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Honorable City Council <br />of the City of Santa Ana <br />Santa Ana, California <br />Responsibilities of Management for Compliance <br />Management is responsible for compliance with the requirements referred to above and for the <br />design, implementation, and maintenance of effective internal control over compliance with the <br />requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements <br />applicable to the City's federal programs. <br />Auditor's Responsibilities for the Audit of Compliance <br />Our objectives are to obtain reasonable assurance about whether material noncompliance with the <br />compliance requirements referred to above occurred, whether due to fraud or error, and express an <br />opinion on the City's compliance based on our audit. Reasonable assurance is a high level of <br />assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in <br />accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always <br />detect material noncompliance when it exists. The risk of not detecting material noncompliance <br />resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, <br />intentional omission, misrepresentations, or override of internal control. Noncompliance with the <br />compliance requirements referred to above is considered material if there is a substantial likelihood <br />that, individually or in aggregate, it would influence the judgment made by a reasonable user of the <br />report on compliance about the City's compliance with the requirements of each major federal <br />program as a whole. <br />In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform <br />Guidance, we: <br />exercise professional judgment and maintain professional skepticism throughout the audit. <br />identify and assess the risks of material noncompliance, whether due to fraud or error, and <br />design and perform audit procedures responsive to those risks. Such procedures include <br />examining, on a test basis, evidence regarding the City's compliance with the compliance <br />requirements referred to above and performing such other procedures as we considered <br />necessary in the circumstances. <br />obtain an understanding of the City's internal control over compliance relevant to the audit in <br />order to design audit procedures that are appropriate in the circumstances and to test and <br />report on internal control over compliance in accordance with the Uniform Guidance, but not <br />for the purpose of expressing an opinion on the effectiveness of the City's internal control over <br />compliance. Accordingly, no such opinion is expressed. <br />We are required to communicate with those charged with governance regarding, among other <br />matters, the planned scope and timing of the audit and any significant deficiencies and material <br />weaknesses in internal control over compliance that we identified during the audit. <br />Report on Internal Control Over Compliance <br />Our consideration of internal control over compliance was for the limited purpose described in the <br />Auditors' Responsibilities for the Audit of Compliance section above and was not designed to identify <br />all deficiencies in internal control over compliance that might be material weaknesses or significant <br />deficiencies in internal control over compliance and therefore, material weaknesses or significant <br />deficiencies may exist that were not identified. We did not identify any deficiencies in internal control <br />over compliance that we consider to be material weaknesses. However, as discussed below, we did <br />identify a certain deficiency in internal control over compliance that we consider to be a significant <br />deficiency. <br />.19 <br />