1. A. Home agencies must conduct a risk assessment on project readiness and ensure grantees are prepared to spend at least eighty-five percent of their allocated capital outlay funds within three years of the grant award.
2. B. Home agencies must adhere to the state’s model accounting practices requirements for grant management and oversight (FIN 9.2), as amended, and use an approved capital outlay or special appropriation grant agreement template developed by the department.
3. C. Home agencies must analyze and review compliance and expenditure reports submitted by grantees for capital outlay or special appropriations at least quarterly, and they must also be able to create fund drawdown projections for each project.
4. D. Home agencies, in collaboration with the state auditor’s office, must develop policies and procedures for performing field audits of capital outlay or special appropriation projects using a statistical or stratified approach.
5. E. Grantees must undergo performance reviews to assess the implementation of corrective action plans for material weaknesses or significant deficiencies. The home agency must monitor compliance and take appropriate steps to address any non-compliance throughout the grant period.
6. F. Home agencies must ensure that the sales, leases, and licenses of capital assets acquired with appropriations are approved in accordance with applicable law.
7. G. Home agencies must continuously monitor a grantee’s compliance with the applicable uniform funding criteria and take appropriate action to correct any noncompliance.

[2.91.1.10 NMAC - N, 7/28/2026]