Okla. Admin. Code § 612:25-4-27

Current through Vol. 41, No. 19, June 17, 2024

Section 612:25-4-27 - Initial inventory and supplies

(a)Initial inventory. A licensed manager may acquire initial merchandise for resale by purchasing it with his/her own funds, utilizing start-up assistance/client services that may be available from DRS or other public and private sources, or use of a merchandise loan provided by the State Licensing Agency (SLA). When the SLA provides the manager a merchandise loan for initial merchandise, the manager is not allowed to utilize DRS start-up assistance for same purpose.

(b)Merchandise loan. When necessary to enable a licensed manager to acquire initial merchandise inventory, the SLA may extend a merchandise loan subject to the following terms:

(1) The amount of the loan will be determined by the SLA in consultation with the licensed manager and based on an assessment of merchandise necessary to initiate sales and the availability of funds.

(2) The total amount of the loan will not exceed the average of the prior year's inventories without approval from the BEP operations coordinator. This means the prior year's inventories will be summed and then divided by twelve to obtain the average.

(3) All merchandise purchased and placed on a merchandise loan must have prior approval by the SLA. The SLA will not make multiple purchases from any purveyor.

(4) The incoming licensed manager, BEP business consultant and BEP operations coordinator will determine what may be purchased from the existing stock of the outgoing facility manager. Only salable merchandise may be purchased.

(5) A merchandise loan must be repaid to the SLA by a licensed manager in monthly installments of no less than two percent of gross sales to pay loan balance in full. A licensed manager shall not allow the facility inventory level to fall below that of the balance of the merchandise loan and are subject to disciplinary action should this occur. Managers receiving loans will sign a merchandise security agreement that will be retained on file by DRS and released to the manager when loan repayment is complete along with a letter from the BEP Operations Coordinator officially notifying the licensed manager of their full repayment of the loan.

(6) When a merchandise loan is secured by stock, a licensed manager may not permit the ownership of the stock to vest in any person or organization other than the SLA.

(7) When a licensed manager leaves a business enterprise, any remaining merchandise loan balance (and other unmet obligations to the SLA) will be subtracted from the ending inventory to determine the manager's equity in the ending stock.

(8) Merchandise loans are not allowed for satellite facilities unless extenuating circumstances prevail and only after approval of BEP Operations Coordinator in consultation with the ECM chair person.

(9) Merchandise loans for existing managers currently operating an "A" or "B" classified facility as their primary may be granted at the discretion of the BEP Operations Coordinator in consultation with the ECM chair person.

(c)Failure of licensed manager to repay loan.

(1) If a licensed manager's merchandise loan payment is not received in the BEP office within five days after the due date, the licensed manager will be placed on probation and is not eligible to make application into the selection process. Merchandise loan payments are due at the time monthly reports and set-aside payments are due. (612:25-6-22)

(2) If a licensed manager's merchandise loan payment remains delinquent through the succeeding month and is not received in the BEP office within five days after the succeeding month's due date, the BEP operations coordinator will recommend suspension or termination of the operator's agreement by the SLA director unless an alternate repayment schedule has been approved by the SLA. The SLA will initiate action to collect a remaining merchandise loan balance when a loan payment is two months overdue.

(3) When a licensed manager leaves the program for any reason, the merchandise loan is due in full unless arrangements are made with the SLA to divide the balance into twelve (12) equal payments that will be due on the first day of each month.

(d)Second merchandise loan.

(1) Under documented extreme circumstances, a licensed manager who has paid off his/her previous merchandise loan may receive a second merchandise loan for the same facility when it has been determined that the loan is necessary to allow the licensed manager to remain in his/her facility.

(2) If a licensed manager requires a second merchandise loan while the first loan is still outstanding, other than for the expansion of his/her facility, he/she will be placed on probation until one of the loans is paid in full.

(3) Second merchandise loans for the purpose of facility expansion will be limited to 50% of the cost of additional salable merchandise needed.

(e) It is the incoming Licensed Manager's choice to accept or reject any and or all merchandise or personal property from the out-going Licensed Manager, however, a merchandise loan cannot be used to purchase property. The incoming Licensed Manager must notify the Business Consultant and the outgoing Licensed Manager of his/her intent of purchasing outgoing manager's inventory seven (7) days prior to the day of the inventory count.

(f) If the incoming manager rejects all of the outgoing manager's merchandise, the outgoing manager may be allowed two weeks to reduce his/her inventory, before transfer of facility. This two week period must be approved by the BEP Operations Coordinator in consultation with the ECM chair.

(g) In order to expedite the processing of merchandise loans, the outgoing manager must provide a merchandise price list to the business consultant and incoming manager seven (7) days before the day of the inventory count.

Okla. Admin. Code § 612:25-4-27

Added at 14 Ok Reg 1472, eff 7-1-97; Amended at 22 Ok Reg 2222, eff 7-1-05; Amended at 29 Ok Reg 1447, eff 7-1-12

Amended by Oklahoma Register, Volume 31, Issue 24, September 2, 2014, eff. 9/12/2014

Amended by Oklahoma Register, Volume 32, Issue 23, August 17, 2015, eff. 8/27/2015

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022