| 3 | | - | 1.3 management requirements; amending Minnesota Statutes 2024, sections 16B.97, |
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| 4 | | - | 1.4 subdivisions 2, 4; 16B.98, subdivisions 4, 5; 16B.981, subdivisions 2, 3; 16B.991, |
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| 5 | | - | 1.5 subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 15. |
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| 6 | | - | 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 7 | | - | 1.7 Section 1. [15.0572] FRAUD REPORTING REQUIRED. |
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| 8 | | - | 1.8 A state employee who believes they have discovered evidence of fraud must immediately |
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| 9 | | - | 1.9notify the employee's supervisor, the head of the employee's agency or their designee, or |
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| 10 | | - | 1.10the legislative auditor. If the state employee notifies the employee's supervisor, agency head, |
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| 11 | | - | 1.11or agency head's designee, then the supervisor, agency head, or designee must immediately |
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| 12 | | - | 1.12notify the legislative auditor. The legislative auditor must report to the Legislative Audit |
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| 13 | | - | 1.13Commission if there are multiple reports about the same agency. An employee making a |
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| 14 | | - | 1.14good faith report under this section has the protections provided for under section 181.932, |
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| 15 | | - | 1.15prohibiting the employer from discriminating against the employee. |
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| 16 | | - | 1.16 Sec. 2. [15.0574] ORGANIZATIONAL CHARTS POSTED. |
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| 17 | | - | 1.17 Each state agency must prominently post on the agency's website a current organizational |
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| 18 | | - | 1.18chart that includes the name and contact information for the agency head, all deputy and |
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| 19 | | - | 1.19assistant agency heads, and the head of each division or bureau within the agency. |
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| 3 | + | 1.3 management requirements; establishing a criminal penalty; amending Minnesota |
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| 4 | + | 1.4 Statutes 2024, sections 16B.97, subdivisions 2, 4; 16B.98, subdivisions 4, 5, 8; |
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| 5 | + | 1.5 16B.981, subdivisions 2, 3; 16B.991, subdivision 1; proposing coding for new law |
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| 6 | + | 1.6 in Minnesota Statutes, chapter 15. |
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| 7 | + | 1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 8 | + | 1.8 Section 1. [15.0572] FRAUD REPORTING REQUIRED. |
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| 9 | + | 1.9 If an employee of a state agency has reason to suspect the existence of fraud in a program |
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| 10 | + | 1.10administered by the agency, the employee must immediately notify law enforcement and |
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| 11 | + | 1.11the chairs and ranking minority members of the house of representatives and senate |
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| 12 | + | 1.12committees with jurisdiction over the agency's operating budget. For purposes of this section |
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| 13 | + | 1.13and section 15.0574, "agency" means a department of the state designated in section 15.01 |
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| 14 | + | 1.14and a multimember executive branch agency described in section 15.012, paragraph (a). |
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| 15 | + | 1.15 Sec. 2. [15.0574] ORGANIZATIONAL CHARTS POSTED. |
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| 16 | + | 1.16 Each state agency must prominently post on the agency's website a current organizational |
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| 17 | + | 1.17chart that includes the name and contact information for the commissioner, all deputy |
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| 18 | + | 1.18commissioners and assistant commissioners, and the head of each division or bureau within |
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| 19 | + | 1.19the agency. |
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| 45 | | - | 2.13exception to the requirements under clause (11) for any grant over $500,000. Exceptions |
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| 46 | | - | 2.14shall expire or be renewed after five years. The commissioner must report each approved |
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| 47 | | - | 2.15exception to the chairs and ranking minority members of the legislative committees with |
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| 48 | | - | 2.16jurisdiction over the agency. If a grant is suspended under section 16B.991, subdivision 1, |
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| 49 | | - | 2.17the commissioner must revoke for at least 12 months any approved exception to the |
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| 50 | | - | 2.18requirements under clause (11) for that particular grant program, but the commissioner's |
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| 51 | | - | 2.19revocation only applies to any grant over $50,000. Executive agencies shall retain |
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| 52 | | - | 2.20management of individual grants programs; |
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| 53 | | - | 2.21 (2) provide a central point of contact concerning statewide grants management policies |
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| 54 | | - | 2.22and procedures; |
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| 55 | | - | 2.23 (3) serve as a resource to executive agencies in such areas as training, evaluation, |
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| 56 | | - | 2.24collaboration, and best practices in grants management; |
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| 57 | | - | 2.25 (4) ensure grants management needs are considered in the development, upgrade, and |
