party to be bound. Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally. Page 10 The nature of our services makes it difficult, with the passage of time, to gather and present evidence that fully and fairly establishes the facts underlying any dispute that may arise between us. The parties agree that, notwithstanding any statute or law of limitations that might otherwise apply to a dispute, including one arising out of this agreement or the services performed under this agreement, for breach of contract or fiduciary duty, tort, fraud, misrepresentation or any other cause of action or remedy, any action or legal proceeding by you against us must be commenced within twenty‐four (24) months (“limitation period”) after the date when we deliver our final audit report under this agreement to you, regardless of whether we do other services for you relating to the audit report, or you shall be forever barred from commencing a lawsuit or obtaining any legal or equitable relief or recovery. The limitation period applies and begins to run even if you have not suffered any damage or loss, or have not become aware of the existence or possible existence of a dispute. Professional standards prohibit auditors from agreeing to indemnify attest clients for damages, losses or costs arising from lawsuits, claims or settlements that relate, directly or indirectly, to the client’s acts. As such, professional standards will prevail for indemnification clauses included in audit contracts. In addition, we are unable to obtain waivers on our professional liability insurance policy for certain provisions, including indemnification provisions, provisions requiring the firm to name the City as an additional insured party, and a waiver of subrogation rights. Professional standards require us to be independent with respect to you in the performance of these services. Any discussion that you have with our personnel regarding potential employment with you could impair our independence with respect to this engagement. Therefore, we request that you inform us prior to any such discussions so that we can implement appropriate safeguards to maintain our independence and objectivity. Further, any employment offers to any staff members working on this engagement without our prior knowledge may require substantial additional procedures to ensure our independence. You will be responsible for any additional costs incurred to perform these procedures. Our fee for these services will be at the amount outlined in our proposal. We exercised care in estimating the fee and believe it accurately indicates the scope of the work. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. Our fees are based on anticipated cooperation from your personnel, timely receipt of information, and the assumption that unexpected circumstances will not be encountered during the audit, including factors beyond our control, such as new accounting pronouncements or legal requirements, additional consultation, and assistance in correcting errors in your financial records. We will plan the engagement based on the assumption that your personnel will prepare and provide us with the items listed in our request for audit information, including preparing requested schedules, retrieving supporting documents, and preparing confirmations. If, for whatever reason, your personnel are unavailable to provide the necessary assistance in a timely manner, it may substantially increase the work we have to do to complete the engagement within the established deadlines, resulting in an increase in fees over our original fee estimate. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Additional fees incurred will be billed at the following hourly rates: Partner ‐ $288; Manager ‐ $226; Senior ‐ $169; Staff ‐ $123. If any term or provision of this agreement is determined to be invalid or unenforceable, such term or provision will be deemed stricken, and all other terms and provisions will remain in full force and effect. Page 11 Government Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract. Our 2021 peer review report accompanies this letter. We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the significant terms of our engagement. Please feel free to contact us at any time if you have any questions or concerns. If you have any questions regarding this letter, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Heinfeld, Meech & Co., P.C. Tucson, Arizona cc: Dawn Lang, Deputy City Manager | CFO Kristi Smith, CPA, CFE, Financial Services Director RESPONSE This letter correctly sets forth the understanding of City of Chandler, Arizona. Printed Name: ____________________________________________ Title: ___________________________________________________ Signature: _______________________________________________ Date: ___________________________________________________ Dawn Lang Deputy City Manager | CFO 04/17/2024 Grant Bennett Associates A PROFESSIONAL CORPORATION www.gbacpa.com 10850 Gold Center Drive, Suite 260 1970 Broadway, Suite 260 Rancho Cordova, CA 95670 Oakland, CA 94612 Princeville, HI 916/922-5109 FAX 916/641-5200 510/817-4886 888/763-7323 Together as One. Grant Bennett Associates is a Member of the Alliott Global Alliance of independent professional firms. Report on the Firm’s System of Quality Control August 31, 2021 To Heinfeld, Meech & Co., P.C. and the Peer Review Committee of the California Society of CPAs We have reviewed the system of quality control for the accounting and auditing practice of Heinfeld, Meech & Co., P.C. (the firm) in effect for the year ended May 31, 2021. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm’s Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer’s Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm’s compliance therewith based on our review. Required Selections and Considerations Engagements selected for review included engagements performed under Government Auditing Standards, including compliance audits under the Single Audit Act and an audit of an employee benefit plan. As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. Opinion In our opinion, the system of quality control for the accounting and auditing practice of Heinfeld, Meech & Co., P.C. in effect for the year ended May 31, 2021, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Heinfeld, Meech & Co., P.C. has received a peer review rating of pass. GRANT BENNETT ASSOCIATES A PROFESSIONAL CORPORATION Certified Public Accountants TRANSACTION DETAILS DOCUMENT DETAILS Reference Number 599C1ABF-66C6-4CB3-AC94-7DFF831E64AA Transaction Type Signature Request Sent At 04/16/2024 15:05 MST Executed At 04/17/2024 06:43 MST Identity Method email Distribution Method email Signed Checksum b4be252ba306cfd68dcd9de2361bbe04e0e674cbfcad176010d7dff3d7a8e57d Signer Sequencing Disabled Document Passcode Disabled Document Name Engagement Ltr FY24 Chandler City Filename Engagement_Ltr_FY24_Chandler_City.pdf Pages 12 pages Content Type application/pdf File Size 405 KB Original Checksum d3a0570c247db4f18d1e77738365249d0d674147ad54244c20b475ec575270f9 SIGNERS SIGNER E-SIGNATURE EVENTS Name Dawn Lang Email dawn.lang@chandleraz.gov Components 4 Status signed Multi-factor Digital Fingerprint Checksum c228b268807a2f59bbd0da70ec5b259f9efadff9727730920ea96316f4631d42 IP Address 198.241.2.1 Device Microsoft Edge via Windows Typed Signature Signature Reference ID 002454D6 Viewed At 04/17/2024 06:40 MST Identity Authenticated At 04/17/2024 06:43 MST Signed At 04/17/2024 06:43 MST AUDITS TIMESTAMP AUDIT 04/16/2024 15:05 MST Carri Corbett (carri.corbett@hm.cpa) created document 'Engagement_Ltr_FY24_Chandler_City.pdf' on Chrome via Windows from 76.134.178.164. 04/16/2024 15:05 MST Dawn Lang (dawn.lang@chandleraz.gov) was emailed a link to sign. 04/16/2024 17:00 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via iOS from 44.221.191.180. 04/16/2024 17:00 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via iOS from 68.98.30.112. 04/16/2024 17:01 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Chrome via Windows from 38.206.1.226. 04/16/2024 17:02 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via iOS from 68.98.30.112. 04/17/2024 06:40 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via Windows from 198.241.2.1. 04/17/2024 06:40 MST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via Windows from 54.156.188.139. 04/17/2024 06:43 MST Dawn Lang (dawn.lang@chandleraz.gov) authenticated via email on Microsoft Edge via Windows from 198.241.2.1. 04/17/2024 06:43 MST Dawn Lang (dawn.lang@chandleraz.gov) signed the document on Microsoft Edge via Windows from 198.241.2.1. SIGNATURE CERTIFICATE REFERENCE NUMBER 599C1ABF-66C6-4CB3-AC94-7DFF831E64AA Heinfeld, Meech & Co., P.C. 1365 N. Scottsdale Road. Suite 300 Scottsdale, AZ 85257 This representation letter is provided in connection with your audit of the financial statements of City of Chandler, Arizona, (City), which comprise the respective financial position of the governmental activities, the business‐type activities, each major fund, and the aggregate discretely presented component units and remaining fund information as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows for the period then ended, and the disclosures (collectively the “financial statements”), for the purpose of expressing opinions as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted 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 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. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors. We confirm, to the best of our knowledge and belief, as of the date of our signature, the following representations made to you during your audit. Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter, including our responsibility for the preparation and fair presentation of the financial statements in accordance with U.S. GAAP and for preparation of the supplementary information in accordance with the applicable criteria. 2. The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government and all component units required by generally accepted accounting principles to be included in the financial reporting entity. 3. 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. Page 2 4. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 5. The methods, significant assumptions, and data used in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in accordance with U.S. GAAP. 6. Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with U.S. GAAP. 7. Adjustments or disclosures have been made for all events, including instances of noncompliance, subsequent to the date of the financial statements that would require adjustment to or disclosure in the financial statements or in the schedule of findings and questioned costs. 8. The effects of all known actual or possible litigation, claims, and assessments have been evaluated, and if necessary, have been accounted for and disclosed in accordance with U.S. GAAP. 9. Guarantees, whether written or oral, under which the City is contingently liable, if any, have been properly recorded or disclosed. Information Provided 10. 