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Honorable Mayor and Members <br /> of the City Council <br />City of Little Canada <br />Page 2 <br /> <br /> Management’s estimate of the depreciation expense on capital assets is based on <br />management’s estimated useful lives of those assets. We evaluated the key factors and <br />assumptions used to develop the allowance in determining that it is reasonable in relation to the <br />financial statements taken as a whole. <br /> Management’s estimate of the City’s liability for compensated absences is based on employee <br />wage information and the City’s policies of earning vacation and sick pay. We evaluated the key <br />factors and assumptions used to develop the liability in determining that it is reasonable in <br />relation to the financial statements taken as a whole. <br /> Management’s estimate of the City’s proportionate share of PERA’s GERF net pension liability <br />as well as the related deferred inflows and outflows is based on guidance from GASB Statement <br />No. 68, and the plan’s allocation tables. The plan’s allocation tables allocate a portion of the <br />plan’s net pension liability based on the City’s contributions during the plan’s fiscal year as a <br />percentage of total contributions received for the related fiscal year by the plan. We evaluated <br />the key factors and assumptions used to develop the liability in determining that it is reasonable <br />in relation to the financial statements taken as a whole. <br />Financial statement disclosures <br />Certain financial statement disclosures are particularly sensitive because of their significance to <br />financial statement users. There were no particularly sensitive financial statement disclosures. <br />The financial statement disclosures are neutral, consistent, and clear. <br />Difficulties encountered in performing the audit <br />We encountered no significant difficulties in dealing with management in performing and completing <br />our audit. <br />Uncorrected misstatements <br />Professional standards require us to accumulate all misstatements identified during the audit, other <br />than those that are clearly trivial, and communicate them to the appropriate level of management. <br />Management did not identify and we did not notify them of any uncorrected financial statement <br />misstatements. <br />Corrected misstatements <br />None of the misstatements detected as a result of audit procedures and corrected by management <br />were material, either individually or in the aggregate, to the financial statements taken as a whole. <br />Disagreements with management <br />For purposes of this letter, a disagreement with management is a financial accounting, reporting, or <br />auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial <br />statements or the auditors’ report. No such disagreements arose during our audit. <br />Management representations <br />We have requested certain representations from management that are included in the management <br />representation letter dated May 26, 2020.