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| 58 | | - | 2.26use of statewide administrative systems and leverage existing technology wherever possible; |
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| 59 | | - | 2.27 (5) oversee and approve future professional and technical service contracts and other |
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| 60 | | - | 2.28information technology spending related to executive agency grants management systems |
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| 61 | | - | 2.29and activities; |
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| 62 | | - | 2.30 (6) provide a central point of contact for comments about executive agencies violating |
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| 63 | | - | 2.31statewide grants governance policies and about fraud and, waste, and abuse in grants |
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| 64 | | - | 2.32processes, with each comment concerning fraud reported as required under section 15.0572; |
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| 44 | + | 2.13exception to the requirements under clause (11). Exceptions shall expire or be renewed after |
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| 45 | + | 2.14five years. Executive agencies shall retain management of individual grants programs; |
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| 46 | + | 2.15 (2) provide a central point of contact concerning statewide grants management policies |
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| 47 | + | 2.16and procedures; |
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| 48 | + | 2.17 (3) serve as a resource to executive agencies in such areas as training, evaluation, |
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| 49 | + | 2.18collaboration, and best practices in grants management; |
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| 50 | + | 2.19 (4) ensure grants management needs are considered in the development, upgrade, and |
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| 51 | + | 2.20use of statewide administrative systems and leverage existing technology wherever possible; |
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| 52 | + | 2.21 (5) oversee and approve future professional and technical service contracts and other |
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| 53 | + | 2.22information technology spending related to executive agency grants management systems |
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| 54 | + | 2.23and activities; |
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| 55 | + | 2.24 (6) provide a central point of contact for comments about executive agencies violating |
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| 56 | + | 2.25statewide grants governance policies and about fraud and, waste, and abuse in grants |
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| 57 | + | 2.26processes, with each comment concerning fraud reported as required under section 15.0572; |
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| 58 | + | 2.27 (7) forward received comments to the appropriate agency for further action, and may |
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| 59 | + | 2.28follow up as necessary; |
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| 60 | + | 2.29 (8) provide a single listing of all available executive agency competitive grant |
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| 61 | + | 2.30opportunities and resulting grant recipients; |
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| 62 | + | 2.31 (9) selectively review development and implementation of executive agency grants, |
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| 63 | + | 2.32policies, and practices; and |
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| 66 | | - | REVISOR SGS H0002-1HF2 FIRST ENGROSSMENT 3.1 (7) forward received comments to the appropriate agency for further action, and may |
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| 67 | | - | 3.2follow up as necessary; |
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| 68 | | - | 3.3 (8) provide a single listing of all available executive agency competitive grant |
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| 69 | | - | 3.4opportunities and resulting grant recipients; |
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| 70 | | - | 3.5 (9) selectively review development and implementation of executive agency grants, |
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| 71 | | - | 3.6policies, and practices; and |
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| 72 | | - | 3.7 (10) selectively review executive agency compliance with best practices.; and |
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| 73 | | - | 3.8 (11) require executive agencies to: |
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| 74 | | - | 3.9 (i) conduct at least one in-person, unannounced monitoring visit before final payment |
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| 75 | | - | 3.10is made for any grant over $50,000 and at least annual in-person, unannounced monitoring |
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| 76 | | - | 3.11visits for any grant over $250,000; and |
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| 77 | | - | 3.12 (ii) withhold funds from any grantee that does not submit a progress report required |
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| 78 | | - | 3.13under the grant agreement until the grantee submits a satisfactory report, unless the grantee's |
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| 79 | | - | 3.14inability to submit a progress report is caused by the executive agency, including but not |
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| 80 | | - | 3.15limited to a malfunction or failure of the executive agency's grant portal. |
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| 81 | | - | 3.16 (b) The commissioner may determine that it is cost-effective for agencies to develop |
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| 82 | | - | 3.17and use shared grants management technology systems. This system would be governed |
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| 83 | | - | 3.18under section 16E.01, subdivision 3, paragraph (b). |
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| 84 | | - | 3.19 Sec. 5. Minnesota Statutes 2024, section 16B.98, subdivision 4, is amended to read: |
