1. (a) Bonding and insurance.

   1. (1) Each entity is required to have a current fidelity bond providing coverage at a minimum ten percent (10%) of any funds received from the Office of Program Planning and Community Grant Services of the Division of County Operations in which the agency is liable for the reimbursement of federal or state funds to the grantor.
   2. (2) The United States Department of Health and Human Services reserves the right to require agencies to maintain adequate bonding and insurance if the current bonding or insurance is deemed inadequate to protect the interests of the federal government.

   3. (3)

      1. (A) The eligible entity must, as a condition for the receipt of Community Services Block Grant funds, secure fidelity bond coverage for appropriate eligible entity officials.
      2. (B) Coverage must be secured for each person authorized to sign or countersign checks or to transport, maintain custody of, or disburse sizable amounts of cash, such as for payrolls, in the minimum amount equal to ten percent (10%) of the total funds awarded to be disbursed.
      3. (C)

2. (i) Prior to its initial agreement with the state lead agency for funding, each eligible entity shall submit assurance that this condition has been met.

   1. (ii) This assurance shall take the form of a letter from a bonding company or agent stating:
3. (a) (a) The type of bond;

4. (b) (b) Amount and period of coverage;

   1. (c) (c) Positions covered; and

      1. (d) (d) The annual cost of the bond that has been obtained.
      2. (D) The state lead agency must be notified by the eligible entity within thirty (30) calendar days of any changes in bonding coverage.

5. (b) The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

   1. (c) The state lead agency also requires each eligible entity provide proof of adequate coverage under a director’s and officer’s policy.

Codification Notes: The Employee Retirement Income Security Act of 1974 (ERISA) was enacted by Pub. L. No. 93-406.