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, such as records (including information obtained from outside of the general and subsidiary ledgers), documentation, and other matters and all audit or relevant monitoring reports, if any, received from funding sources. b. Additional information that you have requested from us for the purpose of the audit. c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence. d. Minutes of the meetings of the City Council or summaries of actions of recent meetings for which minutes have not yet been prepared. e. Actuarial reports prepared for each of the City’s pension and OPEB plans, as applicable, during the year. f. Service auditor’s reports prepared during the year for service organizations engaged by the City. Page 3 11. All material transactions have been recorded in the accounting records and are reflected in the financial statements and the schedule of expenditures of federal awards. 12. 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. 13. We have no knowledge of any fraud or suspected fraud that affects the City 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. 14. We have no knowledge of any allegations of fraud or suspected fraud affecting the City’s financial statements communicated by employees, former employees, grantors, regulators, or others. 15. We have no knowledge of any instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or waste or abuse, whose effects should be considered when preparing financial statements. 16. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements. 17. We have disclosed to you the identity of the City’s related parties and all the related party relationships and transactions, including any side agreements. Government‐specific 18. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 19. If applicable, we have taken timely and appropriate steps to remedy fraud, noncompliance with provisions of laws, regulations, contracts, and grant agreements that you have reported to us. 20. We have a process to track the status of audit findings and recommendations. 21. We have identified and communicated to you any previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. 22. We have identified to you any investigations or legal proceedings that have been initiated with respect to the period under audit. 23. If applicable, we have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report. Page 4 24. The City has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, deferred outflows/inflows of resources, and fund balance or net position. 25. We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts, and legal and contractual provisions for reporting specific activities in separate funds. 26. With respect to your compliance examination of highway user revenue fund monies and other dedicated state transportation revenues, we represent the following: we are responsible for compliance with A.R.S. Title 28, Chapter 18, Article 2; and for establishing and maintaining effective internal controls to ensure compliance. we have disclosed to you all known noncompliance with the aforementioned statutes and related requirements. we have disclosed to you all communications from regulatory agencies, internal auditors, other independent accountants or consultants, and others regarding possible noncompliance with the aforementioned statutes and related requirements 27. We have identified and disclosed to you all instances of identified fraud and suspected fraud that we believe have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 28. We have identified and disclosed to you all instances of identified noncompliance with provisions of contracts and grant agreements that we believe have a material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 29. We have identified and disclosed to you all instances of identified abuse that could be quantitatively or qualitatively material to the financial statements or other financial data significant to the audit objectives. 30. There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance. 31. There were no omissions from the participants’ data provided to the City’s actuary for the purpose of determining the net pension and OPEB liabilities and other actuarially determined amounts in the financial statements. 32. The City agrees with the actuarial methods and assumptions used by the actuary for funding and financial reporting purposes, and for determining the City’s actuarial the net pension and OPEB liabilities and has no knowledge or belief that such methods or assumptions are inappropriate in the circumstances. Page 5 33. The City agrees with the results of actuarial reports issued and have adequately considered the qualifications of the actuary 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 the actuary 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 actuaries. 34. The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral. 35. The City has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 36. We have followed all applicable laws and regulations in adopting, approving, and amending budgets. 37. If applicable, the financial statements include all component units, appropriately present majority equity interest in legally separate organizations and joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations. 38. The financial statements properly classify all funds and activities in accordance with U.S. GAAP. 39. All funds that meet the quantitative criteria for presentation as a major fund are identified and presented as such and all other funds that are presented as a major fund are particularly important to financial statement users. 40. Components of net position (net investment in capital assets; restricted; and unrestricted) and components of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved. 41. Investments are properly valued. 42. 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 conformity with U.S. GAAP. There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. 43. If applicable, provisions for uncollectible receivables have been properly identified and recorded. Page 6 44. All payroll information and the individual employment data have been properly submitted to the state retirement systems, and the employer contributions have been properly submitted to the retirement systems. 45. Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 46. Revenues are appropriately classified in the statement of activities within program revenues, and general revenues. 47. Interfund, internal, and intra‐entity activity and balances have been appropriately classified and reported. 48. Special and extraordinary items, if any, are appropriately classified and reported. 49. Deposits and investment securities are properly classified as to risk and are properly disclosed. 50. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated. 51. We have appropriately disclosed the City’s 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 is available and have determined that net position is properly recognized under the policy. 52. We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned, or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classifications for financial reporting purposes. 53. We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed. 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. 54. We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI. 55. With respect to the supplementary information presented, such as the combining and individual fund financial statements and schedules, financial data schedules (FDS) for HUD reporting, and the schedule of expenditures of federal awards. Page 7 a. We acknowledge our responsibility for presenting the supplementary information in accordance with accounting principles generally accepted in the United States of America, and 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 and presentation of the supplementary information have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information. b. If the supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor’s report thereon. 56. We acknowledge our responsibility for the other information included in the financial statements, such as the transmittal letter and statistical data. We believe the other information, including its form and content, is fairly presented and is materially consistent with the basic financial statements. 57. With respect to federal award programs: a. We are responsible for understanding and complying with and have complied with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including requirements relating to preparation of the schedule of expenditures of federal awards (SEFA). b. We acknowledge our responsibility for preparing and presenting the schedule of expenditures of federal awards and related disclosures 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. c. If the SEFA is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the SEFA no later than the date we issue the SEFA and the auditor’s report thereon. d. We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance compliance audit, and have included in the SEFA, expenditures made during the audit period for all awards provided by federal agencies in the form of federal awards, 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. Page 8 e. We are responsible for understanding and complying with, and have complied with, the requirements of federal statutes, regulations, and the terms and conditions of federal awards related to each of our federal programs and have identified and disclosed to you the requirements of federal statutes, regulations, and the terms and conditions of federal awards that are considered to have a direct and material effect on each major program. f. We are responsible for establishing and maintaining, and have established and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that we are managing our federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended. g. We have made available to you all federal awards (including amendments, if any) and any other correspondence with federal agencies or pass‐through entities relevant to federal programs and related activities. h. We have received no requests from a federal agency to audit one or more specific programs as a major program. i. We have complied with the direct and material compliance requirements (except for noncompliance disclosed to you), 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 direct and material compliance requirements of federal awards, if any. j. We have disclosed any communications from federal awarding agencies 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. k. We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor’s report. l. Amounts claimed or used for matching were determined in accordance with relevant guidelines in OMB’s Uniform Guidance (2 CFR Part 200, Subpart E). m. We have disclosed to you our interpretation of compliance requirements that may have varying interpretations. n. 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. Page 9 o. 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. p. 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. q. No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any corrective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the period covered by the auditor’s report. r. 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. s. 