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| 85 | | - | 3.20 Subd. 4.Reporting of violations.A state employee who discovers evidence of violation |
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| 86 | | - | 3.21of laws or rules governing grants is encouraged to must immediately report the violation or |
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| 87 | | - | 3.22suspected violation to the employee's supervisor, the commissioner or the commissioner's |
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| 88 | | - | 3.23designee, or the legislative auditor. If the state employee notifies the employee's supervisor, |
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| 89 | | - | 3.24the commissioner, or the commissioner's designee, then the supervisor, commissioner, or |
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| 90 | | - | 3.25designee must immediately notify the legislative auditor. The legislative auditor shall report |
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| 91 | | - | 3.26to the Legislative Audit Commission if there are multiple complaints about the same agency. |
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| 92 | | - | 3.27The auditor's report to the Legislative Audit Commission under this section must disclose |
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| 93 | | - | 3.28only the number and type of violations alleged. An employee making a good faith report |
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| 94 | | - | 3.29under this section has the protections provided for under section 181.932, prohibiting the |
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| 95 | | - | 3.30employer from discriminating against the employee. |
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| 96 | | - | 3Sec. 5. |
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| 97 | | - | REVISOR SGS H0002-1HF2 FIRST ENGROSSMENT 4.1 Sec. 6. Minnesota Statutes 2024, section 16B.98, subdivision 5, is amended to read: |
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| 98 | | - | 4.2 Subd. 5.Creation and validity of grant agreements.(a) A grant agreement and |
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| 99 | | - | 4.3amendments are not valid and do not bind unless: |
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| 100 | | - | 4.4 (1) the grant agreement and amendments have been executed by the head of the agency |
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| 101 | | - | 4.5or a delegate who is party to the grant; |
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| 102 | | - | 4.6 (2) the grant agreement and amendments have been approved by the commissioner; |
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| 103 | | - | 4.7 (3) the accounting system shows an encumbrance for the amount of the grant in |
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| 104 | | - | 4.8accordance with policy approved by the commissioner except as provided in subdivision |
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| 105 | | - | 4.911; and |
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| 106 | | - | 4.10 (4) the grant agreement and amendments include an effective date that references either |
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| 107 | | - | 4.11section 16C.05, subdivision 2, or 16B.98, subdivisions 5 and 7, as determined by the granting |
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| 108 | | - | 4.12agency. |
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| 109 | | - | 4.13 (b) The combined grant agreement and amendments must not exceed five years without |
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| 110 | | - | 4.14specific, written approval by the commissioner according to established policy, procedures, |
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| 111 | | - | 4.15and standards, or unless the commissioner determines that a longer duration is in the best |
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| 112 | | - | 4.16interest of the state. |
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| 113 | | - | 4.17 (c) A fully executed copy of the grant agreement with all amendments and other required |
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| 114 | | - | 4.18records relating to the grant must be kept on file at the granting agency for a time equal to |
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| 115 | | - | 4.19that required of grantees in subdivision 8. |
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| 116 | | - | 4.20 (d) Grant agreements must comply with policies established by the commissioner for |
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| 117 | | - | 4.21minimum grant agreement standards and practices. Grant agreements must require the |
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| 118 | | - | 4.22grantee to prominently post on the grantee's website the names of, and contact information |
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| 119 | | - | 4.23for, the organization's leadership and the employee or other person who directly manages |
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| 120 | | - | 4.24and oversees the grant for the grantee. |
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| 121 | | - | 4.25 (e) The attorney general may periodically review and evaluate a sample of state agency |
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| 122 | | - | 4.26grants to ensure compliance with applicable laws. |
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| 123 | | - | 4.27 Sec. 7. Minnesota Statutes 2024, section 16B.981, subdivision 2, is amended to read: |
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| 124 | | - | 4.28 Subd. 2.Financial information required; determination of ability to perform.For |
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| 125 | | - | 4.29grants of $50,000 or more and subject to sections 16B.97 and 16B.98, before an agency |
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| 126 | | - | 4.30awards a competitive, legislatively named, single-source, or sole-source grant, the agency |
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| 127 | | - | 4.31must complete a preaward risk assessment to assess the risk that a potential grantee cannot |
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| 65 | + | REVISOR SGS/RC 25-0216301/14/25 3.1 (10) selectively review executive agency compliance with best practices.; and |
