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CITY OF LAKE ELMO, MINNESOTA <br />REQUIRED COMMUNICATIONS <br /> <br /> <br />2 <br />Auditing standards generally accepted in the United States of America (AU-C 260, The Auditor’s Communication <br />With Those Charged With Governance) require the auditor to promote effective two-way communication between the <br />auditor and those charged with governance. Consistent with this requirement, the following summarizes our <br />responsibilities regarding the financial statement audit as well as observations arising from our audit that are <br />significant and relevant to your responsibility to oversee the financial and related compliance reporting process. <br /> <br />Our Responsibilities With Regard to the Financial Statement and Compliance Audit <br />Our responsibilities under auditing standards generally accepted in the United States of America and Government <br />Auditing Standards issued by the Comptroller General of the United States have been described to you in our <br />engagement letter dated December 8, 2022. Our audit of the basic financial statements does not relieve management or <br />those charged with governance of their responsibilities, which are also described in that letter. <br /> <br />Overview of the Planned Scope and Timing of the Financial Statement Audit <br />We have issued a separate communication dated April 10, 2024 regarding the planned scope and timing of our audit <br />and identified significant risks. <br /> <br />Accounting Policies and Practices <br /> <br />Preferability of Accounting Policies and Practices <br />Under accounting principles generally accepted in the United States of America, in certain circumstances, <br />management may select among alternative accounting practices. In our view, in such circumstances, management has <br />selected the preferable accounting practice. <br /> <br />Adoption of, or Change in, Accounting Policies <br />Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The <br />City did not adopt any significant new accounting policies, nor have there been any changes in existing significant <br />accounting policies during the current period. <br /> <br />Significant Accounting Policies <br />We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of <br />authoritative guidance or consensus. <br /> <br />Significant Unusual Transactions <br />We did not identify any significant unusual transactions. <br /> <br />Management’s Judgments and Accounting Estimates <br />Accounting estimates are an integral part of the preparation of financial statements and are based upon management's <br />current judgment. The process used by management encompasses their knowledge and experience about past and <br />current events and certain assumptions about future events. You may wish to monitor throughout the year the process <br />used to determine and record these accounting estimates. The only estimates we have deemed significant to the <br />financial statements are estimates associated with the following balances reported at year-end: <br />• Net OPEB liability and related deferred outflows/inflows of resources <br />• Net pension asset/liability and related deferred outflows/inflows of resources <br />