If a loan is in default, the department will, in its discretion, require a borrower to furnish annual financial statements consisting of a balance sheet, profit-and-loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit to determine whether the borrower has complied with the provisions of the loan, and conduct periodic inspection of collateral securing repayment of the loan.

(Eff. 9/11/85, Register 95)