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STATE OF MAINE
SINGLE AUDIT REPORT
Uniform Guidance
Fiscal Year Ending June 30, 2021
Office of the State Auditor
Jacob B. Norton, CIA
State Auditor
STATE OF MAINE
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2021
Table of Contents
Page
LETTER OF TRANSMITTAL
Letter of Transmittal .................................................................................................. v
EXECUTIVE SUMMARY
Executive Summary ................................................................................................... A-3
BASIC FINANCIAL STATEMENTS
Independent Auditor’s Report...................................................................................... B-3
Management's Discussion and Analysis....................................................................... B-7
Basic Financial Statements:
Government-wide Financial Statements
Statement of Net Position .......................................................................................... B-22
Statement of Activities ............................................................................................... B-24
Governmental Fund Financial Statements
Balance Sheet – Governmental Funds ....................................................................... B-28
Reconciliation of the Balance Sheet – Governmental Funds
to the Statement of Net Position .................................................................... B-29
Statement of Revenues, Expenditures and Changes
in Fund Balances – Governmental Funds ...................................................... B-30
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances – Governmental Funds to the Statement of Activities ...... B-31
Proprietary Fund Financial Statements
Statement of Fund Net Position – Proprietary Funds ................................................ B-34
Statement of Revenues, Expenses and Changes
in Fund Net Position – Proprietary Funds ..................................................... B-35
Statement of Cash Flows – Proprietary Funds ........................................................... B-36
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position – Fiduciary Funds ............................................ B-38
Statement of Changes in Fiduciary Net Position – Fiduciary Funds ......................... B-39
Component Unit Financial Statements
Statement of Net Position – Component Units .......................................................... B-42
Statement of Activities – Component Units .............................................................. B-44
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Table of Contents – Continued
Notes to the Financial Statements .................................................................................... B-47
Required Supplementary Information:
Budgetary Comparison Schedule – Major Governmental Funds .............................. B-120
Budgetary Comparison Schedule – Budget to GAAP Reconciliation ....................... B-123
Notes to Required Supplementary Information – Budgetary Reporting ................... B-124
Required Supplementary Information – State Retirement Plans ............................... B-126
Required Supplementary Information – Other Post-employment Benefit Plans ....... B-146
Information about Infrastructure Assets Reported Using the Modified Approach.... B-152
INDEPENDENT AUDITOR’S REPORTS ON INTERNAL CONTROL AND COMPLIANCE
Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards............................. C-3
Independent Auditor’s Report on Compliance for Each Major Program and on Internal
Control Over Compliance Required by the Uniform Guidance ................................ C-5
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Schedule of Expenditures of Federal Awards .................................................................. D-3
U.S. Department of Agriculture ................................................................................. D-3
U.S. Department of Commerce .................................................................................. D-3
U.S. Department of Defense ...................................................................................... D-4
U.S. Department of Housing and Urban Development ............................................. D-4
U.S. Department of the Interior ................................................................................. D-4
U.S. Department of Justice ........................................................................................ D-4
U.S. Department of Labor .......................................................................................... D-5
U.S. Department of Transportation ............................................................................ D-5
U.S. Department of the Treasury ............................................................................... D-6
U.S. Equal Employment Opportunity Commission................................................... D-6
Institute of Museum and Library Services ................................................................. D-6
National Endowment for the Arts .............................................................................. D-6
National Endowment for the Humanities .................................................................. D-6
National Science Foundation ..................................................................................... D-6
U.S. Department of Veterans Affairs ......................................................................... D-6
U.S. Environmental Protection Agency ..................................................................... D-7
U.S. Department of Energy ........................................................................................ D-7
U.S. Department of Education ................................................................................... D-7
National Archives and Records Administration ........................................................ D-8
U.S. Election Assistance Commission ....................................................................... D-8
Northern Border Regional Commission .................................................................... D-8
U.S. Department of Health and Human Services ...................................................... D-8
Corporation for National and Community Service .................................................... D-11
Social Security Administration .................................................................................. D-11
U.S. Department of Homeland Security .................................................................... D-11
Notes to the Schedule of Expenditures of Federal Awards ............................................. D-12
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Table of Contents – Continued
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Section I - Summary of Auditor's Results ............................................................................. E-3
Section II - Index to Financial Statement Findings ............................................................... E-7
Section II - Financial Statement Findings .............................................................................. E-9
Section III - Index to Federal Findings by Federal Program and Finding Type .................... E-35
Section III - Index to Federal Findings by State Agency and Federal Compliance Area ...... E-41
Section III - Federal Findings and Questioned Costs ............................................................ E-45
CORRECTIVE ACTION PLAN
Corrective Action Plan........................................................................................................... F-3
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Summary Schedule of Prior Audit Findings .......................................................................... G-3
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STATE OF MAINE
OFFICE OF THE STATE AUDITOR
66 STATE HOUSE STATION
AUGUSTA, ME 04333-0066
TEL: (207) 624-6250
B. Melissa Perkins, CPA
Jacob B. Norton, CIA
Deputy State Auditor
State Auditor
Letter of Transmittal
Honorable Members of the Legislative Council for the 130th Legislature
Honorable Janet T. Mills
Governor of the State of Maine
I am pleased to submit the Single Audit of the State of Maine for the fiscal year ended
June 30, 2021. The audit was conducted in accordance with Government Auditing Standards,
issued by the Comptroller General of the United States; the requirements of the Single Audit Act
Amendments of 1996; and Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Our audit complies with 5 MRSA §243 and is also a prerequisite for the
receipt of Federal financial assistance. During fiscal year 2021, $6.4 billion in Federal financial
assistance was expended by the State of Maine.
This document contains the following reports and schedules:
• Independent Auditor’s Report
• Basic Financial Statements, Management’s Discussion and Analysis, Notes to the
Financial Statements, and Required Supplementary Information
• Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters based on an Audit of Financial Statements performed in
accordance with Government Auditing Standards
• Independent Auditor’s Report on Compliance for Each Major Program and on Internal
Control over Compliance Required by the Uniform Guidance
• Schedule of Expenditures of Federal Awards
• Schedule of Findings and Questioned Costs
• Financial Statement Findings
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• Indexes to Federal Program Findings
• Federal Findings and Questioned Costs
• Corrective Action Plan
• Summary Schedule of Prior Audit Findings
On behalf of the Office of the State Auditor, I thank employees throughout Maine Government
who assisted us during the audit.
Please contact me if you have questions or comments about the 2021 Single Audit of the State of
Maine.
Respectfully submitted,
Jacob Norton
State Auditor
March 31, 2022
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STATE OF MAINE
EXECUTIVE SUMMARY
FOR THE YEAR ENDED JUNE 30, 2021
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STATE OF MAINE
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2021
EXECUTIVE SUMMARY
The Office of the State Auditor (OSA) performs the Single Audit of the State of Maine, an
annual financial and compliance audit, to meet Federal and State requirements. OSA’s audit for
fiscal year 2021 includes fourteen major Federal programs that represent 86 percent of the $6.4
billion in Federal expenditures for the 2021 fiscal year. This Single Audit Report actually
consists of various audit reports, the related financial statements, and Federal audit findings and
recommendations.
Independent Auditor’s Report
OSA’s opinion on the State’s basic financial statements was unmodified. This means that OSA
provides reasonable assurance that the State of Maine’s financial statements are presented fairly
in all material respects in accordance with accounting principles generally accepted in the United
States of America. This report includes an opinion on the Schedule of Expenditures of Federal
Awards in relation to the basic financial statements taken as a whole.
Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance With Government Auditing Standards
OSA reported on internal control over financial reporting and identified one deficiency in
internal control that we considered to be a material weakness. A deficiency in internal control
exists when the design or operation of a control does not allow management or employees, in the
normal course of performing their assigned functions, to prevent, or detect and correct financial
statement misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the State’s financial statements would not be prevented or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance. We identified 13 significant deficiencies in
this report.
As part of obtaining reasonable assurance regarding whether the State’s financial statements
were not materially misstated, OSA performed tests of compliance with certain provisions of
Federal statutes, regulations, and the terms and conditions of its Federal awards applicable to its
Federal programs. The results of OSA’s tests disclosed one instance of noncompliance that is
required to be reported under Government Auditing Standards.
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Independent Auditor’s Report on Compliance for Each Major Program and on Internal
Control over Compliance Required by the Uniform Guidance
Compliance with program requirements
OSA qualified the opinion on compliance with program requirements for the Children’s Health
Insurance Program (CHIP), Disaster Grants – Public Assistance (Presidentially Declared
Disasters), Emergency Rental Assistance Program, Epidemiology and Laboratory Capacity for
Infectious Diseases (ELC), Immunization Cooperative Agreements, Medicaid Cluster,
Presidential Declared Disaster Assistance to Individuals and Households – Other Needs, SNAP
Cluster, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC),
Temporary Assistance for Needy Families (TANF), and Unemployment Insurance (UI) because
of material noncompliance. The remaining three Federal programs complied in all material
respects with program requirements.
Internal control over compliance
OSA identified 53 deficiencies in internal control over compliance. A deficiency exists when the
operation of a control over compliance does not allow management or employees, in the normal
course of performing their assigned functions, to prevent, or detect and correct, noncompliance
with a type of compliance requirement of a Federal program, on a timely basis.
Twenty-one deficiencies were considered to be material weaknesses in internal control. A
material weakness in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance, such that there is a reasonable possibility that
material noncompliance with a type of compliance requirement of a Federal program will not be
prevented, or detected and corrected, on a timely basis.
Another 32 deficiencies were considered to be significant deficiencies in internal control over
compliance. A significant deficiency exists when there is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a
Federal program that is less severe than a material weakness in internal control over compliance,
yet important enough to merit attention by those charged with governance.
Schedule of Findings and Questioned Costs
The Schedule of Findings and Questioned Costs includes management’s responses to the audit
findings. OSA’s Single Audit Report also identified $2.1 million of known questioned costs.
Questioned costs are amounts of Federal financial assistance that OSA believes were not spent in
accordance with program requirements. The Federal government may or may not disallow these
costs which could result in reimbursements from the State to the Federal government.
Corrective Action Plan
The Corrective Action Plan is a document separate from the audit findings that includes
information identifying the name of the person responsible for corrective action, the planned
corrective action, and the anticipated completion date.
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STATE OF MAINE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2021
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INDEX TO FINANCIAL INFORMATION
General Purpose Financial Statements of the State of Maine
For the Fiscal Year Ended June 30, 2021
PAGE
.....................................................................................................................................................................................................................................
Independent Auditor's Report B-3
.....................................................................................................................................................................................................................................
Management's Discussion and Analysis B-7
Basic Financial Statements
.....................................................................................................................................................................................................................................
B-19
.....................................................................................................................................................................................................................................
Notes to the Financial Statements B-47
Required Supplementary Information
.....................................................................................................................................................................................................................................
B-117
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STATE OF MAINE
OFFICE OF THE STATE AUDITOR
66 STATE HOUSE STATION
AUGUSTA, ME 04333-0066
TEL: (207) 624-6250
B. Melissa Perkins, CPA
Acting State Auditor
INDEPENDENT AUDITOR’S REPORT
Honorable Troy D. Jackson
President of the Senate
Honorable Ryan M. Fecteau
Speaker of the House of Representatives
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the State of Maine, as of and
for the year ended June 30, 2021, and the related notes to the financial statements. We did not audit the
financial statements of the aggregate discretely presented component units. These financial statements
collectively comprise the State of Maine’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit
the financial statements of the following component units: Child Development Services, Efficiency Maine
Trust, Finance Authority of Maine, Maine Community College System, Maine Governmental Facilities
Authority, Maine Health and Higher Educational Facilities Authority, Maine Maritime Academy, Maine
Municipal Bond Bank, Maine Public Employees Retirement System, Maine State Housing Authority,
Maine Turnpike Authority, Midcoast Regional Redevelopment Authority, Northern New England
Passenger Rail Authority, and the University of Maine System. The financial statements of these named
component units comprise 100 percent of the assets, net position, and revenue of the aggregate discretely
presented component units; 94 percent of assets, 95 percent of fund balance/net position, and 76 percent of
revenue of the aggregate remaining fund information (Maine Public Employees Retirement System and
Maine Governmental Facilities Authority); and 4 percent of the assets, and less than 1 percent of the net
position and revenue of the governmental activities (Maine Governmental Facilities Authority). The
financial statements of these named component units were audited by other auditors whose reports have
been furnished to us, and our opinion, insofar as it relates to the amounts included for these component
units, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing
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standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental activities,
the business-type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the State of Maine, as of June 30, 2021, and the respective changes
in financial position and, where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis on pages B-7 to B-18, and Budgetary Comparison Information, State Retirement
Plans, Other Post-Employment Benefit Plans, and Information about Infrastructure Assets Reported Using
the Modified Approach on pages B-117 to B-154, be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We and other
auditors have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the State of Maine’s basic financial statements. The accompanying Schedule of Expenditures of
Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal
B-4
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, and is not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United States
of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 10, 2021, on our consideration of the State of Maine’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is solely to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on the effectiveness of the State of Maine’s internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the State of Maine’s internal control over financial reporting and compliance.
B. Melissa Perkins, CPA
Acting State Auditor
Office of the State Auditor
Augusta, Maine
December 10, 2021
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the State of Maine’s annual financial report presents the State’s discussion and analysis of financial performance during
the year ended June 30, 2021. Please read it in conjunction with the transmittal letter at the front of this report and with the State’s
financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
Coronavirus Disease (COVID-19) Pandemic:
During the fiscal year ended June 30, 2021, the effects of COVID-19, a respiratory disease caused by a new strain of coronavirus,
which was declared a pandemic by the World Health Organization, continued to disrupt economic activity at all levels, including
within the State, and continued to cause volatility in financial markets around the world, including in the United States. The State of
Maine declared a state of emergency on March 15, 2020 and expired on June 30, 2021.
In response to the public health crisis created by COVID-19, since early March, the Governor has issued multiple executive orders
and declarations and taken various actions to protect the public health in an effort to reduce community spread of the virus and protect
Maine’s citizens. These measures have included, among others, closing or restricting access to certain businesses and activities,
issuing a “stay at home” directive for most citizens, restricting nonessential travel, requiring self-quarantining by persons traveling into
the State, suspension of lodging and short-term rental operations, and limiting movement of all persons in Maine to those necessary to
obtain or provide essential services or conduct essential activities.
Maine was well-poised, economically before the onset of the COVID- 19 pandemic. Maine avoided the fiscal distress experienced
broadly by other States between March and December 2020 due to the wise, bipartisan decisions made by the Governor and
Legislature from the onset of this Administration, to invest appropriately and responsibly and to manage State government in a fiscally
sound manner
Maine’s economy, as measured by GDP, has not only fully recovered to pre-pandemic levels, it has surpassed them. Maine’s bond
ratings have been upheld by both Moody’s and Standard & Poor's, and we have more than doubled the balance in the Budget
Stabilization Fund to its highest level ever.
The unprecedented federal fiscal and monetary policies have significantly impacted Maine’s economy, raising the volume and mix of
economic activity, which is in turn driving revenues and prosperity. The economic, financial and budgetary impacts on the State and
its economy from the measures taken to combat the spread of COVID-19, have been and are expected to continue to be significant.
Government-wide:
The net position of Governmental Activities increased by $974.5 million, while net position of Business-Type Activities
decreased by $88.5 million. The State’s assets and deferred outflows exceeded its liabilities and deferred inflows by
$1.941 billion at the close of fiscal year 2021. Of this amount $2.368 billion was reported as negative “Unrestricted” net
position. A negative balance means that it would be necessary to convert restricted assets (e.g., capital assets) to
unrestricted assets if all ongoing obligations were immediately due and payable. Component units reported net position
of $3.646 billion, an increase of $344.3 million (10.4 percent) from the previous year.
Fund level:
At the end of the fiscal year, the State’s governmental funds reported combined ending fund balances of $2.520 billion,
an increase of $1.040 billion from the previous year. The General Fund’s total fund balance was $785.6 million, an
increase of $561.8 million from the previous year. The Other Special Revenue Fund total fund balance was $1.370
billion, an increase of $418.1 million from the prior year.
The proprietary funds reported net position at year-end of $957.5 million, a decrease of $28.4 million from the previous
year. The decrease is primarily the result of a decrease in the Employment Security Fund of $94.4 million and an
increase in Employee Health Insurance and Retiree Health Insurance Funds, both Internal Service Funds, of $40.2
million and $15.7 million, respectively.
B-7
Long-term Debt:
The State’s liability for general obligation bonds increased by $27.3 million during the fiscal year, which represents the
difference between new issuances and payments of outstanding debt. During the year, the State issued $117.5 million in
bonds and made principal payments of $90.2 million.
Additional information regarding the government-wide, fund level, and long-term debt activities can be found beginning on page 10.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is an introduction to the State of Maine’s basic financial statements, which are comprised of three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other supplementary information in addition to the basic financial statements.
Government-wide Statements
The government-wide statements report information about the State as a whole using accounting methods similar to those used by
private-sector companies. The Statement of Net Position presents all of the State’s assets, deferred outflows, liabilities and deferred
inflows with the difference between the two reported as net position. Over time, increases and decreases in net position are an indicator
of whether the financial position is improving or deteriorating.
The Statement of Activities presents information showing how the State’s net position changed during the most recent fiscal year. All
changes in net position are reported as soon as the underlying events giving rise to the change occur, regardless of the timing of related
cash flows. Therefore, revenues and expenses are reported in these statements for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected taxes and earned but unused leave).
Both government-wide statements report three activities:
Governmental activities - Most basic services, such as health and human services, education, governmental support and operations,
justice and protection, and transportation are included in this category. The Legislature, Judiciary and the general operations of the
Executive departments fall within the Governmental Activities. Income taxes, sales and use taxes, and State and federal grants finance
most of these activities.
Business-type activities - The State charges fees to customers to help cover all, or most of, the costs of certain services it provides.
Operating costs not covered by customer fees are subsidized by the General Fund. Lottery tickets, Ferry Services, and the State’s
unemployment compensation services are examples of business-type activities.
Component units - Although legally separate, component units are important because the State is financially accountable for these
entities. The State has one “blended” component unit, the Maine Governmental Facilities Authority (MGFA) with Governmental
Activities as described above. Maine reports 12 other component units (7 major and 5 non-major) as discretely presented component
units of the State, and one component unit is reported with the State’s fiduciary funds. Complete financial statements of the individual
component units may be obtained directly from their respective administrative offices as shown in Note 1 A to the financial statements.
Government-wide statements are reported utilizing an economic resources measurement focus and full accrual basis of accounting. The
following summarizes the impact of the transition from modified accrual to full accrual accounting:
Capital assets used in governmental activities are not reported on governmental fund statements but are included on
government-wide statements.
Certain tax revenues that are earned, but not available, are reported as revenues in the Governmental Activities, but are
reported as deferred inflows on the governmental fund statements.
Other long-term assets that are not available to pay for current period expenditures are recorded as deferred outflows in
governmental fund statements, but not deferred on the government-wide statements.
Internal service funds are reported as Governmental Activities in the government-wide statements, but reported as proprietary
funds in the fund financial statements.
B-8
Governmental fund long-term liabilities, such as certificates of participation, net pension liabilities, compensated absences,
bonds and notes payable, and others appear as liabilities only in the government-wide statements.
Capital outlay spending results in capital assets on the government-wide statements, but is recorded as expenditures on the
governmental fund statements.
Proceeds from bonds, notes and other long-term financing arrangements result in liabilities on the government-wide
statements, but are recorded as other financing sources on the governmental fund statements.
Net position balances are allocated as follows:
Net Investment in Capital Assets are capital assets, net of accumulated depreciation, and reduced by outstanding
balances for bonds, notes, and other debt attributed to the acquisition, construction or improvement of those assets.
Restricted Net Position are those with constraints placed on the use by external sources (creditors, grantors, contributors,
or laws or regulations of governments) or imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows
of resources that do not meet any of the above restrictions.
Fund Financial Statements
The fund financial statements provide more detailed information about the State’s most significant funds. Funds are fiscal and
accounting entities with self-balancing sets of accounts that the State uses to keep track of specific revenue sources and spending for
particular purposes. The State’s funds are divided into three categories – governmental, proprietary, and fiduciary – and use different
measurement focuses and bases of accounting.
Governmental funds: Most of the basic services are included in governmental funds, which generally focus on how money flows into
and out of those funds and the balances left at year-end that are available for future spending. The governmental fund statements
provide a detailed short-term view that helps determine whether there are more or fewer financial resources that can be spent in the
near future to finance the programs of the State. The governmental fund statements focus primarily on the sources, uses, and balance of
current financial resources and often have a budgetary orientation. These funds are reported using a flow of current financial resources
measurement focus and the modified accrual basis of accounting. Because this information does not encompass the additional long-
term focus of the government-wide statements, a separate reconciliation provides additional information that explains the relationship
(or differences) between them. The governmental funds consist of the General Fund, special revenue, capital projects, and permanent
funds.
Proprietary funds: When the State charges customers for the services it provides, whether to outside customers or to other agencies
within the State, these services are generally reported in proprietary funds. Proprietary funds (enterprise and internal service) apply the
accrual basis of accounting utilized by private sector businesses. Enterprise funds report activities that provide supplies and services to
the general public. An example is the State Lottery Fund. Internal service funds report activities that provide supplies and services to
the State’s other programs and activities – such as the State’s Postal, Printing and Supply Fund. Internal service funds are reported as
Governmental Activities on the government-wide statements.
Fiduciary funds: The State is the trustee or fiduciary for assets that belong to others. The State is responsible for ensuring that the
assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. These funds include
pension and other employee benefit trusts administered by the Maine Public Employees Retirement System, a component unit, private-
purpose trusts, and agency funds. Fiduciary funds are reported using the accrual basis of accounting, except for Agency funds which
have no measurement focus. The State excludes these activities from the government-wide financial statements because these assets are
restricted in purpose and do not represent discretionary assets of the State to finance its operations.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in both
the government-wide and fund financial statements.
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Required Supplementary Information
The required supplementary information includes budgetary comparison schedules for the General Fund and major special revenue
funds. Also included are notes and a reconciliation of fund balance from the budgetary basis to fund balance determined according to
generally accepted accounting principles. This section also includes schedules of funding progress for certain pension and other post-
employment benefit trust funds and condition and maintenance data regarding certain portions of the State’s infrastructure.
Other Supplementary Information
Other supplementary information includes combining financial statements for non-major governmental, proprietary, and fiduciary
funds. These funds are added together, by fund type, and presented in single columns in the basic financial statements. Budgetary
comparison schedules by agency are also included for the general fund, the highway fund, federal funds, and other special revenue
fund.
FINANCIAL ANALYSIS OF THE STATE AS A WHOLE
The State's net position increased by $886.0 million to $1.941 billion over the course of fiscal year ended June 30, 2021, as detailed in
Tables A-1 and A-2. The increase is primarily due to increased corporate and individual tax revenue for governmental activities.
TABLE A-1: CONDENSED STATEMENT OF NET POSITION
(Expressed in Thousands)
Governmental Business-type Total
Activities Activities Primary Government
2021 2020* 2021 2020* 2021 2020*
Current and other noncurrent assets
Current and other assets $ 4,065,972 $ 3,619,224 $ 569,197 $ 715,461 $ 4,635,169 $ 4,334,685
Long-term assets 1,373,969 834,390 10,758 6,727 1,384,727 841,117
Current and other noncurrent assets 5,439,941 4,453,614 579,955 722,188 6,019,896 5,175,802
Total capital assets net of accum depr 4,457,571 4,346,711 39,887 37,205 4,497,458 4,383,916
Total Assets 9,897,512 8,800,325 619,842 759,393 10,517,354 9,559,718
Deferred Outflows of Resources 1,159,927 839,909 4,545 3,950 1,164,472 843,859
Current liabilities 2,423,597 2,511,428 53,349 105,174 2,476,946 2,616,602
Non-current liabilities 7,040,262 6,194,067 29,037 26,213 7,069,299 6,220,280
Total Liabilities 9,463,859 8,705,495 82,386 131,387 9,546,245 8,836,882
Deferred Inflows of Resources 193,764 509,385 519 1,986 194,283 511,371
Net Position (Deficit)
Net Investment in Capital Assets 3,587,505 3,651,931 39,887 37,205 3,627,392 3,689,136
Restricted 171,245 162,102 510,934 605,378 682,179 767,480
Unrestricted (deficit) (2,358,934) (3,388,679) (9,339) (12,613) (2,368,273) (3,401,292)
Total Net Position $ 1,399,816 $ 425,354 $ 541,482 $ 629,970 $ 1,941,298 $ 1,055,324
* As Restated
The State's fiscal year 2021 revenues totaled $13.034 billion. (See Table A-2) Taxes and Operating grants and contributions accounted
for most of the State's revenue by contributing 40.7 percent and 47.1 percent, respectively. The remainder came from charges for
services and other miscellaneous sources.
