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OHE pitches formula shift for tribal college O&M grants to speed payments
Summary
Office of Higher Education told lawmakers reimbursement and contract processes delayed operations-and-maintenance payments to three tribal colleges and proposed moving the legislatively named grants into a formula distribution to speed access to funds.
The Minnesota Office of Higher Education told the House Higher Education Finance and Policy Committee that three tribal colleges experienced uneven timing in receiving legislatively named operations-and-maintenance (O&M) funds, and the office is proposing to transition those grants into a formula-driven program to accelerate payments.
Commissioner Dennis Olsen said the governor’s budget includes a proposal "to incorporate this program into the existing tribal college supplemental assistance grant program and transition it from a legislatively named grant into a formula based program." He and agency staff said the change would create a funding floor for each college while enabling formula distribution to reduce contracting delays.
Why it matters: tribal colleges said during earlier hearings that some saw almost all funds while others had little or none available in the initial months. Fitzgibbon explained that because legislatively named grants must be managed as contracts, OHE requires grantees to submit work plans and budgets, then to execute grant contracts and submit reimbursement requests. "Our agency does for the most part work on a reimbursement process," Fitzgibbon said, noting that some colleges simply had less time to incur eligible expenses and request reimbursement before the end of the fiscal window.
OHE described the proposed mechanics: set a funding floor to meet legislative intent (the agencies discussed a $1,000,000 floor in testimony) and then fold remaining funds into the supplemental assistance formula (the office referenced the existing $150,000 appropriation within the supplemental program as part of the structure). The agency said the tribe presidents and administrators it consulted generally supported a formula approach because formula funding reduces negotiation time and speeds availability to campuses.
OHE staff also noted implementation details committee members pressed on: what counts as eligible O&M spending (the agency said statutory language and higher-education accounting standards were used to determine items that qualify; new construction is typically excluded) and grant contract timing. Commissioner Olsen said the office is working with the three tribal colleges on reimbursement for an unemployment insurance aid component passed last year.
Ending: OHE asked lawmakers to consider the budget bill language that would shift the existing legislatively named O&M appropriations into the supplemental-assistance formula. Committee members indicated they would consider the proposal during budget deliberations and follow up with questions about statutory language and any required statutory changes.
