STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPT.

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this subgrant agreement will be immediately remitted to the Pass -through Entity, and no longer available to the Subrecipient. c. The Pass -through Entity retains the right to suspend financial assistance, in whole or in part, to protect the integrity of the funds or to ensure proper operation of the program, providing the Subrecipient is given prompt notice and the opportunity for an informal review of the Pass -through Entity's decision. The EDD Chief Deputy Director or his/her designee will perform this informal review and will issue the final administrative decision within 60 days of receiving the written request for review. Failure on the part of the Subrecipient or a Subcontractor of the Subrecipient to comply with the provisions of this subgrant agreement, or with WIOA or other applicable regulations, when such failure involves fraud or misappropriation of funds, may result in immediate withholding of funds. d. If applicable, the chief elected official (CEO) of a unit of general local government designated as a Local Workforce Development Area shall be liable to the Pass -through Entity for all funds not expended in accordance with WIOA, and shall return to the Pass -through Entity all of those funds. If there is more than one unit of general local government in a local area, the CEO(s) will be the individual(s) designated under an agreement executed by the CEO(s) of the local units of government. The CEO(s) designated under the agreement shall be liable to the Pass -through Entity for all funds not expended in accordance with WIOA, and shall return to the Pass -through Entity all of those funds. 4. Insurance a. Except for city and county governmental entities, Subrecipients must provide the Pass -through Entity evidence of the coverage specified in paragraphs (1), (ii), (Ili) and (iv) below. The evidence of coverage shall include the registration number of the subgrant agreement for identification purposes. I. Subrecipient will obtain a fidelity bond in an amount of not less than prior to the receipt of funds under this subgrant agreement. If the bond is canceled or reduced, Subrecipient will immediately notify the Pass - through Entity. In the event the bond is canceled or revised, the Pass -through Entity will make no further disbursements until It is assured that adequate coverage has been obtained. ii. Subrecipient will provide general liability insurance with a combined limit of $1,000,000, or public liability and property damage coverage with a combined limit of not less than $1,000,000. Ili. Subrecipient will provide broad form automobile liability coverage with limits as set forth in (ii) above, which applies to both owned/leased and non -owned automobiles used by the Subrecipient or its agents in performance of this subgrant agreement. Or, in the event that the Subrecipient will not utilize owned/leased automobiles but intends to require employees, trainees or other agents to utilize their own automobiles in performance of this subgrant agreement, Subrecipient will secure and maintain on file from all such employees, trainees or agents a self -certification of automobile insurance coverage. iv. Subrecipient will provide workers' compensation insurance, which complies with provisions of the California Labor Code, covering all employees of the Subrecipient and all participants enrolled in work experience programs. Medical and Accident Insurance will be carried for those participants not qualifying as "employee" (§ 3350, at seq. of the California Labor Code) for workers' compensation. v. The Pass -through Entity will be named as "Certificate Holder" of policies secured in compliance with paragraphs (I), (ii), (iii) and (iv) above and will be provided certificates of insurance or insurance company "binders" prior to any disbursement of funds under this subgrant agreement, verifying the insurance requirements have been complied with. The coverage noted in paragraphs (iii) and (iv) above must contain the following clauses: 1. Insurance coverage will not be canceled or changed unless 30 days prior to the effective date of cancellation or change written notice is sent by the Subrecipient to: Employment Development Department, Central Office Workforce Page 5 of 16