FY 2023-24 Los Angeles County Regional Park and Open Space District

L O S A N G E L E S C O U N T Y R E G I O N A L P A R K A N D O P E N S P A C E D I S T R I C T Basic Financial Statements With Independent Auditor’s Report For the Fiscal Year Ended June 30, 2024 (With Comparative Totals for 2023) 2 3 5 5 C r e n s h a w B l v d . S u i t e 1 5 0 T o r r a n c e , C A 9 0 5 0 1 t: (3 1 0) 7 92 -46 40 f : (3 1 0) 7 92 -41 40 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT Basic Financial Statements with Independent Auditor’s Report For the Fiscal Year Ended June 30, 2024 (With Comparative Totals for 2023) Table of Contents Page Independent Auditor’s Report ............................................................................................................ 1 Management’s Discussion and Analysis (Unaudited) ........................................................................ 4 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ..................................................................................................... 8 Statement of Activities .......................................................................................................... 9 Fund Financial Statements: Balance Sheet ...................................................................................................................... 10 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position ............................................................................................. 11 Statement of Revenues, Expenditures, and Change in Fund Balance ................................................................................................................ 12 Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Change in Fund Balance to the Statement of Activities .................................................................................................................. 13 Notes to the Basic Financial Statements .................................................................................. 14 Required Supplementary Information: Statement of Revenues, Expenditures, and Change in Fund Balance – Budget and Actual – General Fund .................................................................................. 27 Notes to Required Supplementary Information ...................................................................... 28 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT Basic Financial Statements with Independent Auditor’s Report For the Fiscal Year Ended June 30, 2024 (With Comparative Totals for 2023) Table of Contents (Continued) Page Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Basic Financial Statements Performed in Accordance with Government Auditing Standards ........................................... 29 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 F a c s i m il e: 310.792.4331 www.bcawr.com INDEPENDENT AUDITOR’S REPORT To the Board of Directors of Los Angeles County Regional Park and Open Space District Los Angeles, California Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of the governmental activities of the Los Angeles County Regional Park and Open Space District (the District), a component unit of the County of Los Angeles, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities of the District, as of June 30, 2024, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 1 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis on pages 4 through 7 and budgetary comparison information of the District on page 27 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 Prior Year Comparative Information We have previously audited the District’s June 30, 2023 basic financial statements, and we expressed an unmodified audit opinion on those audited basic financial statements in our report dated December 19, 2023. In our opinion, the summarized comparative information presented herein as of and for the fiscal year ended June 30, 2024 is consistent, in all material respects, with the audited basic financial statements from which it has been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2024, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over the financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance related to the Fund. Torrance, California December 20, 2024 3 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) For the Fiscal Year Ended June 30, 2024 (Amounts expressed in Thousands) Management's discussion and analysis of the Los Angeles County Regional Park and Open Space District (the District) provides a narrative overview of the District's financial activities for the fiscal year ended June 30, 2024. Please read it in conjunction with the accompanying basic financial statements, footnotes, and supplementary information. Financial Highlights • As more fully explained in the government-wide financial analysis below and in footnote 2 to the financial statements, the District’s net position was $792.0 million at June 30, 2024, an increase of $114.6 million from the prior year. • The District's fund balance increased by $114.8 million to $790.5 million. Financial Statement Overview This discussion and analysis consist of a series of basic financial statements: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. In addition to the basic financial statements, this report contains required supplementary information and an additional supplementary schedule. Government-wide financial statements: The government-wide financial statements are designed to provide a broad overview of the District's activities and present a longer-term view of the District's finances. • The Statement of Net Position presents all of the District's assets reduced by liabilities, which represents net position. Over time, increases or decreases in net position may serve as a useful indicator to determine whether the financial position of the District is improving or deteriorating. • The Statement of Activities presents information showing how the District's net position changed during the fiscal year. All changes in net position (revenues and expenses) are reported when the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Accordingly, revenues and expenses are reported in this statement for items that will result in cash flows in future fiscal periods (e.g., uncollected assessment revenues, and accrued but unpaid interest expense). The government-wide financial statements can be found on pages 8 through 9 of this report. Fund financial statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All funds of the District are Governmental fund types. • Governmental Funds - All of the District's activities are reported in governmental funds. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed view of the District's operations. Governmental fund information helps to determine the amounts of financial resources used to finance the District's programs. 4 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) For the Fiscal Year Ended June 30, 2024 (Amounts expressed in Thousands) The fund financial statements can be found on pages 10 and 12 of this report. The net position/fund balance difference between the government-wide and fund statements is highlighted on page 11 and is primarily the result of the exclusion of unearned revenue from the government-wide liabilities. The difference between the change in net position/fund balance on the government-wide versus the fund financial statements is highlighted on page 13 and is primarily the result of reporting the net change in unearned revenue from the prior year as revenue in the fund financial statements. Notes to the basic financial statements: The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. Government-wide Financial Analysis Our government-wide analysis focuses on the net position (Table 1) and change in net position (Table 2) for the District's governmental activities. Table 1 Net Position (in Thousands) Governmental Activities Summary of Statement of Position 2024 2023 Total assets $ 795,231 $ 679,421 Total liabilities $ 3,262 $ 2,060 Net position Restricted for: Maintenance and servicing 19,471 19,464 Park and open space preservation 772,498 657,897 $ 791,969 $ 677,361 Governmental Accounting Standards Board (GASB) Statement No. 34 requires that the government-wide statements reflect a liability in outstanding bonds issued to finance grants made to other governmental agencies, but does not permit the recognition of assets for future assessment revenues that are pledged for the annual debt service payments on the bonds. Amounts distributed to the cities and other eligible entities are recorded as expenses by the District and no capital assets are recorded. This fiscal year, the Statement of Net Position reflected a positive net position for the tenth consecutive fiscal year, in the amount of approximately $792.0 million. 5 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) For the Fiscal Year Ended June 30, 2024 (Amounts expressed in Thousands) Total assets of the District increased by 17.0% from the prior fiscal year to $795.2 million due to a $115.1 million increase in pooled cash and investments, a $0.2 million increase in assessments receivable, a $0.8 million increase in interest receivable, and offset by a $0.2 million decrease in other receivables. Total liabilities of the District increased by 58.3% from the prior fiscal year to $3.3 million due primarily to a $1.3 million increase in due to the County of Los Angeles (the County) and a $0.6 million decrease in accounts payable. Total net position increased by $114.6 million to $792.0 million due to an excess in total revenues over total expenses. Table 2 Changes in Net Position (in Thousands) Governmental Activities Summary of Statement of Activities 2024 2023 Revenues Taxes $ 116,925 $ 108,911 Investment income 32,765 9,676 Charges for services 96 244 Other income 588 1,014 Total revenues 150,374 119,845 Expenses Recreation and cultural services 35,766 19,335 Total expenses 35,766 19,335 Increase in net position $ 114,608 $ 100,510 Total revenues increased by $30.5 million resulting primarily from the $23.1 million increase in investment income, a $8.0 million increase in taxes and assessment revenue, offset by a $0.4 million decrease in other revenue and a $0.1 million decrease in charges for services. The District spent $16.4 million more on park improvements and maintenance in the current fiscal year. Fund Statements Financial Analysis As of the end of the current fiscal year, the District's governmental fund reported a fund balance of $790.5 million, an increase of $114.8 million from the prior fiscal year. Current fiscal year revenues from the governmental funds were $150.6 million, an increase of 24.8% from the prior fiscal year primarily as a result of the increase in investment income of $23.1 million. Expenditures in the current fiscal year were $35.8 million, an increase of 85.0% from the prior fiscal year. 6 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) For the Fiscal Year Ended June 30, 2024 (Amounts expressed in Thousands) Debt Management At June 30, 2024, the District did not have any bonds payable. Budgets No material adjustments were made to the District's original budget. During fiscal year 2023-24, the District again spent much less than the amount budgeted for park grants, projects, and maintenance. Economic Factors On November 8, 2016, the County voters approved “The Los Angeles County Safe, Clean Neighborhood Parks and Beaches Measure of 2016 (Measure A)”. Measure A will continue to provide funding for the District to support local parks, beaches, open space, and water resources. Measure A is expected to generate approximately $117 million in fiscal year 2024-25 through an annual parcel tax of 1.81 cents per square foot of development. Contacting the District's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the County of Los Angeles, Department of Auditor-Controller, 500 West Temple Street Room 525, Los Angeles, CA 90012. 