The report identifies ‘serious weaknesses in internal control’

of state spending.

HALLOWELL (AP) – Maine Auditor Gail Chase released her latest single audit report with more fanfare than usual Thursday, inviting reporters to her office to review the multipart accounting booklet for fiscal 2002 with Senate President Beverly Daggett and Baldacci administration budget chief Rebecca Wyke.

Having already made known her decision to forgo the strongest censures, Chase’s media availability highlighted a recognition by state officials of heightened interest in fiscal accountability – especially in the wake of continuing questions about the use of $18.9 million at the Department of Human Services.

The Baldacci administration has called in outside examiners to trace the federal welfare funds in question and officials say indications are, as Chase said previously, that the money did not appear to have been misappropriated.

In giving the state its first ever “unqualified opinion,” the auditor’s report still “identified serious weaknesses in internal control, as well as instances of noncompliance” with program regulations.

“However, we recognize that the financial managers of the state have initiated action that should resolve many of these issues,” the audit report concluded in the annual assessment, which covered a 12-month period ending a year ago, before Gov. John Baldacci took office.

Among the problem areas cited in the audit report were adoption assistance and foster care, with both programs found to be “in material noncompliance with the eligibility requirements.”

Overall, the report said, “the state of Maine has corrected the deficiencies that resulted in a qualification of the audit opinion for the previous fiscal year. Various departments and agencies have improved their systems of accountability, and most managers and employees perform their duties well.”

In the case of the foster care program within the Human Services Department’s Bureau of Child and Family Services, the report projected “likely questioned costs” of more than $4.2 million within a total expenditure of federal funds of nearly $22.5 million.

Similarly, in the bureau’s adoption assistance program, projections based on sample reviews resulted in an estimate of nearly $2 million in likely questioned costs within a total expenditure of just over $7 million in federal funds.

In both foster care and adoption assistance, expenditures consisted primarily of board and care payments.

Actual questioned costs in both programs, resulting from sample case reviews, were substantially lower.

In both cases, responses outlining corrective action were included in the auditor’s report.

House Speaker Patrick Colwell issued a statement Thursday praising Chase’s report and putting in a plug for a fledgling state oversight unit.

“The new office of Program Evaluation and Government Accountability will help Maine to do an even better job of evaluating what works and what does not work,” the Gardiner Democrat said. “OPEGA will be a powerful tool for showing that Maine government is accountable, especially when combined with the scrupulous word of the office of the auditor.”

Daggett, an Augusta Democrat who previously served on a legislative oversight panel, has been less enthusiastic about the new office and suggested Thursday she still had questions about its funding.

In her comments, she focused on the process already in place that brought accounting questions to light – a point also made by Colwell.

“The system that we have in place worked. … I think this is an example of things working,” she said.

AP-ES-07-03-03 1417EDT



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