The Public Finance Accountability Act establishes new funding criteria and grant management requirements for state agencies in New Mexico. It mandates that grantees must complete an annual audit for one of the past two fiscal years to be eligible for capital outlay appropriations or special purpose appropriations. If a grantee's audit reveals material weaknesses or significant deficiencies, they must create an actionable plan to address these issues, with support from the state agency. The act also outlines conditions under which a state agency may require a fiscal agent for a grant and allows grantees to appeal such decisions.

Additionally, the act requires the Department of Finance and Administration to develop grant management and oversight procedures, ensuring compliance with applicable laws regarding the sale, lease, or licensing of capital assets acquired through appropriations. The department is tasked with monitoring state agencies' adherence to these requirements and has the authority to temporarily waive compliance in cases of force majeure, such as natural disasters or pandemics, provided that adequate alternatives are in place to protect public funds. The provisions of this act will take effect on July 1, 2025.