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion dollar economic stimulus
bill signed into law on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic. Through federal legislation,
the State of Maine received $1.25 billion dollars of Coronavirus Relief Funds (CRF) during fiscal year 2020 to be expended through
fiscal year 2023.
The State recorded operating grant revenues and operating expenses in the Coronavirus Relief Federal Expenditures Fund as costs
were incurred. The current unexpended amount is recorded as a Due To Other Government.
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The American Rescue Plan Act of 2021, also known as ARPA, is a $1.9 trillion dollar bill intended to provide funding to combat the
COVID-19 pandemic, including public health and economic impacts, signed into law on March 11, 2021. Through federal legislation,
the State of Maine received $997.5 million dollars of Coronavirus State Fiscal Recovery Funds (CSFRF) payable in two tranches. The
first tranche, $498.75 million was received during fiscal year 2021.
The total cost of all programs and services totaled $12.148 billion for the year 2021. (See Table A-2) These expenses are
predominantly (75.2 percent) related to health & human services, education and economic development & workforce training
activities. The State's governmental support & operations activities accounted for 5.0 percent of total costs. Total net position
increased by $886.0 million, primarily due to an increase in tax revenue of $1.067 billion. The increase in operating grants and
contributions was offset with increases in expenses in health & human services, education and economic development & workforce
training primarily due to the impact of the COVID-19 pandemic.
TABLE A-2: CONDENSED STATEMENT OF ACTIVITIES
(Expressed in Thousands)
Governmental Business-type Total
Activities Activities Primary Government
2021 2020* 2021 2020* 2021 2020*
Revenues:
Program Revenues:
Charges for Services $ 597,760 $ 581,995 $ 791,159 $ 707,105 $ 1,388,919 $ 1,289,100
Operating grants and contributions 6,124,694 4,853,773 19,379 42,756 6,144,073 4,896,529
General Revenues:
Taxes 5,299,667 4,232,398 - - 5,299,667 4,232,398
Other 201,560 210,472 - - 201,560 210,472
Total Revenues 12,223,681 9,878,638 810,538 749,861 13,034,219 10,628,499
Expenses:
Governmental Activities:
Governmental Support 606,474 552,439 - - 606,474 552,439
Education 2,518,099 2,115,388 - - 2,518,099 2,115,388
Health & Human Services 4,911,056 4,450,704 - - 4,911,056 4,450,704
Justice & Protection 538,019 504,571 - - 538,019 504,571
Transportation Safety 696,683 739,290 - - 696,683 739,290
Economic Development & Workforce Training 1,705,292 1,386,867 - - 1,705,292 1,386,867
Other 335,746 330,173 - - 335,746 330,173
Interest Expense 57,852 56,707 - - 57,852 56,707
Business-type Activities:
Employment Security - - 251,681 92,125 251,681 92,125
Lottery - - 328,250 254,683 328,250 254,683
Alcoholic Beverages - - 175,750 158,350 175,750 158,350
Military Equipment Maintenance - - 120 802 120 802
Other - - 23,223 25,162 23,223 25,162
Total Expenses 11,369,221 10,136,139 779,024 531,122 12,148,245 10,667,261
Excess (Deficiency) before Special Items, Gain
(Loss) on Sale of Assets and Transfers 854,460 (257,501) 31,514 218,739 885,974 (38,762)
Transfers 120,002 121,635 (120,002) (121,635) - -
Increase (Decrease) in Net Position 974,462 (135,866) (88,488) 97,104 885,974 (38,762)
Net Position, beginning of year 425,354 561,220 629,970 532,866 1,055,324 1,094,086
Ending Net Position $ 1,399,816 $ 425,354 $ 541,482 $ 629,970 $ 1,941,298 $ 1,055,324
* As Restated
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Governmental Activities
Revenues for the State's Governmental Activities totaled $12.224 billion while total expenses equaled $11.369 billion. The increase in
net position for Governmental Activities was $974.5 million in 2021, which was primarily the result of an increase in tax revenue of
$1.067 billion. The increase in expense activities is offset in part with the increase in operating grants & contributions primarily due to
the impact of COVID-19. In addition, the State’s Business-Type Activities transfers of $120.0 million (net) to the Governmental
Activities, included statutorily required profit transfers and the pledged profit of the Alcoholic Beverages Fund to finance the payment
of the Liquor Revenue Bonds.
The users of the State's programs financed $597.8 million of the cost. The federal and State governments subsidized certain programs
with grants and contributions of $6.125 billion. $5.501 billion of the State's net costs were financed by taxes and other miscellaneous
revenue.
TABLE A-3: TOTAL SOURCES OF REVENUES FOR GOVERNMENTAL ACTIVITIES FOR FISCAL YEAR 2021
TABLE A-4: TOTAL EXPENSES FOR GOVERNMENTAL ACTIVITIES FOR FISCAL YEAR 2021
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Business-Type Activities
Revenues for the State's Business-Type Activities totaled $810.5 million while expenses totaled $779.0 million. The decrease in net
position for Business-Type Activities was $88.5 million in 2021, due entirely to the transfer of $120.0 million (net) to Governmental
Activities.
Table A-5 presents the revenue of State Business-Type Activities: Employment Security, Alcoholic Beverages, Lottery, Ferry Services,
Military Equipment Maintenance, Consolidated Emergency Communications and other. The table also shows each activity's net cost
(total cost less fees generated by the activities and intergovernmental aid provided for specific programs) or net revenue. The net cost
shows the financial burden placed on the State's taxpayers by each of these functions.
TABLE A-5: NET REVENUE (COST) OF BUSINESS-TYPE ACTIVITIES
(Expressed in Thousands)
Total Cost Net Revenue (Cost)
2021 2020 2021 2020
Employment Security $ 251,681 $ 92,125 $ (95,234) $ 98,918
Alcoholic Beverages 175,750 158,350 61,671 60,090
Lottery 328,250 254,683 69,748 67,672
Ferry Services 12,501 13,841 (6,659) (8,915)
Military Equipment Maintenance 120 802 (105) (126)
Consolidated Emergency Communications 6,120 5,473 989 1,270
Other 4,602 1,379 1,104 436
Total $ 779,024 $ 526,653 $ 31,514 $ 219,345
The cost of all Business-Type Activities this year was $779.0 million. The users of the State's programs financed most of the cost.
The State's net revenue from Business-Type Activities was $31.5 million. Employment Security net revenue decreased by $95.2, while
Alcoholic Beverages and Lottery contributed $61.7 and $69.7 million of net revenue, respectively. The $120.0 million (net) transfers
from the State’s Business-Type Activities to the Governmental Activities included statutorily required profit transfers and the pledged
profit of the Alcoholic Beverages Fund to finance the payment of the Liquor Revenue Bonds.
FINANCIAL ANALYSIS OF THE STATE'S FUNDS
TABLE A-6: GOVERNMENTAL FUND BALANCES
(Expressed in Thousands)
2021 2020 Change
General $ 785,596 $ 223,842 $ 561,754
Highway 56,673 19,181 37,492
Federal 61,932 36,192 25,740
Other Special Revenue 1,369,756 951,653 418,103
Other Governmental Funds 246,120 248,815 (2,695)
Total $ 2,520,077 $ 1,479,683 $ 1,040,394
As of the end of the fiscal year, the State’s governmental funds reported combined ending fund balances of $2.520 billion, an increase
of $1.040 billion in comparison with the prior year. Of this total, $85.2 million (3.4 percent) is classified as non-spendable, either due
to its form or legal constraints, and $991.0 million (39.3 percent) is restricted for specific programs by external constraints,
constitutional provisions, or contractual obligations. Unspent bond proceeds and revenue restricted for transportation, natural resources
or other programs are included in restricted fund balance. At the end of fiscal year 2021, there was a $338.3 million of unassigned
fund balance on the GAAP basis in the General Fund.
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General Fund revenues and other sources were greater than General Fund expenditures and other uses resulting in an increase in the
fund balance of $561.8 million. Revenues and other sources of the General Fund increased by approximately $1.2 billion (29.0
percent), as compared to fiscal year end 2020, which is mainly attributed to an increase in tax revenue of over $1.0 billion primarily
due to in Sales & Use Tax and Individual Income Tax. General Fund expenditures and other financing uses increased by $446.0
million (10.8 percent), as compared to fiscal year 2020. This is due, primarily, to an increase in Transfers to Other Funds of $476.6
million primarily related to various legislative initiatives.
Other Special Revenue Fund balance increased $418.1 million, due primarily to an increase in net Transfers from Other Funds of
$438.6 million for various legislative initiatives.
Budgetary Highlights
For the 2021 fiscal year, the final legally adopted budgeted expenditures for the General Fund amounted to $4.019 billion, a decrease
of about $192 million from the original legally adopted budget of approximately $4.211 billion. Actual expenditures on a budgetary
basis amounted to approximately $250.5 million less than those authorized in the final budget. After deducting the encumbered
obligations and other commitments that will come due in fiscal year 2021, including the budgeted starting balance for fiscal year 2021,
there were funds remaining of $279.5 million to distribute in fiscal year 2021. Actual revenues exceeded final budget forecasts by
$307.1 million. For year end 2021, the Legislature approved transfers of $8.0 million from unappropriated surplus to the Budget
Stabilization Fund. In addition, there was interest earnings of $1.8 million along with legislatively and statutorily approved transfers
resulting in an increase to the balance in the Budget Stabilization Fund to $491.9 million as of June 30, 2021. This item is further
explained in Note 2 of the Financial Statements.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
By the end of fiscal year 2021, the State had roughly $4.497 billion in a broad range of capital assets, including land, infrastructure,
improvements, buildings, equipment, vehicles and intangibles. During fiscal year 2021, the State acquired or constructed more than
$186.6 million of capital assets. The most significant impact on capital assets during the year resulted from continued construction and
rehabilitation of roads and bridges, and major construction and renovation of State-owned facilities. More detailed information about
the State's capital assets and significant construction commitments is presented in Notes 8 and 17 to the financial statements.
TABLE A-7: CAPITAL ASSETS
(Expressed in Thousands)
Governmental Business-type Total
Activities Activities Primary Government
2021 2020 2021 2020 2021 2020
Land $ 654,589 $ 649,952 $ 2,389 $ 2,389 $ 656,978 $ 652,341
Buildings 890,790 881,631 4,655 4,655 895,445 886,286
Equipment 341,501 323,110 24,664 24,683 366,165 347,793
Improvements other than buildings 111,754 105,064 42,757 42,757 154,511 147,821
Software 121,686 118,777 - - 121,686 118,777
Infrastructure 2,988,290 2,959,855 - - 2,988,290 2,959,855
Construction in Progress 173,313 80,121 17,446 12,491 190,759 92,612
Total Capital Assets 5,281,923 5,118,510 91,911 86,975 5,373,834 5,205,485
Accumulated Depreciation 824,352 771,799 52,024 49,770 876,376 821,569
Capital Assets, net $ 4,457,571 $ 4,346,711 $ 39,887 $ 37,205 $ 4,497,458 $ 4,383,916
Modified Approach for Infrastructure
As allowed by GASB Statement No. 34, the State has adopted an alternative process for recording depreciation expense on selected
infrastructure assets – highways and bridges. Under this alternative method, referred to as the modified approach, the State expenses
certain maintenance and preservation costs and does not report depreciation expense. Utilization of this approach requires the State to:
1) maintain an asset management system that includes an up-to-date inventory of infrastructure assets; 2) perform condition
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assessments that use a measurement scale and document that the infrastructure assets are being preserved at or above the condition
level established; and 3) estimate the annual amounts that must be expended to preserve and maintain the infrastructure at the condition
level established by the State. As long as the State meets these requirements, any additions or improvements to infrastructure are
capitalized and all other maintenance and preservation costs are expensed.
Highways and bridges are included in the State’s infrastructure. There are 8,799 highway miles or 17,874 lane miles within the State.
Bridges have a deck area of 12.4 million square feet among 3,016 total bridges. The State has established a policy to maintain its
highways at an average condition assessment of 60. At June 30, 2021, the actual average condition was 74.0. Its policy for bridges is
an average sufficiency rating condition assessment of 60. The actual average condition for bridges was 74.7 at June 30, 2021.
Preservation costs for fiscal year 2021 totaled $192.3 million compared to estimated preservation costs of $185.0 million.
Transportation bonds, approved by referendum, are issued to fund improvements to highways and bridges. Of the amount authorized
by PL 2019, Chapter 673, $83 million in General Fund bonds were spent during fiscal year 2021. Of the amount authorized by PL
2019, Chapter 532, $35 million in General Fund bonds were spent during fiscal year 2021.
Additional information on infrastructure assets can be found in Required Supplementary Information (RSI).
Long-Term Debt
The State Constitution authorizes general obligation long-term borrowing, with 2/3 approval of the Legislature and ratification by a
majority of the voters, and general obligation short-term notes, of which the principal may not exceed an amount greater than 10
percent of all moneys appropriated, authorized and allocated by the Legislature from undedicated revenues to the General Fund and
dedicated revenues to the Highway Fund for that fiscal year, or greater than 1 percent of the total valuation of the State of Maine,
whichever is the lesser.
At year-end, the State had $1.647 billion in general obligation and other long-term debt outstanding. More detailed information about
the State's long-term liabilities is presented in Note 11 to the financial statements.
TABLE A-8: OUTSTANDING LONG-TERM DEBT
(Expressed in Thousands)
Governmental Business-type Total
Activities Activities Primary Government
2021 2020 2021 2020 2021 2020
General Obligation
Bonds $ 589,665 $ 572,700 $ - $ - $ 589,665 $ 572,700
Unmatured Premiums 89,397 79,098 - - 89,397 79,098
Other Long-Term Obligations 966,776 927,893 979 948 967,755 928,841
Total $ 1,645,838 $ 1,579,691 $ 979 $ 948 $ 1,646,817 $ 1,580,639
During the year, the State reduced outstanding long-term obligations by $90.2 million for general obligation bonds and $405.5 million
for other long-term debt. Also during fiscal year 2021, the State incurred $561.9 million of additional long-term obligations.
Credit Ratings
The State’s credit was rated during fiscal year 2021 by Moody’s Investors Service as Aa2 with a stable outlook and by Standard &
Poor’s as AA with a stable outlook.
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FACTORS BEARING ON THE FUTURE OF STATE AND NEXT YEAR'S BUDGETS
The Maine Consensus Economic Forecasting Commission (CEFC) convened on October 29, 2021, to review and revise its forecast
through 2025. This meeting builds on the Commission’s forecast update of April 1, 2021, incorporating the most recent data available
for all relevant baseline data.
As a critical part of the forecasting process, the Commission reviewed their key assumptions from the April 2021 forecast. Overall, the
Commission continues to be optimistic about increased in-migration to Maine but remains concerned about the economic
consequences of possible future COVID-19 variants.
Since the last forecast, the CEFC has seen its assumptions about federal stimulus and programs aiding the recovery confirmed, as
poverty rates in 2020 decreased as a result of these supports. The fate of similar programs now pending in Congress, however, remain
uncertain at this time. Inflation has spiked, led by supply chain challenges and oil price increases, and will accelerate the timing of
increased interest rates. Regional variations across the state in vaccinations and social distancing measures will likely contribute to an
uneven recovery in the coming months and years.
Total nonfarm employment is projected to increase by 3.7% in 2021, 2.3% in 2022, 1.0% in 2023 and 0.7% in both 2024 and 2025.
Compared to the April 2021 forecast, this is revised down in 2021, unchanged in 2022, and revised up in all years from 2023-2025
(from 0.7%, 0.1% and 0.1%). The new forecast accounts for both a decelerating labor market recovery in 2021, in large part at the
hands of the Delta variant, as well as an upside potential for increased migration into the state in the following years. The commission
is also optimistic that other factors, such as the return of K-12 school and childcare accessibility and a growing willingness by
employers both to train potential workers who may not currently possess the experience and skills they have transitionally expected
and to be increasingly flexible in work hours and locations will aid in employment growth in coming years. The CEFC continues to
monitor structural changes that may impact the long-term trajectory of employment, in-migration, and labor force participation trends.
The Commission is hopeful that this more optimistic medium-term forecast will be confirmed with future data. The revised forecast
anticipates employment will reach pre-pandemic levels by 2023 and continue growing to 647.9 thousand in 2025. The April 1, 2021,
forecast reached 640 thousand in 2025. The CEFC remains optimistic regarding the upside opportunity of increased migration into the
state as COVID-19 has been a catalyst for remote work but is cautious of the constraints that may be caused by ongoing tight real
estate markets.
The forecast for total personal income was revised up slightly to +5.2% in 2021, compared to 5.0% in the previous forecast. Personal
income was revised up in all remaining years, to 0.5% in 2022, 4.6% in 2023, 4.8% in 2024 and 4.6% in 2025, compared to 0.2%,
4.1%, 4.3% and 4.5% in 2022-2025, respectively. This revision accounts for higher wage growth in 2021-2024.
Growth in wages and salaries, the largest component of personal income, was revised up for 2021 by 0.5 percentage points compared
to April’s forecast, from 5.0% to 5.5%. 2022-2024 were each revised up by 1.0 percentage point, from 4.0% to 5.0%, while 2025 was
left unchanged.
Growth in supplements to wages and salaries was revised down in 2021 from 5.0% to 4.7%, while all remaining years were left
unchanged, at 4.0%.
Finally, the forecast for corporate profits was revised up in 2021, from 15.0% to 30.0%. The forecast was revised down for 2022 and
2023, to 2.0% and 3.0% compared to 4.7% in both years in the previous forecast. Additionally, the CEFC made upward revisions to its
forecast for 2024 and 2025 to 6.0% annually, compared to 4.7% annually in the April forecast.
Total personal income fell by 7.8% in the second quarter, following a 12.5% increase in the first quarter. The decline was driven by a
drop in transfer receipts as provisions of the American Rescue Plan Act phased out. Wage and salary income, which is the largest
component of personal income, grew by 2.3%. Gross Domestic Product rose 5.5% at an annual rate in the second quarter of 2021,
surpassing pre-pandemic levels.
The Consumer Price Index continues to show rising prices, sitting at 5.4% year-over-year in September. Meanwhile, the chained
Personal Consumption Expenditures price index was up 4.3% in August. Energy prices have spiked throughout 2021. Gasoline prices
averaged $3.38 per gallon the week of October 18, 2021, while heating oil is nearing its 5-year high price of $3.088 per gallon.
Nationwide, consumer sentiment has fallen as supply chains are strained and COVID-19 infections are high. The September 2021
consumer sentiment index was down 9.5% compared to a year prior, while the Small Business Optimism Index was 4.7% under
September 2020.
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Single family existing-home sales in Maine in September 2021 were down 9.7% compared to September 2020, although up 10.7%
from September 2019, while the median sales price continued to rise by nearly 17% year-over-year. Maine’s House Price Index rose
by over 22% in the second quarter of 2021 over a year prior, higher than both New England and the United States and reaching its all-
time series high.
Overall, the Commission continues to be optimistic about in-migration to Maine but remains concerned about possible future COVID-
19 variants. The key assumptions made by the CEFC are:
With economic recovery underway, concerns remain that this recovery is uneven across different sectors,
demographic/socioeconomic groups, and amongst Maine counties.
Although infection rates remain high, public health concerns will subside with the continuation of vaccine rollout. Continued
social distancing, testing, and contact tracing will help the state mitigate the onset of COVID-19 variants. Regional variations
across the state in vaccination rates and social distancing measures could contribute to an uneven recovery as areas with
higher vaccination rates will rebound faster than areas with lower vaccination rates.
Federal stimulus and prolonged low interest rates have boosted consumption and aided in the economic recovery; poverty
rates in 2020 were reduced through Federal stimulus and the successful deployment of economic assistance programs.
Additional federal programs such as the Infrastructure Investment and Jobs Act and Build Back Better reconciliation bill are
still uncertain at this time.
Structural changes in the economy are occurring as the demand for labor differs from the supply and its longer term impact is
yet to be determined. The availability of regular, in-person childcare and K-12 education will remain a major determinant in
returning labor force participation rates to normal levels; larger employers are increasingly providing childcare benefits. Older
workers may have decided to retire early due to the pandemic, which would contribute to the current reduced labor force.
The Commission is optimistic that there is an opportunity for Maine to see increased in-migration in the coming years as
telework becomes part of the “new normal” and people look for less densely populated places to live; however, the supply of
housing is extremely limited and may be a constraint both on continued home sales growth and the availability of workforce
housing. Rising interest rates may slow demand for real estate. On the commercial real estate front, office space is seeing
uncertainty as hybrid work plans and staffing are being finalized; industrial space has been in very high demand; retail space
was hit hardest by the pandemic, but the robust summer tourism season helped.
The availability of high-speed internet and mobile phone coverage will be an important equalizer between urban and rural
areas and could contribute to the diffusion of migration across the state. The creation of the Maine Connectivity Authority and
infusion of federal funding will help the successful buildout of high-speed internet.
Human behavior underpins several key uncertainties at this time, including vaccination uptake, willingness to continue to
adhere to social distancing procedures, and eventual willingness to return to normal activity once it is considered safe to do
so. Continued interest in outdoor activities could lead to a strong winter sports season, providing a boost to rural areas. Pent-
up demand for services as well as supply chain issues may lead to a substitution away from purchases of goods.
Inflation expectations have increased considerably in recent months and are much higher than what the Federal Reserve Bank
previously expected; there is a risk of continued inflation throughout 2021 and 2022. Interest rates are expected to begin
increasing sooner than previously anticipated.
In its May 2021 forecast, the Revenue Forecasting Committee (RFC) revised General Fund (GF) revenue estimates up by $479.4
million for FY21 and by $460.5 million for the FY22/23 biennium. Despite the updated FY21 GF revenue forecast being
approximately $100 million more than the committee’s pre-pandemic forecast, GF revenues ended the fiscal year over budget by
$349.6 million; a positive variance of 8.4 percent and year-over-year growth of 13.9 percent. The revenue surplus allowed for a $223.6
million transfer to the Budget Stabilization Fund, bringing the total in the fund to $492 million, approximately 11 percent of FY21 GF
revenue.
The RFC will meet to review and update the current revenue forecast to comply with the statutory reporting date in December 2021.
Based on the November CEFC forecast, the RFC will consider its revenue projections through the fiscal year ending June 30, 2022 for
the General Fund, Highway Fund, Fund for a Healthy Maine and Medicaid/MaineCare Dedicated Revenue Taxes.
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At June 30, 2021, the State of Maine reported an ending fund balance of $785.6 million in the General Fund on a GAAP basis, an
increase of more than $561.8 million since the end of fiscal year 2020. The General Fund “unassigned” fund balance on a GAAP basis
at June 30, 2021 was $338.3 million.
There are factors that adversely affect our General Fund Balance Sheet that we should continue to strive to improve over the next
several years. The primary factors that have a significant impact on the State’s Financial Statements compiled and issued in accordance
with Generally Accepted Accounting Principles as applicable to governments include such items as accruing tax revenues for
budgetary purposes and for financial statement purposes without accruing the offsetting liabilities for budgetary purposes and the
demand from appropriations whose balances carry from year to year, which results in lower amounts accruing to the Unassigned Fund
Balance of the General Fund. The State has eliminated the smaller tax line accruals on a budgetary basis and has made contributions to
General Fund reserves a higher priority in the budget.
