California Health And Safety Code Section 1790

(a) Each provider that has obtained a provisional or finalcertificate of authority and each provider that possesses an inactivecertificate of authority shall submit an annual report of itsfinancial condition. The report shall consist of audited financialstatements and required reserve calculations, with accompanyingcertified public accountants' opinions thereon, the reserveinformation required by paragraph (2), Continuing Care Provider Feeand Calculation Sheet, evidence of fidelity bond as required bySection 1789.8, and certification that the continuing care contractin use for new residents has been approved by the department, all ina format provided by the department, and shall include all of thefollowing information: (1) A certification, if applicable, that the entity is maintainingreserves for prepaid continuing care contracts, statutory reserves,and refund reserves. (2) Full details on the status, description, and amount of allreserves that the provider currently designates and maintains, and onper capita costs of operation for each continuing care retirementcommunity operated. (3) Disclosure of any funds accumulated for identified projects orpurposes and any funds maintained or designated for specificcontingencies. Nothing in this subdivision shall be construed torequire the accumulation of funds or funding of contingencies, norshall it be interpreted to alter existing law regarding the reservesthat are required to be maintained. (4) Full details on any increase in monthly care fees, the basisfor determining the increase, and the data used to calculate theincrease. (5) The required reserve calculation schedules shall beaccompanied by the auditor's opinion as to compliance with applicablestatutes. (6) Any other information as the department may require. (b) Each provider shall file the annual report with the departmentwithin four months after the provider's fiscal yearend. If thecomplete annual report is not received by the due date, a onethousand dollar ($1,000) late fee shall accompany submission of thereports. If the reports are more than 30 days past due, an additionalfee of thirty-three dollars ($33) for each day over the first 30days shall accompany submission of the report. The department may, atits discretion, waive the late fee for good cause. (c) The annual report and any amendments thereto shall be signedand certified by the chief executive officer of the provider, statingthat, to the best of his or her knowledge and belief, the items arecorrect. (d) A copy of the most recent annual audited financial statementshall be transmitted by the provider to each transferor requestingthe statement. (e) A provider shall amend its annual report on file with thedepartment at any time, without the payment of any additional fee, ifan amendment is necessary to prevent the report from containing amaterial misstatement of fact or omitting a material fact. (f) If a provider is no longer entering into continuing carecontracts, and currently is caring for 10 or fewer continuing careresidents, the provider may request permission from the department,in lieu of filing the annual report, to establish a trust fund or tosecure a performance bond to ensure fulfillment of continuing carecontract obligations. The request shall be made each year within 30days after the provider's fiscal yearend. The request shall includethe amount of the trust fund or performance bond determined bycalculating the projected life costs, less the projected liferevenue, for the remaining continuing care residents in the year theprovider requests the waiver. If the department approves the request,the following shall be submitted to the department annually: (1) Evidence of trust fund or performance bond and its amount. (2) A list of continuing care residents. If the number ofcontinuing care residents exceeds 10 at any time, the provider shallcomply with the requirements of this section. (3) A provider fee as required by subdivision (c) of Section 1791. (g) If the department determines a provider's annual auditedreport needs further analysis and investigation, as a result ofincomplete and inaccurate financial statements, significant financialdeficiencies, development of work out plans to stabilize financialsolvency, or for any other reason, the provider shall reimburse thedepartment for reasonable actual costs incurred by the department orits representative. The reimbursed funds shall be deposited in theContinuing Care Contract Provider Fee Fund.