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| 66 | + | 3.2 (11) require executive agencies, without exception, to: |
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| 67 | + | 3.3 (i) conduct at least one in-person, unannounced monitoring visit before final payment |
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| 68 | + | 3.4is made for any grant over $50,000 and at least annual in-person, unannounced monitoring |
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| 69 | + | 3.5visits for any grant over $250,000; |
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| 70 | + | 3.6 (ii) conduct a financial reconciliation of each grant project expenditure prior to |
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| 71 | + | 3.7disbursement for any grant over $50,000; and |
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| 72 | + | 3.8 (iii) withhold funds from any grantee that does not submit a progress report required |
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| 73 | + | 3.9under the grant agreement until the grantee submits a satisfactory report. |
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| 74 | + | 3.10 (b) The commissioner may determine that it is cost-effective for agencies to develop |
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| 75 | + | 3.11and use shared grants management technology systems. This system would be governed |
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| 76 | + | 3.12under section 16E.01, subdivision 3, paragraph (b). |
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| 77 | + | 3.13 (c) A state employee who knowingly violates a requirement imposed by the commissioner |
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| 78 | + | 3.14under paragraph (a), clause (11), is guilty of a misdemeanor. |
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| 79 | + | 3.15 Sec. 5. Minnesota Statutes 2024, section 16B.98, subdivision 4, is amended to read: |
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| 80 | + | 3.16 Subd. 4.Reporting of violations.A state employee who discovers evidence of violation |
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| 81 | + | 3.17of laws or rules governing grants is encouraged to must report the violation or suspected |
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| 82 | + | 3.18violation to the employee's supervisor, the commissioner or the commissioner's designee, |
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| 83 | + | 3.19or and the legislative auditor. The legislative auditor shall report to the Legislative Audit |
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| 84 | + | 3.20Commission if there are multiple complaints about the same agency. The auditor's report |
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| 85 | + | 3.21to the Legislative Audit Commission under this section must disclose only the number and |
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| 86 | + | 3.22type of violations alleged. An employee making a good faith report under this section has |
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| 87 | + | 3.23the protections provided for under section 181.932, prohibiting the employer from |
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| 88 | + | 3.24discriminating against the employee. |
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| 89 | + | 3.25 Sec. 6. Minnesota Statutes 2024, section 16B.98, subdivision 5, is amended to read: |
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| 90 | + | 3.26 Subd. 5.Creation and validity of grant agreements.(a) A grant agreement and |
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| 91 | + | 3.27amendments are not valid and do not bind unless: |
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| 92 | + | 3.28 (1) the grant agreement and amendments have been executed by the head of the agency |
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| 93 | + | 3.29or a delegate who is party to the grant; |
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| 94 | + | 3.30 (2) the grant agreement and amendments have been approved by the commissioner; |
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| 95 | + | 3Sec. 6. |
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| 96 | + | REVISOR SGS/RC 25-0216301/14/25 4.1 (3) the accounting system shows an encumbrance for the amount of the grant in |
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| 97 | + | 4.2accordance with policy approved by the commissioner except as provided in subdivision |
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| 98 | + | 4.311; and |
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| 99 | + | 4.4 (4) the grant agreement and amendments include an effective date that references either |
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| 100 | + | 4.5section 16C.05, subdivision 2, or 16B.98, subdivisions 5 and 7, as determined by the granting |
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| 101 | + | 4.6agency. |
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| 102 | + | 4.7 (b) The combined grant agreement and amendments must not exceed five years without |
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| 103 | + | 4.8specific, written approval by the commissioner according to established policy, procedures, |
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| 104 | + | 4.9and standards, or unless the commissioner determines that a longer duration is in the best |
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| 105 | + | 4.10interest of the state. |
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| 106 | + | 4.11 (c) A fully executed copy of the grant agreement with all amendments and other required |
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| 107 | + | 4.12records relating to the grant must be kept on file at the granting agency for a time equal to |
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| 108 | + | 4.13that required of grantees in subdivision 8. |
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| 109 | + | 4.14 (d) Grant agreements must comply with policies established by the commissioner for |
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| 110 | + | 4.15minimum grant agreement standards and practices. Grant agreements must require the |
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| 111 | + | 4.16grantee to prominently post on the grantee's website a current organizational chart for the |
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| 112 | + | 4.17duration of the grant agreement. |