These actions, along with the Governor’s commitment to closing the structural gap in the budget, have resulted in significant increases
in the equity and cash positions of the General Fund. Consequently, the State has seen record levels in its Treasurer’s Cash Pool and
Budget Stabilization Fund, and has not required external borrowing in the form of TANs or BANs for cash flow purposes.
CONTACTING THE STATE'S FINANCIAL MANAGEMENT
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the
finances of the State and to demonstrate the State’s accountability for the money it receives. If you have any questions about this
report or need additional financial information, please contact:
State of Maine
Office of the State Controller
14 State House Station
Augusta, ME 04333-0014
(207)-626-8420
financialreporting@maine.gov
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BASIC FINANCIAL
STATEMENTS
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B-20
STATE OF MAINE
BASIC FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
Government-wide Financial Statements
.....................................................................................................................................................................................................................................
Statement of Net Position B-22
Statement of Activities
.....................................................................................................................................................................................................................................
B-24
Governmental Fund Financial Statements
.....................................................................................................................................................................................................................................
Balance Sheet B-28
.....................................................................................................................................................................................................................................
Reconciliation of the Balance Sheet - Governmental Funds to the Statement of Net Position B-29
.....................................................................................................................................................................................................................................
Statement of Revenues, Expenditures and Changes in Fund Balances B-30
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental
.....................................................................................................................................................................................................................................
Funds to the Statement of Activities B-31
Proprietary Fund Financial Statements
.....................................................................................................................................................................................................................................
Statement of Fund Net Position B-34
.....................................................................................................................................................................................................................................
Statement of Revenues, Expenses and Changes in Fund Net Position B-35
Statement of Cash Flows
.....................................................................................................................................................................................................................................
B-36
Fiduciary Fund Financial Statements
.....................................................................................................................................................................................................................................
Statement of Fiduciary Net Position B-38
Statement of Changes in Fiduciary Net Position
.....................................................................................................................................................................................................................................
B-39
Component Unit Financial Statements
.....................................................................................................................................................................................................................................
Statement of Net Position B-42
.....................................................................................................................................................................................................................................
Statement of Activities B-44
B-21
STATE OF MAINE
STATEMENT OF NET POSITION
June 30, 2021
(Expressed in Thousands)
Primary Government
Governmental Business-Type
Activities Activities Total Component Units
Assets
Current Assets:
Equity in Treasurer's Cash Pool $ 2,170,301 $ 18,337 $ 2,188,638 $ 101,917
Cash and Cash Equivalents 217 1,188 1,405 132,270
Cash with Fiscal Agent 297,120 - 297,120 -
Investments 163,686 - 163,686 855,295
Restricted Assets:
Restricted Equity in Treasurer's Cash Pool 54,634 - 54,634 -
Restricted Deposits and Investments 2,235 466,170 468,405 639,581
Inventories 39,204 4,340 43,544 2,439
Receivables, Net of Allowances for Uncollectibles:
Taxes Receivable 445,024 - 445,024 -
Loans & Notes Receivable 3,354 - 3,354 103,899
Other Receivables 311,884 85,865 397,749 75,217
Internal Balances 9,323 (9,323) - -
Due from Other Governments 479,535 2,020 481,555 204,645
Due from Primary Government - - - 73,769
Loans Receivable from Primary Government - - - 59,283
Due from Component Units 81,659 - 81,659 -
Other Current Assets 7,796 600 8,396 41,140
Total Current Assets 4,065,972 569,197 4,635,169 2,289,455
Noncurrent Assets:
Equity in Treasurer's Cash Pool 1,272,982 10,758 1,283,740 59,780
Investments - - - 575,480
Restricted Assets:
Restricted Equity in Treasurer's Cash Pool 32,046 - 32,046 -
Restricted Deposits and Investments - - - 447,513
Pension Assets 5,039 - 5,039 -
Receivables, Net of Current Portion:
Taxes Receivable 58,541 - 58,541 -
Loans & Notes Receivable - - - 2,039,478
Other Receivables 447 - 447 1,639
Due from Other Governments 4,914 - 4,914 1,520,135
Loans Receivable from Primary Government - - - 277,710
Due from Primary Government - - - 3,810
Post-Employment Benefit Assets - - - 26,374
Other Noncurrent Assets - - - 12,388
Capital Assets:
Land, Infrastructure, & Other Non-Depreciable Assets 3,816,192 19,835 3,836,027 892,533
Buildings, Equipment & Other Depreciable Assets 641,379 20,052 661,431 1,010,107
Total Noncurrent Assets 5,831,540 50,645 5,882,185 6,866,947
Total Assets 9,897,512 619,842 10,517,354 9,156,402
Deferred Outflows of Resources $ 1,159,927 $ 4,545 $ 1,164,472 $ 94,455
The accompanying notes are an integral part of the financial statements.
B-22
Primary Government
Governmental Business-Type
Activities Activities Total Component Units
Liabilities
Current Liabilities:
Accounts Payable $ 675,469 $ 25,548 $ 701,017 $ 72,140
Accrued Payroll 46,495 757 47,252 4,999
Tax Refunds Payable 309,222 - 309,222 -
Due to Component Units 75,769 - 75,769 -
Due to Primary Government - - - 81,659
Current Portion of Long-Term Obligations:
Compensated Absences 10,347 149 10,496 4,127
Due to Other Governments 1,027,677 - 1,027,677 801
Amounts Held under State & Federal Loan Programs - - - 40,519
Claims Payable 26,525 - 26,525 -
Bonds & Notes Payable 96,275 - 96,275 232,296
Revenue Bonds Payable 19,388 - 19,388 30,060
Obligations under Capital Leases 5,300 - 5,300 162
Certificates of Participation & Other Financing
Arrangements 10,380 - 10,380 -
Loans Payable to Component Unit 59,283 - 59,283 -
Accrued Interest Payable 8,784 - 8,784 28,395
Unearned Revenue 3,567 226 3,793 59,793
Other Post-Employment Benefits 29,377 - 29,377 -
Other Current Liabilities 19,739 26,669 46,408 85,653
Total Current Liabilities 2,423,597 53,349 2,476,946 640,604
Long-Term Liabilities:
Compensated Absences 57,978 830 58,808 -
Due to Component Units 3,810 - 3,810 -
Due to Other Governments - - - 5,345
Amounts Held under State & Federal Loan Program - - - 42,419
Claims Payable 54,137 - 54,137 -
Bonds & Notes Payable 582,787 - 582,787 4,008,428
Revenue Bonds Payable 358,397 - 358,397 582,565
Obligations under Capital Leases 44,187 - 44,187 1,307
Certificates of Participation & Other Financing Arrangements 43,144 - 43,144 -
Loans Payable to Component Unit 277,710 - 277,710 -
Unearned Revenue 9,943 - 9,943 -
Net Pension Liability 2,677,112 14,988 2,692,100 75,163
Other Post-Employment Benefits 2,888,650 13,219 2,901,869 57,540
Pollution Remediation & Landfill Obligations 42,407 - 42,407 -
Other Noncurrent Liabilities - - - 99,864
Total Long-Term Liabilities 7,040,262 29,037 7,069,299 4,872,631
Total Liabilities 9,463,859 82,386 9,546,245 5,513,235
Deferred Inflows of Resources 193,764 519 194,283 91,800
Net Position
Net Investment in Capital Assets 3,587,505 39,887 3,627,392 1,236,344
Restricted:
Governmental Support & Operations 6,055 - 6,055 -
Justice & Protection 1,318 - 1,318 -
Employment Security - 510,934 510,934 -
Other Purposes - - - 1,686,807
Funds Held for Permanent Investments:
Expendable 113,536 - 113,536 -
Nonexpendable 50,336 - 50,336 305,246
Unrestricted (2,358,934) (9,339) (2,368,273) 417,425
Total Net Position $ 1,399,816 $ 541,482 $ 1,941,298 $ 3,645,822
B-23
STATE OF MAINE
STATEMENT OF ACTIVITIES
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Program Revenues
Operating Capital Grants
Charges for Grants and and
Expenses Services Contributions Contributions
Primary Government:
Governmental Activities:
Governmental Support & Operations $ 606,474 $ 135,662 $ 86,648 $ -
Arts, Heritage & Cultural Enrichment 14,135 887 4,064 -
Business Licensing & Regulation 60,150 73,427 71 -
Economic Development & Workforce Training 1,705,292 1,643 1,547,046 -
Education 2,518,099 20,730 522,960 -
Health & Human Services 4,911,056 14,203 3,392,043 -
Justice & Protection 538,019 74,735 215,819 -
Natural Resources Development & Protection 261,461 109,899 71,251 -
Transportation Safety & Development 696,683 166,574 284,792 -
Interest Expense 57,852 - - -
Total Governmental Activities 11,369,221 597,760 6,124,694 -
Business-Type Activities:
Employment Security 251,681 137,068 19,379 -
Alcoholic Beverages 175,750 237,421 - -
Lottery 328,250 397,998 - -
Ferry Services 12,501 5,842 - -
Military Equipment Maintenance 120 15 - -
Consolidated Emergency Communications 6,120 7,109 - -
Other 4,602 5,706 - -
Total Business-Type Activities 779,024 791,159 19,379 -
Total Primary Government 12,148,245 1,388,919 6,144,073 -
Component Units:
Finance Authority of Maine 37,650 18,880 19,820 -
Maine Community College System 137,319 3,203 51,234 5,007
Maine Health & Higher Education Facilities Authority 21,833 20,120 779 -
Maine Municipal Bond Bank 66,733 51,321 505 73,025
Maine State Housing Authority 281,875 73,912 218,983 -
Maine Turnpike Authority 104,023 115,460 - -
University of Maine System 703,461 273,864 273,436 8,225
All Other Non-Major Component Units 179,075 30,961 126,008 5,520
Total Component Units $ 1,531,969 $ 587,721 $ 690,765 $ 91,777
The accompanying notes are an integral part of the financial statements.
B-24
Net (Expenses) Revenues and
Changes in Net Position
Primary Government
Governmental Business-type Component
Activities Activities Total Units
$ (384,164) $ - $ (384,164) $ -
(9,184) - (9,184) -
13,348 - 13,348 -
(156,603) - (156,603) -
(1,974,409) - (1,974,409) -
(1,504,810) - (1,504,810) -
(247,465) - (247,465) -
(80,311) - (80,311) -
(245,317) - (245,317) -
(57,852) - (57,852) -
(4,646,767) - (4,646,767) -
- (95,234) (95,234) -
- 61,671 61,671 -
- 69,748 69,748 -
- (6,659) (6,659) -
- (105) (105) -
- 989 989 -
- 1,104 1,104 -
- 31,514 31,514 -
(4,646,767) 31,514 (4,615,253) -
- - - 1,050
- - - (77,875)
- - - (934)
- - - 58,118
- - - 11,020
- - - 11,437
- - - (147,936)
- - - (16,586)
$ - $ - $ - $ (161,706)
General Revenues:
Taxes:
Corporate Taxes 324,990 - 324,990 -
Individual Income Taxes 2,236,349 - 2,236,349 -
Fuel Taxes 235,125 - 235,125 -
Property Taxes 88,696 - 88,696 -
Sales & Use Taxes 1,974,930 - 1,974,930 -
Other Taxes 439,577 - 439,577 -
Unrestricted Investment Earnings 55,139 - 55,139 57,758
Non-Program Specific Grants, Contributions &
Appropriations - - - 441,413
Miscellaneous Income 95,847 - 95,847 13,865
Gain (Loss) on Sale of Assets - - - (7,015)
Tobacco Settlement 50,574 - 50,574 -
Transfers - Internal Activities 120,002 (120,002) - -
Total General Revenues and Transfers 5,621,229 (120,002) 5,501,227 506,021
Change in Net Position 974,462 (88,488) 885,974 344,315
Net Position - Beginning (as restated) 425,354 629,970 1,055,324 3,301,507
Net Position - Ending $ 1,399,816 $ 541,482 $ 1,941,298 $ 3,645,822
B-25
B-26
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
MAJOR FUNDS
General Fund – This is the State's primary operating fund. Its purpose is to account for all financial resources obtained and used for
general government operations, which are not required to be accounted for in another fund.
Highway Fund – This fund is used primarily to account for motor fuel tax revenues, motor vehicle license and registration fees, and
special State appropriations that are legally restricted to the construction and maintenance of State highways and bridges.
Federal Fund – This fund is used to account for grants, block grants and other financial assistance received from the federal
government, that are legally restricted to expenditures for purposes specified in the grant awards or agreements.
Other Special Revenue Fund – This fund is used to account for revenue sources that are legally restricted to expenditures for specified
purposes, including some major capital projects that are not accounted for in the Highway and Federal Funds.
NON-MAJOR FUNDS
Other Governmental Funds are used to account for revenue sources that are legally restricted to expenditures for specified purposes,
including some major capital projects and funds held in trust for public purposes.
B-27
STATE OF MAINE
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2021
(Expressed in Thousands)
Other Total
Other Special Governmental Governmental
General Highway Federal Revenue Funds Funds
Assets
Equity in Treasurer's Cash Pool $ 976,028 $ 54,182 $ 876,745 $ 1,057,433 $ 186 $ 2,964,574
Cash & Short-Term Investments 98 76 - 41 - 215
Cash with Fiscal Agent 13,152 525 - 277,753 - 291,430
Investments - - - - 163,686 163,686
Restricted Assets:
Restricted Equity in Treasurer's Cash Pool - - - - 86,680 86,680
Inventories 4,180 1 29,832 - - 34,013
Receivables, Net of Allowance for Uncollectibles:
Taxes Receivable 466,358 21,613 - 15,594 - 503,565
Loans Receivable 1 - - 3,353 - 3,354
Other Receivable 81,599 2,561 150,645 67,248 - 302,053
Due from Other Funds 54,651 19,155 5,767 37,776 - 117,349
Due from Other Governments - - 478,649 - - 478,649
Due from Component Units - - - 81,659 - 81,659
Other Assets 731 3 434 225 - 1,393
Working Capital Advances Receivable 111 - - - - 111
Total Assets $ 1,596,909 $ 98,116 $ 1,542,072 $ 1,541,082 $ 250,552 $ 5,028,731
Liabilities
Accounts Payable $ 170,968 $ 26,605 $ 369,120 $ 46,130 $ 181 $ 613,004
Accrued Payroll 21,386 7,050 5,294 8,752 - 42,482
Tax Refunds Payable 309,213 9 - - - 309,222
Due to Other Governments - - 1,016,253 - - 1,016,253
Due to Other Funds 85,646 4,153 61,225 20,189 16 171,229
Due to Component Units 3,359 240 11,059 58,010 4,232 76,900
Unearned Revenue - 3,101 2,937 6,839 3 12,880
Other Accrued Liabilities 12,700 4 2,828 7,027 - 22,559
Total Liabilities 603,272 41,162 1,468,716 146,947 4,432 2,264,529
Deferred Inflows of Resources 208,041 281 11,424 24,379 - 244,125
Fund Balances
Nonspendable:
Permanent Fund Principal - - - - 50,336 50,336
Inventories & Prepaid Items 4,584 - 30,265 - - 34,849
Restricted 16,893 56,673 31,667 690,025 195,784 991,042
Committed 10,165 - - 548,129 - 558,294
Assigned 415,605 - - 131,602 - 547,207
Unassigned 338,349 - - - - 338,349
Total Fund Balances 785,596 56,673 61,932 1,369,756 246,120 2,520,077
Total Liabilities, Deferred Inflows and Fund
Balances $ 1,596,909 $ 98,116 $ 1,542,072 $ 1,541,082 $ 250,552 $ 5,028,731
The accompanying notes are an integral part of the financial statements.
B-28
STATE OF MAINE
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
June 30, 2021
(Expressed in Thousands)
Total fund balances for governmental funds $ 2,520,077
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental
funds. 4,818,021
Accumulated Depreciation 556,789
4,261,232
Refunded Bond Deferred Outflows 1,625
Pollution Remediation Receivable 461
Long-term liabilities are not due and payable in the current period. Therefore, long-term liabilities are not reported in the
governmental fund statements. However, these amounts are included in the Statement of Net Position. This net effect of
these balances on the statement:
Bonds Payable (1,056,847)
Interest Payable Related to Long-term Financing (5,905)
Certificates of Participation and Other Financing Arrangements (40,032)
Loans Payable to Component Unit (336,993)
Compensated Absenses (63,060)
Pension Liabilities and Deferrals (2,096,098)
Other Post-Employment Benefit Liabilities and Deferrals (2,396,763)
Pollution Remediation and Landfill Obligations (42,407)
(6,038,105)
Certain revenues are earned but not available and therefore are not reported in the governmental fund statements. 244,125
Other Revenue (5,638)
Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and
liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 416,039
Net position of governmental activities $ 1,399,816
The accompanying notes are an integral part of the financial statements.
B-29
STATE OF MAINE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Other Total
Other Special Governmental Governmental
General Highway Federal Revenue Funds Funds
Revenues
Taxes $ 4,765,942 $ 213,390 $ - $ 349,084 $ - $ 5,328,416
Assessments 94,909 110,418 - 173,215 - 378,542
Federal Grants & Reimbursements 103 - 6,121,874 13,092 - 6,135,069
Charges for Services 57,120 4,903 - 140,989 - 203,012
Investment Income 9,556 305 600 1,489 40,594 52,544
Miscellaneous Revenues 12,493 386 200 116,842 - 129,921
Total Revenues 4,940,123 329,402 6,122,674 794,711 40,594 12,227,504
Expenditures
Current:
Governmental Support & Operations 337,750 2,407 20,438 227,313 173 588,081
Economic Development & Workforce Training 44,638 - 1,620,723 47,152 7,500 1,720,013
Education 1,780,320 - 520,431 67,543 12,636 2,380,930
Health & Human Services 1,181,934 - 3,392,059 382,701 - 4,956,694
Business Licensing & Regulation - - 68 61,496 - 61,564
Natural Resources Development & Protection 68,515 34 70,578 116,655 5,288 261,070
Justice & Protection 274,665 22,053 193,563 124,665 59 615,005
Arts, Heritage & Cultural Enrichment 9,255 - 4,006 966 5 14,232
Transportation Safety & Development 2,000 284,646 248,646 75,180 3,980 614,452
Debt service:
Principal Payments 99,235 2,210 16,760 37,590 - 155,795
Interest Expense 42,230 111 7,287 8,952 - 58,580
Capital Outlay - - - - 127,027 127,027
Total Expenditures 3,840,542 311,461 6,094,559 1,150,213 156,668 11,553,443
Revenue over (under) Expenditures 1,099,581 17,941 28,115 (355,502) (116,074) 674,061
Other Financing Sources (Uses)
Transfer from Other Funds 158,611 25,430 13,722 794,374 - 992,137
Transfer to Other Funds (719,903) (6,404) (16,097) (109,123) (4,121) (855,648)
COPs & Other 23,465 525 - 133 - 24,123
Loan Proceeds from Component Units - - - 75,000 - 75,000
Bonds Issued - - - 12,785 96,875 109,660
Refunding Bonds Issued - - - 37,355 - 37,355
Premiums on Bond Issuance - - - - 20,625 20,625
Payments to Refunded Bond Escrow Agent - - - (36,919) - (36,919)
Net Other Finance Sources (Uses) (537,827) 19,551 (2,375) 773,605 113,379 366,333
Net Change in Fund Balances 561,754 37,492 25,740 418,103 (2,695) 1,040,394
Fund Balance at Beginning of Year 223,842 19,181 36,192 951,653 248,815 1,479,683
Fund Balances at End of Year $ 785,596 $ 56,673 $ 61,932 $ 1,369,756 $ 246,120 $ 2,520,077
The accompanying notes are an integral part of the financial statements.
B-30
STATE OF MAINE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Net change in fund balances - total governmental funds $ 1,040,394
Amounts reported for governmental activities in the Statement of Net Activities are different because:
Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of those
assets is allocated over their estimated useful lives as depreciation expense.
Capital Outlay 157,429
Depreciation Expense (43,399)
The net effect of various transactions involving capital assets (i.e. sales, trade-ins and contributions) is to increase
net position. (269)
113,761
Refunded Bond Deferred Outflows (445)
Pollution Remediation Receivable (15)
The issuance of long-term debt provides current financial resources to governmental funds which increases long-
term debt in the Statement of Net Position. Repayment of the principal of long-term debt consumes the current
financial resources of governmental funds, but repayment reduces long-term debt in the Statement of Net Position.
This is the amount that proceeds exceed repayments:
Bond Proceeds (147,015)
Premium on Bonds Issued (20,625)
Proceeds from Other Financing Arrangements (23,990)
Loan Proceeds from Component Unit (74,887)
Payment to Refund Bond Escrow Agent 34,310
Repayment of Bond Principal 101,445
Repayment of Other Financing Debt 7,044
Repayment of Pledged Revenue Principal 58,087
Repayment of Capitalized Lease Principal 531
Accrued Interest 665
Amortization of Bond Premiums 10,326
(54,109)
Certain expenditures are reported in the funds. However, they either increase or decrease long-term liabilities
reported as expenditures on the Statement of Net Position and have been eliminated from the Statement of
Position as follows:
Compensated Absences (5,793)
Pension Liabilities and Deferrals (28,241)
Other Post-employment Benefit Liabilities and Deferrals (123,373)
Pollution Remediation and Landfill Obligations 66
(157,341)
Certain revenues are earned but not available and therefore are not reported in the governmental fund statements. (27,890)
Internal service funds are used by management to charge the costs of certain activities to individual funds. The net
revenue (expense) of the internal service funds is included in governmental activities in the Statement of
Activities. 60,107
Changes in net position of governmental activities $ 974,462
The accompanying notes are an integral part of the financial statements.
B-31
B-32
PROPRIETARY FUND
FINANCIAL STATEMENTS
MAJOR FUNDS
Employment Security Fund - This fund accounts for unemployment insurance contributions from employers and the payment of
unemployment benefits to eligible claimants.
NON-MAJOR FUNDS
Non-Major Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business,
where the State intends to finance or recover the costs of providing goods or services to the General Public on a continuing basis
primarily through user charges. The State also uses these funds where periodic determination of net income is appropriate for
accountability purposes.
B-33
STATE OF MAINE
STATEMENT OF FUND NET POSITION
PROPRIETARY FUNDS
June 30, 2021
(Expressed in Thousands)
Business-Type Activities Governmental
Enterprise Funds Activities
Major Non-Major
Employment Other Internal Service
Security Enterprise Total Funds
Assets
Current Assets:
Equity in Treasurer's Cash Pool $ - $ 18,337 $ 18,337 $ 301,730
Cash & Short-Term Investments 434 754 1,188 2
Cash with Fiscal Agent - - - 5,690
Restricted Assets:
Restricted Deposits & Investments 466,159 11 466,170 2,235
Inventories - 4,340 4,340 5,191
Receivables, Net of Allowance for Uncollectibles:
Other Receivable 50,081 35,784 85,865 9,824
Due from Other Funds 6,408 2,342 8,750 56,502
Due from Other Governments 2,020 - 2,020 -
Other Assets - 600 600 6,403
Total Current Assets 525,102 62,168 587,270 387,577
Noncurrent Assets:
Equity in Treasurer's Cash Pool - 10,758 10,758 176,979
Capital Assets - Net of Depreciation - 39,887 39,887 196,339
Total Noncurrent Assets - 50,645 50,645 373,318
Total Assets 525,102 112,813 637,915 760,895
Deferred Outflows of Resources $ - $ 4,545 $ 4,545 $ 24,391
Liabilities
Current Liabilities:
Accounts Payable $ 9,144 $ 16,404 $ 25,548 $ 16,268
Accrued Payroll - 757 757 4,013
Due to Other Funds 3,835 14,254 18,089 39,473
Due to Component Units - - - 2,679
Current Portion of Long-Term Obligations:
Certificates of Participation and Other Financing Arrangements - - - 5,234
Obligations under Capital Leases - - - 5,300
Claims Payable - - - 26,525
Compensated Absences - 149 149 692
Unearned Revenue - 226 226 630
Accrued Interest Payable - - - 59
Other Accrued Liabilities 1,189 25,480 26,669 -
Total Current Liabilities 14,168 57,270 71,438 100,873
Long-Term Liabilities:
Working Capital Advances Payable - - - 111
Certificates of Participation & Other Financing Arrangements - - - 8,258
Obligations under Capital Leases - - - 44,187
Claims Payable - - - 54,137
Compensated Absences - 830 830 4,572
Net Pension Liability - 14,988 14,988 82,335
Net Other Post-Employment Benefit Liability - 13,219 13,219 71,925
Total Long-Term Liabilities - 29,037 29,037 265,525
Total Liabilities 14,168 86,307 100,475 366,398
Deferred Inflows of Resources $ - $ 519 $ 519 $ 2,832
Net Position
Net Investment in Capital Assets: - 39,887 39,887 139,050
Restricted for:
Unemployment Compensation 510,934 - 510,934 -
Other Purposes - - - 511
Unrestricted - (9,355) (9,355) 276,495
Total Net Position $ 510,934 $ 30,532 541,466 $ 416,056
Amounts reported for business-type activities in the government-wide Statement of Activities
are different due to elimination of the State's internal business-type activities 16
Net Position of Business-Type Activities $ 541,482
The accompanying notes are an integral part of the financial statements.
