Okla. Admin. Code § 565:10-27-2

Current through Vol. 42, No. 8, January 2, 2025

Section 565:10-27-2 - Financial stability

(a) An Applicant shall have and maintain:

(1) A ratio of current assets to current liabilities of not less than 1:1

(2) Adequate financial resources to meet its responsibilities and to ensure the continuity of services as demonstrated by:

(A) A positive net worth or net equity on the latest Balance Sheet;

(B) A positive cash or total liquid assets balance on the latest Balance Sheet; and

(C) With cash or total liquid assets sufficient to pay three (03) months of projected expenses without the receipt of any student tuition or fees monies.

(b) If an Applicant does not comply with the financial stability requirements, the Board may require the Applicant to evidence an additional safeguard(s), submit additional periodic financial or other documentation, or meet with the OBPVS or the Board.

(c) Additional documentation may include but not be limited to:

(1) Interim (monthly or quarterly) financial statements that may be internally prepared and signed as true and correct by an appropriate school official

(2) Interim financial statements to be prepared by a CPA

(3) Being required to secure and maintain a bond or certificate of deposit in an amount exceeding the otherwise allowed minimum amount.

(d) Safeguards or circumstances that may mitigate the need for an Applicant to be required to submit periodic financial or other documentation or to meet with the OBPVS or the Board may include, but not be limited to:

(1) An Owner's placement of a voluntary irrevocable letter of credit to meet specifications of the OBPVS

(2) An Owner's personal financial guaranty to meet the obligations of the school

(3) The Applicant being related to a larger entity with a long-standing reputation and substantial financial resources.

(e) Beginning not later than the second annual relicensing following the effective date for rule changes, a licensed school shall have and maintain:

(1) A ratio of current assets to current liabilities of not less than 1:1

(2) Adequate financial resources to meet its responsibilities and to ensure the continuity of services as demonstrated by:

(A) A positive cash or total liquid assets balance on the latest Balance Sheet; and

(B) A positive net worth or net equity on the latest Balance Sheet.

(f) Upon the failure of a school to comply with the financial stability requirements, the Board may require the school bond or certificate of deposit to be increased as provided in 565:10-9-1(a). To further assure adequate financial resources, the owners(s) may be permitted or required to file a personal financial statement along with a notarized statement stating that the owner(s) shall take financial responsibility for the school and shall furnish adequate financial resources for its operation, or to document to the OBPVS the placement of another safeguard(s).

Okla. Admin. Code § 565:10-27-2

Added at 12 Ok Reg 2905, eff 7-13-95; Amended at 15 Ok Reg 2782, eff 7-1-98; Amended at 19 Ok Reg 2835, eff 7-2-02 (emergency); Amended at 20 Ok Reg 2489, eff 7-11-03

Amended by Oklahoma Register, Volume 32, Issue 24, September 1, 2015, eff. 9/11/2015

Amended by Oklahoma Register, Volume 33, Issue 24, September 1, 2016, eff. 9/12/2016