Audit 321361

Title: NOTE 1 – PURPOSE OF THE SCHEDULE AND SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Louisville Water Company (“LWC”) under programs of the federal government for the year ended December 31, 2021 and is presented on the accrual basis of accounting. 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 (Uniform Guidance). 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. De Minimis Rate Used: N Rate Explanation: LW has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Basis of Presentation: The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Louisville Water Company (“LWC”) under programs of the federal government for the year ended December 31, 2023 and is presented on the accrual basis of accounting. 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 (Uniform Guidance). 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. LW has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Because the schedule presents only a selected portion of the operations of LWC, it is not intended to and does not present the financial position, changes in net position, or cash flows of LWC.