B-34
STATE OF MAINE
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Business-Type Activities Governmental
Enterprise Funds Activities
Major Non-Major Internal
Employment Other Service
Security Enterprise Total Funds
Operating Revenues
Charges for Services $ - $ 649,948 $ 649,948 $ 546,134
Assessments 133,714 3,997 137,711 -
Miscellaneous Revenues 3,354 3 3,357 762
Total Operating Revenues 137,068 653,948 791,016 546,896
Operating Expenses
General Operations - 525,164 525,164 444,267
Depreciation - 2,273 2,273 20,671
Claims/Fees Expense 251,681 - 251,681 16,232
Other Operating Expenses - - - 708
Total Operating Expenses 251,681 527,437 779,118 481,878
Operating Income (Loss) (114,613) 126,511 11,898 65,018
Nonoperating Revenues (Expenses)
Investment Revenue (Expenses) - net 10,632 - 10,632 2,595
Interest Expense - - - (11,016)
Operating Subsidy and Grants 8,747 - 8,747 -
Other Nonoperating Revenue (Expenses) - net - 143 143 (14)
Total Nonoperating Revenues (Expenses) 19,379 143 19,522 (8,435)
Income (Loss) Before Capital Contributions, Transfers and Special Items (95,234) 126,654 31,420 56,583
Capital Contributions, Transfers and Special Items
Capital Contributions from (to) Other Funds - 4,955 4,955 396
Transfer from Other Funds 4,433 6,092 10,525 3,222
Transfer to Other Funds (3,643) (131,839) (135,482) -
Total Capital Contributions, Transfers and Special Items 790 (120,792) (120,002) 3,618
Change in Net Position (94,444) 5,862 (88,582) 60,201
Net Position - Beginning (as restated) 605,378 24,670 355,855
Net Position - End of Year $ 510,934 $ 30,532 $ 416,056
Amounts reported for business-type activities in the government-wide Statement of
Activities are different due to elimination of the State's internal business-type
activities 94
Changes in Business-Type Net Position $ (88,488)
The accompanying notes are an integral part of the financial statements.
B-35
STATE OF MAINE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Business-type Activities - Enterprise Funds
Governmental
Major Non-Major Activities
Employment Other Internal Service
Security Enterprise Totals Funds
Cash Flows from Operating Activities
Receipts from Customers and Users $ 216,459 $ 652,121 $ 868,580 $ 41,828
Other Operating Cash Receipts (Payments):
Cash Received from Interfund Services 16 7,394 7,410 523,734
Payments of Benefits (251,681) - (251,681) -
Payments to Prize Winners - (275,106) (275,106) -
Payments to Suppliers (57,876) (225,376) (283,252) (321,614)
Payments to Employees - (14,871) (14,871) (81,117)
Payments for Interfund Goods and Services (5,930) (11,078) (17,008) (73,212)
Net Cash Provided (Used) by Operating Activities (99,012) 133,084 34,072 89,619
Cash Flows from Noncapital Financing Activities
Transfers from Other Funds 4,433 6,092 10,525 3,222
Transfers to Other Funds (3,643) (131,839) (135,482) -
Operating Subsidy and Grants 8,747 - 8,747 -
Net Cash Provided (Used) by Noncapital Financing Activities 9,537 (125,747) (116,210) 3,222
Cash Flows from Capital and Related Financing Activities
Payments for Acquisition of Capital Assets - (1) (1) (18,245)
Proceeds from Financing Arrangements - - - 5,500
Principal and Interest Paid on Financing Arrangements - - - (21,903)
Proceeds from Sale of Capital Assets - 1 1 1,269
Net Cash Provided (Used) by Capital and Related Financing Activities - - - (33,379)
Cash Flows from Investing Activities
Interest Revenue 10,632 143 10,775 2,595
Net Cash Provided (Used) by Investing Activities 10,632 143 10,775 2,595
Net Increase (Decrease) in Cash/Cash Equivalents
(78,843) 7,480 (71,363) 62,057
Cash/Cash Equivalents - Beginning of Year 545,436 22,380 567,816 424,579
Cash/Cash Equivalents - End of Year
$ 466,593 $ 29,860 $ 496,453 $ 486,636
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating
Activities
Operating Income (Loss) $ (114,613) $ 126,511 $ 11,898 $ 65,018
Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating
Activities:
Depreciation Expense - 2,273 2,273 20,671
Decrease (Increase) in Assets:
Accounts Receivable 47,849 4,763 52,612 (4,103)
Interfund Balances (5,930) (6,617) (12,547) 106
Due from Other Governments 31,558 - 31,558 -
Inventories - (284) (284) (986)
Other Assets - (375) (375) (58)
Deferred Outflows - (595) (595) (1,469)
Increase (Decrease) in Liabilities:
Accounts Payable (58,069) 5,208 (52,861) (3,647)
Accrued Payroll Expense - (91) (91) 119
Due to Other Governments - - - 2,096
Compensated Absences - 31 31 759
Deferred Inflows - (1,467) (1,467) (8,563)
Net Pension Liability - 2,285 2,285 9,022
Other Accruals 193 910 1,103 10,776
Net OPEB Liability - 532 532 (122)
Total Adjustments 15,601 6,573 22,174 24,601
Net Cash Provided (Used) by Operating Activities $ (99,012) $ 133,084 $ 34,072 $ 89,619
Non Cash Investing, Capital and Financing Activities
Contributed Capital Assets - 4,955 4,955 396
Disposal of Assets - - - (2,760)
The accompanying notes are an integral part of the financial statements.
B-36
FIDUCIARY FUND
FINANCIAL STATEMENTS
Pension (and Other Employee Benefits) Trusts – accounts for funds held by the Maine Public Employees Retirement System (the
System), a component unit included with Fiduciary Funds per GASB Statement No. 34. The System provides pension, death, and
disability benefits to its members, including State employees, some public school employees, and employees of approximately 300
local municipalities and other public entities in Maine.
Private-Purpose Trusts and Custodial Funds are used to account for private-purpose assets held by the State in a fiduciary capacity,
acting as either a trustee or an agent for individuals, organizations or other governments.
B-37
STATE OF MAINE
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
June 30, 2021
(Expressed in Thousands)
Pension (and
Other Private
Employee Purpose Custodial
Benefits) Trusts Funds
Assets
Equity in Treasurer's Cash Pool $ - $ 500 $ 84,464
Cash & Short-Term Investments 32,281 5,466 27
Receivables, Net of Allowance for Uncollectibles:
State and Local Agency Contributions 34,694 - -
Interest and Dividends 4,137 - -
Due from Brokers for Securities Sold 771 - -
Other Receivable - 2,910 -
Investments at Fair Value:
Equity Securities 2,995,714 - -
Common/Collective Trusts 16,369,556 - -
Investments - Other - 23,318 -
Securities Lending Collateral 80,266 - -
Due from Other Funds - 46,197 -
Investments Held on Behalf of Others - - 62,417
Capital Assets - Net of Depreciation 15,014 - -
Other Assets - 3,471 51
Total Assets 19,532,433 81,862 146,959
Liabilities
Accounts Payable 4,616 629 18
Due to Other Funds - 7 -
Obligations Under Securities Lending 80,266 - -
Other Accrued Liabilities 38,006 - 2,616
Total Liabilities 122,888 636 2,634
Net Position
Restricted for Pension 18,828,585 - -
Restricted for Other Post-Employment Benefits 580,960 - -
Restricted for Individuals, Organizations and Other Governments - 81,226 144,325
Total Net Position $ 19,409,545 $ 81,226 $ 144,325
The accompanying notes are an integral part of the financial statements.
B-38
STATE OF MAINE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Pension (and
Other Private
Employee Purpose Custodial
Benefits) Trusts Funds
Additions:
Contributions:
Federal Grants $ - $ - $ 59,654
Members 222,909 - -
State & Local Agency Employers 390,858 - -
Non-Employer Contributing Entity 183,931 - 3,309
Litigation Receipts - - 13,384
Other - - 2,150
Investment Income (Loss):
Net Increase (Decrease) in the Fair Value of Investments 4,162,547 5,042 (1,435)
Interest & Dividends 128,517 404 19
Securities Lending Income & Borrower Rebates Refunded 468 - -
Less Investment Expense:
Investment Activity Expense 123,781 - -
Securities Lending Expense (17) - -
Net Investment Income (Loss) 4,167,768 5,446 (1,416)
Miscellaneous Revenues - 27,919 -
Transfer from Other Pension Plans 694 - -
Total Additions 4,966,160 33,365 77,081
Deductions:
Benefits Paid to Participants, Beneficiaries or Clients 1,156,309 11,510 8,903
Refunds & Withdrawals 23,752 - 2,886
Restitution Payments - - 1,223
Administrative Expenses 15,242 385 -
Claims Processing Expense 1,164 - -
Miscellaneous Disbursements - - 794
Transfer to Other Funds - 14,754 -
Transfer to Other Pension Plans 695 - -
Total Deductions 1,197,162 26,649 13,806
Net Increase (Decrease) 3,768,998 6,716 63,275
Net Position:
Restricted
Beginning of Year (as restated) 15,640,547 74,510 81,050
End of Year $ 19,409,545 $ 81,226 $ 144,325
The accompanying notes are an integral part of the financial statements.
B-39
B-40
COMPONENT UNIT
FINANCIAL STATEMENTS
Finance Authority of Maine (FAME) – The Authority provides commercial financing and loan guarantees to Maine businesses and
educational financing to Maine students and their parents; administers several revolving loan programs on behalf of the State; and
administers the Maine College Savings Program Fund.
Maine Community College System – is Maine’s comprehensive two-year college system and offers certificate, diploma and associate
degree programs. The financial statements of the system include the activity of seven colleges, the central administrative office and the
Center for Career Development.
Maine Health & Higher Educational Facilities Authority – MHHEFA assists Maine health care institutions and institutions of higher
education in undertaking projects involving the acquisition, construction, improvement, reconstruction and equipping of health care
and educational facilities and the refinancing of existing indebtedness. The Authority, pursuant to the Student Loan Corporations Act
of 1983, may finance student loan programs of institutions of higher education.
Maine Municipal Bond Bank – is authorized to issue bonds providing funds to counties, cities, towns, school districts, or other quasi-
municipal corporations within the State.
Maine State Housing Authority – is authorized to issue bonds for the purchase of notes and mortgages on single- and multi-family
residential units to provide housing for persons and families of low income in the State. The Authority also administers various housing
and energy related state and federal programs and collects and disburses federal rent subsidies for low income housing.
The Maine Turnpike Authority – is authorized and empowered to construct, maintain and operate a turnpike at such a location as shall
be approved by the State Highway Commission and to issue turnpike revenue bonds of the Authority, payable solely from revenues of
the Authority.
University of Maine System – The State University consists of seven universities, eight centers, and a central administrative office.
B-41
STATE OF MAINE
STATEMENT OF NET POSITION
COMPONENT UNITS
June 30, 2021
(Expressed in Thousands)
Maine Health &
Finance Authority of Maine Community Higher Educational Maine Municipal
Maine College System Facilities Authority Bond Bank
Assets
Current Assets:
Equity in Treasurer's Cash Pool $ 22,812 $ 12,580 $ 3,919 $ 29,050
Cash & Short-Term Investments 4,381 14,947 15,379 121
Investments 56,974 71,771 2,035 11,719
Restricted Assets:
Restricted Deposits & Investments - - 17,183 341,428
Inventories - - - -
Receivables, Net of Allowance for Uncollectibles:
Loans Receivable 38,435 - 27,136 -
Other Receivable 3,083 5,230 140 527
Due from Other Governments - 10,953 - 153,253
Due from Primary Government - 1,324 - 52,517
Loans Receivable from Primary Government - - - 59,283
Other Assets 710 2,021 618 29,754
Total Current Assets 126,395 118,826 66,410 677,652
Noncurrent Assets:
Equity in Treasurer's Cash Pool 13,381 7,378 2,299 17,039
Restricted Assets:
Restricted Assets 34,703 1,171 68,251 202,061
Investments - 18,599 26,588 -
Receivables, Net of Current Portion:
Loans & Notes Receivable 50,528 - 518,443 -
Other Receivables - - - -
Due from Other Governments - - - 1,520,135
Due from Primary Government - - - -
Loans Receivable from Primary Government - - - 277,710
Post-Employment Benefit Asset - 8,316 - -
Capital Assets - Net of Depreciation 1,299 183,442 - 1,186
Other Non-Current Assets - - - -
Total Noncurrent Assets 99,911 218,906 615,581 2,018,131
Total Assets 226,306 337,732 681,991 2,695,783
Deferred Outflows of Resources $ 1,432 $ 16,417 $ - $ 16,910
Liabilities
Current Liabilities:
Accounts Payable $ 5,170 $ 4,438 $ 37 $ 773
Accrued Payroll - - - -
Compensated Absences - 3,230 - -
Due to Other Governments - - - 415
Due to Primary Government - - - 80,581
Amounts Held Under State & Federal Loan Programs - - - 40,519
Bonds & Notes Payable 4,847 850 29,875 174,117
Obligations under Capital Leases - - - -
Accrued Interest Payable 335 - 9,019 13,418
Unearned Revenue 1,055 2,989 408 4,962
Other Accrued Liabilities 19,385 7,752 - (4)
Total Current Liabilities 30,792 19,259 39,339 314,781
Long-Term Liabilities:
Due to Other Governments 4,761 - - 269
Amounts Held Under State & Federal Loan Programs 42,419 - - -
Bonds & Notes Payable 93,525 15,539 582,505 1,518,246
Obligations under Capital Leases - - - -
Net Pension Liability - 51,041 - 715
Net Other Post-Employment Benefit Liability - 2,993 - 929
Other Noncurrent Liabilities - - - -
Total Long-Term Liabilities: 140,705 69,573 582,505 1,520,159
Total Liabilities 171,497 88,832 621,844 1,834,940
Deferred Inflows of Resources - 22,618 - 209
Net Position
Net Investment in Capital Assets 1,299 168,225 - 1,186
Restricted 22,959 48,353 - 797,179
Unrestricted 31,983 26,121 60,147 79,179
Total Net Position $ 56,241 $ 242,699 $ 60,147 $ 877,544
The accompanying notes are an integral part of the financial statements.
B-42
Maine State Housing Maine Turnpike University of Maine Non-Major
Authority Authority System Component Units Total
$ - $ - $ 33,292 $ 264 $ 101,917
42,747 25,453 4,681 24,561 132,270
438,158 - 258,372 16,266 855,295
- 226,456 - 54,514 639,581
- 1,470 - 969 2,439
37,682 - 77 569 103,899
10,837 5,718 45,829 3,853 75,217
8,472 - 30,727 1,240 204,645
8,823 - 6,115 4,990 73,769
- - - - 59,283
- 1,760 5,562 715 41,140
546,719 260,857 384,655 107,941 2,289,455
- - 19,528 155 59,780
- 60,281 34,203 46,843 447,513
24,176 - 490,617 15,500 575,480
1,422,228 - 28,200 20,079 2,039,478
- 39 1,363 237 1,639
- - - - 1,520,135
- - 3,175 635 3,810
- - - - 277,710
- - 18,058 - 26,374
18,239 841,793 688,736 167,945 1,902,640
9 209 9,033 3,137 12,388
1,464,652 902,322 1,292,913 254,531 6,866,947
2,011,371 1,163,179 1,677,568 362,472 9,156,402
$ 22,106 $ 18,143 $ 17,636 $ 1,811 $ 94,455
$ 6,653 $ 22,633 $ 18,857 $ 13,579 $ 72,140
- 4,144 - 855 4,999
- - - 897 4,127
355 - - 31 801
- - - 1,078 81,659
- - - - 40,519
20,950 17,350 13,574 793 262,356
- - 162 - 162
5,623 - - - 28,395
17,662 12,460 19,222 1,035 59,793
- 11,682 45,806 1,032 85,653
51,243 68,269 97,621 19,300 640,604
- - - 315 5,345
- - - - 42,419
1,579,789 641,968 151,798 7,623 4,590,993
- - 1,307 - 1,307
2,819 15,351 - 5,237 75,163
- 52,858 - 760 57,540
18,409 1,083 80,372 - 99,864
1,601,017 711,260 233,477 13,935 4,872,631
1,652,260 779,529 331,098 33,235 5,513,235
1,003 8,840 58,565 565 91,800
2,768 353,317 550,019 159,530 1,236,344
343,293 93,979 558,186 128,104 1,992,053
34,153 (54,343) 197,336 42,849 417,425
$ 380,214 $ 392,953 $ 1,305,541 $ 330,483 $ 3,645,822
B-43
STATE OF MAINE
STATEMENT OF ACTIVITIES
COMPONENT UNITS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Maine Health &
Higher
Finance Maine Educational Maine
Authority Of Community Facilities Municipal Bond
Maine College System Authority Bank
Expenses $ 37,650 $ 137,319 $ 21,833 $ 66,733
Program Revenues
Charges for Services 18,880 3,203 20,120 51,321
Program Investment Income 1,273 3,563 779 281
Operating Grants & Contributions 18,547 47,671 - 224
Capital Grants & Contributions - 5,007 - 73,025
Net Revenue (Expense) 1,050 (77,875) (934) 58,118
General Revenues
Unrestricted Investment Earnings 7,687 10,256 52 29
Non-program Specific Grants, Contributions &
Appropriations - 99,796 - -
Miscellaneous Revenues - 1,138 113 2,247
Gain (Loss) on Assets Held for Sale - - - -
Special Items - - - 4,200
Total General Revenues 7,687 111,190 165 6,476
Change in Net Position 8,737 33,315 (769) 64,594
Net Position, Beginning of Year 47,504 209,384 60,916 812,950
Net Position, End of Year $ 56,241 $ 242,699 $ 60,147 $ 877,544
The accompanying notes are an integral part of the financial statements.
B-44
Maine State Non-Major
Housing Maine Turnpike University Of Component
Authority Authority Maine System Units Total
$ 281,875 $ 104,023 $ 703,461 $ 179,075 $ 1,531,969
73,912 115,460 273,864 30,961 587,721
1,942 - 105,254 8 113,100
217,041 - 168,182 126,000 577,665
- - 8,225 5,520 91,777
11,020 11,437 (147,936) (16,586) (161,706)
132 1,179 22,485 15,938 57,758
- - 325,475 16,142 441,413
- 4,989 - 5,041 13,528
- (4,620) (2,395) - (7,015)
- (3,863) - - 337
132 (2,315) 345,565 37,121 506,021
11,152 9,122 197,629 20,535 344,315
369,062 383,831 1,107,912 309,948 3,301,507
$ 380,214 $ 392,953 $ 1,305,541 $ 330,483 $ 3,645,822
B-45
B-46
NOTES TO THE
FINANCIAL STATEMENTS
B-47
STATE OF MAINE
NOTES TO THE FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE
Notes to the Financial Statements
.....................................................................................................................................................................................................................................
Note 1 - Summary of Significant Accounting Policies B-49
.....................................................................................................................................................................................................................................
Note 2 - Budgeting and Budgetary Control, and Legal Compliance B-56
.....................................................................................................................................................................................................................................
Note 3 - Accounting Changes and Restatements B-59
.....................................................................................................................................................................................................................................
Note 4 - Deficit Fund Balances/Net Position B-60
.....................................................................................................................................................................................................................................
Note 5 - Deposits and Investments B-60
.....................................................................................................................................................................................................................................
Note 6 - Receivables B-66
.....................................................................................................................................................................................................................................
Note 7 - Interfund Transactions B-67
.....................................................................................................................................................................................................................................
Note 8 - Capital Assets B-69
.....................................................................................................................................................................................................................................
Note 9 - Maine Public Employees Retirement System B-70
.....................................................................................................................................................................................................................................
Note 10 - Other Postemployment Benefit Plans B-80
.....................................................................................................................................................................................................................................
Note 11 - Long-Term Obligations B-91
.....................................................................................................................................................................................................................................
Note 12 - Self - Insurance B-99
.....................................................................................................................................................................................................................................
Note 13 - Joint Ventures B-102
.....................................................................................................................................................................................................................................
Note 14 - Related Party Transactions B-105
.....................................................................................................................................................................................................................................
Note 15 - Deferred Outflows and Deferred Inflows B-106
.....................................................................................................................................................................................................................................
Note 16 - Tax Abatements B-107
.....................................................................................................................................................................................................................................
Note 17 - Commitments and Contingencies B-108
.....................................................................................................................................................................................................................................
Note 18 - Subsequent Events B-115
B-48
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the State of Maine (the State) have been prepared under guidelines established by generally
accepted accounting principles (GAAP) as mandated by the Governmental Accounting Standards Board (GASB).
Preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements.
A. REPORTING ENTITY
For financial reporting purposes, the State of Maine’s reporting entity includes the “primary government” and its “component units.”
The primary government includes all funds, organizations, agencies, boards, commissions and authorities. Component units are legally
separate organizations for which the State is financially accountable. Component units can also be legally separate, tax exempt entities
that raise and hold economic resources for the direct benefit of a governmental unit.
Financial accountability is defined in GASB Statement No. 14, The Financial Reporting Entity, as amended by GASB Statement No.
61, The Financial Reporting Entity: Omnibus – an amendment of GASB Statements No. 14 and No. 34. The State is financially
accountable for those entities for which it appoints a voting majority of the governing board and either is able to impose its will on that
entity or the entity may provide specific financial benefits to, or impose specific financial burdens on, the primary government. Entities
for which the State does not appoint a voting majority of the governing board may be included if the organization is fiscally dependent
on the primary government and there exists a financial benefit or burden relationship with the State. Entities that do not meet the
specific criteria for inclusion may still be included if the nature and significance of its relationship with the primary government is such
that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.
Under GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an Amendment of GASB
Statement No. 14, individually significant legally separate, tax-exempt entities should be reported as component units if their resources
are for the direct benefit of the State and the State can access those resources. Although the State has not identified any organizations
that would qualify as direct component units of the State by meeting all of the criteria of GASB Statement No. 39, a few of the
component units described later in this note have significant foundations that meet the criteria of GASB Statement No. 39.
Blended Component Units
Blended component units are entities that are legally separate from the State, but provide services entirely, or almost entirely to the
State or otherwise exclusively, or almost exclusively, benefits the primary government even though they do not provide services
directly to it. The State reports one blended component unit.
The Maine Governmental Facilities Authority (MGFA) is a legally separate organization that has its board appointed by the primary
government and provides services entirely, or almost entirely, to the State. Its purpose includes assisting in the financing, acquisition,
construction, improvement, reconstruction, and equipping of additions to structures designed for use as a court facility, State office or
State activity space. In their separately issued financial statements, MGFA records a lease receivable from the State and a liability for
bonds issued. However, in accordance with GASB, capital leases that exist between the State and MGFA are not recorded as leases in
this report. The assets associated with these leases are reported in the government-wide statements along with the related debt. The
corresponding debt service activity is recorded in the Governmental Funds. MGFA financial activity associated with servicing the debt
is reported in an internal service fund. Therefore, the State reports MGFA’s balances and transactions as though they were part of the
primary government, using the blending method.
