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<br />J <br /> <br />/ ~4f~UF~' au~ ue:~{ YAX JOj 236 2847 <br /> <br />. <br /> <br />RD <br /> <br />. <br /> <br />~004 <br /> <br />10. Insurance and Bondin2: <br />A. You must seeure a Fidelity Bond on those positions responsible for the eash assets. <br />Coverage may be provided either for all individual positions or persons, or through <br />"blanket" coverage providing protection for all appropriate employees and/or officials. The <br />amount of coverage required by Rural Development will normally approximate the total <br />annual debt service. requirements for the Rural Development loan. Form FmHA 440-24, <br />"Position Fidelity Schedule Bond", may be used. <br /> <br />B. Fire and extended coverage insurance will be obtained on all buildings above ground, <br />including their contents, which are a part of the system. The amount of insurance should be <br />recommended by your engineer and approved by Rural Development. <br /> <br />C. Uability and malpractice insurance and Workers' Compensation will be obtained as <br />recommended by your attorney. <br /> <br />D. The insurance, fidelity bond and Workers' Compensation insurance will be in force prior <br />to the loan closing or start of construction whichever occurs first. <br /> <br />11. Construction Contracts and Bidding: The preparation of bid forms and all construction <br />contraets must meet the requirements of the Rural Development as indicated in RD <br />Instruction 1780, section 1780.61. A copy is attached and should be given to your engineer <br />for guidance, <br /> <br />12 Proeurements Re~ations: You arerequired to have procurement regulations which <br />comply with State and Loca1laws, rules, regulations and the standards identified in RD <br />Instruction 1780-C, section 1780.70, "Owners Procurement Regulationsh. <br /> <br />13. Accounts. Records. and Audits: You will be required to provide Rural Development <br />with the management reports prescribed in RD 1780-B, section 1780.47. Form FmHA 442-2, <br />will be required 30 days following the end of the quarter. A copy of the proposed budget for <br />the ensuing year will be sublIlitted to Rural Development for review at the end of each fiscal <br />year. Annual reports will be in accordance with RD Instruction 1780-B, section 1780.47. <br />Rural Development must review and approve the accounting and financial reporting system. <br />An audit prepared in accordance with OMB Cireu1ar A-128 will be provided at the end of <br />each fiscal year in which $100,000 or more in Federal funds are received, including interim <br />financing. <br /> <br />14. Plans and Specifications: All plans and specifications must be approved by the Rural <br />Development, and other local or state agencies. All required permits must be obtained prior <br />to start of construction. <br /> <br />3 <br />