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. t. If applicable, we have monitored subrecipients to determine that they have expended subawards in compliance with federal statutes, regulations, and the terms and conditions of the subaward and have met the other pass‐through entity requirements of the Uniform Guidance. u. If applicable, we have issued management decisions for audit findings that relate to federal awards made to subrecipients and such management decisions have been issued within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Additionally, we have followed‐up ensuring that the subrecipient has taken timely and appropriate action on all deficiencies detected through audits, on‐site reviews, and other means that pertain to the federal award provided to the subrecipient. v. If applicable, we have considered the results of subrecipient audits and have made any necessary adjustments to our books and records. w. We have charged costs to federal awards in accordance with applicable cost principles. x. We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance, and we have provided you with all information on the status of the follow‐up on prior audit findings by federal awarding agencies and pass‐through entities, including all management decisions. y. We are responsible for and have ensured the reporting package does not contain protected personally identifiable information. Page 10 z. We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance. aa. We are responsible for taking corrective action on each audit finding of the compliance audit and have developed a corrective action plan that meets the requirements of the Uniform Guidance. bb. If applicable, we have disclosed to you all contracts or other agreements with service organizations, and we have disclosed to you all communications from the service organizations relating to noncompliance at the service organizations. We understand that at the conclusion of the audit, Heinfeld, Meech & Co., P.C. will submit to the City Council a communication to those charged with governance that will include a copy of this representation letter and a copy of the engagement letter. _______________________________________________ ________________________ Dawn Lang, Deputy City Manager / CFO Date City of Chandler, Arizona _______________________________________________ _________________________ Kristi Smith, CPA, CFE, Financial Services Director Date City of Chandler, Arizona 12/20/2024 12/20/2024 TRANSACTION DETAILS DOCUMENT DETAILS Reference Number DD5B5A92-CBC9-430C-983F-87707E1A3E40 Transaction Type Signature Request Sent At 12/19/2024 18:59 EST Executed At 12/20/2024 19:36 EST Identity Method email Distribution Method email Signed Checksum 4e275dbe49d1eabff854136b1cc44cb30765c071f3fe7408fcc51fffb97b3143 Signer Sequencing Disabled Document Passcode Disabled Document Name Representation Letter FY24 City of Chandler Filename Representation_Letter_FY24_City_of_Chandler.pdf Pages 10 pages Content Type application/pdf File Size 224 KB Original Checksum c49d277fa41865b37e894eb4b6c56cf289c5627de4053b848de54cf6bb24a031 SIGNERS SIGNER E-SIGNATURE EVENTS Name Dawn Lang Email dawn.lang@chandleraz.gov Components 2 Status signed Multi-factor Digital Fingerprint Checksum 95679ad1438697678b80df12d1a4324d04ec091adfb919ac8626cfc875e97090 IP Address 198.241.2.1 Device Microsoft Edge via Windows Typed Signature Signature Reference ID B996D6D9 Viewed At 12/20/2024 19:36 EST Identity Authenticated At 12/20/2024 19:36 EST Signed At 12/20/2024 19:36 EST Name Kristi Smith Email kristi.smith@chandleraz.gov Components 2 Status signed Multi-factor Digital Fingerprint Checksum 90b71fb6a711243de37f961c03a39ffe2b405f900358c3f74b5e1ef0e7397f75 IP Address 198.241.2.1 Device Chrome via Windows Drawn Signature Signature Reference ID 59A44B7F Signature Biometric Count 6 Viewed At 12/20/2024 10:43 EST Identity Authenticated At 12/20/2024 10:43 EST Signed At 12/20/2024 10:43 EST AUDITS TIMESTAMP AUDIT 12/19/2024 18:59 EST Emily Powell (emily.powell@hm.cpa) created document 'Representation_Letter_FY24_City_of_Chandler.pdf' on Chrome via Windows from 54.144.112.110. 12/19/2024 18:59 EST Dawn Lang (dawn.lang@chandleraz.gov) was emailed a link to sign. 12/19/2024 18:59 EST Kristi Smith (kristi.smith@chandleraz.gov) was emailed a link to sign. 12/20/2024 10:02 EST Kristi Smith (kristi.smith@chandleraz.gov) viewed the document on Chrome via Windows from 198.241.2.1. SIGNATURE CERTIFICATE REFERENCE NUMBER DD5B5A92-CBC9-430C-983F-87707E1A3E40 12/20/2024 10:03 EST Kristi Smith (kristi.smith@chandleraz.gov) viewed the document on Chrome via Windows from 54.225.23.16. 12/20/2024 10:04 EST Kristi Smith (kristi.smith@chandleraz.gov) viewed the document on Chrome via Windows from 23.105.136.35. 12/20/2024 10:42 EST Kristi Smith (kristi.smith@chandleraz.gov) viewed the document on Chrome via Windows from 198.241.2.1. 12/20/2024 10:43 EST Kristi Smith (kristi.smith@chandleraz.gov) viewed the document on Chrome via Windows from 98.85.71.103. 12/20/2024 10:43 EST Kristi Smith (kristi.smith@chandleraz.gov) authenticated via email on Chrome via Windows from 198.241.2.1. 12/20/2024 10:43 EST Kristi Smith (kristi.smith@chandleraz.gov) signed the document on Chrome via Windows from 198.241.2.1. 12/20/2024 18:44 EST Dawn Lang (dawn.lang@chandleraz.gov) was emailed a reminder. 12/20/2024 18:46 EST Dawn Lang (dawn.lang@chandleraz.gov) was emailed a reminder. 12/20/2024 19:35 EST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via Windows from 198.241.2.1. 12/20/2024 19:36 EST Dawn Lang (dawn.lang@chandleraz.gov) viewed the document on Microsoft Edge via Windows from 44.206.36.8. 12/20/2024 19:36 EST Dawn Lang (dawn.lang@chandleraz.gov) authenticated via email on Microsoft Edge via Windows from 198.241.2.1. 12/20/2024 19:36 EST Dawn Lang (dawn.lang@chandleraz.gov) signed the document on Microsoft Edge via Windows from 198.241.2.1. TIMESTAMP AUDIT