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5000 Hopyard Road, Suite 335 Pleasanton, CA 94588 Tel: 925.734.6600 Fax: 925.734.6611 www.vtdcpa.com
FRESNO LAGUNA HILLS PLEASANTON RANCHO CUCAMONGA PALO ALTO SACRAMENTO
To Those Charged with Governance
City of Saratoga
We have audited the financial statements of the City of Saratoga for the year ended June 30, 2011.Professional
standards require that we provide you with information about our responsibilities under generally accepted
auditing standards, as well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our engagement letter to you. Professional standards require that we provide
you with the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by City of Saratoga are described in Note 1 to the financial statements.The City adopted
the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions,
effective July 1, 2010. All other policies adopted this year had no significant impact on the financial statements
and the application of existing policies was not changed during the year ended June 30, 2011. We noted no
transactions entered into by City of Saratoga during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management’s knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and
because of the possibility that future events affecting them may differ significantly from those expected. The
most sensitive estimate affecting the financial statements was:
Management’s estimate of capital asset depreciation expense is based upon useful lives of
five to fifty years calculated on a straight-line basis. We evaluated the key factors and
assumptions used to develop depreciation expense in determining that it is reasonable in
relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosures affecting the financial statements was the actuarial information
related to pension benefits in footnote 8.We relied on actuaries to provide much of the information contained in
this footnote.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
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Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are trivial, and communicate them to the appropriate level of management. Management has
corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures
and corrected by management were material, either individually or in the aggregate, to the financial statements
taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to
the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation
letter dated November 15,2011.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an
accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s
opinion that may be expressed on those statements, our professional standards require the consulting accountant
to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit’s auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a condition
to our retention.
This information is intended solely for the use of the Board of Directors and management of City of Saratoga and
is not intended to be and should not be used by anyone other than these specified parties.
Pleasanton, California
November 15, 2011