7 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT STATEMENT OF NET POSITION June 30, 2024 (With Comparative Totals for 2023) (Amounts expressed in thousands) Governmental Activities 2024 2023 Assets Pooled cash and investments (Note 6) $ 7 89,227 $ 6 74,146 Assessments receivable 2 ,083 1 ,912 Interest receivable 2 ,204 1 ,403 Other receivable 1 ,713 1 ,960 Due from other funds 4 - Total assets 7 95,231 6 79,421 Liabilities Current liabilities Accounts payable 3 7 1 00 Due to County of Los Angeles (Note 5) 3 ,225 1 ,960 Total liabilities 3 ,262 2 ,060 Net Position Restricted for: Maintenance and servicing 1 9,471 1 9,464 Park and open space preservation 7 72,498 6 57,897 $ 7 91,969 $ 6 77,361 - - See accompanying notes to the basic financial statements. 8 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2024 (With Comparative Totals for 2023) (Amounts expressed in thousands) Net (Expense) Revenue and Program Revenue Changes in Net Position Operating Capital Charges for Contributions Contributions Governmental Activities Expenses Services and Grants and Grants 2024 2023 Governmental activities: Recreation and cultural services $ 35,766 $ 96 $ - $ - $ (35,670)$ (19,091) Total (35,670) (19,091) General Revenues: Taxes 116,925 108,911 Investment income 32,765 9,676 Other income 588 1,014 Total general revenues 150,278 119,601 Change in net position 114,608 100,510 Net position, beginning of year 677,361 576,851 Net position, end of year $ 791,969 $ 677,361 See accompanying notes to the basic financial statements. 9 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2024 (With Comparative Totals for 2023) (Amounts expressed in thousands) 2024 2023 Assets Pooled cash and investments (Note 6) $ 789,227 $ 674,146 Assessments receivable 2,083 1,912 Interest receivable 2,204 1,403 Other receivable 1,713 1,960 Due from other funds 4 - Total assets 795,231 679,421 Liabilities, Deferred Inflows of Resources and Fund Balance Current liabilities Accounts payable 37 100 Due to County of Los Angeles (Note 5) 3,225 1,960 Total liabilities 3,262 2,060 Deferred inflows of resources Unearned revenue - property taxes (Note 7) 1,455 1,638 Total deferred inflows of resources 1,455 1,638 Fund balance Restricted 790,514 675,723 Total fund balance 790,514 675,723 Total liabilities, deferred inflows of resources and fund balance $ 795,231 $ 679,421 See accompanying notes to the basic financial statements. 10 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2024 (Amounts expressed in thousands) See accompanying notes to the basic financial statements. 11 F A N u m a b e n d b a la n c e o f g o v e r n m e n ta l fu n d s ( p a g e 1 0 ) o u n ts r e p o r te d fo r G o v e r n m e n t A c tiv itie s in th e S ta te m e n r e d iffe r e n t fr o m th o s e r e p o r te d in th e G o v e r n m e n ta l F u n d e c a u s e o f th e fo llo w in g : R e v e n u e s th a t d o n o t p r o v id e c u r r e n t fin a n c ia l r e s o u r c e s a r e v e n u e s in th e g o v e r n m e n ta l fu n d s . T h is is th e d e fe r r e d t p o s itio n o f g o v e r n m e n ta l a c tiv itie s ( p a g e 8 ) t o f N e t P o s itio n B a la n c e S h e e t r e n o t r e p o r te d a r e v e n u e b a la n c e s . $ $ 7 9 0 1 7 9 1 ,5 ,4 ,9 1 5 6 4 5 9 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2024 (With Comparative Totals for 2023) (Amounts expressed in thousands) 2024 2023 Revenues Taxes $ 117,108 $ 109,747 Assessments 588 1,014 Investment income 32,765 9,676 Charges for services 96 244 Total revenues 150,557 120,681 Expenditures Services and supplies 27,043 11,442 Park improvements 8,723 7,893 Total expenditures 35,766 19,335 Net changes in fund balance 114,791 101,346 Fund balance, July 1, 2023 675,723 574,377 Fund balance, June 30, 2024 $ 790,514 $ 675,723 See accompanying notes to the basic financial statements. 12 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2024 (Amounts expressed in thousands) Net change in fund balance - governmental funds (page 12) $ 114,791 Amounts reported for Government Activities in the Statement of Activities differ because of the following: Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds. This is the net change in deferred revenues from the prior year. (183) Change in net position of governmental activities (page 9) $ 114,608 - See accompanying notes to the basic financial statements. 13 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 1 – HISTORY AND ORGANIZATION General Proposition A was passed by the voters on November 3, 1992, which provided for the formation of the assessment district “Regional Park and Open Space District” (the District). The District was formed and the assessments were levied pursuant to Sections 5538.9 and 5539.9 of the California Public Resources Code. The objectives of the District are to improve the quality of life in the County of Los Angeles (the County) through the preservation of beaches, parks, and wild lands; the construction, renovation, and improvement of new and existing recreational facilities; and the restoration of rivers, streams, and trails. These powers are exercised through the County Board of Supervisors, which acts as the governing body of the District. Among its duties, it approves the District’s budget, determines the District’s assessment rates, approves contracts, and determines when to issue bonds authorized by the voters of the District. On November 5, 1996, the voters approved the Safe Neighborhood Parks Proposition, which provided for the District to levy additional assessments and to amend the method of assessments within the District. Reporting Entity The District is a component financial reporting unit of the County, as the governing board of the County also serves as the District’s governing board, and the County is financially accountable for the District. The District is included in the County’s annual comprehensive financial report for the fiscal year ended June 30, 2024. In evaluating how to define the District for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth by accounting principles generally accepted in the United States of America (US GAAP). The District does not have any component units. The District’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Measurement Focus The basic financial statements of the District are comprised of the following: • Government-wide financial statements • Fund financial statements • Notes to the basic financial statements 14 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Government-wide Financial Statements Government-wide financial statements display information about the District as a whole. These statements include separate columns for the government and business-type activities of the primary government. The District does not have business-type activities. Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by the function to which they are allocated). However, general government expenses have not been allocated as indirect expenses to the various functions of the District. Government-wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government- wide financial statements. The basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, deferred outflows of resources, and liabilities resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33. Program revenues include charges for services and payments made by parties outside of the reporting District’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the Statement of Activities to present the net cost of each program. The District did not have any program revenues for the fiscal year ended June 30, 2024. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as another financing source. Amounts paid to reduce the long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. The District’s financial statements are presented in accordance with the provisions of GASB Statement No. 34 Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. GASB Statement No. 34 established standards for external financial reporting for all state and local governmental entities. It requires the classification of net position into three components – net investment in capital assets; restricted; and unrestricted. These classifications are defined as follows: Net investment in capital assets – This component of net position consists of capital assets, including restricted capital assets, net of accumulated depreciation and is reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is included in the same net position component as the unspent proceeds. As of June 30, 2024, the District had no capital assets and thus no debt obligations related to capital assets. 15 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Government-wide Financial Statements (Continued) Restricted net position – This component of net position represents restricted assets net of liabilities that relate to those specific restricted assets. A restricted asset is an asset for which constraints have been placed on the asset’s use by creditors, contributors, laws, or regulations of other governments, or as a consequence of a restriction established by the reporting government’s own governing body at the time a particular fee, charge, levy, or assessment was approved. These restrictions must be narrower than the general purposes for which the reporting government can use its resources. As of June 30, 2024, the District had a restricted net position of $791,969,000. Proposition A requires that not less than 15% of all proceeds of assessments levied and collected shall be used for the maintenance and servicing of completed projects. As a result, the amount of assessments collected for maintenance and servicing and unspent as of June 30, 2024 has been reflected as restricted net position in the Statement of Net Position. Unrestricted net position – GASB Statement No. 34 requires that local governments record in the statement of net position the local government’s liability for debt issued to finance the construction and acquisition of assets to be owned by other parties. GASB Statements No. 33 and 34 do not permit the recognition of assets for future tax increment revenues that are pledged for the annual retirement of bonded debt issuances. Any negative equity resulting from the reporting of the District’s liability for this debt is required by GASB Statement No. 34 to be reported as unrestricted net position. When both restricted and unrestricted net positions are available, restricted resources are depleted first before the unrestricted resources are used. Fund Financial Statements The underlying accounting system of the District is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities and deferred inflows of resources, fund balance, revenues, and expenditures. Governmental Type Funds Governmental resources are allocated to and accounted for in individual funds based on the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the primary government’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually and non-major funds in the aggregate for governmental funds. The District has no non-major funds. 16 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Type Funds (Continued) In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. For this purpose, the District uses an availability period of 60 days for assessment revenues and 1 year for investment income. Assessments and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available when cash is received by the District. Exchange transactions are recognized in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed tax revenues are recognized as revenues in the period in which the underlying exchange transactions upon which they are based take place. Imposed non-exchange transactions are recognized as revenues in the period for which they are imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenue arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of available expendable resources. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available expendable resources during a period. Non-current portions of long-term receivables are reported on their balance sheets in spite of their spending measurement focus. However, special reporting treatments are used to indicate that they should not be considered available expendable resources since they do not represent net current assets. Recognition of governmental fund type revenues represented by deferred inflows of resources is shown as unearned revenue until they become current receivables. When property taxes are measurable but not available, the collectible portion (taxes levied less estimated uncollectible) is recorded as deferred inflows of resources in the period when an enforceable legal claim to the asset arises or when the resources are received, whichever occurs first. As a result of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as government fund type expenditures or fund liabilities. 17 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Type Funds (Continued) Amounts expended to acquire capital assets are recorded as expenditures in the year that resources are expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. Major Fund The District has only one fund, the General Fund. This fund is available for any authorized purpose and is used to account for all financial resources except those required to be accounted for in another fund. Cash and Investments Investments are reported in the accompanying financial statements at fair value. Changes in fair value that occur during a fiscal year are reported as a component of investment income. Investment income also includes interest earnings and any gains or losses realized upon the liquidation, maturity, or sale of investments. All cash and investment balances of the District are pooled and invested by the County Treasurer and are subject to withdrawal from the pool upon demand. Each fund’s share in this pool is displayed in the accompanying financial statements as pooled cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on the fund’s average cash and investment balance, as provided by California Government Code Section 53647. Capital Assets The District provides funding to other entities, including the County, for purposes that may include acquiring real property. Title to properties acquired is recorded in the name of the purchasing entity, not the District. Accordingly, there are no capital assets recorded on the Statement of Net Position. Deferred Inflows of Resources - Deferred Revenue Pursuant to GASB Statement No. 65, the District recognizes deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of fund balance by the government that is applicable to a future reporting period. Refer to Note 7 for a detailed listing of the deferred inflows of resources that the District has recognized. 18 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance In the fund financial statements, governmental funds report fund balance as non-spendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the District is bound to honor constraints on how specific amounts can be spent. Non-spendable fund balance – amounts that cannot be spent because they are either (a) not spendable in form or (b) legally or contractually required to be maintained intact. Restricted fund balance – amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed fund balance – amounts that can only be used for specific purposes determined by formal action of the District’s highest level of decision-making authority (the Board of Directors) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. Assigned fund balance – amounts that are constrained by the District’s intent to be used for specific purposes. The intent can be established at either the highest level of decision making, or by a body or an official designated for that purpose. Unassigned fund balance – the residual classification for the District’s funds that include amounts not contained in the other classifications. When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by committed, assigned, and unassigned resources as they are needed. The Board of Directors establishes, modifies, or rescinds fund balance commitments and assignments by passage of an ordinance or resolution. This is done through the adoption of the budget amendments that occur throughout the fiscal year. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Comparative Financial Data The amounts shown for fiscal year 2022-23 in the accompanying basic financial statements are included only to provide a basis for comparison with fiscal year 2023-24 and are not intended to present all information necessary for a fair presentation in accordance with generally accepted accounting principles. 