HF2786

Purpose of the Bill

The purpose of this bill is to set criteria for when the Minnesota Department of Education must not enter into or must terminate grant agreements. The bill aims to ensure that grant recipients are compliant with legal and financial accountability standards.

Main Provisions

• The bill outlines specific conditions under which grant agreements should not be entered or must be terminated with nonprofit organizations. These conditions include:

  • The failure of a nonprofit organization to file required IRS Form 990 or Form 990-EZ.
  • Failure to file required reports under section 309.53.
  • An organization being administratively dissolved by the Secretary of State for failing to renew annually.
  • Losing tax-exempt status under state or federal law.
  • Administrative costs exceeding 25% of the organization's revenue.
  • Employee compensation exceeding 110% of the governor's compensation.
  • The organization being under investigation for fraud, waste, or abuse.

• There is an exclusion for grants provided to political subdivisions, such as school districts, cooperative units, or charter schools, meaning these rules do not apply to them.

Significant Changes to Existing Law

• This bill introduces new criteria under Minnesota Statutes chapter 127A for the management and oversight of educational grants, particularly focusing on financial accountability and addressing fraud prevention.

Relevant Terms

• Grants
• Department of Education
• Nonprofit organization
• IRS Form 990
• Administrative dissolution
• Tax-exempt status
• Compensation limits
• Fraud investigation
• Education Finance