Discrete Component Units
Discrete component units are entities that are legally separate from the State but are either accountable to the State or related so closely
to the State that exclusion would cause the State’s financial statements to be misleading or incomplete. Component units that are not
material to the State’s financial statements have been excluded. The column labeled “Component Units” emphasizes these
organizations’ separateness from the State’s primary government.
The State is able to impose its will upon these discretely presented component units whose boards of directors or boards of trustees are
appointed by the Governor:
The Maine Community College System is Maine’s comprehensive two-year college system and offers certificate, diploma and associate
degree programs. The combined financial statements of the System include the activity of seven colleges, the central administrative
office and the Center for Career Development (including the Maine Career Advantage and Maine Quality Centers programs), and its
component unit, Maine Community College Educational Foundations.
The Maine Turnpike Authority (MTA) constructs, maintains and operates a turnpike at such a location approved by the State Highway
Commission. It issues turnpike revenue bonds payable solely from revenues of the Authority. The Authority’s fiscal year ends
December 31.
B-49
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The University of Maine System is the State University governed by a single Board of Trustees. The combined financial statements of
the System include the activity of seven universities, eight centers, the central administrative office, and its component units, which
include several foundations and alumni associations that raise funds on the System’s behalf.
There is a financial burden/benefit relationship between these entities and the State:
The Finance Authority of Maine provides commercial financing and loan guarantees to Maine businesses and educational financing to
Maine students and their parents. The Authority also provides financial and other services for the NextGen College Investing Plan,
Department of Agriculture for the Agricultural Marketing Loan Fund and the Potato Marketing Improvement Fund, the Northern
Maine Transmission Corporation, Dairy Improvement Loan Fund Board, Compliance Assistance Loan Program Board, Maine Rural
Development Authority Board and the Small Enterprise Growth Fund Board. The Governor appoints the fifteen voting members of the
Authority.
Maine Health & Higher Educational Facilities Authority (MHHEFA) – MHHEFA assists Maine health care institutions and
institutions of higher education in undertaking projects involving the acquisition, construction, improvement, reconstruction and
equipping of their facilities and the refinancing of existing indebtedness. The Authority, pursuant to the Student Loan Corporations Act
of 1983, may also finance student loan programs of institutions of higher education. MHHEFA's board consists of twelve members,
four of whom serve ex officio and must be the Superintendent of Financial Institutions, the Commissioner of Health and Human
Services, the Commissioner of Education, and the Treasurer of State. The remaining eight members must be residents of the State
appointed by the Governor.
The Maine Municipal Bond Bank issues bonds on behalf of counties, cities, towns, school administrative districts, community school
districts, or other quasi-municipal corporations or eligible borrowers as designated by the Legislature (the “governmental units”) within
the State. The Bond Bank is also authorized by the Legislature to issue bonds on behalf of the State of Maine to finance qualified
transportation projects and payments to healthcare providers, to be repaid by taxes, fees and grant and liquor revenues. The Governor
appoints three residents of the State to the five-member Board of Commissioners. The remaining two members include the Treasurer
of State and Superintendent of Financial Institutions who serve as commissioners, ex officio.
Maine State Housing Authority issues bonds to purchase notes and mortgages on residential units, both single and multi-family, for the
purpose of providing housing for persons and families of low income in the State. The Authority also acts as an agent for the State in
administering federal weatherization, energy conservation, fuel assistance and homeless grant programs and collecting and disbursing
federal rent subsidies for low income housing. The Governor appoints five of the Authority’s seven commissioners. The remaining
two commissioners are the Treasurer of State and the Director of the Maine State Housing Authority, both of whom serve ex officio.
The Authority’s fiscal year ends on December 31.
The State’s financial statements also include a fiduciary component unit:
Maine Public Employees Retirement System administers a public employee retirement system. It provides pension, death, and
disability benefits to its members, which include employees of the State, some public school employees, employees of approximately
300 local municipalities and other public entities in Maine. The State has a financial benefit/burden relationship with the retirement
system since the legislature has substantive approval over their budget.
Complete financial statements of the major component units can be obtained directly from their respective administrative offices by
writing to:
Finance Authority of Maine Maine Health and Higher Maine Public Employees Maine Turnpike Authority
5 Community Dr. Education Facilities Authority Retirement System 2360 Congress Street
PO Box 949 PO Box 2268 PO Box 349 Portland, ME 04102
Augusta, ME 04432 Augusta, ME 04338 Augusta, ME 04332-0349
Maine Community Maine Municipal Bond Maine State Housing University of Maine
College System Bank Authority System
323 State Street PO Box 2268 26 Edison Drive 5703 Alumni Hall, Suite 101
Augusta, ME 04330 Augusta, ME 04338 Augusta, ME 04330-6046 Orono, ME 04469
Related Organizations
Officials of the State’s primary government appoint a voting majority of the governing board of the Maine Veteran’s Home. The
primary government has no material accountability for this organization beyond making board appointments.
B-50
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities report information on all non-fiduciary activities of the primary government
and its component units. Primary government activities are distinguished between governmental and business-type activities.
Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues.
Business-type activities are financed in whole or in part by fees charged to external parties for goods or services.
The Statement of Net Position presents the reporting entity’s non-fiduciary assets, deferred outflows of resources, liabilities, deferred
inflows of resources, and net position. Net position is reported in three components:
Net investment in capital assets component consists of capital assets, net of accumulated depreciation, reduced by the
outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of those assets.
Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related
to those assets. Generally, a liability relates to restricted assets if the asset results from a resource flow that also results in the
recognition of a liability or if the liability will be liquidated with the restricted assets reported. Constraints placed on restricted
components of net position are either externally imposed by creditors, grantors, contributors, and the like, or imposed by law
through constitutional provisions or enabling legislation. The government-wide statement of net position reports $682.2 million
of restricted net position, of which $510.9 million is restricted by enabling legislation.
Unrestricted component of net position consists of the net amount of assets, deferred outflows of resources, liabilities, and
deferred inflows of resources that do not meet the definition of the two preceding categories. The unrestricted component of net
position often is designated, to indicate that management does not consider it to be available for general operations and often
have constraints on resources that are imposed by management, but can be removed or modified.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program
revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and 2)
grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other
items not meeting the definition of program revenues are instead reported as general revenues.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are
excluded from the government-wide statements. Major individual governmental funds and major individual proprietary funds are
reported as separate columns in the fund financial statements, with non-major funds being combined into a single column.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
Measurement Focus and Basis of Accounting
The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as
are the proprietary and fiduciary fund financial statements except for custodial funds which have no measurement focus. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all
eligibility requirements imposed by the provider have been met.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally
result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
Governmental fund statements are reported using the current financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized in the governmental funds when they become susceptible to accrual, generally when they
become both measurable and available. “Available” means earned and collected or expected to be collected within the current period
or soon enough thereafter to pay liabilities of the current period. For this purpose, the State generally considers revenues available if
they are collected within 60 days of the end of the fiscal year.
Significant revenues susceptible to accrual include: income taxes, sales and use taxes, and other taxes; federal grants; federal
reimbursements; and other reimbursements for use of materials and services. Revenues from other sources are recognized when
received because they are generally not measurable until received in cash. Property taxes are recognized as revenue in the year for
which they are levied, provided the “available” criterion is met.
B-51
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The State Tax Assessor levies taxes on properties located in the unorganized territory of Maine by August 1 of each year, and on
telecommunications personal properties statewide by March 30 of each year. Unorganized territory property taxes are due on October
1 and telecommunications personal property taxes are due on August 15. Formal collection procedures begin on November 1, and
unpaid property taxes become a lien no later than March 15 of the fiscal year for which they are levied.
Expenditures are generally recorded when a liability is incurred. However, expenditures related to claims and judgments, debt service
and compensated absences are recorded only when payment is due and payable.
Financial Statement Presentation
The State reports the following major governmental funds:
The General Fund is the State’s primary operating fund. It accounts for all financial resources except those required to be
accounted for in another fund.
The Highway Fund accounts for the regulation, construction and maintenance of State highways and bridges and is funded by
motor fuel taxes, motor vehicle license and registration fees, special State appropriations, and other charges.
The Federal Fund accounts for grants and other financial assistance received from the federal government, including federal
block grants, that are legally restricted to expenditures for purposes specified in the grant awards or agreements.
The Other Special Revenue Fund accounts for specific revenue sources that are legally required to be expended for specified
purposes, and the related current liabilities, including some major capital projects that are not accounted for in the Highway and
Federal Funds. Examples of the most significant types of revenue sources include: Fund for a Healthy Maine (tobacco settlement
revenue), State municipal revenue sharing, hospital and service provider taxes, and oil transfer fees.
The State reports the following major enterprise fund:
The Maine Employment Security Fund receives contributions from employers and provides unemployment compensation benefits
to eligible unemployed workers.
Additionally, the State reports the following fund types:
Governmental Fund Types:
Special Revenue Funds include operating fund activities financed by specific revenue sources that are legally restricted for
specified purposes. An example is funds for acquisition of public reserved lands.
Capital Projects Funds account for the acquisition or construction of major capital assets and other programs financed by bond
proceeds.
Permanent Trust Funds report resources that are legally restricted to the extent that only earnings, and not principal, may be used
for purposes that benefit the government or its citizenry. Examples include the Baxter State Park Fund and Permanent School
Fund.
Proprietary Fund Types:
Enterprise Funds report the activities for which fees are charged to external users for goods or services, such as the
unemployment compensation program, lottery operations and transportation services.
Internal Service Funds provide goods or services primarily to other agencies or funds of the State, rather than to the general
public. These goods and services include printing and mailing services, supplies warehousing, information technology, fleet
management, risk management, health-related benefits, and financing for acquisition and construction of governmental facilities.
Fiduciary Fund Types:
Pension (and Other Employee Benefits) Trust Funds report resources that are required to be held in trust for members and
beneficiaries of the State’s pension, death and disability benefit plans. These resources are managed by the Maine Public
Employees Retirement System (MPERS). The fund also reports resources that are required to be held in trust for members and
beneficiaries of the State and for MPERS’ retiree healthcare benefits. The investment trusts, managed by the Maine Public
Employees Retirement System, hold the long-term investments. The trustees of the Healthcare Other Employee Benefits Trust
Fund are the State Controller and State Treasurer.
Private Purpose Trust Funds report resources of all other trust arrangements in which principal and income benefit individuals,
private organizations, or other governments. Examples include Abandoned Property and Lands Reserved Trust Funds.
Custodial Funds report assets and liabilities for deposits and investments entrusted to the State as an agent for others. Examples
include amounts held for entities self-insured for worker's compensation and unemployment claims, inmate and student
guardianship accounts and non-entitlement units.
B-52
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
D. FISCAL YEAR-ENDS
All funds and discretely presented major component units are reported using fiscal years which end on June 30, except for the Maine
State Housing Authority and Maine Turnpike Authority, which utilize December 31 year-ends.
E. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION/FUND
BALANCE
Equity in Treasurer's Cash Pool
The State pools cash and cash equivalents for a variety of State agencies and public sector entities. The pooled balances are reported
at fair value. Interest earned on pooled cash is allocated to the various funds, generally based on their average equity balances. The
Treasurer’s Cash Pool has the general characteristics of a demand deposit account and is comprised primarily of prime commercial
paper, repurchase agreements, U.S. Treasury Bills, U.S. Treasury Notes, and other U.S. Agency Obligations, certificates of deposit,
and corporate bonds.
For component units that participate in the cash pool, equity is shown at fair value.
Cash and Cash Equivalents
Cash equivalents consist of short-term investments that mature within three months. On the Statement of Cash Flows, the amount
reported as “Cash and Cash Equivalents” is equal to the total of the amounts reported on the Statement of Net Position as “Equity in
Treasurer’s Cash Pool,” “Cash and Cash Equivalents,” “Cash with Fiscal Agent,” “Restricted Equity in Treasurer’s Cash Pool,” and
“Restricted Deposits and Investments.”
Cash with Fiscal Agent
Cash with Fiscal Agent in Governmental Funds represents cash that will be used for debt service on bonds and unspent proceeds of
bonds and Certificates of Participation.
Cash with Fiscal Agent in Proprietary Funds represents proceeds of Certificates of Participation and other financing arrangements that
have not been spent.
Other investments of the State are carried at fair value. Donated investments are stated at fair value at the date of donation.
Investments Held on Behalf of Others
These assets include amounts held by the State in a fiduciary capacity, acting as either a trustee or an agent for individuals,
organizations or other funds. Generally, these investments are reported at fair value or at amortized cost which approximates fair value.
The State also holds $129.0 million of Workers’ Compensation, $64.2 million of Bureau of Insurance, and $42.0 million of Maine
Department of Labor surety bonds and letters of credit that are not reflected on the financial statements.
Restricted Deposits and Investments
Restricted deposits and investments include: unemployment tax receipts deposited with the United States Treasury that are drawn down
to pay unemployment benefits; cash and investments of the Maine Governmental Facilities Authority, a blended component unit that
has been independently audited; unspent bond proceeds, and funds invested in Certificates of Deposit and other investments at various
financial institutions within the State. The financial institutions lend these deposits and investments to local commercial and
agricultural enterprises to foster economic growth in Maine.
Inventories
The costs of materials and supplies of the Governmental Funds are reported as expenditures when purchased. Undistributed vaccines
and food commodities are reported as inventory and unearned revenue in the Federal Fund. Revenues and corresponding expenditures
are recognized when vaccines and food commodities are issued. Inventories of materials and supplies in the Proprietary Funds are
determined by physical counts and by perpetual inventory systems. Proprietary Fund inventories are stated at cost or average cost.
Receivables
Receivables consist primarily of amounts due to the State from taxpayers and service providers. Also included in receivables are
amounts due but not yet remitted to the State from lottery sales by agents. Loans receivable for the primary government represent low
interest financing arrangements to construct and modernize agricultural storage facilities and local commercial enterprises, as well as
Department of Transportation loans to local governments. Receivables in the component units’ column arise in the normal course of
business. Receivables are stated net of estimated allowances for uncollectible amounts that are determined based upon past collection
experience and aging of the accounts.
Interfund Transactions and Balances
Numerous transactions are made between funds to finance operations, provide services, and acquire or construct assets. To the extent
that transactions between funds were not completed as of June 30, interfund receivables and payables have been recorded in the fund
financial statements. Interfund receivables and payables have been eliminated from the Statement of Net Position.
B-53
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Long-term loans made by one fund to another are classified as “Working Capital Advances Receivable” and “Working Capital
Advances Payable.” In the fund financial statements, advances receivable are offset by nonspendable fund balance designations
indicating that the long-term loans do not constitute expendable financial resources.
Due from/to Primary Government/Component Units
Numerous transactions are made between the primary government and component units to finance operations, provide services, acquire
or construct assets, or repay bonds. To the extent that transactions between funds were not completed as of June 30, “Due from
Primary Government” and “Due to Component Unit” receivables and payables have been recorded. Two component units have
December 31 year ends, therefore the “due to” and “due from” amounts may differ.
Due from/to Other Governments
Due from/to Other Governments represents amounts receivable from or payable to municipalities or the federal government. Due from
Other Governments represents primarily federal grants receivable for Medicaid claims, other health and human services programs, and
federal grants receivable for transportation-related expenditures. Due from Other Governments in the component units column
represents amounts receivable for grants, bond repayment and retirement benefits. Due to Other Governments primarily consist of
amounts owed to municipalities for Municipal Revenue Sharing and the federal government for Medicaid cost recoveries from
providers.
Capital Assets
Capital assets, which include land, buildings, equipment and infrastructure assets (e.g., roads, bridges, ramps and similar items), are
reported in the government-wide statements and applicable fund financial statements. Capital assets that are used for governmental
activities are only reported in the government-wide statements. The State capitalizes governmental fund buildings valued at $1 million
or more and proprietary fund buildings valued at $100 thousand or more. Governmental fund equipment is capitalized at $10 thousand
or more and proprietary fund equipment is capitalized at $5 thousand or more. Governmental and proprietary fund software is
capitalized at $1 million or more. All land, regardless of value, is capitalized. Capital assets are recorded at cost or, if donated, at
acquisition value at date of acquisition. In some instances, capital assets historical cost were not available. The costs of these assets at
the date of acquisitions have been estimated.
In the government-wide statements, most capital assets are depreciated on a straight-line basis over the assets’ estimated useful lives,
which are 10-40 years for software, buildings and improvements, and 2-25 years for equipment. The State uses the modified approach
for reporting its significant infrastructure assets. As long as the State maintains and preserves its infrastructure assets at pre-determined
condition levels, maintenance costs are expensed and depreciation is not reported. This approach is discussed further in the Required
Supplementary Information.
Capital assets of component units are capitalized upon purchase and depreciated over their estimated useful lives. Interest incurred
during construction is capitalized. The estimated useful lives of fixed assets are 5–60 years for non-road structures and improvements
and 3–15 years for equipment, furniture, fixtures and vehicles. Component units reflect infrastructure in improvements other than
buildings and record depreciation expense on them. The Maine Turnpike Authority (MTA) uses the modified approach for reporting
its significant infrastructure assets. As long as MTA maintains and preserves its infrastructure assets at pre-determined condition
levels, maintenance costs are expensed and depreciation is not reported.
Deferred Outflows of Resources
Deferred outflows of resources are defined as a consumption of net assets by the government applicable to a future period; they
increase net position, similar to assets. Note 15 provides further detail on the components of deferred outflows of resources.
Accounts Payable
Accounts payable represent the gross amount of expenditures or expenses incurred as a result of normal operations, but for which no
actual payment has yet been issued to vendors/providers. Incurred but not paid (IBNP) Medicaid claims settlements are actuarially
estimated. The IBNP estimate recorded at June 30, 2021 is $227.1 million.
Tax Refunds Payable
The amount of collected or accrued tax revenues that will be refunded is estimated and accrued as a General Fund liability.
Claims Payable
Claims payable represent workers’ compensation, retiree health, employee health, and other claims payable, including actual claims
submitted and actuarially determined claims incurred but not reported. The actuarially determined claims liability is discounted and
presented at net present value.
B-54
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Compensated Employee Absences
In the government-wide statements and proprietary fund financial statements, compensated absences are recorded as a long-term
liability as required by GASB. In the governmental fund financial statements, vested or accumulated leave is reported as an
expenditure and fund liability when incurred upon retirement, termination or death. Sick and vacation payments to terminated
employees as of June 30, 2021 but paid after the fiscal year end are also reported in the funds. Approximately 55 percent of the
governmental fund compensated absences are liquidated by the general fund. In the discretely presented component units, employees’
accumulated compensated absences are recorded as an expense and liability as the benefits accrue.
Net Pension Liability
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of the Maine Public Employees Retirement System (MPERS) and
additions/deductions from MPERS’ fiduciary net position have been determined on the same basis as they are reported by MPERS.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance
with the benefit terms. The primary government’s proportionate share of pension amounts was further allocated to proprietary funds
based on the salaries paid by each proprietary fund. Pension investments are reported at fair value. Note 9 provides further detail on
the net pension liability.
OPEB Liability
The total OPEB liability is the portion of the actuarial present value of projected benefit payments attributed to past periods of
employee service. It is the liability of employers and nonemployer contributing entities to employees for benefits provided through an
OPEB plan that is not administered through a trust. The net OPEB liability is the liability of employers and nonemployer contributing
entities to employees for benefits provided through a defined benefit OPEB plan that is administered through a trust.
Deferred Inflows of Resources
Deferred inflows of resources are defined as an acquisition of net assets by the government applicable to a future period; they decrease
net position, similar to liabilities. Note 15 provides further detail on the components of deferred inflows.
Loans Payable to Component Units
In the Statement of Net Position, the amount of bond proceeds received by a component unit for unmatured GARVEE, TransCap and
Liquor Revenue bond proceeds is called “Loans Payable to Component Unit.” The offsetting receivables are classified as “Loans
Receivable from Primary Government.”
Long-Term Obligations
In the government-wide statements and proprietary fund financial statements, long-term debt and other long-term obligations are
recorded as liabilities.
In the fund financial statements, governmental fund types recognize the face amount of debt issued as other financing sources.
Net Position/Fund Balances
The difference between assets, deferred outflows of resources, liabilities and deferred inflows of resources is “Net Position” on the
government-wide, proprietary and fiduciary fund statements and “Fund Balances” on governmental fund statements.
Fund Balance Restrictions
Fund balances for governmental funds have been classified in accordance with GASB Statement No. 54.
The State reported the following fund balance restrictions:
Nonspendable Fund Balance - indicates items that cannot be spent. This includes activity that is not in a spendable form
(inventories, prepaid amounts, long-term portion of loans/notes receivable, or property held for resale unless those proceeds are
restricted, committed or assigned) and activity that is legally or contractually required to remain intact, such as a principal
balance in a permanent fund.
Restricted Fund Balances – include balances that are legally restricted for specific purposes due to constraints that are either
externally imposed by creditors, grantors, contributors, or imposed by law through a constitutional provision or enabling
legislation.
Committed Fund Balances – indicates assets can be used only for specific purposes pursuant to constraints imposed by a formal
action of the Maine Legislature through Legislation passed into law.
Assigned Fund Balances – include amounts constrained by the State’s intent to be used for a specific purpose, but are neither
restricted nor committed. The State has two types of intent authorized by statute. Management decisions are made in accordance
with statutory powers and duties, including encumbrances. Legislative assignments include formal actions passed into law that
lapse with the passage of time and do not require additional legislation. For governmental funds, other than the General Fund,
this is the residual amount within the fund that is not restricted or committed.
B-55
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Unassigned Fund Balance – is the residual amount of the General Fund not included in the four categories described above.
Also, any deficit fund balances within the other governmental fund types are reported as unassigned.
F. REVENUES AND EXPENDITURES/EXPENSES
In the government-wide Statement of Activities, revenues and expenses are segregated by activity (governmental or business-type),
then further by function (e.g., governmental support & operations, education, health & human services, etc.). Additionally, revenues
are classified between program and general revenues. Program revenues include: charges to customers or applicants for goods,
services, or privileges provided; operating grants and contributions; and capital grants and contributions. Internally dedicated
resources are reported as general revenues, rather than as program revenue. General revenues include all taxes. Certain indirect costs
are included in the program expenses reported for individual functions.
The State’s policy is that restricted amounts are spent first when an expenditure is incurred for purposes for which both restricted and
unrestricted (committed, assigned, or unassigned) amounts are available. Within unrestricted fund balance, the State’s policy is that
committed amounts are reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for
purposes for which amounts in any of those unrestricted fund balance classifications could be used.
In the governmental fund financial statements, expenditures are reported by function. Capital outlay expenditures for real property or
infrastructure (e.g. highways) are included with expenditures by function.
Revenues and expenses of proprietary funds are classified as operating or nonoperating and are subclassified by object (e.g. general
operations and depreciation). Operating revenues and expenses generally result from providing services and producing and delivering
goods. All other revenues and expenses are reported as nonoperating, capital contributions, transfers or special items
G. RISKS AND UNCERTAINTIES
The Worldwide Health Organization declared COVID-19 a global pandemic on March 11, 2020. The impact of the pandemic and
significant related restrictive measures affected operations and performance in fiscal year 2021 and is likely to affect operations in
fiscal year 2022. In late March 2020, a variety of federal legislation was passed, including, but not limited to, the Coronavirus Aid,
Relief, and Economic Security Act (CARES) that provides certain relief to partially mitigate the economic impact of the pandemic.
The State of Maine received $1.25 billion of direct relief provided under the CARES Act through the Coronavirus Relief Fund (CRF).
In March 2021, the American Rescue Plan Act of 2021, also known as ARPA, was signed into law. This federal legislation is intended
to provide funding to combat the COVID-19 pandemic, including public health and economic impacts. The State of Maine was
awarded $997.5 million of Coronavirus State Fiscal Recovery Funds (CSFRF) payable in two tranches. The first tranche, $498.75
million was received during fiscal year 2021. The second tranche, in an equal amount, is expected to be received in fiscal year 2022.
