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2. Interim Fieldwork: <br />Gather information about the City and its environment, including internal control: <br />Evaluate the design of Internal controls that are relevant to <br />whether the control, either individually or in combinatior <br />preventing or detecting and correcting material misstatements. <br />Determine that the controls have been implemented, that is, <br />that the City is using it. <br />Specific areas to review include: <br />- Accounts payable/cash disbursements <br />- Accounts receivable/cash receipts <br />- Payroll disbursements <br />- Utility billing process <br />- Investment compliance <br />Property and equipment <br />Review of minutes of the City of Santa Ana. <br />Review of important contracts and debt agreements, <br />the audit and determine <br />is capable of effecting, <br />that the controls exist and <br />Interim exit conference with the City to review results of interim fieldwork, including any <br />findings, <br />3. Final Audit Work: <br />During the final audit work, we will assess "risk" of material misstatement based on understanding <br />of the City's audit environment, including Its internal control, to identify account balances to audit <br />that appear in the City's financial statements. Our audit programs will be specifically tailored to <br />address any significant risks identified. The Prepared by Client (PBC) list will be provided at least <br />one month in advance of fieldwork. Our work may include: <br />• Confirmation of cash and investments balances and testing of bank reconciliations. <br />• Confirm significant receivable balances or review subsequent cash receipts to verify <br />receivable balance. <br />• Search for unrecorded liabilities. <br />• Testing of interfund balances and transfers. <br />• Test capital asset additions and depreciation expense. <br />• Confirm long-term debt balances and review the accounting treatment of debt issued or <br />refunded. <br />• Test support for other significant assets or liabilities. <br />• Analytical procedures on balance sheet and revenue and expenditure accounts; to evaluate <br />and explain unusual fluctuations from prior year balances or current year budgeted <br />amounts. <br />• Review of attorney letters for significant legal matters affecting the City's financial position. <br />• An exit conference will be held to review any significant adjustments or findings, <br />The audit workpapers will be reviewed by our management team as the work is being performed <br />in the field so that at the conclusion of the fieldwork we are able to report any adjustments or <br />findings. <br />25E-63 25 <br />