HomeMy WebLinkAbout2023 Letter CAFR ACFR City of Lansing Audit 2425 E.Grand River Ave.,
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Manor Suite 1,Lansing,MI 48912
n 517.323.7500
Costerisan (D 517.323.6346
December 18, 2023
To the Honorable Mayor and
Members of the City Council
City of Lansing,Michigan
We have audited the financial statements of the governmental activities,the business-type activities,the aggregate
discretely presented component units,each major fund,and the aggregate remaining fund information of the City
of Lansing, Michigan (the City),for the year ended June 30, 2023. Professional standards require that we provide
you with information about our responsibilities under generally accepted auditing standards and Government
Auditing Standards,as well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our letter to City Council dated October 30,2023. Professional standards also
require that we communicate to you 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 the City of Lansing are described in Note 1 to the financial statements. As described
in Note 21 to the financial statements, the City adopted Governmental Accounting Standards Board (GASB)
Statement No. 96 Subscription-based IT Arrangements, during the year ended June 30, 2023. Accordingly, the
cumulative effects of the accounting changes are reported in the applicable financial statements and note
disclosures. We noted no transactions entered into by the City of Lansing 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 governmental activities, the business-type activities, the
aggregate discretely presented component units, the General Fund, the Sewage Disposal System Fund, the
Municipal Parking System Fund,and the aggregate remaining fund information was:
Management's calculation of the fair market value of pooled investments, which is defined as the amount
that the City could reasonably expect to receive for an investment in a current sale between a willing buyer
and a willing seller, is generally measured by quoted market prices. The City's investments are carried at
fair market value.
Management's calculation of the percentages for the allowance for uncollectible receivable balances is based
on past experience and future expectation for collection of various account balances.
Management's calculation of the income tax receivable balance is based on past experience utilizing the first
45 days collections of income tax withholdings.
Management's calculation of the other accrued liability for claims payable balance is based on past
experience and future expectation for payments of various legal claims against the City.
The most sensitive estimates affecting the governmental activities, the business-type activities, the aggregate
discretely presented component units, the Sewage Disposal System Fund, the Municipal Parking System Fund,
and the aggregate remaining fund information were-.-
Management's calculation of depreciation expense for the current period is based on an estimate of the
useful lives of the capital assets.
Management's calculation of the net pension liability and changes therein was based on actuarial
assumptions and the use of a specialist(actuary).
Management's calculation of the percentages for current and noncurrent compensated absence payments is
based on an estimate of the percentage of employees'use of compensated absences.
Management's calculation of the net other post-employment benefits liability is calculated using the
individual entry age actuarial method of calculation based upon certain actuarial assumptions.
The most sensitive estimate affecting the governmental activities and the aggregate remaining fund information
was:
Management's calculation of the liability for uninsured risks of loss,including incurred but not reported claims
based on an estimate of reported claims and calculation provided by the City's third-party administrators.
The most sensitive estimate affecting the Sewage Disposal System Fund, the Municipal Parking Fund, and
business-type activities was:
Management's calculation of the leases receivable balances is based on past experience and future estimates
of lease collections.
We evaluated the key factors and assumptions used to develop the estimations in determining that they are
reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral,consistent,and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are clearly trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements that were detected as a result of audit procedures. The
misstatements that were corrected by management related to various year end accrual adjustments.
Disagreements with Management
For purposes of this letter, a disagreement with management is 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.
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Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 18, 2023,
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 City'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.
OtherAudit 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 City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
Other Matters
We applied certain limited procedures to the management's discussion and analysis, budgetary comparison
information,and the historical pension and other post-employment benefits supplementary information,which
are required supplementary information (RSI)that supplement the basic financial statements. Our procedures
consisted of inquiries of management regarding the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries,the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and
do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining and individual nonmajor fund financial statements and budgetary
comparison schedules, which accompany the financial statements but are not RSI. With respect to this
supplementary information, we made certain inquiries of management and evaluated the form, content, and
methods of preparing the information to determine that the information complies with accounting principles
generally accepted in the United States of America, the method of preparing it has not changed from the prior
period,and the information is appropriate and complete in relation to our audit of the financial statements. We
compared and reconciled the supplementary information to the underlying accounting records used to prepare
the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements but are not RSI. We did not audit or perform other procedures on this other information,and we do
not express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the use of the City Council of the City of Lansing and management of the
City of Lansing and is not intended to be,and should not be,used by anyone other than these specified parties.
Very truly yours,
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