Title: Note 3 - Credit enhancement for Charter School facilities
Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Local
Initiatives Support Corporation and Affiliates (the "Organization") under programs of the federal government for the year
ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Local
Initiatives Support Corporation and its Affiliates, it is not intended to and does not present the financial position, changes in
net assets and cash flows of Local Initiatives Support Corporation and Affiliates. Expenditures reported on the Schedule are
reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the
Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative
amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported
as expenditures in prior years. The Organization has elected not to use the 10‐percent de minimus indirect cost rate allowed
under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are
limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10‐percent
percent de minimus indirect cost rate allowed under the Uniform Guidance.
The U.S. Department of Education has awarded total grants of $53,462,977 to the Organization to credit enhance the loans made by financial institutions to stimulate the financing of charter schools. The grant funds are to remain invested in separate grant reserve accounts in accordance with the requirements of the grant. Such financial assistance is considered federal awards expended based on the amounts in the reserve accounts at the beginning of the grantee fiscal year; plus any new funds received; plus investment earnings received in the grantee's fiscal year to add to the reserve account; less any application of the grants resulting from the credit enhancements provided. Cumulative application of grant funds to cover credit enhancement losses from program inception to December 31, 2023 were $580,731. The reserve account balance as of December 31, 2023 is $60,277,454 consisting of the grant balance of $52,498,350 and accumulated net investment earnings of $7,779,104 of which $1,397,553 was earned in 2023.
Title: Note 4 - Capital Magnet Fund
Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Local
Initiatives Support Corporation and Affiliates (the "Organization") under programs of the federal government for the year
ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Local
Initiatives Support Corporation and its Affiliates, it is not intended to and does not present the financial position, changes in
net assets and cash flows of Local Initiatives Support Corporation and Affiliates. Expenditures reported on the Schedule are
reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the
Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative
amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported
as expenditures in prior years. The Organization has elected not to use the 10‐percent de minimus indirect cost rate allowed
under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are
limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10‐percent
percent de minimus indirect cost rate allowed under the Uniform Guidance.
The U.S. Department of Treasury has awarded a total of $24,800,000 to the Organization to support Affordable Housing Activities, Economic Development Activities, or Community Service Facilities in the following manners: to provide loan loss reserves, to capitalize a revolving loan fund, for risk sharing loans, for loan guarantees, and for the awardee's operations. The balance of loans outstanding that have continuing compliance under the Capital Magnet Fund (Assistance Listing No. 21.011) at December 31, 2023 is $15,754,019.
In accordance with presentation requirements, the schedule of expenditures of federal awards includes the amount outstanding at December 31, 2022 for Capital Magnet Fund of $10,638,487, in addition to amounts disbursed in fiscal 2023 of $5,115,532. There were no administrative costs claimed for the Capital Magnet Fund program in fiscal 2023.
Title: Note 5 - Federal loan programs
Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Local
Initiatives Support Corporation and Affiliates (the "Organization") under programs of the federal government for the year
ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S.
Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Local
Initiatives Support Corporation and its Affiliates, it is not intended to and does not present the financial position, changes in
net assets and cash flows of Local Initiatives Support Corporation and Affiliates. Expenditures reported on the Schedule are
reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the
Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative
amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported
as expenditures in prior years. The Organization has elected not to use the 10‐percent de minimus indirect cost rate allowed
under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are
limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10‐percent
percent de minimus indirect cost rate allowed under the Uniform Guidance.
The loan program listed subsequently is administered directly by the Organization, and the balance and transactions related to this program is included in the Organization's basic financial statements. Loans outstanding at the beginning of the year and loan proceeds received during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at December 31, 2023 consists of: Assistance Listing Number 21.014, Program Name: Community Development Financial Institutions Bond Guarantee Program, Balance at December 31, 2023: $ 39,578,572