2007 Minnesota Statutes

16B.98 GRANTS MANAGEMENT PROCESS.
    Subdivision 1. Limitation. As a condition of receiving a grant from an appropriation of
state funds, the recipient of the grant must agree to minimize administrative costs. The granting
agency is responsible for negotiating appropriate limits to these costs so that the state derives the
optimum benefit for grant funding.
    Subd. 2. Ethical practices and conflict of interest. An employee of the executive branch
involved directly or indirectly in grants processes, at any level, is subject to the code of ethics in
section 43A.38.
    Subd. 3. Conflict of interest. (a) The commissioner must develop policies regarding code of
ethics and conflict of interest designed to prevent conflicts of interest for employees, committee
members, or others involved in the recommendation, awarding, and administration of grants. The
policies must apply to employees who are directly or indirectly in the grants process, which
may include the following:
    (1) developing request for proposals or evaluation criteria;
    (2) drafting, recommending, awarding, amending, revising, or entering into grant agreements;
    (3) evaluating or monitoring performance; or
    (4) authorizing payments.
    (b) The policies must include:
    (1) a process to make all parties to the grant aware of policies and laws relating to conflict of
interest, and training on how to avoid and address potential conflicts; and
    (2) a process under which those who have a conflict of interest or a potential conflict
of interest must disclose the matter.
    (c) If the employee, appointing authority, or commissioner determines that a conflict of
interest exists, the matter shall be assigned to another employee who does not have a conflict of
interest. If it is not possible to assign the matter to an employee who does not have a conflict of
interest, interested personnel shall be notified of the conflict and the employee may proceed
with the assignment.
    Subd. 4. Reporting of violations. A state employee who discovers evidence of violation
of laws or rules governing grants is encouraged to report the violation or suspected violation to
the employee's supervisor, the commissioner or the commissioner's designee, or the legislative
auditor. The legislative auditor shall report to the Legislative Audit Commission if there are
multiple complaints about the same agency. The auditor's report to the Legislative Audit
Commission under this section must disclose only the number and type of violations alleged. An
employee making a good faith report under this section has the protections provided for under
section 181.932, prohibiting the employer from discriminating against the employee.
    Subd. 5. Creation and validity of grant agreements. (a) A grant agreement is not valid
and the state is not bound by the grant unless:
    (1) the grant has been executed by the head of the agency or a delegate who is party to the
grant; and
    (2) the accounting system shows an encumbrance for the amount of the grant in accordance
with policy approved by the commissioner.
    (b) The combined grant agreement and amendments must not exceed five years without
specific, written approval by the commissioner according to established policy, procedures, and
standards, or unless the commissioner determines that a longer duration is in the best interest of
the state.
    (c) A fully executed copy of the grant agreement with all amendments and other required
records relating to the grant must be kept on file at the granting agency for a time equal to that
required of grantees in subdivision 8.
    (d) Grant agreements must comply with policies established by the commissioner for
minimum grant agreement standards and practices.
    (e) The attorney general may periodically review and evaluate a sample of state agency
grants to ensure compliance with applicable laws.
    Subd. 6. Grant administration. A granting agency shall diligently administer and monitor
any grant it has entered into.
    Subd. 7. Grant payments. Payments to the grantee may not be issued until the grant
agreement is fully executed.
    Subd. 8. Audit. (a) A grant agreement made by an executive agency must include an audit
clause that provides that the books, records, documents, and accounting procedures and practices
of the grantee or other party that are relevant to the grant or transaction are subject to examination
by the granting agency and either the legislative auditor or the state auditor, as appropriate, for a
minimum of six years from the grant agreement end date, receipt and approval of all final reports,
or the required period of time to satisfy all state and program retention requirements, whichever
is later. If a grant agreement does not include an express audit clause, the audit authority under
this subdivision is implied.
    (b) If the granting agency is a local unit of government, and the governing body of the local
unit of government requests that the state auditor examine the books, records, documents, and
accounting procedures and practices of the grantee or other party according to this subdivision, the
granting agency shall be liable for the cost of the examination. If the granting agency is a local unit
of government, and the grantee or other party requests that the state auditor examine all books,
records, documents, and accounting procedures and practices related to the grant, the grantee or
other party that requested the examination shall be liable for the cost of the examination.
    Subd. 9. Authority of attorney general. The attorney general may pursue remedies
available by law to avoid the obligation of an agency to pay under a grant or to recover payments
made if activities under the grant are so unsatisfactory, incomplete, or inconsistent that payment
would involve unjust enrichment. The contrary opinion of the granting agency does not affect the
power of the attorney general under this subdivision.
    Subd. 10. Grants with Indian tribes and bands. Notwithstanding any other law, an agency
may not require an Indian tribe or band to deny its sovereignty as a requirement or condition
of a grant with an agency.
History: 2007 c 148 art 2 s 23