Audit 295615

Title: LOANS Accounting Policies: GENERAL: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) presents the activity of all federal award programs of the City of Lake City, South Carolina (the “City”) for the year ended June 30, 2023. Expenditures for federal financial assistance awarded directly from the federal agencies, as well as those passed through other government agencies, are included on the Schedule. BASIS OF ACCOUNTING: The accompanying Schedule is presented using the modified accrual basis of accounting, which is described in the notes to the City’s financial statements. RELATIONSHIP TO THE FINANCIAL STATEMENTS: Federal award expenditures are reported in the City’s financial statements as expenditures in the General Fund, Water Fund, and Sewer Fund for all federal programs. MATCHING COSTS: Matching costs, i.e., the non-federal share of certain program costs, are not included in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. During the year ended June 30, 2022, the City issued a Bond Anticipation Note (“BAN”) in the amount of $4,940,000. The BAN was required by the United States Department of Agriculture (“USDA”) as interim financing, and the loan was repaid through the issuance of a USDA Rural Utilities Service loan in September 2022. The remaining proceeds expended during the year totaling approximately $770,000 are included in the Schedule.