An Act Regarding Audits of State Agency Expenditures To Recover Overpayments and Lost Discounts
Maine Legislature, Session 125, LD 0104
Committee: State and Local Government
Sponsors: LANGLEY, COLLINS, COURTNEY, MASON, THIBODEAU, BRYANT, FITTS, FLEMINGS
Amends: 5 MRSA §1622

Legislative Document 
No. 104 
S.P. 46 
In Senate, January 20, 2011 
An Act Regarding Audits of State Agency Expenditures To Recover 
Overpayments and Lost Discounts 
(EMERGENCY) 
Reference to the Committee on State and Local Government suggested and ordered printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator LANGLEY of Hancock. 
Cosponsored by Senators: COLLINS of York, COURTNEY of York, MASON of 
Androscoggin, THIBODEAU of Waldo, Representatives: BRYANT of Windham, FITTS of 
Pittsfield, FLEMINGS of Bar Harbor. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, this legislation provides for the identification and recovery of payments 
made in error by the State; and 
Whereas, the current economic situation demands that the State take measures such 
as those required by this legislation as soon as possible; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §1622 is enacted to read: 
§1622.  Recovery of certain state agency overpayments 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Overpayment" includes a duplicate payment made to a vendor for a single 
invoice and a payment made to a vendor: 
(1)  When a discount available from the vendor was not applied; 
(2)  For a late payment penalty that was improperly applied by the vendor; 
(3)  For shipping costs that were computed incorrectly or incorrectly included in 
an invoice; 
(4)  For a state tax imposed pursuant to Title 36; or 
(5)  For a good or service the vendor did not provide. 
B.  "State agency" means a department, commission, board, office or other entity that 
is in the executive branch of State Government. 
2.  Recovery audits for certain overpayments.  In addition to the audit authorized 
pursuant to section 1621, the State Controller shall contract with one or more consultants 
to conduct recovery 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 with all information necessary for the audit.  The State Controller may 
exempt from the mandatory recovery audit process a state agency that has a low 
proportion of its expenditures made to vendors, according to criteria the State Controller 
adopts by rule after consideration of the likely costs and benefits of performing recovery 
audits for agencies that make relatively few or small payments to vendors. 
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; 
(2)  May permit or require the consultant to pursue a judicial action in a court 
inside or outside this State to recover an overpaid amount; and 
(3)  To allow time for the performance of existing state payment auditing 
procedures, may not allow a recovery audit of a payment during the 180-day 
period after the date the payment was made. 
B.  Notwithstanding any law to the contrary, the State Controller or a state agency 
whose payments are being audited may provide a person acting under a contract 
authorized by this subsection with any confidential information in the custody of the 
State Controller or state agency that is necessary for the performance of the audit or 
the recovery of an overpayment, to the extent the State Controller and state agency 
are not prohibited from sharing the information under an agreement with another 
state or the Federal Government.  A person acting under a contract authorized by this 
subsection, and each employee or agent of that person, is subject to all prohibitions 
against the disclosure of confidential information obtained from the State in 
connection with the contract that apply to the State Controller or applicable state 
agency or an employee of the State Controller or applicable state agency.  A person 
acting under a contract authorized by this subsection or an employee or agent of the 
person who discloses confidential information in violation of a prohibition under this 
subsection is subject to the same sanctions and penalties that would apply to the State 
Controller or applicable state agency or an employee of the State Controller or 
applicable state agency for that disclosure. 
3.  Payment to contractors and Federal Government.  A state agency shall pay, 
from recovered money appropriated for the purpose, the recovery audit consultant 
responsible for obtaining for the agency a reimbursement from a vendor. 
A state agency shall expend or return to the Federal Government any federal money that 
is recovered through a recovery audit conducted under this section.  The state agency 
shall expend or return the federal money in accordance with the rules of the federal 
program through which the agency received the federal money. 
4.  Reports.  The State Controller shall provide the following reports. 
A.  Within 7 days of receipt, the State Controller shall provide copies of any reports, 
including those in electronic form, received from a consultant contracted with 
pursuant to subsection 2 to: 
(1)  The Governor; 
(2)  The State Auditor; and 
(3)  The Legislative Council. 
B.  Not later than December 1st of each odd-numbered year, the State Controller shall 
issue a report to the Legislature summarizing the contents of all reports received from 
a contractor contracted pursuant to subsection 2 during the state fiscal biennium 
ending June 30th of that year. 
5.  Rules.  The State Controller shall adopt rules to implement the provisions of this 
section.  Rules adopted under this subsection are major substantive rules pursuant to 
chapter 375, subchapter 2-A. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill requires the State Controller to contract with one or more consultants to 
conduct recovery audits of payments made by state agencies to vendors to identify 
payments made in error and to recommend improvements for state agency accounting.  
The bill enumerates authorized contract provisions and provides for the handling of 
confidential information by a contractor.  The bill requires recovery audits of state 
agencies but allows the State Controller to exempt agencies with a low proportion of 
expenditures made to vendors.  The bill requires agencies to use recovered money to pay 
the audit consultant responsible for the recovery and to return or expend recovered 
federal money according to the rules of the federal program through which the agency 
received the money.  The bill requires the State Controller to forward the audit reports to 
the Governor, the State Auditor and the Legislative Council and to issue a summary 
report to the Legislature on a biennial basis.