I’d say your theme is broken. It isn’t setup to use widgets correctly. Edit the widgets parameters in the functions.php file to be correct, or talk to the theme author.
It’s not in the functions.php The problem is in the sidebar.php or if there’s another bar, it’s there. I’m not in the business of fixing other people’s themes, but if you post a link to the theme or send it to me I’ll fix it this time.
Chances are that they forgot to wrap the li elements in a ul, or the ul is generated by a conditional statement that’s not met. Can you post the code from your sidebar file?