The COVID-19 pandemic has significantly affected travel, commerce and financial markets globally. The degree of impact on the
State's operations and finance is extremely difficult to predict due to uncertainties relating to the duration and severity of the COVID-
19 outbreak. In response, the Maine Consensus Economic Forecasting Commission and the Maine Revenue Forecasting Committee are
meeting frequently to monitor and update the economic and revenue forecasts to reflect the impact of the COVID-19 pandemic.
NOTE 2 - BUDGETING AND BUDGETARY CONTROL, AND LEGAL COMPLIANCE
Appropriation Limits
The total General Fund appropriation for each fiscal year of the biennium in the Governor's budget submission to the Legislature may
not exceed the General Fund appropriation of the previous fiscal year multiplied by one plus the average real personal income growth
rate, as defined in Title 5 Maine Revised Statutes Annotated (MRSA) § 1665, subsection 1, plus the average forecasted inflation rate.
“Average forecasted inflation rate” means the average forecasted change in the Consumer Price Index underlying the revenue
projections developed by the Revenue Forecasting Committee.
This appropriation limitation may be exceeded only by the amount of the additional costs or the lost federal revenue from the following
exceptional circumstances: unfunded or under-funded new federal mandates; losses in federal revenues or other revenue sources;
citizens' initiatives or referenda that require increased State spending; court orders or decrees that require additional State resources to
comply with the orders or decrees; and sudden or significant increases in demand for existing State services that are not the result of
legislative changes that increased eligibility or increased benefits.
The Governor may designate exceptional circumstances that are not explicitly defined, but meet the intent of, this statute. "Exceptional
circumstances" means an unforeseen condition or conditions over which the Governor and the Legislature have little or no control.
Exceptional circumstances do not apply to new programs or program expansions that go beyond existing program criteria and
operation.
B-56
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Budget Stabilization Fund
The Maine Budget Stabilization Fund ("BSF"), a fund designation established under Title 5 MRSA C. 142, is included in the $338.3
million unassigned General Fund fund balance. The BSF had a balance of $491.9 million. Amounts in the stabilization fund may be
expended only to offset a General Fund revenue shortfall. The Governor may also allocate funds for payment of death benefits for law
enforcement officers, firefighters and emergency medical services personnel.
Balances in the fund do not lapse, but carry forward each year. Money in the fund may be invested with any earnings credited to the
fund except when the fund is at its statutory cap. The State Controller is required to transfer to the fund 80 percent of the amount
available from the unappropriated surplus after all required deductions of appropriations, budgeted financial commitments and
adjustments at the close of each fiscal year when the fund is not at its statutory cap. In accordance with the statute, the State Controller
made the required $223.6 million transfer for fiscal year 2021. The State Controller also transferred $8.0 million from the General
Fund unappropriated surplus to the Budget Stabilization Fund in accordance with Public Law 2021, Chapter 1, Part FF-1.
The statutory cap for the fund is 18 percent of the total General Fund revenue received in the immediately preceding fiscal year. At the
close of the fiscal year, the cap is based on the revenue received in the fiscal year being closed. Based on fiscal year 2021 actual
General Fund revenue, the statutory cap at the close of fiscal year 2021 and during fiscal year 2021 was $813.7 million. At the close
of fiscal year 2021, the balance of the Maine Budget Stabilization Fund was $491.9 million. No reductions to the Maine Budget
Stabilization Fund balance are required when it exceeds the balance of the statutory cap as a result of a decline of General Fund
revenue.
Budget Stabilization Fund Activity
(Expressed in Thousands)
Balance, beginning of year $ 258,747
Increase in fund balance 233,168
Balance, end of year $ 491,915
Budget and Budgetary Expenditures
The gross unified budget bills and budget document encompass resources from the General Fund, Highway Fund, Federal
Expenditures Fund, Federal Block Grant Fund, Other Special Revenue Fund, internal service funds and enterprise funds. Separate
gross unified budget bills must be submitted for the General Fund and the Highway Fund. All funds except trust and custodial funds,
bond funds and costs of goods sold expenditures in internal service funds and enterprise funds are subject to legislative allocation. The
biennial budget sets forth proposed expenditures for the administration, operation and maintenance of the departments and agencies of
the State Government; all interest and debt redemption charges during each fiscal year and all expenditures for capital projects to be
undertaken and executed during each fiscal year. Within this structure, budgetary control by agency is maintained at the program and
line category level. The State Budget Officer and the Governor must approve budget revisions during the year, reflecting program
changes or intradepartmental administrative transfers.
Except in specific instances, only the Legislature may transfer appropriations between departments. Changes in appropriation,
allocation, or funding for new programs are presented to the Legislature as supplemental budgets or separate pieces of legislation. For
the year ended June 30, 2021, the Legislature decreased appropriations to the General Fund by $179.5 million.
Actual expenditures did not exceed legislatively authorized appropriations at the Department level; therefore, the State complied with
all related budget laws at the legal level.
Governmental Fund Balances - Restricted, Committed and Assigned
The State’s fund balances represent: (1) restricted purposes, which include balances legally restricted for specific purposes due to
constraints that are externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; (2) committed
purposes, which include balances that can only be used for specific purposes pursuant to constraints imposed by formal action of the
Legislature; (3) assigned purposes, which includes balances that are constrained by government’s intent to be used for specific
purposes, but are neither restricted nor committed. A summary of the nature and purpose of these fund balance types at June 30, 2021
are detailed on the following pages.
B-57
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Governmental Fund Balances
(Expressed in Thousands)
NSIF Restricted Committed Assigned
General Fund:
Education $ - $ - $ - $ 42,853
Economic & Community Development - - - 1,173
Governmental Support & Operations - 12,177 - 87,742
Treasury - - - 19,711
Health & Human Services - - 10,165 242,639
Public Safety - 975 - 1,833
Justice & Protection - - - 17,443
Defense, Veterans & Emergency Management - - - 1,693
Inland Fisheries & Wildlife - 3,741 - -
All Other 4,584 - - 518
Total $ 4,584 $ 16,893 $ 10,165 $ 415,605
Highway Fund:
Transportation, Highway & Bridge Construction $ - $ 56,673 $ - $ -
Total $ - $ 56,673 $ - $ -
Federal Fund:
Economic Development & Workforce Training $ - $ 3,089 $ - $ -
Help America Vote Act (HAVA) Election Security - 6,660 - -
Health & Human Services - 4,322 - -
Centers for Disease Control - 1,378 - -
Substance Abuse & Mental Health - 2,537 - -
Office of Child & Family Services - 2,226 - -
Transportation - Highway & Bridge Construction - 11,455 - -
All Other 30,265 - - -
Total $ 30,265 $ 31,667 $ - $ -
Other Special Revenue Fund:
Workers Compensation Board - 11,678 5,599 -
Professional & Financial Regulation - 40,154 32,115 679
Public Utilities Commission - 4,160 10,930 1,331
Education - 2,778 1,728 4,954
Higher Education - - 10,000 -
Economic & Community Development - 11,907 8,182 15,636
Tourism Marketing Promotion Fund - - 12,446 -
Governmental Support & Operations - 79,113 23,453 6,232
Bonds for Highway & Bridge Construction - 181,130 - -
State Facilities Capital Improvements - - 51,093 -
COVID Economic Relief Fund - - 150,000 -
Transportation Highway and Bridge Reserve Fund - - 50,000 -
Medical Marijuana Use Fund - - 9,477 -
Unorganized Territory Education - 10,816 - -
Municipal Excise Tax Reimbursement Fund - - 7,175 -
Fund for Healthy Maine - - 38,766 -
Office of Family Independence - 6,159 391 2,074
Substance Abuse & Mental Health - - 11,333 4,804
Centers for Disease Control & Prevention - 2,309 3,728 1,218
MaineCare - 21,262 - 68,215
Defense, Veterans & Emergency Management - 1,786 7,773 -
Justice & Protection - 134,578 4,569 6,349
Public Safety - 12,802 - 2,292
Agriculture & Conservation - 4,801 9,381 12,245
Inland Fisheries & Wildlife - 16,135 - -
Marine Resources - 6,375 2,054 2,258
Bureau of Agriculture PFAS Reserve Fund - - 10,000 -
Aerial Fire Suppression Fund - - 6,881 -
Land for Maine's Future Fund - - 40,000 -
Uncontrolled Sites Fund - 25,465 - -
Ground and Surface Waters Cleanup Fund - 6,951 - -
Environmental Protection Fund - - 9,726 -
Transportation Safety & Development - 8,012 2,476 3,315
Transportation - Highway & Bridge Construction - 101,654 7,665 -
Multimodal Transportation - - 21,188 -
All Other - - - -
Total $ - $ 690,025 $ 548,129 $ 131,602
B-58
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Governmental Fund Balances
(Expressed in Thousands)
NSIF Restricted Permanent
Other Governmental Funds:
Capital Projects - Agriculture & Conservation $ - $ 4,387 $ -
Capital Projects - Higher Education - 3,878 -
Capital Projects - Highway & Bridge Construction - 8,442 -
Capital Projects - Multimodal Transportation - 25,686 -
Capital Projects - Economic & Community
Development - 1,230 -
Capital Projects - Environmental Protection - 35,475 -
Capital Project - Treasury - 3,150 -
Permanent Funds - Baxter Park - - 11,653
Permanent Funds - All Others - - 38,683
Special Revenue Funds - Baxter Park - 113,339 -
Special Revenue Funds - All Other - 197 -
Total $ - $ 195,784 $ 50,336
NOTE 3 - ACCOUNTING CHANGES AND RESTATEMENTS
ACCOUNTING CHANGES
GASB Statement No. 84, Fiduciary Activities, as amended by paragraphs 4 and 5 of GASB Statement No. 97 Certain Component Unit
Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The
principal objective of this Statement is to enhance the consistency and comparability of fiduciary activity reporting by state and local
governments. This Statement also is intended to improve the usefulness of fiduciary activity information primarily for assessing the
accountability of governments in their roles as fiduciaries. GASB Statement No. 97 requirements will result in more consistent
financial reporting of defined contribution pension plans, defined contribution OPEB plans, and other employee benefit plans, while
mitigating the costs associated with reporting those plans. The requirements also will enhance the relevance, consistency, and
comparability of (1) the information related to Section 457 plans that meet the definition of a pension plan and the benefits provided
through those plans and (2) investment information for all Section 457 plans.
The changes in the table below are primarily the result of implementing GASB 84.
(Expressed in Thousands)
Statement of Activities Statement of Fiduciary Activities
Private
Purpose Custodial
Trusts Funds
Bureau of
Insurance Self-Insured
Business- and Other and Other
Governmental Type Custodial Custodial
Activities Activities Total Funds Funds
June 30, 2020 Net Position $ 445,896 $ 628,000 $ 1,073,896 $ 79,100 $ - $ -
Recognize net position balance for
formerly reported agency funds - - - - 77,773 5,247
Reclassify the Permanent School Fund
and its related expendable interest
fund 4,590 - 4,590 (4,590) - -
Reclassify the Competitive Scholarship
Fund as an Enterprise Fund - 1,970 1,970 - - (1,970)
Change in Net Position $ 450,486 $ 629,970 $ 1,080,456 $ 74,510 $ 77,773 $ 3,277
GASB Statement No. 90, Majority Equity Interests—an amendment of GASB Statements No. 14 and No. 61. This Statement modifies
previous guidance for reporting a government’s majority equity interest in a legally separate organization. This Statement also provides
guidance for reporting a component unit if a government acquires a 100 percent equity interest in that component unit.
B-59
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
GASB Statement No. 98, The Annual Comprehensive Financial Report. This Statement replaces references in authoritative literature
to the term comprehensive annual financial report but does not otherwise establish new accounting and financial reporting
requirements.
Other Restatements
As a result of a court settlement, the $24.7 million permanent fund Baxter Wilderness Trust and its companion $0.4 million expendable
revenue Baxter Park Wilderness Trust were removed from the State’s financial statements.
NOTE 4 - DEFICIT FUND BALANCES/NET POSITION
PROPRIETARY FUNDS
Five internal service funds showed deficits for the fiscal year ended June 30, 2021. The Workers’ Compensation Fund reported a
deficit of $21.5 million, which reflects accruals for actuarially determined claims payable. The Leased Space Fund had a deficit of
$5.8 million because rates charged were insufficient to cover expenses incurred. The Postal, Printing & Supply fund reported a deficit
of $5.7 million because expenses are recognized when incurred; however, related revenue is not earned until jobs are satisfactorily
completed. All of the deficits mentioned above are expected to be funded by future service charges. The remaining two internal
service funds, Financial and Personnel Services and Information Services, reported deficits of $34.5 million and $58.7 million,
respectively. These deficits are primarily the result of the implementation of GASB Statement No. 68, Accounting and Financial
Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pension, which required the recognition of the entire net pension and postemployment benefits other than pension liability.
Two enterprise funds showed deficits for the fiscal year ended June 30, 2021. Maine Military Authority reported a deficit of $6.0
million. Maine Military Authority significantly reduced its operation and workforce in Fiscal Year 2019. As a result, the fund
incurred a loss on the disposal of its assets. The Consolidated Emergency Communications Fund reported a deficit of $6.3 million.
The deficit is primarily the result of the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions
and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pension, which required
the recognition of the entire net pension and postemployment benefits other than pension liability.
NOTE 5 - DEPOSITS AND INVESTMENTS
Title 5 MRSA § 135 governs the deposit and investment policies of the State of Maine Office of the State Treasurer. The Treasurer
may deposit State funds, including trust funds of the State, in any of the banking institutions (including trust companies, State or
federal savings and loan associations, and mutual savings banks) organized under the laws of this State and any national bank or
federal savings and loan association located in the State.
The State follows the practice of pooling cash and cash equivalents for a variety of State agencies and public sector entities. The
Treasurer may invest funds that exceed current obligations, with the concurrence of the State Controller or the Commissioner of
Administrative and Financial Services and the consent of the Governor.
Approved investments include bonds, notes, certificates of indebtedness, other obligations of the United States that mature not more
than 36 months from the date of investment; repurchase agreements secured by obligations of the United States that mature within the
succeeding 12 months; prime commercial paper with maturities not exceeding 270 days from the date of purchase; tax-exempt
obligations that mature not more than 36 months from the date of investment and have a long-term rating of no less than “AA” or the
equivalent; corporate bonds rated “AAA” that mature within 36 months from the date of investment; banker’s acceptances with an
original maturity not exceeding 180 days and rated in the highest short-term category by at least one nationally recognized securities
rating organization (NRSRO); and “no-load” shares of an investment company registered under the Federal Investment Company Act
of 1940, which are rated “AAAm” or “AAAm-G” by Standard & Poor’s, or the equivalent by another NRSRO. Although authorized
to do so, the Treasurer does not participate in the securities loan market.
Investment policies of the permanent trusts are governed by Title 5 MRSA § 138. The Treasurer, with the approval of the
Commissioner of Administrative and Financial Services, the Superintendent of Financial Institutions and the Attorney General, shall
invest the funds in securities that are legal investments in accordance with Title 9-B MRSA. The investments need not be segregated
to the separate trusts, but the identity of each trust must be maintained. The Treasurer may enter into custodial care and servicing
contracts or agreements negotiated in accordance with the laws of this State for the handling of funds held in trust.
B-60
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
No amounts exceeding 25 percent of the capital, surplus, and undivided profits of any trust company or national bank or 25 percent of
the reserve fund and undivided profits of a mutual savings bank or State or federal savings and loan association, shall be on deposit in
any one institution at any one time. This restriction does not apply to deposits subject to immediate withdrawal to meet the payment of
any bonded debt or interest or to pay current bills or expenses of the State. Also exempt are deposits secured by the pledge of certain
securities as collateral or fully covered by insurance.
With assistance from the Finance Authority of Maine, the Treasurer participates in a restricted deposit program to encourage banks to
provide loans at two percent below market rate. The Treasurer may invest up to $8 million in lending institutions at a two percent
lower-than-market rate provided the lenders pass the rate reduction on to the borrowers. This program earmarks $4 million for loans to
agricultural enterprises and the other $4 million are designated for commercial entities.
The Primary Government’s Deposits and Investments, excluding component units that are fiduciary in nature, at June 30, 2021 are as
follows:
Primary Government Deposits and Investments
(Expressed in Thousands)
Business- Private
Governmental Type Purpose Custodial
Activities Activities Trusts Funds Total
Equity in Treasurer's Cash Pool $ 3,443,283 $ 29,095 $ 500 $ 84,464 $ 3,557,342
Cash and Cash Equivalents 217 1,188 5,466 27 6,898
Cash with Fiscal Agent 297,120 - - - 297,120
Investments 163,686 - 23,318 - 187,004
Restricted Equity in Treasurer's Cash Pool 86,680 - - - 86,680
Restricted Deposits and Investments 2,235 466,170 - - 468,405
Investments Held on Behalf of Others - - - 62,417 62,417
Total Primary Government $ 3,993,221 $ 496,453 $ 29,284 $ 146,908 $ 4,665,866
Interest Rate Risk – Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of
an investment. In general, the State holds securities to maturity. All debt securities are reported at full-term.
The following table provides the segmented time distribution of the Primary Government’s investments at June 30, 2021:
Maturities in Years
(Expressed in Thousands)
Less than More than No
1 1-5 6-10 11-20 20 Maturity Fair Value
Governmental and Business-Type Activities, excluding Non-Major Special Revenue and Permanent Funds
US Instrumentalities $ 145,970 $ 565,618 $ - $ - $ - $ - $ 711,588
US Treasury Notes 235,061 651,404 - - - - 886,465
Corporate Notes and Bonds 25,254 - - - - - 25,254
Commercial Paper 438,406 - - - - - 438,406
Certificates of Deposit 37,108 115,963 - - - - 153,071
Cash and Cash Equivalents 1,218 - - - - 1,346,696 1,347,914
Unemployment Fund - - - - - 466,170 466,170
Private-Purpose Trusts, Custodial Funds, and Non-Major Special Revenue and Permanent Funds
US Instrumentalities 3,485 13,479 366 465 1,572 - 19,367
US Treasury Notes 7,233 20,476 7,181 - 919 1,968 37,777
Corporate Notes and Bonds 1,152 2,968 1,081 8,437 349 53,020 67,007
Other Fixed Income Securities 211 - - - - 51,046 51,257
Commercial Paper 10,466 - - - - - 10,466
Certificates of Deposit 897 2,774 - - - 10,568 14,239
Money Market - - - - - 4,767 4,767
Cash and Cash Equivalents 5,466 - - - - 48,295 53,761
Equities - - - - - 74,940 74,940
Other - - - - - 6,297 6,297
$ 911,927 $ 1,372,682 $ 8,628 $ 8,902 $ 2,840 $ 2,063,767 $ 4,368,746
Other Assets
Cash with Fiscal Agent 297,120
Total Primary Government $ 4,665,866
B-61
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. This credit risk
is measured by the credit quality ratings of investments as described by nationally recognized statistical rating organizations. The
State’s investment policy limits its investments to those with high credit quality made by or with the advice and upon the due diligence
of the State’s independent investment advisor. The State limits credit risk in its trusts by ensuring that the fixed income credit quality
at the time of purchase is a minimum bond rating of “A” by either Standard & Poor’s or Moody’s rating service. Fixed income
holdings thereafter shall maintain a minimum bond rating of “BBB”.
The Primary Government’s total investments by credit quality rating as of June 30, 2021 are presented below:
Standard and Poor's Credit Rating
(Expressed in Thousands)
A1 A AA AAA BB BBB Not Rated Total
Governmental and Business-Type Activities, excluding Non-Major Special Revenue and
Permanent Funds
Corporate Notes and Bonds $ - $ - $ - $ 25,254 $ - $ - $ - $ 25,254
Commercial Paper 438,406 - - - - - - 438,406
Private-Purpose Trusts, Custodial Funds, and Non-Major Special Revenue and Permanent
Funds
Corporate Notes and Bonds - 1,197 313 702 - 2,299 62,496 67,007
Commercial Paper 10,466 - - - - - - 10,466
Money Market - - - - - - 4,767 4,767
Other Fixed Income Securities - - - - - - 6,297 6,297
Total Primary Government $ 448,872 $ 1,197 $ 313 $ 25,956 $ - $ 2,299 $ 73,560 $ 552,197
Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment
in a single issuer. The State limits concentration of credit risk in its trusts by requiring that no single stock represent more than seven
percent of the total portfolio. There is no concentration of credit risk policy for the Treasurer’s Cash Pool. At June 30, 2021, there
were no investments that exceeded five percent of the Treasurer’s Cash Pool.
Custodial Credit Risk - For investments, custodial credit risk is the risk that, in the event of a failure of the counterparty to a
transaction, the State will not be able to recover the value of its investment or collateral securities that are in the possession of an
outside party. The State limits its custodial credit risk for the Treasurer’s Cash Pool by maintaining a file of the most recent credit
rating analysis reports performed for each approved financial institution. The State also requires that all securities be perfected in the
name of the State and held in third party safekeeping by a state approved custodian. Of the cash pool’s $165 million invested in non-
negotiable certificates of deposit, certain CD’s exceeded the FDIC insured amounts for the institutions at which they were held.
However, certificates of deposits, money market accounts and regular cash deposits are all collateralized at a minimum of 100 percent
with pledged securities or a Federal Home Loan Bank letter of credit.
The State does not have a policy regarding custodial credit risk for its trusts. The Percival P. Baxter Trust is held by a counterparty, but
not in the State’s name.
The fair value of the trust’s investments as of June 30, 2021 was $113.3 million and was comprised of the following (expressed in
thousands):
Percival
Baxter
Trust
U.S. Instrumentalities $ 2,402
U.S. Treasury Notes 2,643
Corporate Notes and Bonds 4,016
Other Fixed Income Securities 18,401
Equities 74,705
Cash and Equivalents 854
Other 10,318
Total $ 113,339
B-62
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The State and certain vendors contract with a fiscal intermediary, Clareon, for electronic disbursements from the State to its vendors.
During fiscal year 2021 these disbursements, on average, exceeded $227 million per month. The funds in transit are not collateralized
and are not held by the State Treasurer. Until the vendor receives payment, the State retains some liability.
Fair Value Measurements - The State of Maine categorizes its fair value measurements within the fair value hierarchy established by
the generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of an asset.
The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are
described below:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that
the State of Maine has the ability to access.
Level 2 - Inputs to the valuation method include:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data by correlation or other means
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term
of the asset or liability.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Assets and liabilities measured at fair value are based on one or more of the three valuation techniques. The three valuation
techniques are as follows:
Market Approach - Prices and other relevant information generated by market transactions involving identical or
comparable assets or liabilities;
Cost Approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost);
Income Approach – Techniques to convert future amount to a single present amount based on market exceptions
(including present value techniques).
Following is a description of the valuation methodologies used for assets at fair value.
Investments classified as level 1: Investments classified as level 1 are primarily exchange traded equity securities and other fixed
income securities valued at market prices using interactive exchange data. Investments are evaluated by obtaining feeds from a
number of live data sources including active market makers and inter-dealer brokers. Sources are reviewed on the basis of their
historical accuracy for individual issues and maturity ranges. Treasury notes and bonds are evaluated by gathering information
from market sources and integrate relative credit information, observed market movements, and sector news into the evaluated
pricing applications and models.
Investments classified as level 2: Investments classified as level 2 including fixed income corporate bond, fixed income
government bonds and treasury notes are priced using a published mid-price. Investments are evaluated as follows: a. A bullet
(non-call) spread scale is created for each issuer for maturities going out to forty years. These spreads represent credit risk and
are obtained from the new issue market, secondary trading, and dealer quotes. Each issuer-spread line has the capability to link
parent/subsidiary and related companies to capture relevant movements. b. An Option Adjusted Spread (OAS) model is
incorporated to adjust spreads of issues that have early redemption features. c. Final spreads are added to both a 15: and 16: (ET)
U.S. Treasury curve. A special cash discounting yield/price routine calculates prices from final yields to accommodate odd
coupon payment dates typical of medium-term notes. d. Evaluators maintain quality by surveying the dealer community,
obtaining benchmark quotes, incorporating relevant trade data, and updating spreads daily. Note: Floating-rate medium-term
notes are evaluated using the Floating-Rate Note Evaluation Model which generates evaluations for floating-rate notes by
calculating current and future coupons, then discounting each cash flow by an appropriate discount margin.