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| 113 | + | 4.18 (e) The attorney general may periodically review and evaluate a sample of state agency |
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| 114 | + | 4.19grants to ensure compliance with applicable laws. |
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| 115 | + | 4.20 Sec. 7. Minnesota Statutes 2024, section 16B.98, subdivision 8, is amended to read: |
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| 116 | + | 4.21 Subd. 8.Audit.(a) A grant agreement made by an executive agency must include an |
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| 117 | + | 4.22audit clause that provides that the books, records, documents, internal controls, and |
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| 118 | + | 4.23accounting procedures and practices of the grantee or other party that are relevant to the |
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| 119 | + | 4.24grant or transaction are subject to examination by the commissioner, the granting agency |
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| 120 | + | 4.25and either the legislative auditor or the state auditor, as appropriate, for a minimum of six |
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| 121 | + | 4.26years from the grant agreement end date, receipt and approval of all final reports, or the |
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| 122 | + | 4.27required period of time to satisfy all state and program retention requirements, whichever |
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| 123 | + | 4.28is later. If a grant agreement does not include an express audit clause, the audit authority |
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| 124 | + | 4.29under this subdivision is implied. |
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| 125 | + | 4.30 (b) If the granting agency is a local unit of government, and the governing body of the |
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| 126 | + | 4.31local unit of government requests that the state auditor examine the books, records, |
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| 127 | + | 4.32documents, internal controls, and accounting procedures and practices of the grantee or |
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| 128 | + | 4.33other party according to this subdivision, the granting agency shall be liable for the cost of |
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| 129 | | - | REVISOR SGS H0002-1HF2 FIRST ENGROSSMENT 5.1or would not perform the required duties. In making this assessment, the agency must review |
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| 130 | | - | 5.2the following information as applicable: |
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| 131 | | - | 5.3 (1) the potential grantee's history of performing duties similar to those required by the |
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| 132 | | - | 5.4grant, whether the grant requires the potential grantee to perform services at a significantly |
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| 133 | | - | 5.5increased scale, and whether the grant will require significant changes to the operation of |
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| 134 | | - | 5.6the potential grantee's organization; |
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| 135 | | - | 5.7 (2) for a potential grantee that is a nonprofit organization, the potential grantee's most |
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| 136 | | - | 5.8recent Form 990 or Form 990-EZ filed with the Internal Revenue Service. If the potential |
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| 137 | | - | 5.9grantee has not been in existence long enough or is not required to file Form 990 or Form |
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| 138 | | - | 5.10990-EZ, the potential grantee must demonstrate to the agency's satisfaction that the potential |
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| 139 | | - | 5.11grantee is exempt and must instead submit the potential grantee's most recent board-reviewed |
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| 140 | | - | 5.12financial statements and documentation of appropriate internal controls or, if there is no |
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| 141 | | - | 5.13such board, by the applicant's managing group. At a minimum, the potential grantee's internal |
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| 142 | | - | 5.14controls must require the segregation of duties concerning the authorization, disbursement, |
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| 143 | | - | 5.15and recording of expenditures; |
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| 144 | | - | 5.16 (3) for a potential grantee that is a for-profit business, the potential grantee's most recent |
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| 145 | | - | 5.17federal and state tax returns, current financial statements, certification that the business is |
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| 146 | | - | 5.18not under bankruptcy proceedings, and disclosure of any liens on its assets. If a business |
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| 147 | | - | 5.19has not been in business long enough to have a tax return, the grantee must demonstrate to |
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| 148 | | - | 5.20the agency's satisfaction that the grantee has appropriate internal financial controls. At a |
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| 149 | | - | 5.21minimum, the potential grantee's internal controls must require the segregation of duties |
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| 150 | | - | 5.22concerning the authorization, disbursement, and recording of expenditures; |
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| 151 | | - | 5.23 (4) evidence of good standing with the secretary of state under chapter 317A, or other |
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| 152 | | - | 5.24applicable law; |
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| 153 | | - | 5.25 (5) if the potential grantee is required to complete an audit under section 309.53, |
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| 154 | | - | 5.26subdivision 3, the potential grantee's most recent audit report performed by an independent |
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| 155 | | - | 5.27third party in accordance with generally accepted accounting principles; and |
