Grants; increase oversight, accountability and transparency in administration of by state agencies.
What changed between versions
The bill now explicitly covers federal funds appropriated by the State Legislature in addition to state funds. Multiple definitions and provisions were updated to reference 'state or federal funds' throughout.
A federal law carve-out was added throughout: multiple provisions now state they apply 'unless required otherwise by federal law' or 'unless specifically required by federal law,' creating exceptions where federal requirements conflict with state rules.
All reporting requirements changed from quarterly to annual: objectives, progress reports, and financial reports are now due annually rather than quarterly. The termination trigger for unmet metrics changed from two consecutive quarters to 120 days after the annual report due date.
A new conflict-of-interest prohibition was added: grant funds cannot be distributed to an entity sharing a common board member with the funding grantee without written notice and disclosure of the potential conflict.
The detailed five-year debarment regime for voter registration violations (old Section 5) was removed and replaced with a simpler three-year debarment. The public website transparency requirement (old Section 6) requiring agencies to display all grants, subrecipients, and reports online was eliminated entirely.
Enforcement authority was consolidated under DFA, which can now suspend payments, withhold new awards, or recoup funds. Audit reports are published by DFA (not the State Auditor) and transmitted to the Legislative Budget Office rather than to the Lieutenant Governor, Speaker, and committee chairs.
The audit section now explicitly covers quasi-public entities in addition to NGOs. Audit schedules and Corrective Action Plans must now be certified by both an authorized officer and a certified public accountant (previously only the officer).
The effective date was changed from July 1, 2026 to January 1, 2027. The audit report deadline was extended from 120 days to 180 days after fiscal year end. Specific implementation deadlines for DFA guidance and agency policy updates were removed.
The definition of 'grant' was broadened to include funds obtained by methods other than application processes. 'State agency' was expanded to include military departments, government corporations, and quasi-government entities. Individuals and households are now explicitly excluded from the definitions of primary recipient and subrecipient.
The requirement for DFA and MDTIS to develop an automated data processing tool for standardizing financial information was removed. The leadership disqualification provisions that would suspend grants when certain individuals held board positions were also removed.