Staff Report

Augusta – House and Senate Republicans today responded to Maine’s 2025 Single Use Audit, the State Audit that measures compliance with federal programs, warning that serious deficiencies identified in 2024 were not addressed — and in many cases, have worsened.

“This audit makes abundantly clear what legislative Republicans have been saying for months: there is a serious lack of leadership and accountability in the Mills administration, and legislative Democrats are all too willing to ignore it,” said Senate Republican Leader Trey Stewart, R–Aroostook. “Until we hold the administration accountable for its gross mismanagement of taxpayer funds, bad actors will continue to exploit the system, and taxpayers will foot the bill. We’ve heard enough excuses from this administration — it’s beyond time for real accountability and real change.”

 “Last year, State Auditor Matt Dunlap identified major breakdowns in oversight, procurement and internal controls. Republicans called for immediate corrective action. That action never came. The 2025 audit confirms a troubling pattern: systemic failures continue, accountability is lacking and taxpayer dollars remain exposed to waste, fraud and abuse.” said House Republican Leader Billy Bob Faulkingham, R-Winter Harbor. “Democrat control of State Government at all levels has failed the Maine people miserably. It’s time to clean this mess up.”

“Last December, I sent a letter to the administration requesting details on no bid contracts. The administration replied with obfuscation and excuses,” said Assistant Senate Republican Leader Matt Harrington, R-York. “We need accountability and action that includes: a full, independent investigation into state financial controls and program oversight; immediate corrective action with clear benchmarks and deadlines; full transparency for Maine taxpayers; and cooperation with federal oversight agencies”

“This shows a complete lack of accountability, severe mismanagement of taxpayer funds and a system that attracts fraudulent providers,” said Assistant House Republican Leader Katrina Smith, R-Palermo. “Taxpayers deserve confidence that their money is being handled responsibly and assurance that their loved ones are receiving quality care and access to services. None of those goals are being met.”

Key Findings from the 2025 Audit

• State agencies largely agreed with the findings: However, the administration cited staff turnover and a general lack of resources to explain some of the audit’s findings. Additionally, DHHS said in several responses throughout the audit that “there is not a requirement to provide documentation” to verify procurement justification forms were accurate, essentially arguing they weren’t required to be truthful.

• The audit identified 62 deficiencies, including 19 material weaknesses. These represent cases where the state’s internal controls are inadequate enough to prevent or detect errors, waste, fraud or abuse before it happens or even find it afterward through compliance audits. Material weaknesses rose over last year’s report.

• Ten out of 13 federal programs had problems: The audit led to qualified opinions on 10 major federal programs, including Medicaid, SNAP, and Child Nutrition, due to material noncompliance with federal requirements.

• The dead are still receiving benefits: In the SNAP program, auditors found that benefits were issued in 29 cases more than 75 days after the recipient’s date of death (DOD). In one case, benefits were continued for 268 days after DOD when the family informed the Office of Family Independence (OFI) although the department received the notification from MeCDC Vital Records.

• Procurement problems persist: Perennial problems with the way the state handles its $1.6 billion procurement and contract payment portfolio continued. Auditors tested 57 contracts and found that 36 were not signed at least two weeks prior to the contracts’ start date. In some cases, contracts and justification forms were signed nearly a year after work under the agreements reportedly started.

• New state program already has problems: The report detailed significant accounting irregularities in the State’s new Paid Family and Medical Leave (PFML) Fund, which is set to commence in May. Auditors found the amounts owed by employers were initially understated by $47 million, while $7.1 million in software expenditures were expensed rather than capitalized under proper accounting methods. Another error resulted in a $119.3 million overstatement of taxes receivable and deferred inflows, requiring a series of correcting adjusting entries to restate the state’s beginning net position.

• MaineCare compliance goes unchecked: In MaineCare, the state’s Medicaid program that gets $3.4 billion in federal funds, the State didn’t complete any of its 88 nursing home audits required under federal law. Auditors also could not determine whether Maine’s utilization-control program, which covers payments of $3.2 billion – including $2.5 billion in federal funds – to about 10,600 providers was effective. In fact, auditors said in the report the “Program Integrity Unit’s Utilization Cost program may not provide adequate monitoring of all Medicaid services, resulting in potential noncompliance with Federal regulations.”

• Child welfare risk continues: Under the state’s foster care system, auditors found children were placed in homes that did not satisfy federally required abuse and neglect registry checks also required by state policy. In the case of five children who were placed in these homes, this resulted in $7,629 in questioned foster care costs and $42,689 in questioned adoption-assistance costs. Auditors concluded two of those five children were later removed from the home after the checks were completed.