The Director has all powers necessary and proper to fully and effectively execute the provisions of this Code and has the general duty to implement this Code. The Director's powers and duties include, but are not limited to, the following:
(2) The Director shall examine and inspect each licensee at least once each calendar year. The examination shall cover all aspects of the grain operations of the licensee, including but not necessarily limited to options trades and programs and farmer marketing programs. The Department shall perform one of 3 types of examinations of licensees.
(A) Basic Examination. The basic examination shall be performed when the licensee's merchandising and trade practices involve minimal market risk, which might include those situations in which the licensee uses cash back-to-back contracts, traditional hedges with the Chicago Board of Trade, and price later contracts. The specific components and guidelines of the basic examination are to be as provided by rule, but shall at a minimum include verification of grain quality and quantity, reconciliation of records with grain transactions, computation of current ratios, and checking of posting procedures for accuracy. (B) Intermediate Examination. The intermediate examination shall be performed when the licensee's merchandising and trade practices involve an increased amount of risk, which might include those situations in which the licensee uses guaranteed minimum price contracts, purchases options, or writes options. This examination shall include all those things performed as part of the basic examination. In addition, the specific components and guidelines of the intermediate examination are to be as provided by rule, but shall at a minimum include verification of grain quality and quantity, reconciliation of records with grain transactions, and checking of posting procedures for accuracy. (C) Advanced Examination. The advanced examination shall be performed when the licensee's merchandising and grain trading practices involve the most risk, which might include those situations in which the licensee has discretionary trading authority from producers, uses premium offer type contracts, or has contracts with producers that cover multiple crop years. This examination shall include all those things performed as part of the basic examination and the intermediate examination. In addition, the specific components and guidelines of the advanced examination are to be provided by rule, but shall at a minimum include grain market risk evaluation and appropriate levels thereof for the licensee and adequacy of internal controls. Using these guidelines, the Department shall determine the level of examination to be applied to each licensee. In addition, the Department may, in its sole discretion, engage the services of accounting experts, grain risk management experts, or both as part of any intermediate or advanced examination. The Regulatory Fund may be used as a source of payment for the services of accounting experts, grain risk management experts, or both.
The Director may inspect the premises used by a licensee at any time. The books, accounts, records, and papers of a licensee are at all times during business hours subject to inspection by the Director. Each licensee may also be required to make reports of its activities, obligations, and transactions that are deemed necessary by the Director to determine whether the interests of producers and the holders of warehouse receipts are adequately protected and safeguarded. The Director may take action or issue orders that in the opinion of the Director are necessary to prevent fraud upon or discrimination against producers or depositors of grain by a licensee. The sole and exclusive means of halting the warehouse and grain dealer business activities of a licensee, however, are set forth in Section 15-40 relating to suspension and revocation of licenses.