DNR outlines ENRTF community-grants plan as lawmakers press for stricter safeguards on expedited and advance payments

The House Environment and Natural Resources Policy Committee spent its hearing examining how the Department of Natural Resources plans to run a new community grant program funded by the Environment and Natural Resources Trust Fund and whether proposed expedited rounds and advance payments could increase risk to public dollars.

"State law requires agencies to perform pre-award risk assessments for any grant of $50,000 or more," said Catherine Tyson, deputy legislative auditor, summarizing Office of Grants Management policy and state statute for the committee. She told members that reimbursement is the preferred payment method, that grants over $250,000 require at least one annual monitoring visit, and that agencies must evaluate grantees’ past performance and financial information during pre-award checks.

Mary Robinson, the Department of Natural Resources’ chief financial officer, told the committee the DNR believes it can both expand who receives trust-fund money and meet statutory and policy oversight requirements. "We believe that we can meet the goals of this program to expand access to ENRTF funding across the state and also meet the requirements that we need to for our internal controls," Robinson said. DNR said it will use the same grants team that manages Outdoor Heritage and pass-through grants and plans to create an advisory council.

The DNR’s report proposes two kinds of rounds: expedited grants intended for shovel-ready projects and standard grants. The agency outlined proposed dollar thresholds of expedited grants up to $50,000 and standard grants up to $750,000; expedited rounds would move faster and be held more frequently (DNR stated an expectation of two expedited rounds per year and one standard round). DNR also said the program would allow fiscal agents to act as administrative partners for smaller applicants and would permit administrative expenses intended to support application and monitoring work.

Lawmakers pressed DNR on the $50,000 threshold and on whether that level was chosen to avoid more extensive Office of Grants Management rules. "Was the $50,000 threshold ... selected simply to avoid the additional OGM requirements?" asked Chair Heintzeman. Catherine Sherman Hohen, DNR’s agency-wide grants manager, said the threshold was chosen to tailor review and monitoring to grant size, not to avoid oversight. "The intent is not that we will not be doing pre-award financial capacity checking or monitoring," she said; instead, DNR said it will scale the depth of checks for smaller awards while still verifying debarment status, secretary-of-state standing, felony convictions of principals, fiscal capacity and internal controls.

Several committee members said they were alarmed by the combination of expedited rounds, the possibility of advance payments, and the lack of concrete criteria for when advances would be used. Representative Schultz warned that the report appeared focused on "getting the dollars out as fast as possible" and urged stronger integrity measures. DNR replied that advance payments would not be blanket disbursements; any advance would be considered case by case, limited in size and paired with enhanced oversight such as partial disbursements, reconciliation and clawback provisions.

Members also debated whether the proposed $750,000 maximum for standard grants would be adequate for certain projects — especially trail rehabilitation, which DNR staff said can cost "hundreds of thousands of dollars per mile" depending on scope. Other members stressed the original intent of the program to help very small community organizations and suggested fiscal agents and allowable administrative funds could reduce the need for advances.

Judy Randall, legislative auditor, praised the committee’s forward-looking hearing and urged a risk-based approach rather than a binary application of OGM rules based only on dollar thresholds. "You get to decide what you want," Randall said; she recommended that the committee specify which OGM policies should apply regardless of size, require progress reports, and require agencies to identify higher-risk awards for extra oversight.

Next steps: committee chairs invited OLA to provide formal recommendations on statutory language and guardrails; DNR said it plans to continue refining templates and controls as it stands up the program. The committee requested follow-up guidance from OLA and adjourned without a final vote on program design.