An Act Regarding Audits of State Agency Expenditures To Recover Overpayments and Lost Discounts
Maine Legislature, Session 125, LD 0104
Committee Amendment CA_A_S12 (Senate)

COMMITTEE AMENDMENT" A" to S.P. 46, L.D. 104, Bill, "An Act Regarding 
Audits of State Agency Expenditures To Recover Overpayments and Lost Discounts" 
Amend the bill in section 1 in § 1622 in subsection 1 by striking out all of paragraph 
A (page 1, lines 16 to 23 in L.D.) and inserting the following: 
'A. "Overpayment" means a payment made to a vendor: 
(1) In duplicate for a single invoice; 
(2) In the amount of a discount available from the vendor that was not applied; 
(3) For a late payment penalty that was improperly applied by the vendor; 
(4) For shipping costs that were computed incorrectly or incorrectly included in 
an invoice; 
(5) For any commodities billed at an amount higher than negotiated in a contract 
or master agreement; 
(6) For a state tax imposed pursuant to Title 36; or 
(7) For a good or service the vendor did not provide.' 
Amend the bill in section 1 in § 1622 in subsection 2 by striking out all of the first 
paragraph (page 1, lines 26 to 35 in L.D.) and inserting the following: 
'2. Recovery audits for certain overpayments. In addition to the audit authorized 
pursuant to section 1621, at least once every 10 years the State Controller shall contract 
with one or more consultants to conduct recovelY audits of payments made by state 
agencies to vendors. The audits must be designed to detect and recover overpayments to 
the vendors and to recommend improved state agency accounting operations. A state 
agency shall provide the recovery audit consultant all information necessary for the audit.' 
Amend the bill in section 1 in § 1622 in subsection 2 by striking out all of paragraph 
A (page 1, line 36 and page 2, lines 1 to 9 in L.D.) and inserting the following: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 46, L.D. 104 
'A. A contract under this subsection: 
(1) May provide for reasonable compensation for services provided under the 
contract, including compensation determined by the application of a specified 
percentage of the total amount recovered because of the consultant's audit 
activities or recommendations as a fee for services; and 
(2) 
To allow time for the performance of existing state payment auditing 
procedures, may not allow a recovery audit of a payment during the I80-day 
period after the date the payment was made.' 
Amend the bill in section 1 in § 1622 by striking out all of subsection 3 (page 2, lines 
to 32 in L.D.) and inserting the following: 
'3. Funds recovered and payments to consultants. The State Controller shall 
deposit all recovered money in a nonlapsing Other Special Revenue Funds audit recovery 
account within the Department of Administrative and Financial Services. From the audit 
recovery account, the State Controller shall make payment to a consultant that conducts a 
recovery audit under subsection 2 according to the negotiated contract and refund 
amounts in accordance with state or federal regulations. Any amounts not refunded or 
paid to the consultant must be identified in the report pursuant to subsection 4.' 
Amend the bill in section 1 in § 1622 in subsection 4 by striking out all of paragraph 
B (page 2, lines 40 and 41 and page 3, lines 1 and 2 in L.D.) and inserting the following: 
'B. Not later than December 1st of each odd-numbered year, the State Controller 
shall issue a report to the joint standing committee of the Legislature having 
jurisdiction over appropriations and financial affairs and the joint standing committee 
of the Legislature having jurisdiction over state and local government matters 
summarizing the contents of all reports received from a consultant contracted 
pursuant to subsection 2 during the state fiscal biennium ending June 30th of that 
year.' 
Amend the bill in section 1 in § 1622 in subsection 5 in the first line (page 3, line 3 in 
L.D.) by striking out the following: "shall" and inserting the following: 'may' 
SUMMARY 
This amendment makes a number of changes to the bill requiring the State Controller 
to conduct recovery audits. 
1. It adds to the definition of "overpayment" a commodity billed at an amount higher 
than negotiated in a contract or master agreement. 
2. It requires recovery audits to be completed at least every 10 years. 
3. It removes the exemption from the audit recovery process of a state agency that 
has a low ProP9rtion of its expenditures made to vendors. 
4. It removes the section that would have allowed an audit recovery consultant to 
pursue judicial action on behalf of the State. 
5. It changes the wayan audit recovery consultant is paid by setting up an audit 
recovery account out of which the consultant is paid. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A" to S.P. 46, L.D. 104 
6. 
It requires the State Controller to report to the Joint Standing Committee on 
Appropriations and Financial Affairs and the Joint Standing Committee on State and 
Local Government rather than the Legislature as a whole. 
7. It makes rulemaking by the State Controller optional rather than mandatory. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03114/11 frac 
LD 104 
LR 151(02) 
An Act Regarding Audits of State Agency Expenditures To Recover Overpayments and Lost 
Discounts 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment '..A" ~ - /:-
Committee: State and Local Government 
Fiscal Note Required: Yes 
Fiscal Note 
Potential current biennium savings - Other Special Revenue Funds 
Potential current biennium cost increase - Other Special Revenue Funds 
The additional costs to the Department of Administrative and Financial Services to contract with outside auditors to 
recover overpayments made by all state agencies is contingent on the recovery of such payments. Any funds 
recovered will be deposited in the Audit Recovery Account in the State Controller's office and will be used to pay the 
costs of the program. If no recoveries are made, no expenditures will be incurred. The amount of net savings from the 
bill will depend on the results of the audit process and is not estimated at this time. 
LRO 151 (02) - Fiscal Note - Page 1 of 1