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| 156 | | - | 5.28 (6) certification, provided by the potential grantee, that none of its current principals |
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| 157 | | - | 5.29have been convicted of a felony financial crime in the last ten years. For this section, a |
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| 158 | | - | 5.30principal is defined as a public official, a board member, or staff with the authority to access |
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| 159 | | - | 5.31funds provided by this agency or determine how those funds are used. |
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| 160 | | - | 5Sec. 7. |
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| 161 | | - | REVISOR SGS H0002-1HF2 FIRST ENGROSSMENT 6.1 Sec. 8. Minnesota Statutes 2024, section 16B.981, subdivision 3, is amended to read: |
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| 162 | | - | 6.2 Subd. 3.Additional measures for some grantees.The agency may must require |
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| 163 | | - | 6.3additional information and may provide enhanced oversight for grantees that have not |
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| 164 | | - | 6.4previously received state or federal grants for similar amounts or similar duties and have |
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| 165 | | - | 6.5not yet demonstrated the ability to perform the duties required under the grant on the scale |
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| 166 | | - | 6.6required. For nonprofit organizations, this additional information must include but is not |
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| 167 | | - | 6.7limited to two additional years of Form 990 or Form 990-EZ filed with the Internal Revenue |
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| 168 | | - | 6.8Service, where applicable. Before awarding a grant, the agency must inquire about |
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| 169 | | - | 6.9compensation that, in the agency's estimation, is in excess of the amount customarily paid |
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| 170 | | - | 6.10to those in comparable positions. |
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| 171 | | - | 6.11 Sec. 9. Minnesota Statutes 2024, section 16B.991, subdivision 1, is amended to read: |
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| 172 | | - | 6.12 Subdivision 1.Criminal charge or conviction.Each grant agreement subject to sections |
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| 173 | | - | 6.1316B.97 and 16B.98 must provide that the agreement will immediately be terminated |
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| 174 | | - | 6.14suspended if the recipient is convicted of charged with a criminal offense relating to a state |
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| 175 | | - | 6.15grant agreement and terminated if the recipient is convicted. |
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| 176 | | - | 6.16 Sec. 10. CONFORMING CHANGES TO GRANTS POLICIES. |
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| 177 | | - | 6.17 The commissioner of administration must update the commissioner's grants management |
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| 178 | | - | 6.18policies and procedures as necessary to conform with this act. |
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| 179 | | - | 6.19 Sec. 11. EFFECTIVE DATE. |
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| 180 | | - | 6.20 This act is effective the day following final enactment. |
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| 181 | | - | 6Sec. 11. |
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| 182 | | - | REVISOR SGS H0002-1HF2 FIRST ENGROSSMENT |
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| 130 | + | REVISOR SGS/RC 25-0216301/14/25 5.1the examination. If the granting agency is a local unit of government, and the grantee or |
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| 131 | + | 5.2other party requests that the state auditor examine all books, records, documents, internal |
|---|
| 132 | + | 5.3controls, and accounting procedures and practices related to the grant, the grantee or other |
|---|
| 133 | + | 5.4party that requested the examination shall be liable for the cost of the examination. |
|---|
| 134 | + | 5.5 Sec. 8. Minnesota Statutes 2024, section 16B.981, subdivision 2, is amended to read: |
|---|
| 135 | + | 5.6 Subd. 2.Financial information required; determination of ability to perform.For |
|---|
| 136 | + | 5.7grants of $50,000 or more and subject to sections 16B.97 and 16B.98, before an agency |
|---|
| 137 | + | 5.8awards a competitive, legislatively named, single-source, or sole-source grant, the agency |
|---|
| 138 | + | 5.9must complete a preaward risk assessment to assess the risk that a potential grantee cannot |
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| 139 | + | 5.10or would not perform the required duties. In making this assessment, the agency must review |
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| 140 | + | 5.11the following information as applicable: |
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| 141 | + | 5.12 (1) the potential grantee's history of performing duties similar to those required by the |
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| 142 | + | 5.13grant, whether the grant requires the potential grantee to perform services at a significantly |
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| 143 | + | 5.14increased scale, and whether the grant will require significant changes to the operation of |
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| 144 | + | 5.15the potential grantee's organization; |
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| 145 | + | 5.16 (2) for a potential grantee that is a nonprofit organization, the potential grantee's most |
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| 146 | + | 5.17recent Form 990 or Form 990-EZ filed with the Internal Revenue Service. If the potential |
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| 147 | + | 5.18grantee has not been in existence long enough or is not required to file Form 990 or Form |
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| 148 | + | 5.19990-EZ, the potential grantee must demonstrate to the agency's satisfaction that the potential |
