(a) General.

1. (1) The borrower may request the disbursement of loan funds by providing necessary documents as appropriate and consistent with this part.
2. (2) Disbursements will only be made for costs incurred pursuant to work done on the project as described in the engineering report and plans and specifications approved by the Arkansas Natural Resources Commission staff.

3. (3) Disbursements shall be for:

   1. (A) Engineering and other professional services;
   2. (B) Bond issuance costs;
   3. (C) Interest and financing fees during construction;
   4. (D) Costs to administer the project by the borrower;
   5. (E) Equipment costs;
   6. (F) Construction costs including material stored on site less retainage; and
   7. (G) Other project-specific costs.
4. (4) These costs are subject to an eligibility determination of the commission staff according to 15 CAR § 26-1001 et seq.

(b) Procedure. Provided the borrower meets the provisions of the bond purchase agreement, bond ordinance, and this part, disbursements will be made to the borrower under the following conditions:

1. (1)

   1. (A) The disbursement request will be:

(i) Of the form and type required by the commission staff; and

1. (ii) Supplemented with copies of invoices for each cost incurred.

   1. (B) The borrower shall maintain complete documentation of all project costs for audit purposes.
   2. (C) The borrower shall be responsible for maintaining financial control of the project by carefully reviewing all disbursement requests and supplemental documentation before submitting the disbursement request to the commission staff.
   3. (D) The borrower will certify each disbursement request before submittal;

2. (2)

   1. (A) The consulting engineer shall submit the construction contractor's certified progress estimates for each construction contract with the disbursement request.
   2. (B) The estimate shall include a certification by the contractor that it has complied with all labor standards.
   3. (C) Retainage will be according to state law, Arkansas Code § 22-9-604;

3. (3)

   1. (A) Disbursements will not be processed more often than monthly and must be received by the date established by the commission staff.
   2. (B) No disbursements will be made after the estimated completion date specified in the bond purchase agreement unless specifically waived in writing by the commission staff;

4. (4)

   1. (A) Payment for engineering and other professional services during construction shall be based on costs incurred to date up to ninety-five percent (95%) of the approved contract amount, after which no further amounts will be disbursed until the:

      1. (i) Construction is certified complete by the commission staff; and
      2. (ii) Final construction disbursement request has been presented to the commission staff.
   2. (B) Disbursements for engineering project performance fees will be made as approved by the commission staff;
5. (5) Disbursements will not be made for work done by the borrower's employees unless prior approval is provided by the commission staff subject to the requirements of 15 CAR § 26-103(f), force account;
6. (6) The borrower shall promptly remit each disbursement to the firm or individual to whom payment is due; and
7. (7) Periodically during construction, the Arkansas Development Finance Authority may disburse funds from the borrower's loan account to pay the interest and financing fee accrued on the outstanding balance of the loan.