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Qualitative Aspects of Accounting Practices <br />Management is responsible for the selection and use of appropriate accounting policies. The significant accounting <br />policies used by the City are described in Note 1 to the financial statements. The City changed accounting policies during <br />the year ended December 31, 2024 related to the accounting and financial reporting for accounting changes and error <br />corrections (GASB 100) and compensated absences (GASB 101). We noted no transactions entered into by the <br />governmental unit during the year for which there is a lack of authoritative guidance or consensus. All significant <br />transactions have been recognized in the financial statements in the proper period. <br />Accounting estimates are an integral part of the financial statements prepared by management and are based on <br />accounting estimates are particularly sensitive because of their significance to the financial statements and because of <br />the possibility that future events affecting them may differ significantly from those expected. The most sensitive <br />estimates affecting the financial statements included below: <br />calculated using the straight-line method. <br />allocations are also used in allocating accrued compensated absences payable. <br />retirement age for active employees, life expectancy, turnover, and healthcare cost trend rate. <br />received during the lease term. <br />liabilities and assets are based on several factors including, but not limited <br />to, anticipated investment return rate, retirement age for active employees, life expectancy, salary increases and <br />form of annuity payment upon retirement. <br />o The allocation of the pension liability related to Minnesota Public Employee Retirement Association <br />-sharing <br />multiple employer Coordinated and Police and Fire pension plans. <br />We evaluated the key factors and assumptions used to develop these accounting estimates in determining that it is <br />reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are <br />neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their <br />significance to financial statement users. <br />Difficulties Encountered in Performing the Audit <br />We encountered no significant difficulties in dealing with management in performing and completing our audit. <br />Corrected and Uncorrected Misstatements <br />Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than <br />those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such <br />misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by <br />whole. <br />3 191