| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to state government; establishing the position of director of grants |
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| 3 | 3 | | 1.3 management and oversight within the Department of Administration; requiring |
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| 4 | 4 | | 1.4 standards related to grantmaking and grants management practices; requiring |
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| 5 | 5 | | 1.5 reports; amending Minnesota Statutes 2024, sections 16B.97, subdivisions 2, 3, |
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| 6 | 6 | | 1.6 4, 5; 16B.98, subdivisions 4, 5, 6, 7. |
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| 7 | 7 | | 1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 8 | 8 | | 1.8 Section 1. Minnesota Statutes 2024, section 16B.97, subdivision 2, is amended to read: |
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| 9 | 9 | | 1.9 Subd. 2.Grants governance.The commissioner must appoint a director of grants |
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| 10 | 10 | | 1.10management and oversight. At a minimum, the director must have demonstrated professional |
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| 11 | 11 | | 1.11experience in auditing and legal compliance related to grantmaking within a large, complex |
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| 12 | 12 | | 1.12organization. The commissioner director shall provide leadership and direction for oversee |
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| 13 | 13 | | 1.13the implementation of law and policy related to grants management in Minnesota in order. |
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| 14 | 14 | | 1.14The director's responsibilities are to: (1) foster more consistent, streamlined interaction |
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| 15 | 15 | | 1.15between executive agencies, funders, and grantees that will enhance access to grant |
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| 16 | 16 | | 1.16opportunities and information; (2) ensure compliance with laws relating to grantmaking |
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| 17 | 17 | | 1.17and the grants management process; and lead to greater program accountability and |
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| 18 | 18 | | 1.18transparency (3) be a resource in ensuring public accountability and transparency in grant |
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| 19 | 19 | | 1.19programs administered by executive agencies. The commissioner director has the duties |
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| 20 | 20 | | 1.20and powers stated in this section and section 16B.98. Executive agencies shall fully cooperate |
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| 21 | 21 | | 1.21with the commissioner director in the creation, management, and oversight of state grants |
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| 22 | 22 | | 1.22and must do what the commissioner director requires under this section. The commissioner |
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| 23 | 23 | | 1.23director may adopt rules to carry out grants governance, oversight, and management. |
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| 24 | 24 | | 1Section 1. |
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| 25 | 25 | | REVISOR SGS/MI 25-0144712/17/24 |
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| 26 | 26 | | State of Minnesota |
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| 27 | 27 | | This Document can be made available |
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| 28 | 28 | | in alternative formats upon request |
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| 29 | 29 | | HOUSE OF REPRESENTATIVES |
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| 30 | 30 | | H. F. No. 152 |
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| 31 | 31 | | NINETY-FOURTH SESSION |
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| 32 | 32 | | Authored by Robbins, Nash, Engen, Repinski and Gander01/22/2025 |
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| 33 | 33 | | The bill was read for the first time and referred to the Committee on State Government Finance and Policy 2.1 Sec. 2. Minnesota Statutes 2024, section 16B.97, subdivision 3, is amended to read: |
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| 34 | 34 | | 2.2 Subd. 3.Discretionary powers.The commissioner director has the authority to: |
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| 35 | 35 | | 2.3 (1) review grants management practices and establish and enforce policy and procedure |
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| 36 | 36 | | 2.4improvements; |
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| 37 | 37 | | 2.5 (2) sponsor, support, and facilitate innovative and collaborative grants management |
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| 38 | 38 | | 2.6projects with public and private organizations; |
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| 39 | 39 | | 2.7 (3) review, recommend, and implement alternative strategies for grants management; |
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| 40 | 40 | | 2.8 (4) collect and disseminate information, issue reports relating to grants management, |
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| 41 | 41 | | 2.9and sponsor and conduct conferences and studies; |
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| 42 | 42 | | 2.10 (5) participate in conferences and other appropriate activities related to grants |
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| 43 | 43 | | 2.11management issues; |
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| 44 | 44 | | 2.12 (6) suspend or debar grantees from eligibility to receive state-issued grants for up to |