Investments classified as level 3: Investments classified as level 3 include private equities securities that exist in illiquid
markets. These securities are broker priced.
B-63
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of
future fair values. Furthermore, while the State of Maine believes its valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could
result in a different fair value measurement at the reporting date.
The following table set forth by level, within the fair value hierarchy, the State of Maine’s assets carried at fair value on a recurring
basis as of June 30, 2021:
Fair Value Measurement
(Expressed in Thousands)
Quoted Prices in
Active Markets for Significant Other Significant
Identical Assets Observable Inputs Unobservable Inputs
Total Level 1 Level 2 Level 3
Commercial Paper $ 422,598 $ - $ 422,598 $ -
Corporate Notes and Bonds 82,893 53,020 29,801 72
U.S. Instrumentalities 729,237 - 729,237 -
U.S. Treasury Notes 910,970 910,270 - 700
Other Fixed Income Securities 51,177 35,957 854 14,366
Equities 73,505 73,505 - -
Total $ 2,270,380 $ 1,072,752 $ 1,182,490 $ 15,138
MAINE PUBLIC EMPLOYEES RETIREMENT SYSTEM
The Maine Public Employees Retirement System (the System) makes investments in a combination of equities, fixed income securities,
infrastructure, private equity, real estate, mutual funds, commingled mutual and index funds, derivative financial instruments, and other
investment securities established by the Trustee’s investment policy.
Derivative Securities – Derivative financial instruments are financial contracts whose value depends on the value of one or more
underlying assets, reference rates or financial indices. They include futures, forwards, options, and swap contracts. The System’s
investments in derivative securities only have nominal exposure to custodial credit risk. Credit risk is managed, in the case of
exchange-traded derivatives, by the execution of trades through a clearinghouse and, in the case of over-the-counter transactions, by
managers’ due diligence assessment and approval of counterparties. Market risk is managed by imposing strict limits as to the types,
amounts and degree of risk that investment managers may undertake. These limits are approved by the Board of Trustees and are
monitored by the Chief Investment Officer.
The system did not have any derivative investments as of June 30, 2021 or during the year then ended
Foreign currency forward contracts are used to hedge against the currency risk in the System’s foreign equity and fixed income security
portfolios. The System’s fixed income managers invest in Collateralized Mortgage Obligations (CMOs) and Asset-Backed Securities
to improve the yield or adjust the duration of the fixed income portfolio.
Securities Lending - The System has also entered into agreements for securities lending transactions, which are collateralized in an
amount generally valued at 102 percent (105 percent for international securities) of the fair value of the securities loaned plus accrued
interest. All securities and loans can be terminated on demand by either the lender or the borrower.
Cash collateral is invested in a short-term investment pool. Cash collateral may also be invested separately in “term loans.” At June 30,
2021 all of the collateral for securities lending is subject to custodial credit risk. The System believes that there is no credit risk as
defined in GASB Statement No. 28 and GASB Statement No. 40. The collateral held and the market value of securities on loan for the
System as of June 30, 2021 was $168.2 million and $164.4 million, respectively.
Concentration of Credit Risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of investment in a
single issue. The System's investment policy places no limit on the amount the System may invest in any one issuer. No investment
exceeded 5 percent of the fiduciary net position for the defined benefit and OPEB plans.
B-64
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
COMPONENT UNITS
Generally, component unit investment policies authorize investments in obligations of U.S. Treasury and Agency Securities,
repurchase agreements, corporate bonds, certificates of deposit and money market funds. Some component units may invest in stocks,
bonds, fixed income securities, mutual funds, commingled mutual funds and index funds, guaranteed investment contracts, real estate
and other investment securities.
Certain component units also invest in the Treasurer’s Cash Pool and comprise approximately 4.25 percent of pool assets. The
component units reported their participation as either Cash and Cash Equivalents or Investments on their financial statements. The
State reclassified $161.7 million of the component units’ participation to “Equity in Treasurer’s Cash Pool” on the State’s financial
statements. In addition to the amounts reported, the State Treasurer’s Cash Pool includes $20.7 million, consisting of Finance
Authority of Maine component unit fiduciary funds that, because of GASB Statement No. 34 reporting criteria, are not shown in the
accompanying financial statements as invested in the Treasurer’s Cash Pool.
B-65
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 6 - RECEIVABLES
Receivable balances are segregated by type, and presented in the fund financial statements net of allowance for uncollectibles. The
following tables disaggregate amounts considered to be uncollectible by fund and type of receivable as of the close of the fiscal year:
Primary Government - Receivables
(Expressed in Thousands)
Allowance for Net
Taxes Accounts Loans Uncollectibles Receivables
Governmental Funds:
General $ 591,659 $ 157,430 $ 1 $ (201,132) $ 547,958
Highway 21,621 2,580 - (27) 24,174
Federal - 211,265 - (60,620) 150,645
Other Special Revenue 15,726 125,920 3,707 (59,158) 86,195
Total Governmental Funds 629,006 497,195 3,708 (320,937) 808,972
Allowance for Uncollectibles (125,441) (195,142) (354)
Net Receivables $ 503,565 $ 302,053 $ 3,354 $ 808,972
Proprietary Funds:
Employment Security * $ - $ 111,122 $ - $ (61,041) $ 50,081
Nonmajor Enterprise - 35,907 - (123) 35,784
Internal Service - 9,824 - - 9,824
Total Proprietary Funds - 156,853 - (61,164) 95,689
Allowance for Uncollectibles - (61,164) -
Net Receivables $ - $ 95,689 $ - $ 95,689
* Accounts receivable increased significantly in the Employment Security Major Enterprise Fund in fiscal year 2021 & 2020. This is
due primarily to a significant increase in fraudulent claims activity associated with Pandemic Unemployment Assistance and
emergency benefits provided in response to the Coronavirus Pandemic.
Component Units - Receivables
(Expressed in Thousands)
Allowance for Net
Accounts Loans Uncollectibles Receivables
Finance Authority of Maine $ 3,083 $ 94,517 $ (5,554) $ 92,046
Maine Community College System 6,241 - (1,011) 5,230
Maine Health and Educational Facilities Authority 140 545,579 - 545,719
Maine Municipal Bond Bank 527 - - 527
Maine State Housing Authority 10,837 1,468,716 (8,806) 1,470,747
Maine Turnpike Authority 5,757 - - 5,757
University of Maine System 66,425 29,302 (20,258) 75,469
Net Receivables $ 93,010 $ 2,138,114 $ (35,629) $ 2,195,495
B-66
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 7 - INTERFUND TRANSACTIONS
Interfund receivables and payables represent amounts owed to one State fund by another, for goods sold or services received, or for
borrowings to eliminate negative balances in the Treasurer’s Cash Pool.
Balances due within one year are recorded as Due to/Due from Other Funds. The balances of current interfund receivables and
payables as of June 30, 2021 were:
Interfund Receivables
(Expressed in Thousands)
Due to Other Funds
Other Special Other
Due from Other Funds General Highway Federal Revenue Governmental
General $ - $ - $ 5,172 $ 11,986 $ -
Highway 82 92 18,953 18 -
Federal 5 - 182 1,745 -
Other Special Revenue 25,808 479 1,025 1,289 16
Other Governmental - - - - -
Employment Security - - 6,408 - -
Non-Major Enterprise 2,334 8 - - -
Internal Service 11,220 3,574 29,485 5,151 -
Fiduciary 46,197 - - - -
Total $ 85,646 $ 4,153 $ 61,225 $ 20,189 $ 16
Due to Other Funds
Non-Major
Employment Enterprise Internal Fiduciary
Due from Other Funds Security Funds Service Funds Funds Total
General $ - $ 4,999 $ 32,494 $ - $ 54,651
Highway - - 10 - 19,155
Federal 3,835 - - - 5,767
Other Special Revenue - 8,836 323 - 37,776
Other Governmental - - - - -
Employment Security - - - - 6,408
Non-Major Enterprise - - - - 2,342
Internal Service - 419 6,646 7 56,502
Fiduciary - - - - 46,197
Total $ 3,835 $ 14,254 $ 39,473 $ 7 $ 228,798
Not included in the table above are interfund loans/advances, which are not expected to be repaid within one year. Postal, Printing &
Supply (an internal service fund) owes $111 thousand to the General Fund for operating capital.
Transfers are made in accordance with statutory authority. Significant transfers are used to 1) move revenues from the fund that statute
requires to collect them to the fund that statute requires to expend them, 2) move receipts restricted for debt service from the funds
collecting the receipts to the funds required to pay debt service as principal and interest payments come due, 3) use unrestricted
revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations, 4) move profits from the Lottery Fund, 5) transfer accumulated surpluses from other funds to the General Fund when
authorized by statute and 6) move profits from the Alcoholic Beverages Fund.
During fiscal year 2021, the State of Maine, in accordance with the legislatively authorized budget, recorded the following non-routine,
nonrecurring transfers.
The General Fund transferred $150.0 million, $50.0 million, $45.0 million, $40.0 million and $40.0 million to the Other Special
Revenue Fund, respectively, for: COVID Disaster Relief Payment Fund, Capital Construction and Improvement Reserve Fund, School
Revolving Renovation Fund, MaineCare Stabilization Fund and the Land for Maine' Future Fund. The Liquor Operation Revenue
Fund transferred $50.0 million to the unappropriated surplus of the General Fund.
B-67
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Interfund transfers for the year ended June 30, 2021 consisted of the following:
Interfund Transfers
(Expressed in Thousands)
Transferred From
Other Special Other
Transferred To General Highway Federal Revenue Governmental
General $ - $ - $ 462 $ 72,864 $ -
Highway 2,573 - 10,286 12,571 -
Federal - - - 10,079 -
Other Special Revenue 714,108 6,404 916 7,517 4,121
Employment Security - - 4,433 - -
Non-Major Enterprise - - - 6,092 -
Internal Service 3,222 - - - -
Total $ 719,903 $ 6,404 $ 16,097 $ 109,123 $ 4,121
Transferred From
Non-Major
Employment Enterprise Internal Fiduciary
Transferred To Security Funds Service Funds Funds Total
General $ - $ 70,648 $ - $ 14,637 $ 158,611
Highway - - - - 25,430
Federal 3,643 - - - 13,722
Other Special Revenue - 61,191 - 117 794,374
Employment Security - - - - 4,433
Non-Major Enterprise - - - - 6,092
Internal Service - - - - 3,222
Total $ 3,643 $ 131,839 $ - $ 14,754 $ 1,005,884
B-68
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 8 - CAPITAL ASSETS
The following schedule details changes in capital assets for the governmental activities and business-type activities of the primary
government for the fiscal year ended June 30, 2021:
Primary Government - Capital Assets
(Expressed in Thousands)
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities:
Capital assets not being depreciated
Land $ 649,952 $ 4,942 $ 305 $ 654,589
Construction in progress 80,121 108,785 15,593 173,313
Infrastructure 2,959,855 28,435 - 2,988,290
Total capital assets not being depreciated 3,689,928 142,162 15,898 3,816,192
Capital assets being depreciated
Buildings 881,631 13,244 4,085 890,790
Equipment 323,110 32,197 13,806 341,501
Improvements other than buildings 105,064 6,690 - 111,754
Software 118,777 2,909 - 121,686
Total capital assets being depreciated 1,428,582 55,040 17,891 1,465,731
Less accumulated depreciation for
Buildings 382,989 22,199 2,287 402,901
Equipment 239,273 22,429 9,230 252,472
Improvements other than buildings 65,309 3,685 - 68,994
Software 84,228 15,757 - 99,985
Total accumulated depreciation 771,799 64,070 11,517 824,352
Total capital assets being depreciated, net 656,783 (9,030) 6,374 641,379
Governmental Activities Capital Assets, net $ 4,346,711 $ 133,132 $ 22,272 $ 4,457,571
Beginning Ending
Balance Additions Deletions Balance
Business-Type Activities:
Capital assets not being depreciated
Land $ 2,389 $ - $ - $ 2,389
Construction in progress 12,491 4,955 - 17,446
Total capital assets not being depreciated 14,880 4,955 - 19,835
Capital assets being depreciated
Buildings 4,655 - - 4,655
Equipment 24,683 - 19 24,664
Improvements other than buildings 42,757 - - 42,757
Total capital assets being depreciated 72,095 - 19 72,076
Less accumulated depreciation for
Buildings 3,180 134 - 3,314
Equipment 12,170 650 19 12,801
Improvements other than buildings 34,420 1,489 - 35,909
Total accumulated depreciation 49,770 2,273 19 52,024
Total capital assets being depreciated, net 22,325 (2,273) - 20,052
Business-Type Activities Capital Assets, net $ 37,205 $ 2,682 $ - $ 39,887
B-69
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
During the fiscal year, depreciation expense was charged to the following functions in the governmental activities column of the
Statement of Activities for the primary government:
Governmental Activities - Depreciation Expense
(Expressed in Thousands)
Amount
Governmental Activities:
Arts, Heritage and Cultural Enrichment $ 10
Business Licensing and Regulation 386
Economic Development and Workforce Training 1,646
Education 243
Governmental Support and Operations 10,750
Health and Human Services 16,501
Justice and Protection 15,990
Natural Resources Development and Protection 5,538
Transportation Safety and Development 13,006
Total Depreciation Expense - Governmental
Activities $ 64,070
NOTE 9 - MAINE PUBLIC EMPLOYEES RETIREMENT SYSTEM
OVERVIEW OF THE SYSTEM
The Maine Public Employees Retirement System, formerly named the Maine State Retirement System (the System) is a component
unit of the State of Maine. Title 5 MRSA C. 421, 423, and 425 authorized the establishment and administration of the defined benefit
plans. The System administers two cost sharing multiple-employer defined benefit plans, two single employer defined benefit plans and
one closed agent multiple-employer defined benefit plan. All of these plans provide pension, disability, and death benefits to their
members.
The State Employees and Teachers Plan (SETP) is a multiple-employer cost sharing plan with a special funding situation. The plan
covers employees of the State and public school employees (defined by Maine law as teachers). The State of Maine is also a
nonemployer contributing entity in that the State pays the unfunded actuarial liability on behalf of non-grant funded teachers. School
districts contribute the normal cost, calculated actuarially, for their teacher members and directly pay the unfunded actuarial liability on
behalf of grant funded teachers. The Participating Local Districts Plan (Consolidated PLD) covers employees of more than 300 local
municipalities and other public entities (Participating Local Districts, or PLDs) in Maine, each of which contracts for participation in
the System under provisions of the relevant statutes.
The System also provides single employer defined benefit plans to cover State legislators and State Judicial employees and administers
a closed agent, multiple-employer defined benefit plan (Agent PLD) which covers those employers for whom the System administered
single employer plans at the time the PLD Consolidated Plan was implemented who opted not to join the Consolidated Plan.
In addition to administering pension plans, the System invests funds accumulated for two OPEB Trusts. The Retiree Health Insurance
Trust Fund accumulates assets to provide funding for the State’s unfunded obligations for retiree health benefits. Trustees of the
System were named Trustees of the Investment Trust Fund. The System also invests funds for the MainePERS OPEB Trust. The trust
accumulates assets to provide funding for retiree health benefits and life insurance in retirement for qualified individuals who retire
from the System. The Trustees of the System were named Trustees of the MainePERS OPEB Trust.
The System administers three defined contribution plans for employees of PLD’s that elect to participate. At June 30, 2021, there were
78 employers participating in these plans. The 1,480 participants individually direct the $60.5 million covered by the plans.
The System issues a publicly available annual comprehensive financial report that includes financial statements and required
supplementary information (RSI) for the plan. The June 30, 2021 report may be obtained from the Maine Public Employees
Retirement System, PO Box 349 Augusta, ME 04332-0349 or on-line at www.mainepers.org.
Total pension funds managed by the System are constitutionally restricted and held in trust for the payment of pension and related
benefits to its members. OPEB funds are statutorily restricted for the payment of retiree healthcare. The System’s Board of Trustees, in
its fiduciary capacity, establishes the System’s investment policies and their overall implementation. With respect to the SETP, the
actuary prepares valuations for the State’s portion of the SETP, including the segregation of teachers from employees.
B-70
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The System also provides group life insurance under a plan administered by a third party insurance company and invests long-term
assets for two Retiree Health Insurance Post-Employment Benefits Investment Trust Funds. Note 10 provides for further disclosure.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The System’s financial statements are prepared on the accrual basis of accounting. Pension contributions are recognized as additions
in the period when they become due pursuant to formal commitments or statutory or contractual requirements. Investment income is
recognized when earned. Contributions to defined contribution plans are recognized in the period they are contributed. Pension
benefits and contributions and premium refunds are recognized as deductions when due and payable in accordance with Statutes.
Benefits payable incurred but not reported are reflected as other liabilities. Distributions from defined contribution plans are
recognized in the period the disbursement is made.
PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the defined benefit retirement plans and additions to or
deductions from each plans’ fiduciary net position have been determined on the same basis as they are reported by the System. The
measurement period used is June 30, 2020. For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
EMPLOYER ALLOCATIONS FOR COST-SHARING DEFINED BENEFIT RETIREMENT PROGRAMS
Schedules of Employer Allocations for the SETP are displayed separately for the two groups within the Plan, state employees being
one group and teachers the second. This is to reflect the unique funding arrangement that currently exists within the Plan for teachers.
Total employer contributions for the state employees group, adjusted for employer-specific liability contributions, were used as the
basis for allocation. For the teacher group, total employer and non-employer contributions were the basis for the allocation, adjusted to
remove the normal cost contributions paid by local school districts on behalf of their employees. This leaves contributions toward the
unfunded liability of the Plan as the basis of allocation. This method of allocation properly distributes the collective net pension
liability between the State of Maine as the non-employer contributing entity and those districts contributing towards the unfunded
liability of the plan using grant funding.
The Schedules of Employer Allocations for the PLD Consolidated Plan reflect current year employer contributions, adjusted to remove
contributions related to employer specific liabilities to the Plans. For the PLD Plan, certain employers have individual unpooled
pension assets resulting from the closure of individual single employer plans upon joining the PLD Consolidated Plan. For these
employers, current year contributions are adjusted to reflect the gross contributions due for service prior to applying an offset from
these assets, if applicable. An offset occurs when an employer with un-pooled pension assets held by the System chooses to use a
portion of these assets to cover the cost of current contributions due.
MEMBERSHIP
State employees and teachers are covered under the Maine Public Employees Retirement System's State Employee and Teacher
Retirement Program (SETP). State employees and public school teachers are required by law to become members of SETP when hired.
Membership is optional for elected, appointed officials and substitute teachers. SETP also covers eligible employees of two discretely
presented State component units: Maine Community College System and the Northern New England Passenger Rail Authority. At
June 30, 2021 there were 238 employers, including the State of Maine, participating in the plan.
PLD employees become members of the Consolidated PLD plan when they are hired if their employer participates as a PLD in
MainePERS at that time and if they meet the membership eligibility requirements in effect when they are hired. For some PLD
employees, membership is optional. These employees include those employed by their PLD before the PLD joined MainePERS, those
whose employers provide Social Security under a federal law, elected and appointed officials, and chief administrative officers. The
Consolidated PLD plan includes employees of three component units of the State that have defined benefit plans: Maine Municipal
Bond Bank, Maine Maritime Academy, and the Maine Public Employees Retirement System.
The System also administers two single employer retirement programs for specific State employees. The Legislative Retirement
Program was established to provide a retirement program for those serving in the Maine Legislature. Except as provided otherwise by
statute, membership in the Maine Legislative Retirement Program is mandatory for legislators entering service on or after December 3,
1986. The Judicial Retirement Program was established to provide a retirement program for Maine's judges. Membership in the
Judicial Retirement Program is a condition of employment for all judges serving on or after December 1, 1984.
B-71
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Membership in each single employer defined benefit plan consisted of the following at the measurement date of June 30, 2020:
Employees of single employer covered by benefit terms
Judicial Legislative
Inactive employees or beneficiaries
currently receiving benefits 83 206
Terminated participants:
Vested 3 117
Inactive employees due refunds 1 94
Active employees 58 179
Total participants 145 596
STATE EMPLOYEES AND TEACHERS PENSION PLAN BENEFITS
The System’s retirement programs provide retirement benefits based on members’ average final compensation and creditable service.
Vesting occurs upon the earning of five years of service credit or the earning of one year of service credit immediately preceding
retirement at or after normal retirement age. Normal retirement age for State employees and teachers is age 60, 62 or 65. The normal
retirement age is determined by whether a member had met certain creditable service requirements on specific dates, as established by
statute. The monthly benefit of members who retire before normal retirement age by virtue of having at least 25 years of service credit
is reduced by a statutorily prescribed factor for each year of age that a member is below her/his normal retirement age at retirement.
The System also provides disability and survivor benefits, which are established by statute for State employee and teacher members,
and by contract with other participating employers under applicable statutory provisions.
PARTICIPATING LOCAL DISTRICTS PLAN BENEFITS
In the event that a member of the Consolidated PLD Plan withdraws from the System, its individual employee-members remain
contributing members. The PLD remains liable for contributions sufficient to fund benefits for its already retired former employee-
members; for its terminated vested members; and for those active employees, whether or not vested, who remain contributing System
members.
CONTRIBUTION INFORMATION
Contributions from members, employers and non-employer contributors and earnings from investments fund the retirement benefits.
Disability and death benefits are funded by employer normal cost contributions and investment earnings. Member and employer
normal cost contributions are each a percentage of applicable member compensation. Member contribution rates are defined by law or
Board rule and depend on the terms of the plan under which a member is covered. Employers’ contribution rates are determined by
actuarial valuations.
The Maine Constitution, Maine statutes and the System's funding policy provide for periodic employer contributions in addition to the
normal cost contributions for the SETP. These are actuarially determined amounts that, based on certain actuarial assumptions are
sufficient to fully fund, on an actuarial basis, the SETP by the year 2028 (Unfunded Actuarial Accrued Liability (UAAL) payments).
Level percentage of payroll employer contribution rates are determined using the entry age normal actuarial funding method. The
System also uses the level percentage of payroll method to amortize the unfunded liability of the State Employee and Teacher
Retirement Program. For participating employers in the PLD Agent Plan, the level percentage of payroll method is also used.
The UAAL rate as applied to State employee members' compensation is first established through the annual valuation process as an
amount that will meet the required unfunded actuarial accrued liability payment amount; it is then adjusted in the State's budget process
to take into account differences in salary growth projections of the State Budget Office. This adjusted rate, expressed as a percentage
of payroll, is the actual rate paid by the State as payment of the required UAAL payment amount for State employees. For teachers, the
actuarially determined UAAL amount is paid in 12 equal monthly installments. PLD employer contribution rates are actuarially
determined rates.
On occasion, the State may agree to pay employee pension contributions as a part of the compensation and benefits that are negotiated
with employees. The employer-paid contributions are treated as part of their pension compensation. In accordance with statute, the
actuary accumulates them in the Retirement Allowance Fund. Upon termination of membership, members’ accumulated employee
contributions are refundable with interest, credited in accordance with statute. Withdrawal of accumulated contributions results in
forfeiture of all benefits and membership rights. The annual rate of interest credited to terminated members’ accounts is set by the
System’s Board of Trustees and is currently .93 percent.
B-72
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
CONTRIBUTION RATES - DEFINED BENEFIT PENSION PLANS
The Maine Constitution, Maine Statutes and the System’s funding policy provide for periodic employer contributions at actuarially
determined rates that, based upon certain assumptions, are expressed as percentages of annual covered payroll and are sufficient to
accumulate adequate assets to pay benefits when due. On July 20, 2017 Chapter 1, Constitutional Resolution was passed by the
legislature and ratified by the voters in November. Any unfunded liability resulting from experience losses must be retired over a
period not exceeding 20 years. Prior to the change a 10 year amortization period was used.
Significant actuarial assumptions used to compute the contribution requirements are the same as those used to compute the
standardized measure of the net pension liability.
