Annual Requirements. For a period of 30 years following the completion of conversion, acquisition, renovation, capital equipping, or construction of an assisted living facility involving the State grant funds in this chapter, a grantee shall file a written statement annually with the Department containing the following material: A recent certified, audited profit-and-loss statement and balance sheet for the facility; Volume of service at the assisted living facility, such as days of service rendered to clients; and Other supplemental information required by the Secretary. For a period of 30 years following the completion of a project that receives poverty funding under Regulation .07D of this chapter, the grantee shall submit annually a quantitative statement of its performance in serving poverty-designated clients. Insurance Requirements. Upon acquisition of the project, the grantee shall provide an all-risk insurance policy that: Provides coverage for an amount at least equal to the replacement cost of the facility; Names the State as a loss payee; Protects the State's interest in the project; and Requires notification of the Office of Capital Planning, Budgeting, and Engineering Services, 201 West Preston Street, Baltimore, Maryland 21201 of any: Cancellation of policy; Material loss covered by the policy; or Material changes in the policy. The grantee shall provide builders' risk insurance coverage during the entire period of project construction or renovation that: Names the State as a loss payee; Protects the State's interest in the building; Provides an amount at least equal to the replacement cost of the facility; and Requires evidence of the coverage be submitted to the Office of Capital Planning, Budgeting, and Engineering Services, 201 West Preston Street, Baltimore, Maryland 21201. Upon completion of a project, the grantee shall maintain, for a period of 30 years, an all-risk insurance policy that: Provides coverage for an amount at least equal to the replacement cost of the facility; Names the State as a loss payee; Protects the State's interest in the project; Requires notification of the Office of Capital Planning, Budgeting, and Engineering Services, 201 West Preston Street, Baltimore, Maryland 21201 of any: Cancellation of policy; Material loss covered by the policy; or Material changes in the policy. The grantee shall maintain and submit evidence of this insurance annually, for a period of 30 years, to the Office of Capital Planning, Budgeting, and Engineering Services and to the State Treasurer’s Office, Insurance Division. During the entire period of work on the project and for a period of 30 years after the project has been completed or acquired, the Department may audit the business records of the applicant and the applicant's agents, contractors, or assigns. Extension of Time for Completion, and Other Changes. The applicant shall promptly notify the Secretary, if the applicant is unable to encumber funds: In the manner approved by the Secretary; or Within 2 years of the appropriation by the Maryland legislature. For good cause the Secretary may grant a request by the applicant for a change in the manner or time for encumbrance of funds, including an extension of time. Upon a demonstration of good cause for an extension of time, the Secretary may grant an extension of an additional 180 days to encumber funds. Absent good cause, the applicant shall be ineligible for grant funds. The applicant may apply for funds in future years. Expenditures. State funds may not be released until the applicant has a notice of the right of recovery recorded in the land records of the county or Baltimore City in which the property is located, and the applicant is in compliance with this chapter and applicable federal and State laws. Penalties. If the grantee does not comply with this chapter and all other applicable State and federal laws, the Secretary may: Refuse to consider the grantee for any future funding under the Act; Require an audit of the grantee; Notify the Office of Health Care Quality; and Take other action as appropriate.