All expenditures made by a local agency are subject to audit and review by the division before being admitted as charges to project revenue or to funds (in the form of loans or subsidies) advanced or to be advanced by the State. Expenditures not admitted are termed ineligible expenditures. Before incurring expenditures, local agencies should predetermine, as far as possible, their eligibility as development costs or operation expenses, in order to avoid the necessity of making adjustments at a later date.