Audit 298875

Title: Note 1: General Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule presents only the expenditures incurred by the Los Angeles County Development Authority (the "LACDA"), a discretely presented component unit of the County of Los Angeles, California, that are reimbursable under federal programs of federal assistance. For the purposes of this schedule, federal awards include both federal financial assistance received directly from a federal agency, as well as federal funds received indirectly by the LACDA from a , non-federal agency or other organization. Only the portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local, or other non-federal funds are excluded from the accompanying schedule.

Title: Note 2: Basis of Accounting Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting.

Title: Note 3: Relationship to Federal Financial Reports Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Total expenditure amounts reported in the accompanying schedule of expenditures of federal awards agree with the total expenditure amounts reported in the related federal financial reports in all material respects, except for the effect of timing differences described in Note 2. The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Title: Note 4: Relationship to the Basic Financial Statements Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Federal award activities are recorded in the LACDA's special revenue funds and enterprise funds in the basic financial statements.

Title: Note 5: Federal Loan Program Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The loan programs relating to assistance for low-income, elderly, and handicapped persons and development projects are administered directly by the LACDA; and balances and transactions relating to these programs are included in the LACDA's basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the accompanying schedule. The balance of loans outstanding at June 30, 2023, consists of:

Title: Note 6: Public Housing Capital Funds Accounting Policies: The accompanying schedule is presented using the basis of accounting prescribed by the respective granting agencies. Differences between the granting-agencies' basis of accounting and the modified-accrual basis of accounting used by the LACDA in preparing its governmental fund financial statements are as follows: • Amounts disbursed in exchange for notes receivable are treated as expenditures under the granting-agencies' basis of accounting. • Notes receivable collections are treated as grant income under the granting-agencies' basis of accounting. • Principal payments of long-term debt are treated as a reduction of the long-term debt and are not considered to be expenditures under the granting-agencies' basis of accounting. De Minimis Rate Used: N Rate Explanation: The LACDA has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Public Housing Capital Fund (Assistance Listing Number 14.872) expenditures by program identification were as follows: