PASADENA HOUSING SUCCESSOR
CITY OF PASADENA, CALIFORNIA
FOR THE YEAR ENDED JUNE 30, 2024 BASIC FINANCIAL STATEMENTS Attachment H
PASADENA HOUSING SUCCESSOR
CITY OF PASADENA, CALIFORNIA
Basic Financial Statements
For the Year Ended June 30, 2024
PASADENA HOUSING SUCCESSOR
CITY OF PASADENA, CALIFORNIA
Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents
Page
Numbe
r
FINANCIAL SECTION
Independent Auditors’ Report ..................................................................................................................... 1
BASIC FINANCIAL STATEMENTS
Balance Sheet ............................................................................................................................................. 4 Statement of Revenues, Expenditures
and Changes in Fund Balances ................................................................................................................ 5 Notes to Financial Statements .................................................................................................................... 7
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary Comparison Schedule ............................................................................................................... 8 Note to Required Supplementary Information ............................................................................................. 9
SUPPLEMENTAL INFORMATION
Computation of Low- and Moderate-Income Housing Fund Excess/Surplus ............................................ 10 Independent Auditors’ Report on Internal Control over
Financial Reporting and on Compliance and other
Matters Based on an audit of Financial Statements
Performed in Accordance with Government Auditing Standards ............................................................... 11 Independent Auditors’ Report on Compliance and on
Internal Control over Compliance .............................................................................................................. 13
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
Pasadena Housing Successor
City of Pasadena, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Housing Successor special revenue fund (the “Fund”) of the City of Pasadena, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the 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 financial position of the Fund of the City, as of June 30, 2024, and the changes in its financ ial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
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 responsibilit ies 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 City and to meet our other ethical res ponsibilities, 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.
Emphasis of Matter
As discussed in Note 1, the financial statements present on ly the Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance wit h accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
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.
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 au diting standards and Government Auditing Standards will always detect a material misstatement when it exists.
To the Honorable Mayor and Members of the City Council
Pasadena Housing Successor
City of Pasadena, California
The risk of not detecting a material misstatement resu
lting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, mi srepresentations, 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:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x 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. x 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 City’s internal control. Accordingly, no such opinion is expressed. x 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 the Budgetary Comparison Schedule, as listed on the table of contents, 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 informat ion 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.
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial st atements, is required by t he 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. Our opinion on the basic financial statements is not affected by this missing information.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that colle ctively comprise
the Fund’s basic financial statements. The accompanying Computation of Housing Successor Excess/Surplus is presented for purposes of additional analysi s and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 2 To the Honorable Mayor and Members of the City Council Pasadena Housing Successor
City of Pasadena, California
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic finan cial statements or to the basic financial statements themselves, and other additional procedures in accordan ce with auditing standards generally accepted in the United States of America. In our opinion, the Computation of Housing Successor Excess/Surplus is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23,2024 on our consideration of the City’s internal control over the Fund’sfinancial reporting and on 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 pr ovide an opinion on the effectiveness of the City ’s internal control over the Fund’sfinancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City ’sinternal control over the Fund’sfinancial reporting and compliance.
Irvine, California
December 23,2024
3 PASADENA HOUSING SUCCESSOR
Balance Sheet
June 30, 2024
ASSETS
Pooled cash and investments 707,548$
Receivables:
Notes and loans 27,137,599
Allowance for uncollectible notes and loans (27,137,599) Accrued interest 10,028
Total Assets 717,576$
LIABILITIES
Accounts payable 707$
Total Liabilities 707
FUND BALANCES
Restricted for:
Housing activities 716,869
Total Fund Balances 716,869
Total Liabilities and Fund Balances 717,576$
Housing
Successor
Fund
See Notes to Financial Statements.
4 PASADENA HOUSING SUCCESSOR
Statement of Revenues, Expenditures
and Changes in Fund Balances
Year Ended June 30, 2024
REVENUES
Use of money and property 134,868$
Miscellaneous and other revenue 137,828
Total Revenues 272,696
EXPENDITURES
Current:
Housing 577,071
Total Expenditures 577,071
Net Change in Fund Balances (304,375)
Fund Balances, Beginning of Year 1,021,244
Fund Balances, End of Year 716,869$
Housing
Successor
Fund
See Notes to Financial Statements.
5 PASADENA HOUSING SUCCESSOR
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The accompanyin
g financial statements present only the Pasadena Housing Successor, a Special Revenue Fund of the City of Pasadena, California (the City) and do not include any other funds of the City. These financial statements are exclusively for the Pasadena Housing Successor and do not purport to, and do not, present fairly the financial position and changes in the financial position of the City. The City's basic financial statements are available at City Hall.
