Notes to SEFA
Title: Loan/loan guarantee outstanding balances
Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule)includes the federal grant activity of LINC under programs of the federal government for the year endedDecember 31, 2022. The information in this schedule is presented in accordance with the requirementsof Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedulepresents only a selected portion of the operations of LINC, it is not intended to and does not present thefinancial position, changes in net assets, or cash flows of LINC.Expenditures reported on the Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following cost principles contained in Uniform Guidance, wherein certaintypes of expenditures are not allowed or are limited as to reimbursement.LINC has elected not to use the 10% de minimis indirect cost rate as allowed under Uniform Guidancefor the year ended December 31, 2022; and instead allocated indirect costs in accordance with its costallocation plan as allowed by the federal grant programs under Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - Balances outstanding at the end of the audit period were 5000000. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 800000.
Title: COMMUNITY DEVELOPMENT BLOCK GRANT LOAN PROVIDED TO SUBRECIPIENTS
Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule)includes the federal grant activity of LINC under programs of the federal government for the year endedDecember 31, 2022. The information in this schedule is presented in accordance with the requirementsof Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedulepresents only a selected portion of the operations of LINC, it is not intended to and does not present thefinancial position, changes in net assets, or cash flows of LINC.Expenditures reported on the Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following cost principles contained in Uniform Guidance, wherein certaintypes of expenditures are not allowed or are limited as to reimbursement.LINC has elected not to use the 10% de minimis indirect cost rate as allowed under Uniform Guidancefor the year ended December 31, 2022; and instead allocated indirect costs in accordance with its costallocation plan as allowed by the federal grant programs under Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
LINC received loan proceeds of $5,000,000 under the U.S. Department of Housing and UrbanDevelopment (HUD) Community Development Block Grant (CDBG) program, passed through from theCity of Los Angeles Housing and Community Investment Department (HCIDLA) in January 2016(HCIDLA Loan), with simple interest at 4%, for a term of 55 years. LINC concurrently loaned these fundsto LINC Westlake Apartments, LP (the Sub-recipient), a controlled subsidiary, with equivalent terms(Project Loan). The loan proceeds were fully utilized by the Sub-recipient and the project was placed inservice in 2018. The principal balances on the HCIDLA Loan and Project Loan as of December 31, 2022are $5,000,000.