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 provides a process for grantees to appeal such decisions.

Additionally, the Act requires the Department of Finance and Administration to develop grant management and oversight requirements, including ensuring compliance with laws regarding the sale or lease of capital assets acquired through grants. The department is tasked with monitoring compliance and may grant temporary waivers for strict adherence to the Act in cases of force majeure events, provided that adequate alternatives are in place to protect public funds. The provisions of this Act will take effect on July 1, 2025.