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| 45 | 45 | | 2.13three years for reasons specified in Minnesota Rules, part 1230.1150, subpart 2. A grantee |
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| 46 | 46 | | 2.14may obtain an administrative hearing pursuant to sections 14.57 to 14.62 before a suspension |
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| 47 | 47 | | 2.15or debarment is effective by filing a written request for hearing within 20 days of notification |
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| 48 | 48 | | 2.16of suspension or debarment; |
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| 49 | 49 | | 2.17 (7) establish offices for the purpose of carrying out grants governance, oversight, and |
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| 50 | 50 | | 2.18management; and |
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| 51 | 51 | | 2.19 (8) require granting agencies to submit grant solicitation documents for review prior to |
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| 52 | 52 | | 2.20issuance at dollar levels determined by the commissioner. |
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| 53 | 53 | | 2.21 Sec. 3. Minnesota Statutes 2024, section 16B.97, subdivision 4, is amended to read: |
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| 54 | 54 | | 2.22 Subd. 4.Duties.(a) The commissioner director shall: |
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| 55 | 55 | | 2.23 (1) create general grants management policies and procedures that are applicable to all |
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| 56 | 56 | | 2.24executive agencies. The commissioner director may approve exceptions to these policies |
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| 57 | 57 | | 2.25and procedures for particular grant programs. Exceptions shall expire or be renewed after |
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| 58 | 58 | | 2.26five years. Executive agencies shall retain management of individual grants programs, |
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| 59 | 59 | | 2.27provided that the director determines the executive agency is compliant with the requirements |
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| 60 | 60 | | 2.28of law related to grantmaking and grants management in administering its programs; |
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| 61 | 61 | | 2.29 (2) provide a central point of contact concerning statewide grants management policies |
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| 62 | 62 | | 2.30and, procedures, and requirements of law; |
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| 63 | 63 | | 2Sec. 3. |
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| 64 | 64 | | REVISOR SGS/MI 25-0144712/17/24 3.1 (3) serve as a resource to executive agencies in such areas as training, evaluation, |
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| 65 | 65 | | 3.2collaboration, and best practices in grants management; |
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| 66 | 66 | | 3.3 (4) ensure grants management needs are considered in the development, upgrade, and |
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| 67 | 67 | | 3.4use of statewide administrative systems and leverage existing technology wherever possible; |
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| 68 | 68 | | 3.5 (5) oversee and approve future professional and technical service contracts and other |
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| 69 | 69 | | 3.6information technology spending related to executive agency grants management systems |
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| 70 | 70 | | 3.7and activities, including verifying, in consultation with the legislative auditor, that information |
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| 71 | 71 | | 3.8technology systems used by executive branch agencies in administering grant programs |
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| 72 | 72 | | 3.9meet the requirements of this section and section 16B.98; |
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| 73 | 73 | | 3.10 (6) provide a central point of contact for comments about executive agencies violating |
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| 74 | 74 | | 3.11statewide grants governance policies and about fraud and waste in grants processes; |
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| 75 | 75 | | 3.12 (7) forward received comments to the appropriate agency legislative auditor for further |
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| 76 | 76 | | 3.13action, and may follow up as necessary; |
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| 77 | 77 | | 3.14 (8) provide a single listing of all available executive agency competitive grant |
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| 78 | 78 | | 3.15opportunities and resulting grant recipients; |
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| 79 | 79 | | 3.16 (9) selectively review development and implementation of executive agency grants, |
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| 80 | 80 | | 3.17policies, and practices; and |
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| 81 | 81 | | 3.18 (10) selectively review executive agency compliance with best practices.; |
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| 82 | 82 | | 3.19 (11) in consultation with the legislative auditor, review executive agency compliance |
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| 83 | 83 | | 3.20with the requirements of law related to grantmaking and grants management; |
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| 84 | 84 | | 3.21 (12) review and approve or disapprove a grantee's request for waivers, deadline |
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| 85 | 85 | | 3.22extensions, or other variances from the terms of a written grant agreement; and |
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| 86 | 86 | | 3.23 (13) in consultation with the legislative auditor, provide a standardized form that granting |
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| 87 | 87 | | 3.24agencies may use to submit oversight reports to the governor and legislature regarding grant |
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| 88 | 88 | | 3.25activities, including details related to the number of grants awarded by the agency, how |
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| 89 | 89 | | 3.26each grant is being used, appropriate statistics demonstrating how the use of the grant |
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| 90 | 90 | | 3.27benefits the public, and specific details on the use of any funds retained by the granting |
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| 91 | 91 | | 3.28agency for costs associated with administering the grant. |
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| 92 | 92 | | 3.29 (b) No later than July 1, 2025, The commissioner may director must determine that |
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| 93 | 93 | | 3.30whether it is cost-effective for agencies to develop and use shared grants management |
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| 94 | 94 | | 3.31technology systems. This system would be governed under section 16E.01, subdivision 3, |
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| 95 | 95 | | 3.32paragraph (b). If the director determines that a shared grants management technology system |
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| 96 | 96 | | 3Sec. 3. |
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| 97 | 97 | | REVISOR SGS/MI 25-0144712/17/24 4.1would not be cost-effective, the director must propose an alternative enterprise-wide reporting |
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| 98 | 98 | | 4.2system for grants management that allows for public accountability, transparency, and |
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| 99 | 99 | | 4.3information sharing across all agencies. To the extent practical, the director must work with |
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| 100 | 100 | | 4.4the commissioner of management and budget to build appropriate grants management |
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| 101 | 101 | | 4.5functionality into any new statewide accounting system developed for use by agencies. |
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| 102 | 102 | | 4.6 Sec. 4. Minnesota Statutes 2024, section 16B.97, subdivision 5, is amended to read: |
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| 103 | 103 | | 4.7 Subd. 5.Data classification.Data maintained by the commissioner director that identify |
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| 104 | 104 | | 4.8a person providing comments to the commissioner under subdivision 4, paragraph (a), |
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| 105 | 105 | | 4.9clauses (6) and (7), are private and nonpublic data but may be shared with the executive |
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| 106 | 106 | | 4.10agency that is the subject of the comments. |
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| 107 | 107 | | 4.11 Sec. 5. Minnesota Statutes 2024, section 16B.98, subdivision 4, is amended to read: |
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| 108 | 108 | | 4.12 Subd. 4.Reporting of violations.A state employee who discovers evidence of violation |
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| 109 | 109 | | 4.13of laws or rules governing grants is encouraged to must report the violation or suspected |
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| 110 | 110 | | 4.14violation to the employee's supervisor, the commissioner or the commissioner's designee |
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| 111 | 111 | | 4.15director of grants management and oversight, or the legislative auditor. The legislative |
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| 112 | 112 | | 4.16auditor shall report to the Legislative Audit Commission if there are multiple complaints |
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| 113 | 113 | | 4.17about the same agency. The auditor's report to the Legislative Audit Commission under this |
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| 114 | 114 | | 4.18section must disclose only the number and type of violations alleged. An employee making |
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| 115 | 115 | | 4.19a good faith report under this section has the protections provided for under section 181.932, |
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| 116 | 116 | | 4.20prohibiting the employer from discriminating against the employee. |
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| 117 | 117 | | 4.21 Sec. 6. Minnesota Statutes 2024, section 16B.98, subdivision 5, is amended to read: |
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| 118 | 118 | | 4.22 Subd. 5.Creation and validity of grant agreements.(a) A grant agreement and |
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| 119 | 119 | | 4.23amendments are not valid and do not bind unless: |
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| 120 | 120 | | 4.24 (1) the grant agreement and amendments have been executed by the head of the agency |
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| 121 | 121 | | 4.25or a delegate who is party to the grant; |
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| 122 | 122 | | 4.26 (2) the grant agreement and amendments have been approved by the commissioner; |
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| 123 | 123 | | 4.27 (3) the accounting system shows an encumbrance for the amount of the grant in |
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| 124 | 124 | | 4.28accordance with policy approved by the commissioner except as provided in subdivision |
