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Presentation, discussion, and possible action on an order proposing the repeal of 10 TAC Chapter 1, Subchapter D, Uniform Guidance for Recipients of Federal and State Funds, ?1.406 Fidelity Bond Requirements; an order proposing new 10 TAC Chapter 1, Subchapter D, Uniform Guidance for Recipients of Federal and State Funds, ?1.406 Fidelity Bond Requirements; and directing their publication for public comment in the Texas Register
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RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov't Code ?2306.053, the Texas Department of Housing and Community Affairs (the Department) is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, 10 TAC ?1.406 relates to the fidelity bond requirements of entities funded by the Department which requires that in order to provide for fiscal control and accounting procedures any Subrecipient must maintain adequate fidelity bond coverage to indemnify the Subrecipient against losses resulting from the fraud or lack of integrity, honesty or fidelity of one or more of its employees, officers, or other persons holding a position of trust;
WHEREAS, the current rule requires that the fidelity bond be for a minimum of 5% of the Contract amount;
WHEREAS, some activities in the Department that operate on a reservation system do not have any fund amount identified in the contract with the subrecipient, thus inadvertently enabling those subrecipients to not carry fidelity bond coverage; and
WHEREAS, staff is recommending that the rule be revised to provide that fidelity bond coverage be for the greater of 10% of the Contract amount or $50,000, which will thereby add that requirement to all entities whose contracts do not show an amount, and staff has therefore drafted a revision of the current rule on this subject, which upon Board approval will be released for public comment and returned to the Board for adoption at a subsequent Board meeting;
NOW, therefore, it is hereby
RE...
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