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Certified PubUc Accountants. <br />M <br />ctigocpa.corn <br />To the Mayor and City Council <br />of the City of Santa Ana <br />Independent Auditor's Report <br />We have audited the accompanying statement of financial position of the Santa Ana Empowerment <br />Corporation (Organization), a California nonprofit organization, as of June 30, 2010 and 2009, and the <br />related statements of activities, functional expenses, and cash flows for the years then ended. These <br />financial statements are the responsibility of the Organization's management. Our responsibility is to <br />express an opinion on these financial statements based on our audits. <br />We conducted our audits in accordance with auditing standards generally accepted in the United States of <br />America and the standards applicable to financial audits contained in Government Auditing Standards, <br />issued by the Comptroller General of the United States. Those standards require that we plan and perform <br />the audit to obtain reasonable assurance about whether the financial statements are free of material <br />misstatement. An audit includes consideration of internal control over financial reporting as a basis for <br />designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing <br />an opinion on the effectiveness of the Organization's internal control over financial reporting. <br />Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence <br />supporting the amounts and disclosures in the financial statements, assessing the accounting principles <br />used and significant estimates made by management, as well as evaluating the overall financial statement <br />presentation. We believe that our audits provide a reasonable basis for our opinion. <br />In our opinion, the financial statements referred to above present fairly, in all material respects, the <br />financial position of the Organization as of June 30, 2010 and 2009, and the changes in its net assets and <br />its cash flows for the year then ended in conformity with accounting principles generally accepted in the <br />United States of America. <br />The accompanying financial statements have been prepared assuming that the Organization will continue <br />as a going concern. As discussed in Note (8) to the financial statements, the Department of Housing and <br />Urban Development has determined that the grant period for all Empowerment Zone grants ended on <br />August 30, 2010. The Organization will have until September 15, 2010 to request reimbursement for <br />eligible Empowerment Zone expenses. At the conclusion of the grant period the Organization will <br />discontinue operations. <br />In accordance with Government Auditing Standards, we have also issued our report dated September 10, <br />2010, on our consideration of Organization's internal control over financial reporting and on our tests of <br />its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other <br />matters. The purpose of that report is to describe the scope of our testing of internal control over financial <br />reporting and compliance and the results of that testing, and not to provide an opinion on internal control <br />over financial reporting or on compliance. That report is an integral part of an audit performed in <br />accordance with Government Auditing Standards and should be considered in assessing the results of our <br />audit. <br />SS I . w.) .x51tz <br />t, 1VC-9 .