SECTION 310:620-3-1. Financial

  The applicant shall provide proof of sufficient financial resources to complete the acquisition and to maintain services and staffing that meet licensure standards for at least twelve (12) months following acquisition.

(1)   Financial proof for acquisition. Proof of sufficient financial resources to complete the acquisition shall be provided in the following forms, as applicable:

(A)   For conventional, bank, seller-carried, third party, or bond financing, a statement of the proposed principal amount, interest rate and repayment terms, and that the applicant has access to the required funds, signed under oath by a representative of the lending institution, seller, third party, or authority;

(B)   For equity financing:

(i)   An attested balance sheet for the acquiring party that is dated within the past twelve (12) months and that reflects cash or cash equivalents sufficient to fund the project; or

(ii)   A certificate of deposit or other proof that funds are available and have not been pledged for some other purpose.

(C)   For financing or other funding from or guaranteed by a third party that is not duly authorized or chartered as a bank:

(i)   An attested balance sheet, certificate of deposit or other attested proof that is dated within the past twelve (12) months for the third party, unless the third party is a licensed insurer or surplus lines insurer, the United States of America, a state of the United States of America, or an agency or instrumentality thereof; and

(ii)   Copies of organizational documents and contracts necessary to substantiate the relationship between the applicant and the third party.

(2)   Projected Budget. Each application shall include a projected budget of revenues and expenses for the first twelve (12) months of operation of the facility after the anticipated issuance of the Certificate of Need. The Department may require the applicant to justify the difference between the applicant's projected budget and the facility's expenses and revenues as reported to the Oklahoma Health Care Authority pursuant to 56 O.S. Section 2002 or OAC 317:30-5.

(3)   Balance sheets. All balance sheets shall include a release authorizing the Department to verify the financial information submitted in the certificate of need application. The Department may make independent inquiry into the financial condition of the applicant.

(4)   Financial proof for services and staffing. To ensure the maintenance of services and staffing, the applicant shall prove the availability of reserves equivalent to the average monthly projected expenses, in addition to funds needed to complete the acquisition. The amount of the average monthly expenses shall be calculated based on a per-month average of the projected twelve-month budget of revenues and expenses submitted with the application. Proof of the availability of reserves shall conform to the following:

(A)   For reserves to be provided or maintained through letter of credit, line of credit, or conventional, bank or bond financing:

(i)   A statement of the proposed principal amount, interest rate and repayment terms, and that the applicant has access to the required funds, signed under oath by a representative of the lending institution or authority;

(ii)   A statement of provisions for terminating or rescinding a letter of credit or line of credit;

(B)   For reserves to be maintained through the applicant's equity or net worth:

(i)   An attested balance sheet that is dated within the past twelve (12) months for the acquiring party and that reflects cash or cash equivalents sufficient to meet the one-month reserves requirement; or

(ii)   A certificate of deposit or other proof that funds are available and have not been pledged for some other purpose;

(C)   For reserves to be funded or guaranteed by a third party that is not duly authorized or chartered as a bank:

(i)   An attested balance sheet, certificate of deposit or other attested proof that is dated within the past twelve (12) months for the third party, unless the third party is a licensed insurer or surplus lines insurer, the United States of America, a state of the United States of America, or an agency or instrumentality thereof; and

(ii)   Copies of organizational documents and contracts necessary to substantiate the relationship between the applicant and the third party.

(5)   Attested documents. For the purposes of this section, the term "attest" shall have the meanings as defined in 59 O.S. Supp. 2004, Section 15.1A.

[Source: Amended at 12 Ok Reg 3065, eff 7-27-95; Amended at 14 Ok Reg 2261, eff 6-12-971; Amended at 18 Ok Reg 2496, eff 6-25-01; Amended at 19 Ok Reg 2079, eff 6-27-02; Amended at 22 Ok Reg 2414, eff 7-11-05]