Annual Requirements. For a period of 30 years following the conversion of nursing facility beds 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 in the portion of the building converted with State grant funds, 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 .08D of this chapter, the grantee shall submit annually a quantitative statement of its performance in serving designated poverty-area 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 up to and including owner's acceptance of building 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, heirs, or assigns. Extension of Time for Completion; Other Changes. The applicant shall notify the Secretary promptly and, in any event, not more than 30 days after the applicant knew or should reasonably have known that the applicant is unable to encumber funds: In the manner approved by the Secretary; or Within 2 years of the appropriation by the Maryland General Assembly. 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 up to an additional 180 days to encumber funds. Expenditures. State funds may not be released until: The applicant has recorded a notice of the State's right of recovery, as approved by the Secretary, in the land records of Baltimore City or the county in which the property is located; and The applicant is in compliance with this chapter and all 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 Department's Office of Health Care Quality; and Take other action as appropriate.