Sec.10a-34-12. Adequacy of resources

(a) Financial resources. The financial resources of an institution shall be adequate for the effective achievement of the purposes and objectives of the institution and each of its programs, and for meeting obligations to the staff, students and all persons to be served by the institution.

(b) Financial management. An institution applying for approval shall clarify whether it will be operating on a nonprofit or proprietary basis. No part of the income of a nonprofit institution may be distributed to its directors or officers except for payment of reasonable compensation for expenses.

(c) Financial records. The financial records of an institution shall be maintained in such form that evaluation of its financial status is possible at any time. There shall be an annual financial statement which shall be audited annually by an independent public accountant authorized to practice under Chapter 389 of the General Statutes or by a state auditor. Copies of financial statements and audit reports shall be made available at the time of each institutional evaluation and otherwise upon request.

(d) New programs. An application for a new program shall include a complete and realistic plan for implementing and financing the proposed program during the first cycle of operation, based on projected enrollment levels; the nature and extent of instructional services required; the availability of existing resources to support the program; additional resource requirements; and projected sources of funding. If resources to operate a program are to be provided totally or in part through reallocation of existing resources, the institution shall identify the resources to be employed and explain how existing programs will be affected. Reallocation of resources to meet new and changing needs is encouraged, provided such reallocation does not reduce the quality of continuing programs below acceptable levels.

(e) Continuing programs. An application for relicensure or accreditation shall include a copy of the original resource plan and a status report on the implementation of the plan, including but not limited to actual enrollment levels; instructional services provided; resources allocated to the program; and revenues and expenditures.

(Effective March 7, 1986)