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Village of Key Biscayne, Florida March 26, 2021 Page 2 Management’s estimate of the net pension liability in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and the total OPEB liability in accordance with GASB Statement No. 75, Accounting and Reporting for Postemployment Benefits other than Pensions, are based on actuarial methods and assumptions used by the actuary in conjunction with the Village for the development of the funding actuarial valuation as well as the actuarial accounting valuation. We evaluated the key factors and assumptions used to develop the estimate described above, in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the allowance for uncollectible receivables is based on a historical analysis of the collectability of individual accounts. We evaluated the key factors and assumptions used to develop the allowance 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 were: The footnotes to the financial statements as required under GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27 and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which require the Village to recognize a net pension liability and a total OPEB liability, respectively, in their financial statements as described above. 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. None of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. In addition, the attached schedule includes one uncorrected misstatement of the financial statements. Management has determined that its effect is immaterial to the financial statements taken as a whole. FOR PROPOSAL PURPOSES ONLY - DO NOT DISTRIBUTE