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EXHIBIT 3 <br />CLA (CliftonLarsonAllen LLP) <br />2875 Michelle Drive <br />Im <br />Suite 300 <br />Irvine, CA 92606 <br />714-978-1300 1 fax 714-978-7893 <br />' <br />CLAoonriect.com <br />To the Honorable City Council <br />of the City of Santa Ana <br />Santa Ana, California <br />We have audited the financial statements of the governmental activities, business -type activities, each <br />major fund, and aggregate remaining fund information of the City of Santa Ana, California (the City) <br />for the year ended June 30, 2020. Professional standards require that we provide you with information <br />about our responsibilities under generally accepted auditing standards and Government Auditing <br />Standards as well as certain information related to the planned scope and timing of our audit. We have <br />communicated such information in our planning letter to you dated June 9, 2020. Professional <br />standards also require that we communicate to you the following information related to our audit. <br />Significant Audit Matters <br />Qualitative Aspects of Accounting Practices <br />Management is responsible for the selection and use of appropriate accounting policies. The significant <br />accounting policies used by the City are described in Note 1 to the financial statements. No new <br />accounting policies were adopted and the application of existing policies was not changed during the <br />year ended June 30, 2020. We noted no transactions entered into by the City during the year for which <br />there is a lack of authoritative guidance or consensus. All significant transactions have been recognized <br />in the financial statements in the proper period. <br />Accounting estimates are an integral part of the financial statements prepared by management and are <br />based on management's knowledge and experience about past and current events and assumptions <br />about future events. Certain accounting estimates are particularly sensitive because of their <br />significance to the financial statements and because of the possibility that future events affecting them <br />may differ significantly from those expected. <br />The most sensitive estimates affecting the City's financial statements were as follows: <br />a. The annual required contributions, pension expense, net pension liability and <br />corresponding deferred outflows of resources and deferred inflows of resources <br />for the City's public defined benefit plans with CaIPERS and PARS are based on <br />actuarial valuations provided by CalPERS and an outside consultant, <br />respectively. <br />�A member of <br />Nexia <br />International <br />