2006-108-RES-DSHS Document NO. 2007-020428, Regional and Local Medical Services

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contained in required financial reports; and cost source documentation; and (c) effective internal and budgetary controls; determination of reasonableness, allowableness, and allocability of costs; timely and appropriate audits and resolution of any findings; billing and collection policies; and a mechanism capable of billing and making reasonable efforts to collect from clients and third parties. Section 12.04 Insurance and Bonding. Contractor shall maintain insurance or other means of replacing assets purchased with Department funds. Section 12.05 Fidelity Bond. Contractor is required to carry a fidelity bond or insurance coverage equal to the amount of funding provided under this Contract up to $100,000 that covers each employee of Contractor handling funds under this Contract, including person(s) authorizing paYment of such funds. The fidelity bond or insurance shall provide for indemnification oflosses occasioned by: (1) any fraudulent or dishonest act or acts committed by any of Contractor's employees, either individually or in concert with others, and/or (2) failure of Contractor or any of its employees to perform faithfully hislher duties or to account properly for all monies and property received by virtue ofhislher position or emplOYment. Section 12.06 Liability Coverage. Contractor shall also maintain liability insurance coverage, referred to in TEX. GOV'T. CODE 9 2261.102, as "director and officer liability coverage," where Contractor is a legal entity that is required to have directors and/or officers. This provision applies to entities that are organized as non-profit corporations under the Texas Non-Profit Corporation Act; for-profit corporations organized under the Texas Business Corporations Act; and any other legal entity that is required under Texas law to have directors and/or officers. Contractor shall maintain liability insurance coverage in an amount not less than the total value of this Contract and that is sufficient to protect the interests of Department in the event an actionable act or omission by a director or officer of Contractor damages Department's interests. Section 12.07 Overtime Compensation. Except as provided in this section, Contractor shall not use any of the funds provided by this Contract to pay the premium portion of overtime. Contractor shall be responsible for any obligations of premium overtime pay due employees. Premium overtime pay is defined as any compensation paid to an individual in addition to the employee's normal rate of pay for hours worked in excess of normal working hours. Funds provided under this Contract may be used to pay the premium portion of overtime only under the following conditions: 1) with the prior approval of DSHS; 2) temporarily, in the case of an emergency or an occasional operational bottleneck; 3) when employees are performing indirect functions, such as administration, maintenance, or accounting; 4) in performance of tests, laboratory procedures, or similar operations that are continuous in nature and cannot reasonably be interrupted or otherwise completed; or 5) when lower overall cost to DSHS will result. Section 12.08 Program Site. All Contractors shall ensure that the location where services are provided is in compliance with all applicable local, state and federal zoning, building, health, fire, and safety standards. Section 12.09 Cost Allocation Plan. Contractor shall submit a cost allocation plan to the EF29-12425 General Provisions (Core Subrecipient 2007) Rev. 07/20/2006 Page 18