Section 575.700  Terms and Conditions of Loan Agreement

a)         Loan proceeds under this program shall be used exclusively for the purposes listed in Section 575.200 of this Part and shall be expended in accordance with the approved application and the participant's policies and procedures related to such expenditures.  In the event that the loan proceeds are not expended in the manner approved, then the participant, upon written notification from the State Board of Education, shall be required to submit, by the next payment due date, payment of the outstanding principal of the loan and the amount of the interest accrued as of that payment due date.

b)         Loan proceeds shall be obligated no later than six months following receipt of the loan.

c)         Use of loan proceeds shall be accounted for in accordance with the rules of the State Board of Education at 23 Ill. Adm. Code 100 (Requirements for Accounting, Budgeting, Financial Reporting, and Auditing) or, for participants not subject to those rules, in accordance with generally accepted standards of governmental accounting principles.

d)         Loan recipients shall submit to the State Board of Education a report detailing how the loan proceeds were used.  This expenditure report, to be submitted on a form supplied by the State Board of Education, shall be due not later than nine months following receipt of the loan.

e)         Subject to Section 575.400(b)(5) of this Part, in the event of default that is not cured within 90 calendar days, the State Board of Education shall deduct the amount owed from the participant's next payment of General State Aid.  The participant shall be ineligible for additional loans until good standing has been restored; however, the chartering school district of a charter school participant or the school districts participating in a vocational education cooperative shall be allowed to apply for loans on behalf of their respective school districts.

(Source:  Amended at 33 Ill. Reg. 11639, effective July 22, 2009)