19 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 3 – NEW PRONOUNCEMENTS ISSUED AND IMPLEMENTED The following GASB Statements have been implemented in the current basic financial statements. GASB Statement No. 99 - Statement No. 99, Omnibus 2022, enhances comparability in accounting and financial reporting and improves the consistency of authoritative literature by addressing (1) practice issues that have been identified during the implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. GASB Statement No. 99, paragraphs 4-10, the requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53, are effective for reporting periods beginning after June 15, 2023. This statement did not have an impact on the District’s financial statements. GASB Statement No. 100 - Statement No. 100, "Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62" enhances accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. This statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements. This statement did not have a material impact to the financial statements. We will apply the statement as appropriate in the future. Note 4 – ASSESSMENTS The District’s primary revenue source is the assessments from the “The Los Angeles County Safe, Clean Neighborhood Parks and Beaches Measure of 2016 (Measure A)”, which was approved by the voters on November 8, 2016. Measure A will provide funding for the District to support local parks, beaches, open space, and water resources. Measure A does not have a sunset date and is expected to generate approximately $117 million in fiscal year 2024-25 through an annual rate of 1.81 cents per square foot of development. Note 5 – TRANSACTIONS WITH THE COUNTY AND OTHER AGENCIES The County is responsible for providing all necessary employees to the District for purposes of performing all District functions. Costs related to these employees are billed to the District based on actual time spent providing District services. Accordingly, the District has no salaries and employee benefit expenditures or supplies inventory. Accrued expenditures in the amount of $3,225,000 as of June 30, 2024, for services provided by the County and other agencies for reimbursable projects, have been recorded as Due to County of Los Angeles. 20 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 6 – CASH AND INVESTMENTS Pooled Cash and Investments Cash and investments as of June 30, 2024, are classified in the accompanying financial statements as follows (in thousands): Statement of Net Position - Pooled cash and investments $ 789,227 Total cash and investments $ 789,227 Cash and investments as of June 30, 2024, consist of the following (in thousands): Equity in County of Los Angeles investment pool $ 789,227 Total cash and investments $ 789,227 Equity in the Cash and Investment Pool of the County of Los Angeles The District has no separate bank accounts or investments other than the District’s equity in the Los Angeles County Treasury Pool. The District is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Los Angeles County Treasurer and Tax Collector. The District has not adopted an investment policy separate from that of the County. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro-rata share of the fair value calculated by the County for the entire County portfolio. The balance available for withdrawal is based on the accounting records maintained by the County Auditor- Controller, which are recorded on an amortized cost basis. Investments are stated at fair value and are valued daily. The County Treasurer (Treasurer) categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. Securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Securities classified in Level 2 of the fair value hierarchy are valued using other observable inputs such as matrix pricing techniques or based on quoted prices for assets in markets that are not active. Matrix Pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Level 3 inputs are significant unobservable inputs. Securities classified in Level 3 are valued using the income approach such as discounted cash flow techniques. Investment in an external government investment pool is not subject to reporting within the level hierarchy. 21 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 6 – CASH AND INVESTMENTS (Continued) Equity in the Cash and Investment Pool of the County of Los Angeles (Continued) As permitted by the Government Code, the Treasurer developed, and the Board adopted, an Investment Policy that further defines and restricts the limits within which the Treasurer may invest. The table below identifies the investment types that are authorized by the County, along with the related concentration of credit limits: Maximum Percentage Maximum Investment Maximum Maturity of Portfolio In One Issuer Minimum Rating Authorized Investment Type Gov. Code Pool Policy Gov. Code Pool Policy Gov. Code Pool Policy Gov. Code Pool Policy U. S. Treasury Notes, Bills and Bonds 5 years None (1) None None None None None None U.S. Agency Securities 5 years None (1) None None None None None None Local Agency Obligations 5 years 5 years (2) None 10%* None None None Various (2) Asset-Backed Securities 5 years 5 years 20% 20% None $750 million* AA AA (3) * Bankers' Acceptances 180 days 180 days 40% 40% 30% $750 million* None A-1/P-1/F1* Negotiable Certificates of Deposit (4) 5 years 3 years* 30% 30% None $750 million* None A-1/P-1/F1* Commercial Paper 270 days 270 days 40% 40% 10% $1.5 billion* A-1 A-1/P-1/F1 Corporate and Depository Medium-Term Notes (5) 5 years 3 years* 30% 30% 10% $750 million* A A-1/P-1/F1* LAIF N/A N/A None $75 million (6) None None None None Shares of Beneficial Interest N/A N/A 20% 15%* 10% 10% AAA AAA Repurchase Agreements 1 year 30 days* None $1 billion* None $500 million* None None Reverse Repurchase Agreements 92 days 92 