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| 125 | 125 | | 4.2911; and |
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| 126 | 126 | | 4Sec. 6. |
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| 127 | 127 | | REVISOR SGS/MI 25-0144712/17/24 5.1 (4) the grant agreement and amendments include an effective date that references either |
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| 128 | 128 | | 5.2section 16C.05, subdivision 2, or 16B.98, subdivisions 5 and 7, as determined by the granting |
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| 129 | 129 | | 5.3agency. |
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| 130 | 130 | | 5.4 (b) The combined grant agreement and amendments must not exceed five years without |
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| 131 | 131 | | 5.5specific, written approval by the commissioner according to established policy, procedures, |
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| 132 | 132 | | 5.6and standards, or unless the commissioner determines that a longer duration is in the best |
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| 133 | 133 | | 5.7interest of the state. |
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| 134 | 134 | | 5.8 (c) A fully executed copy of the grant agreement with all amendments and other required |
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| 135 | 135 | | 5.9records relating to the grant must be kept on file at the granting agency for a time equal to |
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| 136 | 136 | | 5.10that required of grantees in subdivision 8. |
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| 137 | 137 | | 5.11 (d) Grant agreements must comply with policies established by the commissioner director |
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| 138 | 138 | | 5.12of grants management and oversight for minimum grant agreement standards and practices. |
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| 139 | 139 | | 5.13 (e) The attorney general may must periodically review and evaluate a sample of state |
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| 140 | 140 | | 5.14agency grants to ensure compliance with applicable laws. |
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| 141 | 141 | | 5.15 Sec. 7. Minnesota Statutes 2024, section 16B.98, subdivision 6, is amended to read: |
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| 142 | 142 | | 5.16 Subd. 6.Grant administration.A granting agency shall diligently administer and |
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| 143 | 143 | | 5.17monitor any grant it has entered into. A granting agency must report to the commissioner |
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| 144 | 144 | | 5.18at any time at the commissioner's request on the status of any grant to which the agency is |
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| 145 | 145 | | 5.19a party. At a minimum, a granting agency must: |
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| 146 | 146 | | 5.20 (1) administer a grant utilizing a grants management technology system approved by |
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| 147 | 147 | | 5.21the director of grants management and oversight; |
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| 148 | 148 | | 5.22 (2) require each grantee to identify all grants the grantee has received or applied to |
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| 149 | 149 | | 5.23receive from an executive agency; |
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| 150 | 150 | | 5.24 (3) independently determine whether the grantee has previously received grants or |
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| 151 | 151 | | 5.25entered contracts with a state agency, record that information in the grants management |
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| 152 | 152 | | 5.26technology system, and review any outcomes reported by a state agency related to a grantee's |
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| 153 | 153 | | 5.27performance under a prior grant or contract; |
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| 154 | 154 | | 5.28 (4) identify a program manager for each grant and identify the program manager in the |
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| 155 | 155 | | 5.29grants management technology system; |
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| 156 | 156 | | 5.30 (5) collect appropriate documentation, as determined by the director of grants management |
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| 157 | 157 | | 5.31and oversight, sufficient to verify that providing a grant to a proposed grantee is reasonable |
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| 158 | 158 | | 5.32and appropriate given the grantee's level of financial health and sophistication, including |
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| 159 | 159 | | 5Sec. 7. |
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| 160 | 160 | | REVISOR SGS/MI 25-0144712/17/24 6.1at a minimum, an audit report or IRS form 990, and the proposed grantee's balance sheets |
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| 161 | 161 | | 6.2from the most recent fiscal year or, if the proposed grant has a value of $500,000 or more, |
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| 162 | 162 | | 6.3the proposed grantee's balance sheets covering the most recent five fiscal years, and record |
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| 163 | 163 | | 6.4that information in the grants management technology system; |
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| 164 | 164 | | 6.5 (6) conduct either an unannounced or scheduled in-person meeting with a grantee, at |
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| 165 | 165 | | 6.6the grantee's offices or worksite, to verify that the grant is being used for its intended |