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| 149 | + | 5.20grantee is exempt and must instead submit the potential grantee's most recent board-reviewed |
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| 150 | + | 5.21financial statements and documentation of appropriate internal controls or, if there is no |
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| 151 | + | 5.22such board, by the applicant's managing group. At a minimum, the potential grantee's internal |
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| 152 | + | 5.23controls must require the segregation of duties concerning the authorization, disbursement, |
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| 153 | + | 5.24and recording of expenditures; |
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| 154 | + | 5.25 (3) for a potential grantee that is a for-profit business, the potential grantee's most recent |
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| 155 | + | 5.26federal and state tax returns, current financial statements, certification that the business is |
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| 156 | + | 5.27not under bankruptcy proceedings, and disclosure of any liens on its assets. If a business |
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| 157 | + | 5.28has not been in business long enough to have a tax return, the grantee must demonstrate to |
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| 158 | + | 5.29the agency's satisfaction that the grantee has appropriate internal financial controls. At a |
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| 159 | + | 5.30minimum, the potential grantee's internal controls must require the segregation of duties |
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| 160 | + | 5.31concerning the authorization, disbursement, and recording of expenditures; |
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| 161 | + | 5.32 (4) evidence of good standing with the secretary of state under chapter 317A, or other |
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| 162 | + | 5.33applicable law; |
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| 163 | + | 5Sec. 8. |
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| 164 | + | REVISOR SGS/RC 25-0216301/14/25 6.1 (5) if the potential grantee is required to complete an audit under section 309.53, |
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| 165 | + | 6.2subdivision 3, the potential grantee's most recent audit report performed by an independent |
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| 166 | + | 6.3third party in accordance with generally accepted accounting principles; and |
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| 167 | + | 6.4 (6) certification, provided by the potential grantee, that none of its current principals |
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| 168 | + | 6.5have been convicted of a felony financial crime in the last ten years. For this section, a |
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| 169 | + | 6.6principal is defined as a public official, a board member, or staff with the authority to access |
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| 170 | + | 6.7funds provided by this agency or determine how those funds are used. |
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| 171 | + | 6.8 Sec. 9. Minnesota Statutes 2024, section 16B.981, subdivision 3, is amended to read: |
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| 172 | + | 6.9 Subd. 3.Additional measures for some grantees.The agency may must require |
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| 173 | + | 6.10additional information and may provide enhanced oversight for grantees that have not |
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| 174 | + | 6.11previously received state or federal grants for similar amounts or similar duties and have |
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| 175 | + | 6.12not yet demonstrated the ability to perform the duties required under the grant on the scale |
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| 176 | + | 6.13required. For nonprofit organizations, this additional information must include but is not |
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| 177 | + | 6.14limited to documented employee compensation agreements for each principal and a detailed |
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| 178 | + | 6.15payroll report that includes total compensation, by type, paid to each principal in each of |
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| 179 | + | 6.16the previous three years. Before awarding a grant, the agency must inquire about |
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| 180 | + | 6.17compensation that, in the agency's estimation, is in excess of the amount customarily paid |
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| 181 | + | 6.18to those in comparable positions. |
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| 182 | + | 6.19 Sec. 10. Minnesota Statutes 2024, section 16B.991, subdivision 1, is amended to read: |
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| 183 | + | 6.20 Subdivision 1.Criminal charge or conviction.Each grant agreement subject to sections |
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| 184 | + | 6.2116B.97 and 16B.98 must provide that the agreement will immediately be terminated |
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| 185 | + | 6.22suspended if the recipient is convicted of charged with a criminal offense relating to a state |
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| 186 | + | 6.23grant agreement and terminated if the recipient is convicted. |
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| 187 | + | 6.24 Sec. 11. CONFORMING CHANGES TO GRANTS POLICIES. |
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| 188 | + | 6.25 The commissioner of administration must update the commissioner's grants management |
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| 189 | + | 6.26policies and procedures as necessary to conform with this act. |
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| 190 | + | 6.27 Sec. 12. EFFECTIVE DATE. |
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| 191 | + | 6.28 This act is effective the day following final enactment. |
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| 192 | + | 6Sec. 12. |
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| 193 | + | REVISOR SGS/RC 25-0216301/14/25 |
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