TITLE 44: GOVERNMENT CONTRACTS, GRANTMAKING, PROCUREMENT AND PROPERTY MANAGEMENT
SUBTITLE B: SUPPLEMENTAL PROCUREMENT RULES
CHAPTER IX: DEPARTMENT OF TRANSPORTATION
PART 650 PREQUALIFICATION OF CONTRACTORS, AUTHORIZATION TO BID, AND SUBCONTRACTOR REGISTRATION
SECTION 650.180 BALANCE SHEET SCHEDULES
Section 650.180 Balance Sheet Schedules
In order to provide for the determination of ratings in as objective a manner as possible, the Department has established specific evaluations and classifications for a number of financial rating items. The value attached to the affected financial rating items shall be calculated by decreasing its face value by the discount established in this Part for that item. Where a valuation or classification materially affects an applicant's financial rating, and insufficient information has been submitted, the Department may ask for clarification or substantiation of a classification made by the accountant in preparing the statement. If schedules in the format established in the "Contractor's Statement of Experience and Financial Condition" are not completed, the maximum discounts will be applied. The various financial rating items and their corresponding discounts are delineated as follows:
a) Current Assets
1) Schedule A Cash
Cash includes currency, personal checks, bank drafts, money orders, cashiers checks and money on deposit with banks. The Department classifies cash as a current asset and attaches no discount, provided:
A) Deposits made for a sole proprietorship are held in the name of either the proprietor solely, or jointly with the proprietor's spouse.
B) Deposits made for a partnership are held either in the name of any of the general partners, or in the name of the partnership.
C) Deposits made for a corporation are held in the name of the corporation only.
D) Deposits are free of debt or obligation. Certificates of deposits and other cash assets that are pledged will be discounted by the amount of debt or obligation.
E) For a firm in an unaudited status, a financial release must be submitted by the firm's bank to verify balances as of the balance sheet date.
2) Schedule B Notes Receivable
Notes receivable will be evaluated and classified as follows:
3) Schedule C Certified and Cashier's Checks on Deposit
Deposits which may be included are those which are expected to be refunded within the current period or upon request of the depositor. An example is a deposit for a proposal guarantee. Purchase deposits on real estate and equipment will be included in determining the value of those fixed assets. All other deposits will be discounted 100 percent.
4) Schedule D Accounts Receivable Contracts
Accounts receivable from federal and State agencies for all contracts, and from local agencies for transportation contracts are considered as current assets regardless of the contract completion date. If the applicant has completed work not covered by current pay estimates and an item for such work is shown, the accountant shall obtain evidence in writing from the parties for whom the work was performed to justify such an item. Accounts receivable shall be evaluated as follows:
5) Schedule E Other Accounts Receivable
A) Any other account receivable, such as claims for tax refunds, will be carefully considered to determine whether it constitutes an authentic receivable and is collectible within one year.
B) Other accounts receivable shall be evaluated as follows:
C) Total discounts for accounts receivable will be offset by any allowance established for bad debt except in cases that involve 100% discounts.
D) In determining whether the status of a receivable is current, reference will be made to the previous statements submitted by the applicant. The appearance of an item on two or more successive statements indicates that the receivable is not current and perhaps uncollectible. Therefore, the receivable will be considered noncurrent.
6) Schedule F Stocks and Bonds
A) In listing stocks, bonds, investments, etc., in Schedule F, the accountant shall show as separate items the applicant's investments in other contracting firms.
B) Stocks, bonds and other investments are evaluated and classified as follows:
7) Schedule G Material in Stock
A) Inventories are evaluated and classified as follows:
B) In completing Schedule G, the accountant shall exclude the value of any material for which a material allowance has been paid.
8) Schedule H Cash Surrender Value of Life Insurance
Cash surrender value, not face value, of life insurance is considered a current asset provided the amount of any policy loan is considered as a current liability.
9) Schedule I Prepaid Items
All prepaid items will be discounted 100%.
10) Schedule J Relation of Billings and Costs
A) This schedule is established for the convenience of those contractors that report income for Federal tax purposes on the cash method (completed contract), but who prepare financial statements on the accrual method (percentage of completion).
B) Where the applicant classifies his billings in excess of costs as a fixed or other liability, the Department shall reclassify it as a current liability.
C) The discount applied to billings and costs by the Department is as follows:
b) Fixed Assets
1) Schedule K Real Estate
A) No consideration is given if title-held land and improvements are not verified by the certified public accountant for audited financial statements.
B) The allowance for real estate is the value of title-held land and improvements less long term encumbrances from commercial lending institutions times a factor of 50 percent.
C) The value may be based on an accredited real estate appraisal which is not more than 24 months old at the time of receipt by the Department. The appraiser's background, experience and references must be submitted. The information on the appraiser is not required if a tax assessment value is provided. The firm must request the use of the appraisal and note any deletions or additions (with corresponding values) since the appraisal date.
D) An applicant shall submit the Department's Certificate of Appraiser.
E) If an appraisal is not submitted or accepted, the allowance will be based on book value.
F) If the net appraised or book value is less than long term encumbrances, no reclassification of excess encumbrance will be made to current liabilities if current year's payments are provided for in current liabilities.
G) No allowances are given for oil leases, leasehold improvements, mineral leases or land lease prepayments.
A) In the case of audited financial statements, the accountant shall verify the correctness of the equipment schedule. All equipment which is still serviceable, even though fully depreciated, shall be included and listed by classification such as graders, scrapers, front-end loaders, bulldozers, cranes, etc.
B) The allowance for equipment is the value of owned construction equipment, including purchase deposits and capital leases, less long term encumbrances to commercial lending institutions times a factor of 70 percent. No value will be given for operating leases or rental equipment.
C) The value may be based on an accredited equipment appraisal (physical inspection) that is not more than 24 months old at the time of receipt by the Department. The appraiser's background, experience and references shall be submitted. The firm must request the use of the appraisal and note any deletions or additions (with corresponding values) since the appraisal date.
D) An applicant shall submit the Department's Certificate of Appraiser.
E) An appraisal that includes only the fair market value will be discounted 20% before being included in the calculation of an applicant's financial rating.
F) If an appraisal is not submitted or accepted, the allowance will be based on book value.
G) The accountant may restate any accelerated depreciated value to straight-line depreciation for determining book value.
H) If the net appraised or book value is less than long term encumbrances, no reclassification of excess encumbrance will be made to current liabilities if current year's payments are provided for in current liabilities.
c) Schedule L Other Current or Fixed Assets
If an applicant lists other assets not described in this Part, they shall be described in sufficient detail to be considered. Allowances for this category include, but are not limited to, the following:
(Source: Amended at 30 Ill. Reg. 16373, effective October 10, 2006)