Pay BillWritten by Maura McDevitt, CPA, MBA, CNAP, CGMA, BMSS Member
Mississippi has enacted the Grant and Subgrant Administration Transparency and Accountability of Non-Governmental Organizations Act of 2026 (HB 1171), introducing sweeping new requirements for organizations that receive state-appropriated grant funding. The law, effective January 1, 2027, significantly enhances oversight, reporting, and compliance expectations for nonprofits and other non-governmental entities.
Key Highlights
1. Increased Performance Accountability
State agencies must now establish clear, measurable objectives for all grant programs, including long-term performance goals. Grant recipients will be required to submit annual progress reports demonstrating measurable outcomes. Failure to meet reporting or performance standards may result in payment suspension, termination of funding, and potential disqualification from future grants.
2. Expanded Financial Reporting Requirements
Both primary recipients and subrecipients must provide detailed annual financial reports. These include breakdowns of expenditures, administrative costs, and full transparency regarding funds distributed to subrecipients. Additional documentation is required for significant expenditures, increasing scrutiny over how public funds are used.
3. New Leadership Disclosure Rules
Organizations applying for or receiving grant funding must disclose key information about executive leadership and board members. This includes prior involvement in organizations with compliance violations and any criminal convictions related to financial misconduct. These disclosures must be updated regularly and certified under penalty of perjury.
4. Strict Prohibitions on Use of Funds
The law explicitly prohibits the use of grant funds for partisan political activities, including voter registration efforts or campaign-related activities. It also introduces conflict-of-interest safeguards related to shared board members between funding entities and recipients. Violations may result in immediate termination of funding and a three-year ban on receiving future grants.
5. Enhanced Audit and Transparency Measures
All nonprofit and quasi-public recipients will be subject to detailed compliance audits. These audits require extensive financial schedules, disclosure of related-party transactions, and corrective action plans. Audit results will be publicly available through the state’s Transparency Mississippi portal, reinforcing public accountability.
6. Stronger Enforcement Authority
The Department of Finance and Administration (DFA) is empowered to enforce compliance, including suspending payments, withholding new awards, or recovering funds for noncompliance. Serious violations may also be referred to the Attorney General.
What This Means for Your Organization
Organizations that receive or plan to pursue Mississippi state grant funding should begin preparing now. Key action steps include:
- Reviewing internal reporting and compliance processes
- Strengthening financial tracking and documentation systems
- Evaluating governance structures and disclosure readiness
- Ensuring policies prohibit restricted political activities
Early preparation will be critical to maintaining eligibility and avoiding disruptions in funding once the law takes effect.
Bottom Line
HB 1171 represents a significant shift toward increased transparency and accountability in Mississippi’s grant funding environment. While the law introduces additional administrative responsibilities, it also aims to ensure that public funds are used effectively and responsibly. Organizations that proactively adapt to these requirements will be best positioned for continued success in securing and managing grant funding. If you are in need of assistance in preparing for compliance with this new law, please reach out to BMSS by visiting our website, calling (833) CPA-BMSS or contacting Maura McDevitt directly via email at mmcdevitt@bmss.com.
