AUGUSTA (AP) – Baldacci administration officials told lawmakers Thursday no recurrence of questionable spending within several state cultural agencies is likely, but that an investigation of past practices is continuing.

Appearing before the Legislature’s Appropriations panel, gubernatorial finance chief Rebecca Wyke said meetings with top officials at the agencies left her optimistic that a more thorough understanding of administration concerns was in place. At the same time, State Controller Edward Karass said he expects to come forward with new findings within weeks.

Already, a state controller’s audit has found flaws in the financial management of several state cultural agencies and suggests that several thousand dollars of state money has been misused.

The audit drew sharp responses from leaders of the state agencies, who called the audit process “seriously flawed and poorly managed.”

State museum Director Joseph Phillips, arts commission Director Alden Wilson, historic preservation commission Director Earle Shettleworth and state library Director Gary Nichols wrote that they would “appreciate the opportunity to meet with” Wyke, who heads the state Department of Administrative and Financial Services, “and to offer our willingness to work constructively on these matters in the future.”

The initial audit looked at connections between the agencies, the Maine Cultural Affairs Council on which they and other organizations are represented, the Maine Community Cultural Alliance and the Verrill Dana law firm.

“While the money involved to date is less than $5,000 of state and federal money, we find this relationship to be odd in its nature,” Karass wrote to Wyke.

“There is no clear separation between the state, its employees and the MCCA. Also, we find there to be too many vagaries surrounding the activity that has been engaged in by all involved including the role of the MCCA’s contract with its vendor,” Karass wrote.

The controller’s internal audit review said it was touched off in June by allegations by unnamed individuals of possible wrongdoing. A central issue, the review said, was whether steps were taken “to circumvent the prohibition of using state or federal funds to pay for lobbying activities by creating a corporation through which to process these payments.”

The controller’s report said, in part, “we argue that the Arts Commission and the Maine State Museum contributed state funds to the MCCA with the knowledge that these funds would be directly used to pay for costs incurred by MCCA for Verrill Dana’s services.”

Verrill Dana partner Jim Cohen said last month the firm had not billed the state or understood itself to be working for the state.

AP-ES-11-15-07 1705EST

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