days 20% $500 million* None $250 million* None None Forwards, Futures, and Options N/A 90 days* None $100 million* None $50 million* None A* Interest Rate Swaps N/A None None None None None A A Securities Lending Agreements 92 days 92 days 20% 20% (7) None None None None Supranationals 5 years 5 years 30% 30% None None AA AA (1) Pursuant to the California Government Code 53601, the Board granted authority to make investments in U.S. Treasury Notes, Bills and Bonds, and U.S. Agency Securities that have maturities beyond 5 years. (2) Any obligation issued or caused to be issued on behalf of other County affiliates must have a minimum rating of "A3" (Moody’s) or "A-" (S&P or Fitch) and the maximum maturity is limited to thirty years. Any short- or medium-term obligation issued by the State of California or a California local agency must have a minimum rating of "MIG-1" or "A2" (Moody's) or "SP-1" or "A" (S&P) and the maximum maturity is limited to 5 years. (3) All Asset-Backed securities must be rated at least “AA.” Pool Policy also requires that Asset-Backed securities issuers' debts be rated "A" or its equivalent or better. (4) Euro Certificates of Deposit are further restricted to a maximum maturity of one year and a maximum percentage of portfolio of 10%. (5) Floating Rate Notes are further restricted to a maximum maturity of 5 years, maximum of 10% of the portfolio, and maximum investment in one issuer of $750 million. The maximum maturity may be 7 years, provided that the Board’s authorization to exceed maturities in excess of 5 years is in effect, of which $100 million par value may be greater than 5 years to maturity. (6) The maximum percentage of the portfolio is based on the investment limit established by LAIF for each account, not by Pool Policy. (7) The maximum par value is limited to a combined total of reverse repurchase agreements and securities lending agreements of 20% of the base value of the portfolio. *Represents restriction in which the County’s Investment Policy is more restrictive than the California Government Code. 22 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 6 – CASH AND INVESTMENTS (Continued) Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The County’s Investment Policy limits most investment maturities to less than five years, with the exception of U.S. Treasury Notes, Bills, and Bonds and U.S. Agency Securities, which may have maturities beyond five years. The Treasurer manages the Pool and mitigates exposure to declines in fair value by generally investing in short-term investments with maturities of six months or less and by holding all investments to maturity. Information about the District’s exposure to interest rate risk as a result of its equity in the cash and investment pool of the County is provided by disclosures in the notes to the County Audited Annual Comprehensive Financial Report (ACFR) that show the distribution of the County’s investments by maturity. Remaining Maturity (in Months) Totals 12 Months 13 to 24 More Than Investment Type (in thousands) or Less Months 24 Months LA County Treasury Pool $ 7 89,227 $ 789,227 $ - $ - $ 7 89,227 $ 789,227 $ - $ - Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the County’s investment policy, or debt agreements, and the actual rating as of fiscal year-end for each investment type. The County investment policy establishes minimum acceptable credit ratings for investments from any two nationally recognized statistical rating organizations. These guidelines are summarized in the notes to the basic financial statements of the County ACFR. Concentration of Credit Risk There are no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. All investments of the District are in an investment pool. Although the District has no limitations on the amount that can be invested in any one issuer beyond those stipulated by the California Government Code, all investments are in the County Treasury Pool which is subject to the County investment policy limitations on the amount of pooled funds that may be invested in any one issuer. 23 L A C Ino vu en s tm ty T e n re t T a s u y p ry e P o o l $ $ T o ta (in th o u s 7 8 7 8 lsa n d 9 ,2 2 9 ,2 2 s7 7 ) M in im u L e g a l R a tin g N o n e m $ $ E x e m p t F ro m D is c lo s u re - - $ $ R a tin g F is c a l Y A A A - $ - $ se a s o f a r E n d N o t R a te d 7 8 9 ,2 2 7 8 9 ,2 2 7 7 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 6 – CASH AND INVESTMENTS (Continued) Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The District does not have significant separate certificates of deposit or demand accounts with fiscal agents that are subject to disclosable custodial credit risk (as defined by GASB Statement No. 40). The District does not have direct investments in securities subject to disclosable custodial credit risk (as defined by GASB Statement No. 40). GASB Statement No. 3 exempts participating entities from classifying their pool investments in categories of credit risk; however, GASB Statement No. 40 requires disclosures of common deposit and investment risks related to credit risks, concentration of credit risk, interest rate risk, and foreign currency risk. Information on common deposit and investment risks for the entire County Treasury Pool is presented in Note 4 to the County ACFR for the fiscal year ended June 30, 2024. Note 7 – DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources - unearned revenue in the fund financial statements represents receivables at fiscal year-end that will not be collected soon enough to finance current fiscal year expenditures. The unearned revenue balance at June 30, 2024 was $1,455,000. Note 8 – CONTINGENT LIABILITIES Claims and suits have been filed against the District in the normal course of business. The outcome of these matters is not presently determinable. However, in the opinion of management, the resolution of these matters is not expected to have a significant impact on the financial condition of the District. There were no claims filed against the District for the fiscal year ended June 30, 2024. Note 9 – COMMITMENTS The District uses encumbrances to control expenditure commitments for the year. Encumbrances represent commitments related to executed contracts not yet performed and purchase orders not yet filled. Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Depending on the source(s) of funding, encumbrances are reported as part of restricted, committed, or assigned fund balance on the governmental funds balance sheet. As of June 30, 2024, the encumbrance balance for the District is $94,124,000 and is included in the General Fund’s restricted fund balance. 24 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2024 Note 10 – SUBSEQUENT EVENTS In preparing these basic financial statements, the District has evaluated events and transactions for potential recognition or disclosure through December 20, 2024, the date the basic financial statements were available to be issued. 25 REQUIRED SUPPLEMENTARY INFORMATION 26 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE – BUDGET AND ACTUAL – GENERAL FUND For the Fiscal Year Ended June 30, 2024 (Amounts expressed in thousands) Variance with Fund Budget - Budget Amounts 2024 Actual Positive Original Final (Budgetary Basis) (Negative) REVENUES Taxes $ 109,764 $ 114,064 $ 117,108 $ 3,044 Assessments 329 847 588 (259) Investment income 3,342 3,342 30,030 26,688 Charges for services - - 161 161 TOTAL REVENUES 113,435 118,253 147,887 29,634 EXPENDITURES Services and supplies 22,656 18,680 8,704 9,976 Park improvements 529,959 156,012 51,193 104,819 TOTAL EXPENDITURES 552,615 174,692 59,897 114,795 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (439,180) (56,439) 87,990 144,429 OTHER FINANCING SOURCES (USES) Transfer in 116,951 117,469 121,561 4,092 Transfer out (116,951) (121,769) (121,561) 208 Changes in fund balance (32,310) (410,751) (408,922) 1,829 TOTAL OTHER FINANCING SOURCES (USES) (32,310) (415,051) (408,922) 6,129 NET CHANGE IN FUND BALANCE (471,490) (471,490) (320,932) 150,558 FUND BALANCE, JULY 1, 2023 471,490 471,490 471,490 - FUND BALANCE, JUNE 30, 2024 $ - $ - $ 150,558 $ 150,558 See accompanying notes to required supplementary information. 27 LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2024 1. BUDGETS AND BUDGETARY INFORMATION In accordance with the provisions of Section 29000-29144 of the Government Code of the State of California (the Government Code), commonly known as the County Budget Act, a District budget is adopted on or before October 2 for each fiscal year. Budgets are adopted for the General Fund on a basis of accounting, which is different from accounting principles generally accepted in the United States of America (US GAAP). For budgetary purposes, encumbrances and other reserves are also recorded as other financing uses at the time they are established. For encumbrances, this occurs at the time contracts or other purchase agreements are entered into. Other reserves are also recognized as other financing uses to indicate that certain assets (such as inventories) are not available for appropriation. Cancellations of encumbrances and other fund balance reserves are recorded as other financing sources for budgetary purposes. Under the budgetary basis, property tax revenues are recognized to the extent that they are collectible within one year after year-end. Under the modified accrual basis, property tax revenues are recognized only to the extent that they are collectible within 60 days. For budgetary purposes, investment income is recognized prior to the effect of changes in the fair value of investments. Under the modified accrual basis, the effects of such fair value changes have been recognized. Expenditures are controlled on the object level for all District budgets. Any excess of budgeted expenditures and other financing uses over revenue and other financing sources is financed by beginning available fund balance provided for in the County Budget Act. There were no expenditures that exceeded the related appropriations within any fund as of June 30, 2024. 2. RECONCILIATION OF OPERATIONS ON MODIFIED ACCRUAL BASIS TO BUDGETARY BASIS The District’s Statement of Revenues, Expenditures, and Change in Fund Balance – Governmental Funds has been prepared on the modified accrual basis of accounting in accordance with US GAAP. The following schedule is a reconciliation of the budgetary and US GAAP fund balance as of June 30, 2024 (in thousands): Fund balance - budgetary basis $ 1 50,558 Budgetary fund balance 6 70,836 Subtotal 8 21,394 Adjustments: Change in revenue accruals (30,880) Fund balance - US GAAP basis $ 7 90,514 28 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 F a c s i m il e: 310.792.4331 www.bcawr.com INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors of Los Angeles County Regional Park and Open Space District Los Angeles, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities of the Los Angeles County Regional Park and Open Space District (the “District”), a component unit of the County of Los Angeles, as of and for the fiscal year ended June 30, 2024, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated December 20, 2024. Report on Internal Control over Financial Reporting In planning and performing our audit of the basic financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 29 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of the basic financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Torrance, CA December 20, 2024 30