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| 166 | 166 | | 6.7purposes; |
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| 167 | 167 | | 6.8 (7) submit to the director of grants management and oversight for approval any request |
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| 168 | 168 | | 6.9made by a grantee for a waiver, deadline extension, or other variance from the terms of a |
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| 169 | 169 | | 6.10written grant agreement; |
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| 170 | 170 | | 6.11 (8) ensure that the job description of any employee of an agency with responsibilities |
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| 171 | 171 | | 6.12related to grantmaking or grants management includes those duties, that the employee is |
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| 172 | 172 | | 6.13properly and regularly trained on these duties, and that these duties are incorporated in the |
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| 173 | 173 | | 6.14annual review of the employee's job performance, and where appropriate, remedial action |
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| 174 | 174 | | 6.15is taken in the event an employee fails to adequately fulfill the duties; |
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| 175 | 175 | | 6.16 (9) subject to review and approval by the director of grants management and oversight, |
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| 176 | 176 | | 6.17in consultation with the legislative auditor, establish internal controls for conducting ongoing |
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| 177 | 177 | | 6.18oversight of grants administered by the agency, along with policies and procedures for |
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| 178 | 178 | | 6.19remedial action when these controls are not followed; and |
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| 179 | 179 | | 6.20 (10) using the standardized form established by the director of grants management and |
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| 180 | 180 | | 6.21oversight, submit an annual report to the governor and the legislative committees with |
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| 181 | 181 | | 6.22jurisdiction over the agency's budget detailing the agency's grant activity in the prior year. |
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| 182 | 182 | | 6.23 Sec. 8. Minnesota Statutes 2024, section 16B.98, subdivision 7, is amended to read: |
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| 183 | 183 | | 6.24 Subd. 7.Grant payments.(a) Payments to the grantee may not be issued until the grant |
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| 184 | 184 | | 6.25agreement is fully executed. Encumbrances for grants issued by June 30 may be certified |
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| 185 | 185 | | 6.26for a period of one year beyond the year in which the funds were originally appropriated as |
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| 186 | 186 | | 6.27provided by section 16A.28, subdivision 6. |
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| 187 | 187 | | 6.28 (b) An executive agency must withhold payments on a grant if a grantee has not submitted |
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| 188 | 188 | | 6.29each required progress report, financial reconciliation, or other report required by the terms |
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| 189 | 189 | | 6.30of the grant agreement, or if the executive agency determines that the grantee no longer |
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| 190 | 190 | | 6.31qualifies to receive the grant. |
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| 191 | 191 | | 6.32 (c) An executive agency must not make final payment on a grant until it has received |
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| 192 | 192 | | 6.33all annual financial reconciliations required by the terms of the grant agreement, in addition |
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| 193 | 193 | | 6Sec. 8. |
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| 194 | 194 | | REVISOR SGS/MI 25-0144712/17/24 7.1to a comprehensive reconciliation of all expenses, reimbursements, and other uses of the |
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| 195 | 195 | | 7.2grant funds that demonstrate to the granting agency that the grantee is prepared to receive |
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| 196 | 196 | | 7.3a final grant payment on the grant. |
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| 197 | 197 | | 7.4 Sec. 9. DIRECTOR OF GRANTS MANAGEMENT AND OVERSIGHT; |
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| 198 | 198 | | 7.5TRANSITION. |
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| 199 | 199 | | 7.6 The commissioner must appoint a director of grants management and oversight as |
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| 200 | 200 | | 7.7required by this act no later than October 1, 2025. The commissioner must engage with the |
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| 201 | 201 | | 7.8public and private sector to recruit highly qualified applicants and make a final appointment |
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| 202 | 202 | | 7.9through an open and competitive process. The appointed director's responsibilities must |
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| 203 | 203 | | 7.10include the work and mission of the existing Office of Grants Management, in addition to |
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| 204 | 204 | | 7.11the new duties prescribed by this act. |
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| 205 | 205 | | 7Sec. 9. |
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| 206 | 206 | | REVISOR SGS/MI 25-0144712/17/24 |
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