An Act To Expand Notification Requirements for Internal Control Inquiries Made by Nonstate Organizations
Maine Legislature, Session 122, LD 1862
Committee: State and Local Government
Sponsors: BARSTOW
Amends: 5 MRSA §1541

Legislative Document 
No. 1862 
H.P.1302 
House of Representatives, January 3, 2006 
An Act To Expand Notification Requirements for Internal Control 
Inquiries Made by Nonstate Organizations 
Submitted by the Department of Audit pursuant to Joint Rule 204. 
Received by the Clerk of the House on December 28, 2005. Referred to the Committee on 
State and Local Government pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint 
Rule 401. 
Presented by Representative BARSTOW of Gorham. 
Printed 011 recycled paper 
7r/~/J7.~ 
MILUCENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §1541, sub-§10-A, 1[F, as amended by PL 2003, c. 
600, §3, is further amended to read: 
F. 
Access 
to resources 
and 
records must be limited to 
authorized individuals as determined by the state agency or 
department head, except that the powers and duties of the 
State 
Auditor 
may 
not 
be 
limited 
by 
this 
subsection. 
Restrictions 
on 
access 
to 
resources 
depend 
upon 
the 
vulnerability of the resource and the perceived risk of 
loss, both of which must be periodically assessed. The state 
agency or department head is responsible for maintaining 
accountability for the custody and use of resources 
and 
shall 
assign 
qualified 
individuals 
for 
that 
purpose. 
Periodic comparison must be made between the resources and 
the recorded accountability of the resources to reduce the 
risk of unauthorized use or loss and protect against waste 
and wrongful acts. The vulnerability and value of the state 
agency or department resources determine the frequency of 
this comparison. 
Within each state agency or department there must 
be 
a 
qualified employee whose responsibility, in addition to the 
employee's regularly assigned duties, is to ensure that the 
state agency or department has written documentation of its 
internal accounting 
and administrative control 
system 
on 
file. 
The 
employee 
shall, 
annually, 
or 
more 
often 
as 
conditions warrant, evaluate the effectiveness of the state 
agency's 
or 
department's 
internal 
control 
system 
and 
establish and 
implement 
changes 
necessary to ensure 
the 
continued integrity of the system. The employee shall: 
(1) 
Ensure 
that the 
documentation of all internal 
control systems is readily available for examination by 
the State Controller, 
Commissioner of Administrative 
and Financial Services and State Auditor; 
(2) 
Certify 
to 
the 
State 
appropriate updates have been 
the state agency or department; 
Controller 
that 
the 
made and implemented by 
( 3) 
Ensure 
that 
the 
results 
of 
audits 
and 
recommendations to improve state agency or department 
internal controls are promptly evaluated by the state 
agency or department management; 
(4) 
Ensure 
that 
timely 
and 
appropriate 
corrective 
actions are effected by the state agency or department 
management in response to an audit; 
Page l-LR2843(1) 
(5) 
Ensure that all actions determined by the state 
agency or department management as necessary to correct 
or otherwise resolve matters are addressed by the state 
agency or department in its budgetary request to the 
Legislature; and 
(6) 
Immediately notify the State Controller and the 
State Auditor when an auditor, 
inspector general or 
other representative 
from 
the Federal Government or 
another nons tate organization requests access to state 
agency 
resources 
and 
records 
related 
to 
internal 
controls. 
All unaccounted for variances, losses, shortages or thefts 
of funds or property must be immediately reported to the 
State Controller, who shall review the matter to determine 
the amount involved that must be reported to the appropriate 
state 
agency 
or 
department 
management, 
law 
enforcement 
officials and the State Auditor. 
The State Controller shall 
also 
determine 
the 
internal 
control 
weakness 
that 
contributed to or caused the condition. The State Controller 
shall 
then 
make 
recommendations 
to 
the state agency or 
department official overseeing the internal control system 
and 
other 
appropriate 
management 
officials. 
The 
recommendations of the State Controller must address 
the 
correction 
of 
the 
conditions 
found 
and 
the 
necessary 
internal 
control 
policies 
and 
procedures 
that 
must 
be 
modified. The state agency or department oversight official 
and the appropriate management officials shall immediately 
implement policies 
and procedures necessary to prevent 
a 
recurrence of the problems identified and report the steps 
taken to the State Controller. 
From time to time the State 
Controller 
shall 
examine 
the 
pOlicies 
and 
procedures 
implemented 
to 
ensure 
that 
the 
relevant 
policies 
and 
procedures are functioning appropriately. 
SUMMARY 
This bill requires that the State Auditor be notified when a 
nons tate organization requests access to state agency resources 
and records related to internal controls.