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this subgrant agreement will be immediately remitted to the Pass-through Entity, and EXHIBIT 2 <br />no longer available to the Subrecipient. <br />c. The Pass-through Entity retains the right to suspend financial assistance, In whole <br />or in part, to protect the integrity of the funds or to ensure proper operation of <br />the program, providing the Subrecipient is given prompt notice and the opportunity <br />for an informal review of the Pass-through Entity's decision. The EDD Chief Deputy <br />Director or his/her designee will perform this Informal review and will Issue the <br />final administrative decision within 60 days of receiving the written request for <br />review. Failure on the part of the Subrecipient or a Subcontractor of the <br />Subrecipient to comply with the provisions of this subgrant agreement, or with WIOA <br />or other applicable regulations, when such failure involves fraud or misappropriation <br />of funds, may result In Immediate withholding of funds. <br />d. If applicable, the chief elected official (CEO) of a unit of general local government <br />designated as a Local Workforce Development Area shall be liable to the Pass-through <br />Entity for all funds not expended in accordance with WIOA, and shall return to the <br />Pass-through Entity all of those funds. If there is more than one unit of general <br />local government in a local area, the CEO(s) will be the Individual(s) designated <br />under an agreement executed by the CEO(s) of the local units of government. The <br />CEO(s) designated under the agreement shall be liable to the Pass-through Entity for <br />all funds not expended in accordance with WIOA, and shall return to the Pass-through <br />Entity all of those funds. <br />4. Insurance <br />a. Except for city and county governmental entitles, Subrecipients must provide the <br />Pass-through Entity evidence of the coverage specified in paragraphs (1), (ii), (iii) <br />and (iv) below. The evidence of coverage shall include the registration number of <br />the subgrant agreement for identification purposes. <br />1. Subrecipient will obtain a fidelity bond in an amount of not less than <br />prior to the receipt of funds under this subgrant agreement. If <br />the bond is canceled or reduced, Subrecipient will immediately notify the Pass- <br />through Entity. In the event the bond is canceled or revised, the Pass-through <br />Entity will make no further disbursements until it is assured that adequate <br />coverage has been obtained. <br />ii. Subrecipient will provide general liability insurance with a combined limit of <br />$1,000,000, or public liability and property damage coverage with a combined <br />limit of not less than $1,000,000. <br />iii. Subrecipient will provide broad form automobile liability coverage with limits <br />as set forth in (ii) above, which applies to both owned/leased and non -owned <br />automobiles used by the Subrecipient or its agents in performance of this <br />subgrant agreement. Or, in the event that the Subrecipient will not utilize <br />owned/leased automobiles but intends to require employees, trainees or other <br />agents to utilize their own automobiles in performance of this subgrant <br />agreement, Subrecipient will secure and maintain on file from all such <br />employees, trainees or agents a self -certification of automobile Insurance <br />coverage, <br />iv. Subrecipient will provide workers' compensation insurance, which complies with <br />provisions of the California Labor Code, covering all employees of the <br />Subrecipient and all participants enrolled in work experience programs. Medical <br />and Accident Insurance will be carried for those participants not qualifying as <br />"employee" (§ 3350, at seq. of the California Labor Code) for workers' <br />compensation. <br />v. The Pass-through Entity will be named as "Certificate Holder" of policies <br />secured in compliance with paragraphs (1), (11), (Iii) and (iv) above and will <br />be provided certificates of insurance or insurance company "binders" prior to <br />any disbursement of funds under this subgrant agreement, verifying the insurance <br />requirements have been complied with. The coverage noted in paragraphs (iii) <br />and (iv) above must contain the following clauses: <br />1. Insurance coverage will not be canceled or changed unless 30 days prior to <br />the effective date of cancellation or change written notice is sent by the <br />Subrecipient to: Employment Development Department, Central Office Workforce <br />Page 6 of 17 <br />55E-10 <br />