The Senate File No. 981 is a legislative bill aimed at enhancing financial accountability for nonprofit organizations that receive state grants in Minnesota. Here are the key features of the bill:

1. Definition Enhancements: The bill defines essential terms related to the management of state grants, including what constitutes a certified financial audit, fiscal agent, grant, and the criteria for nonprofit organizations.

2. Eligibility Requirements: To qualify for a state grant, a nonprofit must:

   • Submit IRS Form 990 for the two years before getting a grant.
   • Ensure that no officer or employee is paid more than the governor’s annual compensation.
   • Not have any state agency employees or elected state, county, or local officials as voting members on its governing board.

3. Stringent Checks for Certain Nonprofits: Nonprofits where more than half of their revenue comes from state funds must also provide financial audits for the last two fiscal years and ensure no officers or governing board members have been convicted of financial crimes.

4. Reporting and Transparency: Nonprofits must detail how they spent grant money and report on outcomes. Reporting requirements include job creation, business impacts, and academic performance. These reports are due annually and must be submitted to specific legislative leaders.

5. Legislative Notifications: The bill mandates that if a nonprofit is found ineligible for a grant or if there are allegations of fraud or abuse, the commissioner must report this to relevant legislative chairs.

6. Audit Requirements: The bill specifies that grant agreements must include a clause allowing the examination of the nonprofit’s financial and record-keeping practices by state authorities for accountability.

This bill essentially tightens the financial oversight for nonprofits receiving taxpayer money, ensuring transparency and proper use of funds through rigorous eligibility criteria, mandatory audits, and regular reporting to the state legislature.