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. The Bill impacted the reporting entity of the City of Pasadena that previously had reported a redevelopment agency within the report entity of the City as a blended component unit.
On February 11, 2013, and in accordance with California Health and Safety Code Section 34176, City Council of Pasadena elected that the City retain the housing assets and housing function of the former redevelopment agency. The City continues to report the housing assets and functions in the government special revenue fund designated City Housing Successor.
The Housing Successor accounts for transactions related to affordable housing activities. Revenues include bond proceeds held by the Pasadena Successor Agency that will be transferred for use into this fund for affordable housing activities, contributions from the City of Pasadena, investment earnings, rental income, loan repayments and interest income.
B. Basis of Presentation
The Housing
Successor's financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The financial statement
s are presented using the modified accrual basis of accounting. 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 the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The Housing Successor uses sixty-day availability period. The Housing Successor accrues the following revenue type:
investment earnings.
D. Assets, Liabilities and Fund Balance
1. Cash and Investments
Investments are repo
rted in the accompanying financial statements at fair value based on quoted market prices, except for certain certificates of deposit, money market investments that mature within one year of acquisition and investment contracts that are reported at cost because they are not tr ansferable, they have terms that are not affected by changes in market interest rates, and provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors. 6 PASADENA HOUSING SUCCESSOR
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Both realized and unrealized changes in fair value that occur during a fiscal year are recognized and recorded as net changes in fair value of investments. Investment earnings include interest earnings and all other investment income.
The City pools cash and investments of all funds, except for certain fund specific City held portfolios, deferred compensation assets, and assets held by fiscal agents. The Successor Housing fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance.
2. Fund Balance
In the fund financial statements, The Housing Successor fund balance is made up of the following components:
x
Restricted fund balance is the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors.
NOTE 2: CASH AND INVESTMENTS
As of June 30, 2024, cash and investments were reported in the accompanying financial statements as follows:
707,548 $
707,548 $
Equity in Pasadena Cash and Investment Pool
Total Cash and Investments
A. Equity in the Cash an
d Investment Pool of the City of Pasadena
The Housing
Successor has no separate bank accounts or investments other than its equity in the cash and investment pool managed by the City. This pool is governed by and under the regulatory oversight of the Investment Policy adopted by the City Council of the City. The Housing Successor has not adopted an investment policy separate from that of the City. The fair value of the Housing Successors investment in this pool is reported in the accompanying financial statements at amounts based upon the Housing Successors prorate share of the fair value calculated by the City for the entire City portfolio. The balance available for withdrawal is based on the accounting records maintained by the City.
B. Disclosures Relating to the Investment Policy. Interest Rate Risk, Cred; and Custodial Credit Risk Additional disclosures
related to the investment policy, interest rate risk, credit risk and custodial credit risk are available in the City of Pasadena’s Annual Comprehensive Financial Report.
NOTE 3: NOTES RECEIVABLE
The City of Pasadena Housing Successor made loans to assist in the development of affordable rental housing projects and the purchase of homes by homebuyers. These loans are secured by trust deeds and were funded with redevelopment low-moderate income housing set-aside funds. These notes have various terms, including maturities ranging from 5 to 45 years and interest rates ranging from 1.5% to 11%. Due to the uncertainty of their collectability at June 30, 2024, the City has recorded an allowance for uncollectible of $27,137,599. At June 30, 2024, the long term receivable balance was $27,137,599. 7 PASADENA HOUSING SUCCESSOR
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 1,021,244$ 1,021,244 $ 1,021,244 $ -$ Amounts Available for Appropriations (Inflows):
Use of money and property - - 134,868 134,868
Miscellaneous and other revenue 118,853 118,853 137,828 18,975 Total Amounts Available for Appropriations 1,140,097 1,140,097 1,293,940 153,843 Charges to Appropriations (Outflows):
Housing 251,300 854,421 577,071 277,350 Total Charges to Appropriations 251,300 854,421 577,071 277,350 Budgetary Fund Balance, June 30 888,797$ 285,676$ 716,869$ 431,193$ See Notes to Required Supplementary Information.
8 PASADENA HOUSING SUCCESSOR
Note to Required Supplementary Information
For the Year Ended June 30, 2024
NOTE 1:
BUDGET
The City Council is required to adopt an annual budget resolution by June 30 of each fiscal year for the Pasadena Housing Successor. The budget is adopted on a basis that does not differ materially from accounting principles generally accepted in the United States of America. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount is the department level and within a single fund. The City Manager may authorize transfers of appropriations within a department so long as it is within a single fund. Supplemental appropriations during the year must be approved by the City Council. All unencumbered appropriations lapse at fiscal year-end. In order to be an encumbered appropriation, there must be either an approved purchase order or contract in force as of June 30. 9 PASADENA HOUSING SUCCESSOR
Computation of Low - and Moderate - Income
Housing Fund
Excess/Surplus
Opening Fund Balance 1,021,244$ 716,869$
Less Unavailable Amounts: - -
Available Housing Successor Funds 1,021,244 716,869 Limitation (Greater of $1,000,000 or four years deposits) Aggregate amount deposited for last four years: **
2022 - 2023 N/A 388,064$
2021 - 2022 344,582 344,582
2020 - 2021 366,012 366,012
2019 - 2020 1,443,006 1,443,006
2018 - 2019 848,443 N/A
Total 3,002,043$ 2,541,664$
Base Limitation 1,000,000$ 1,000,000$
Greater amount 3,002,043$ 2,541,664$
Computed Excess/Surplus None None
*
**
June 30, 2024
Please note: In accordance with HSC34176.1(d) If a housing successor has an excess surplus, the housing successor shall encumber the excess surplus for the purposes described in para graph (3) of subdivision (a) or transfer the funds pursuant to paragraph (2) of subdivision (c) within three fiscal years. If t he housing successor fails to comply with this subdivision, the housing successor, within 90 days of the end of the third fiscal year, shall transfer any excess surplus to the Department of Housing and Community Development for expenditure pursuant to the Multifamily Housing Program or the Joe Serna, Jr.
Farmworker Housing Grant Program. For purposes of this subdi vision, "excess surplus" shall mean an unencumbered amount in the account that exceeds the greater of one million dollars ($1, 000,000) or the aggregate amount deposited into the account during the housing successor's preceding four fiscal years, whichever is greater.
The City has elected to uzilize preceding four years without the current fiscal year, as advised by legal counsel, commencing with Fiscal Year 2020.
Low and Moderate
Housing Funds
All Project Area
July 1, 2024
Low and Moderate
Housing Funds
All Project Area
July 1, 2023
10 LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Pasadena, California
We have audited, in accordance with the 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, the financial statements of the Housing Successor special revenue fund of the City of Pasadena, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Fund’s basic financial statements, and have issued our report thereon dated December 23,2024
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the requirements of California Health and Safety Code Applicable to California Housing Successor Agencies, noncompliance with which could have a direct and material effect on the financial statements.
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. 11 To the Honorable Mayor and Members of the City Council City of Pasadena, California
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 Fund’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 Fund’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
December 23, 2024
12 LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE
AND ON INTERNAL CONTROL OVER COMPLIANCE
To the Honorable Mayor and Members of the City Council
Pasadena Housing Successor
City of Pasadena, California
Report on Compliance
Opinion
We have audited the accompanying financial statemen ts of the Pasadena Housing Successor, California (the “Housing Successor”)’s compliance with the types of compliance requirements identified as subject to audit in the California Health and Safety Code sections appli cable to the California Housing Successor Agencies (the “HSC”)that could have a direct and material effect on the City’ of Pasadena’s (the “City”)Low-Moderate Income Housing Program (the “Program”)for the year ended June 30, 2024.
In our opinion, the City complied, in all ma terial respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Program for the year ended June 30, 2024.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of the HSC. Our responsibilities under those standards and the HSC are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for the Pr ogram. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for complian ce with the requirements referred to above and for the design, implementation, and maintenance of effective internal contr ol over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Program.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncom pliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. 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, Government Auditing Standards, and the HSC will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that result ing from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 13 To the Honorable Mayor and Members of the City Council Pasadena Housing Successor
City of Pasadena, California
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the Program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the HSC, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of ma terial noncompliance, 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 City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. x Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstan ces and to test and report on internal control over compliance in accordance with the HSC, but not for the purpose of expressing an opinion on the effectiveness of the City’s internalcontrol over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficien cies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operat ion of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of co mpliance requirement of the Program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the Program will not be prevente d, or detected and corrected, on a timely basis. A significant deficiency in internal control over complianceis a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requiremen t of the Program that is less severe than a material weakness in internal control over com pliance, yet important enough to meri t attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpos e described in the Auditor’s Responsibilities for the Audit of Compliance section abov e and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitation s, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the res ults of that testing based on the require ments of the HSC. Accordingly, this report is not suitable for any other purpose.
Irvine, California
December 23, 2024
14