14b NCAC 15A .0902      MAINTENANCE OF WORKING CAPITAL

(a)  A local board shall set its working capital requirements at not less than two weeks' average gross sales of the latest fiscal year nor greater than:

(1)           four months average of the latest fiscal year for boards with gross sales less than one million five hundred thousand dollars ($1,500,000);

(2)           three months average of the latest fiscal year for boards with gross sales greater than or equal to one million five hundred thousand dollars ($1,500,000) and less than fifty million dollars ($50,000,000); and

(3)           two months average of the latest fiscal year for boards with gross sales equal to or greater than fifty million dollars ($50,000,000).

(b)  A local board is considered insolvent if all of the following conditions apply:

(1)           the local board does not adhere to the working capital requirements as stated in Paragraph (a) of this Rule;

(2)           the local board's current assets are less than the local board's current liabilities and the current portion of long-term debt;

(3)           the local board is unable to pay its debts as they fall due; and

(4)           the Commission determines the projected revenues will not meet the projected expenses in the next fiscal year based upon factors including statewide trends in sales and revenues, the status of the local economy, and the local board's projected expenses based upon the prior fiscal year's expenses.

(c)  As used in this Rule, "long-term debt" means the loans and financial obligations lasting over one year.

History Note:        Authority G.S. 18B‑100; 18B-203(a)(20); 18B-207; 18B-702(g),(u); 18B-805(d);

Eff. January 1, 1982;

Amended Eff. November 1, 2011; July 1, 1992; June 1, 1988; May 1, 1984;

Transferred and Recodified from 04 NCAC 02R .0902 Eff. August 1, 2015;

Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. August 22, 2015;

Amended Eff. December 1, 2019.