BS5770 - Financial Due Diligence - 260E Projects

1. Institutional Regulation
   
   Firms applying for training under section 260E must undergo an examination of their financial statements for the purpose of projecting the long-term likelihood that they will be able to repay the debt.
    
2. Procedure
   1. The responsible business and industry training consultant will provide Business Services with the completed Due Diligence Information Form and the most recent two-years audited financial statements.
   2. Upon receipt, the financial statements shall be mailed to our financial consultants for the performance of agreed upon financial analysis procedures, which may include the use of the modified Altman Z Score and RMA analysis.
      1. The following Schedule details the analytic scores and the resulting number of years for which the tax driver will be used to fund a training program.

         Altman Z Score	RMA Average	Tax Driver
         Over 2.67	N/A	10 years
         1.81 to 2.67	Less than 2.6	10 years
         1.81 to 2.67	2.6 or over	5 years
         Less than 1.81	N/A	None

      2. Business Services will independently review the firm’s financial statements, the financial consultant’s findings and make a recommendation for the continuation of the application to Business & Industry Training and to the Special Funds Accountant.
   3. On a case-by-case basis, additional procedures may be performed. These procedures may include analysis of interim financial statements, interviews with company executives, stick market analysis, lien search or other procedures as deemed appropriate by the Vice President, Business Services.
   4. The President retains the right to consider other pertinent financial information in his final recommendation to the Board of Directors.