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 the responsibilities of the Department of Finance and Administration, which include developing grant agreement templates, monitoring compliance, and conducting field audits of capital outlay projects.

Additionally, the Act includes a force majeure provision that allows for temporary waivers of strict compliance with its requirements in the event of natural disasters or other extraordinary circumstances. Such waivers can only be granted if adequate alternatives are in place to protect public funds, and they must be documented and communicated to relevant parties. The provisions of this Act will take effect on July 1, 2025.