Contribution rates1 in effect for the fiscal years ended June 30, 2021 and June 30, 2020 are as follows:
June 30, 2021 June 30, 2020
SETP - State Employees
Employees 2 7.65% - 8.65% 7.65% - 8.65%
Employer 1 20.93% - 32.68% 20.93% - 32.68%
SETP - Teachers
Employees 2 7.65% 7.65%
Employer 1 4.16% 4.16%
Non-employer entity 1 14.33% 14.33%
Judicial Plan
Employees 2 7.65% 7.65%
Employer 1 8.89% 8.89%
Legislative Plan
Employees 2 7.65% 7.65%
Employer 1 0.00% 0.00%
Consolidated Participating Local
Entities
Employees 2 3.85% - 9.50% 3.85% - 9.50%
Employer 1 5.20% - 16.00% 4.10% - 16.20%
1 Employer and non-employer contribution rates include normal cost and the UAAL required payment, expressed as a percentage of payroll.
2 Employer and employee contribution rates vary depending on specific terms of plan benefits for certain classes of employees.
B-73
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
For the year ended June 30, 2021, the contributions recognized as part of pension expense (grant expense for Teacher Members) for
each plan were as follows:
(Expressed in Thousands)
State Employee and Teacher Pension Plan:
State & Component Unit Members
State Employees $ 154,513
1 Major and Non-major Component Unit and 1
formerly reported component unit. 8,059
Subtotal State & Component Unit Members $ 162,572
Teacher Members (Non-employer contribution) $ 174,093
NET PENSION LIABILITY - SINGLE EMPLOYER
The State is the sole employer for two defined benefit pension plans. The State’s net pension liability was measured as of June 30,
2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.
The changes in net pension liabilities for these plans are as follows:
(Expressed in Thousands)
Judicial Pension Plan Legislative Pension Plan
Increase (Decrease) Increase (Decrease)
Total Plan Net Total Plan Net
Pension Fiduciary Pension Pension Fiduciary Pension
Liability Net Liability Liability Net Liability
(Asset) Position (Asset) (Asset) Position (Asset)
(a) (b) (a) - (b) (a) (b) (a) - (b)
Balances at June 30, 2020 $ 69,317 $ 73,638 $ (4,321) $ 9,067 $ 13,248 $ (4,181)
Changes for the Year:
Service Cost 1,609 - 1,609 335 - 335
Interest 4,645 - 4,645 611 - 611
Differences Between Expected and Actual Experience 943 - 943 414 - 414
Benefit Payments, Including Refunds (4,317) (4,317) - (698) (698) -
Employer Contributions - 716 (716) - - -
Member Contributions - 617 (617) - 157 (157)
Transfers - 765 (765) - 366 (366)
Net Investment Income - 2,165 (2,165) - 391 (391)
Administrative Expense - (69) 69 - (14) 14
Net Changes 2,880 (123) 3,003 662 202 460
Balances at June 30, 2021 $ 72,197 $ 73,515 $ (1,318) $ 9,729 $ 13,450 $ (3,721)
Plan Fiduciary Net Position as a Percentage of the Total Pension
Liability 101.8 % 138.2 %
Covered Payroll $ 8,054 $ 2,814
Net Pension Liability as a Percentage of Covered Payroll (16.4)% (132.2)%
B-74
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
COLLECTIVE NET PENSION LIABILITIES, PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED
INFLOWS OF RESOURCES RELATED TO PENSIONS - COST SHARING PLANS
The State’s net pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The State’s net pension liability is measured as the proportionate
share of the net pension liability. The State’s proportion of the net pension liability was based on a projection of the State’s long-term
share of contributions to the pension plans relative to the projected contributions of all participating employers and non-employer
contributors, actuarially determined. The State’s proportionate share of the collective net pension liability for each plan at June 30,
2021 and June 30, 2020 is as follows:
(Expressed in Thousands)
Proportionate Proportionate Net Pension Net Pension
Share June 30, Share June 30, Asset Liability
Pension Plan 2020 2021 June 30, 2021 June 30, 2021
SETP - State Employees 1 94.775523 % 95.090771 % $ - $ 1,129,955
SETP - Teachers 2 95.540502 % 95.704826 % - 1,562,144
Total Primary Government - 2,692,099
SETP - 1 Major and Non-major Component Unit and 1
formerly reported component unit 1 5.224477 % 4.909229 % $ - $ 58,336
1 Percentage of State Employees in the SETP
2 Percentage of employer and non-employer contributors to the SETP - Teachers
The State’s SETP – State Employee Plan is allocated to governmental and proprietary funds based on employer contributions as shown
below. Of the portion charged to governmental funds, 52 percent is posted to the General Fund, 20 percent to Other Special Revenue
Funds, 15 percent to Highway Funds and 13 percent to Federal Funds.
Change
Increase
Proportion June 30, 2020 June 30, 2021 (Decrease)
Governmental Funds 91.32 % 91.39 % 0.07 %
Internal Service Funds 7.40 % 7.29 % (0.11)%
Enterprise Funds 1.28 % 1.33 % 0.05 %
Detailed information about the pension plan’s fiduciary net position is available in the separately issued Maine Public Employees
Retirement System financial report.
B-75
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
For the cost-sharing defined benefit pension plans it shows:
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
(Expressed in Thousands)
Total State
SETP of Maine
State of Component Employees SETP
Maine Units1 SETP Teachers
Total Pension Liability
Service Cost $ 77,435 $ 3,998 $ 81,433 $ 149,794
Interest 321,020 16,573 337,593 630,651
Changes in Benefit Terms 1,164 60 1,224 -
Differences Between Expected and Actual Experience 49,482 2,555 52,037 (51,875)
Benefit Payments, Including Refunds of Member Contributions (305,682) (15,781) (321,463) (561,157)
Change in Proportionate Share 16,010 (16,010) - -
Net Change in Total Pension Liability 159,429 (8,605) 150,824 167,413
Beginning Total Pension Liability 4,812,747 265,302 5,078,049 9,469,174
Ending Total Pension Liability 4,972,176 256,697 5,228,873 9,636,587
Plan Fiduciary Net Position
Employer Contributions 155,629 8,035 163,664 61,638
Non-employer Contributions - - - 174,531
Member Contributions 49,508 2,556 52,064 99,375
Transfers (1,125) (58) (1,183) (1,085)
Net Investment Income 113,192 5,844 119,036 235,238
Benefit Payments, Including Refunds of Member Contributions (305,682) (15,781) (321,463) (561,157)
Change in Proportionate Share 12,713 (12,713) - -
Administrative Expense (3,614) (187) (3,801) (7,544)
Net Change in Plan Fiduciary Net Position 20,621 (12,304) 8,317 996
Beginning Plan Fiduciary Net Position 3,821,600 210,665 4,032,265 8,003,339
Ending Plan Fiduciary Net Position 3,842,221 198,361 4,040,582 8,004,335
Ending Net Pension Liability $ 1,129,955 $ 58,336 $ 1,188,291 $ 1,632,252
Proportion
June 30, 2021 95.090771 % 4.909229 % 100 % 95.704826 %
June 30, 2020 94.775523 % 5.224477 % 100 % 95.540502 %
Change - Increase (Decrease) 0.315248 % (0.315248)% 0% 0.164324 %
1Includes combined totals for one major component unit, one non-major component unit, and 1 formerly reported component unit.
B-76
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Actuarial Assumptions
Actuarial assumptions used in the June 30, 2020 and 2019 valuations were based on results of an actuarial experience study for the
period June 30, 2012 through June 30, 2015. Actuarially determined contribution rates are calculated based on a 2018 actuarial
valuation developed as a roll-forward of the 2017 actuarial valuation, adjusted for expected experience and any assumption or
methodology changes during fiscal year end 2018 using assets as of June 30, 2018. The individual entry age normal method is used to
determine liabilities. A 3-year smoothed market approach is used for the asset valuation method. Each plan’s unfunded actuarial
liability is being amortized as a level percentage of payroll. For the SETP, prior to 2012, the amortization method used a closed 16-
year amortization of UAL. Beginning in 2012, the amortization method used individual, closed, 10-year amortization of UAL arising
each year. The amortization period used by both the Judicial and Legislative Plans is an open 10-year amortization of the 2016 UAL.
The investment rate of return used for contributions in 2018 was 6.75 percent. The investment rate of return, inflation rate and annual
salary increases, including inflation were 6.75 percent in 2018 (reduced from 6.875 percent), 2.75 percent and 2.75 percent plus merit
component based on employee’s years of service, respectively. All plans used a 2.20 percent cost-of-living. Normal retirement age for
State employees and teachers is age 60, 62 or 65. The normal retirement age is determined by whether a member had met certain
creditable service requirements on specific dates, as established by statute. The Judicial and Legislative Plans assume that 100 percent
retirement occurs at age 60 for members with at least 10 years of creditable service on July 1, 1993. For members with less than 5
years of creditable service on July 1, 2001, 50 percent are assumed to retire each year after reaching age 65.
The Maine State Constitution Article IX, Section 18-A was amended in fiscal year 2018 by CR 2017, c. 1. Any unfunded liability
resulting from experience losses must be retired over a period not exceeding 20 years. Prior to the change a 10-year amortization
period was used.
ANNUAL PENSION COST AND NET PENSION LIABILITY
For the year ended June 30, 2021, the State recognized pension expense of $373,198 which includes $207,153 of teacher pensions
recorded in grant expense.
PENSION COSTS
(Expressed in Thousands)
SETP - State of Maine Pension Expense $ 165,926
SETP - Teachers Non-Employer Pension Expense
(grant expense) 207,153
Legislative Pension Expense 9
Judicial Pension Expense 110
$ 373,198
B-77
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
At June 30, 2021, the State reported $547,388 of deferred outflows of resources and $33,285 of deferred inflows of resources related
to its pension plans. Deferred outflows of resources of $343,817 relate to the State contributions that were made subsequent to the
measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense
over the next four years. Information by pension plan is as follows:
(Expressed in Thousands)
1 Major Component Unit Total
SETP and 2 Formerly Reported State of Maine
State of Maine Component Units Employees SETP
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Differences between expected and actual experience
demographic and economic $ 49,497 $ - $ 2,555 $ - $ 52,052 $ -
Net difference between projected and actual earnings
on pension plan investments 32,475 - 1,677 - 34,152 -
Changes in proportion and differences between State
contributions and proportionate share of
contributions 2,927 188 174 2,914 3,101 3,102
State and component unit contributions subsequent to
the measurement date 164,184 - 8,114 - 172,298 -
Total $ 249,083 $ 188 $ 12,520 $ 2,914 $ 261,603 $ 3,102
For the Year Ended
2022 3,889 (1,473) 2,416
2023 23,785 21 23,806
2024 28,608 1,476 30,084
2025 28,432 1,468 29,900
2026 - - -
SETP
Teachers Legislative Judicial
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Differences between expected and actual experience
demographic and economic $ 49,967 $ 33,097 $ - $ - $ 471 $ -
Net difference between projected and actual earnings
on pension plan investments 64,762 - 110 - 572 -
Changes in proportion and differences between State
contributions and proportionate share of
contributions 2,790 - - - - -
State and component unit contributions subsequent to
the measurement date 178,880 - 14 - 739 -
Total $ 296,399 $ 33,097 $ 124 $ - $ 1,782 $ -
For the Year Ended
2022 (26,646) (106) (154)
2023 (3,325) 21 111
2024 57,497 98 545
2025 56,896 97 541
2026 - - -
B-78
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The long-term expected rate of return on pension plan assets was determined using a building-block method in which best-estimate
ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for
each major class of assets. These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real
rates of return for each major asset class included in the pension plan's target asset allocation are summarized in the following table.
Long-Term
Expected
Target Real Rate of
Asset Class Allocation Return
Public Equities 30.0 % 6.0 %
U.S. Government 7.5 % 2.3 %
Private Equity 15.0 % 7.6 %
Real Assets:
Real Estate 10.0 % 5.2 %
Infrastructure 10.0 % 5.3 %
Natural Resources 5.0 % 5.0 %
Traditional Credit 7.5 % 3.0 %
Alternative Credit 5.0 % 7.2 %
Diversifiers 10.0 % 5.9 %
The discount rate used to measure the collective total pension liability was 6.750 percent for the 2020 and 2019 actuarial valuations for
the State Employee and Teacher Plan. The projection of cash flows used to determine the discount rate assumed that plan member
contributions will be made at the current contribution rate and that employer and non-employer entity contributions will be made at
actuarially determined, contractually required rates. Based on these assumptions, the pension plan's fiduciary net position was
projected to be available to make all projected future benefit payments to current plan members. Therefore, the long-term expected rate
of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
NET PENSION LIABILITY SENSITIVITY
The following table shows how the collective net pension liability would change if the discount rate used was one percentage point
lower or one percentage point higher than the current rate. The current rate used for all plans is 6.750 percent.
(Expressed in Thousands)
Current
Defined Benefit Plans Administered 1% Decrease Discount Rate 1% Increase
Through MPERS (5.750%) (6.750%) (7.750%)
State Employee and Teacher Pension
Plan:
State & Component Unit Members
State Employees $ 1,338,964 $ 1,129,956 $ 377,419
Maine Community College System 60,482 51,041 17,048
2 Formerly Reported Component Units. 8,644 7,295 2,437
Subtotal State & Component Unit
Members 1,408,090 1,188,292 396,904
Teacher Members (100%) 2,830,805 1,632,252 633,284
Total State Employee and Teacher
Pension Plan $ 4,238,895 $ 2,820,544 $ 1,030,188
Judicial Pension Plan 5,068 (1,318) (6,880)
Legislative Pension Plan (2,759) (3,721) (4,557)
B-79
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
RECOGNITION OF CHANGES - EXCEPTIONS
Changes in net pension liability are recognized in pension expense with the following exceptions:
Differences Between Expected and Actual Experience The difference between actual and expected experience with regard to
economic or demographic factors were recognized in pension expense using a straight-line amortization method over a closed period
equal to the average expected remaining service lives of active and inactive members in each plan. For 2020, this was one year for the
Legislative Plan, two years for the Judicial Plan and three years for the State Employee and Teacher Plan. Prior to 2017, this was two
years for the Legislative Plan.
Differences Between Projected and Actual Investment Earnings Differences between projected and actual investment earnings were
recognized in pension expense using a straight-line amortization method over a closed 5 year period.
Changes in Assumptions Differences due to changes in assumptions about future economic or demographic factors or other inputs
were recognized in pension expense using a straight-line amortization method over a closed period equal to the average expected
remaining service lives of active and inactive members in each plan. The actuarial assumptions used for the June 30, 2020 valuation
were based on the results of an actuarial experience study for the period of June 30, 2012 through June 30, 2015.
Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions Differences
resulting from a change in proportionate share of contributions and differences between total employer contributions and the
employer’s proportionate share of contributions were recognized in pension expense using a straight-line amortization method over a
closed period equal to the average expected remaining service lives of active and inactive members in each plan. Differences between
total employer contributions and the employer’s proportionate share of contributions may arise when an employer has a contribution
requirement for an employer specific liability.
COMPONENT UNIT PARTICIPANTS
The Maine Municipal Bond Bank, Maine Maritime Academy, Maine State Housing Authority, Maine Turnpike Authority and the
Maine Public Employees Retirement System have defined benefit pension plans. All are participating local entity participants in plans
administered by the Maine Public Employees Retirement System.
NOTE 10 - OTHER POSTEMPLOYMENT BENEFIT PLANS
POST RETIREMENT HEALTHCARE PLANS AND BENEFITS
State Employees
The State has a single-employer defined benefit healthcare OPEB plan that is administered through a trust. The State of Maine funds
postretirement health care benefits for most retired State employees and legislators, as authorized by Title 5 MRSA § 285. For fiscal
years ending after June 30, 2015 statute limited the total premium increase for active and retired State employee health insurance to no
more than any percentage increase in the Consumer Price Index, as defined in Title 5 MRSA §17001, subsection 9 plus 3 percent.
Pursuant to Title 5 MRSA § 285 most retired employees of the Maine Turnpike Authority, Maine Community College System, Maine
Maritime Academy, Maine Public Employees Retirement System, and Maine Educational Center for the Deaf and Hard of Hearing are
eligible to participate in the health plan but are not funded by the State.
The State pays 100 percent of postretirement health insurance premiums for state employee retirees who were first employed on or
before July 1, 1991. A pro rata portion, ranging from zero percent for retirees with less than five years participation to 100 percent for
retirees with ten or more years of participation, is paid for eligible individuals first employed after July 1, 1991. Per Title 5 MRSA §
285 paragraphs 2 and 3, coverage depends upon terms and conditions contained in collective bargaining agreements with the State
Health Commission. Retirees who are not eligible for Medicare retain coverage in the same group health plan as active employees.
Retirees must pay for Medicare Part B coverage to be eligible to participate in the State-funded Companion Plan. Coverage for
retirees ineligible for Medicare includes basic hospitalization; supplemental major medical and prescription drugs; and costs for
treatment of mental health, alcoholism, and substance abuse.
Part-time employees are eligible for prorated benefits. Retirees who worked 50 percent or more of full-time hours receive 100 percent
of the benefit. Surviving spouses and dependents may continue in the plan and pay 100 percent of the premium. Retirees ineligible for
a State contribution are allowed to participate and pay the retiree premium.
B-80
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Teachers and First Responders
The State also committed to pay a statutorily determined portion of the retiree healthcare premiums for retired Teachers and retired
First Responders as authorized by Title 20-A MRSA § 13451 and Title 5 MRSA § 286-M, respectively. First Responders are defined
in statute as retired county or municipal law enforcement officers and municipal firefighters who participate in an employer-sponsored
retirement plan. Specifically excluded (Title 5 MRSA § 285 1-B) from the definition of Teachers are members of the Maine
Municipal Association, Maine Teachers Association and employees of counties and municipalities and their instrumentalities, except
as provided in subsection 11-A. Each group is a collection of single employer defined benefit plans. State contributions are based on
rates negotiated by each school district and municipality and reflect their individual healthcare experience rating. The plans are
currently funded on a pay-as-you-go basis with the State directly paying insurers.
Effective January 1, 2006, the State contribution to retired teacher health premiums was increased to 45 percent of the retiree-only
premium. The rate is based on a single rate for single and employee plus children coverage, or 50 percent of the two party rate for two
party and family coverage. Eligibility mirrors that of State Employees.
County and municipal law enforcement officers and municipal firefighters began coverage in fiscal year 2008 with the State
contributing 45 percent of the retiree-only premium of their respective plans. Public Law 2019, Chapter 446 §2 changed a number of
plan provisions. Effective July 1, 2021 the applicable premium subsidy is 55 percent. The State’s premium subsidy is outlined in Title
5 MRSA §286-M ¶6, as referenced in Title 5 MRSA §285 ¶11-A, as being the cost of the retiree’s share of the individual premium for
the standard plan identified and offered under the group health insurance plan in which the retiree enrolls. The plan change also
enables an enrollee to participate in the group health insurance plan in which the enrollee's spouse participates if that plan is offered in
this State or in another group health insurance plan that is offered in this State. Active employees may elect to enroll in the plan on
different dates based on date of hire. A special open enrollment period exists for all active employees from October 1, 2019 through
December 31, 2021. The State subsidy ends after the retiree is eligible for Medicare. First Responders are eligible if they retire after
age 50 with 25 or more years of service and receive a retirement benefit from either the MPERS or a defined contribution plan. If
retirees have fewer than 25 years of service, the normal retirement benefit must be at least 50 percent of final average compensation.
Retirees must also participate in their employer’s health insurance plan or other fully insured health plan for at least five years.
Retirees can elect to participate in the plan at their retirement date. If participation is waived at that time, the retiree is ineligible to
participate at a later date.
POST RETIREMENT GROUP LIFE INSURANCE PLAN
The Maine Public Employees Retirement System (the System) is a component unit of the State of Maine. For financial reporting
purposes, the System administers two multiple-employer cost-sharing, defined benefit Group Life Insurance Plans (GLIP) administered
by a third party insurance company in accordance with Title 5 MRSA C. 423 and 425. Members include employees of the State, public
school employees (defined by Maine law as teachers), members of the Judiciary and the Legislature, which are eligible for membership
in the System. The State of Maine is also a non-employer contributing entity in that the State pays contributions for retired public
school teachers in the plan. Group life insurance benefits are also provided to employees of approximately 140 local municipalities
and other public entities (Participating Local Districts, or PLDs) in Maine that elect to participate under provisions of the relevant
statutes.
The Plan provides Basic group life insurance benefits during retirement to employees who participated in the group life insurance plan
prior to retirement for a minimum of 10 years. The 10 year participation requirement does not apply to recipients of disability
retirement benefits. The level of coverage in retirement is initially set to an amount equal to the retiree’s average final compensation.
The initial amount of Basic group life insurance benefit is then subsequently reduced at the rate of 15 percent per year to the greater of
40 percent of the initial amount or $2,500.
Group life insurance funds managed by the System are constitutionally restricted and held in trust for the payment of benefits to
participants or their beneficiaries. The System’s Board of Trustees, in its fiduciary capacity, establishes the System’s investment
policies and their overall implementation. The System maintains separate reserves and accounts for each participating entity and
performs a single actuarial valuation that provides separate data for each participating plan.
The System issues a publicly available annual comprehensive financial report that includes financial statements and required
supplementary information (RSI) for the plan. The June 30, 2021 report may be obtained from the Maine Public Employees
Retirement System, PO Box 349, Augusta, ME 04332-0349 or on-line at www.mainepers.org.
B-81
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The State and the System’s fiduciary financial statements are prepared on the accrual basis of accounting. Premiums are recognized
when due and benefits are paid when incurred using the accrual basis of accounting. Premium refunds reduce premium revenue and
claims recoveries reduce claims expense. Investment income is recognized when earned. In addition, an estimate is made for group
life insurance death benefits incurred before year end but not reported to the System until after year end. Group life insurance death
benefits incurred but not reported are reflected as other liabilities.
CONTRIBUTIONS AND RESERVES
The State Employees Health Insurance Committee establishes contributions to the plan by member employers and employees annually.
Both active and retired members pay the same premium rate. Claims liabilities of the plan are periodically computed using statistical
techniques to establish premium rates. Administrative costs of the plan are allocated to plan participants.
INVESTMENTS
Investments are reported at fair value. Investments that do not have an established market are reported at estimated fair value. Fair
value of shares in managed investment pools is based on unit values reported by the funds. The fair value of other investments,
including real estate holdings and mortgage participation agreements, are based on third-party appraisals and valuations provided by
the sponsor of the agreement. Investment purchases and sales are recorded as of their trade date. Proceeds related to securities sold
not yet purchased are carried as a liability and adjusted to the fair value of the securities.
PLAN MEMBERSHIP
Membership in the OPEB plans is as follows:
Healthcare Group Life
State First State
Employees Teachers Responders Employees* Teachers
Actives 11,886 27,236 598 11,362 14,592
Retirees 8,848 10,292 121 8,768 7,437
Inactives Vested 134 533 - - -
Total 20,868 38,061 719 20,130 22,029
* Group life membership totals include component unit and other members.
STATE EMPLOYEE HEALTHCARE FUNDING POLICY
The Trustees of the State Employee Healthcare Plan are the State Controller and State Treasurer. Title 5 MRSA § 286-B authorized
an Irrevocable Trust Fund for Other Post-Employment Benefits to meet the State’s unfunded liability obligations for retiree health
benefits for eligible participants who are the beneficiaries of the irrevocable trust fund. Annually, beginning with the fiscal year
starting July 1, 2007, the Legislature shall appropriate funds to meet the State’s obligations under any group health plan, policy or
contract purchased by the State Employee Health Commission. Unfunded liabilities may not be created except those resulting from
experience losses. Unfunded liability resulting from experience losses must be retired over a period not to exceed 10 years. The
unfunded liability for retiree health benefits for eligible participants must be retired in 30 years or less from July 1, 2007.
Public Law 2007, Chapter 240, amended Title 5 Chapter 421 by establishing the Irrevocable Trust for Other Post-employment
Benefits. MPERS holds and invests long-term funds in the irrevocable trust fund. Its fiduciary responsibilities include setting
investment policy in order to fund the plan in accordance with a projected disbursement schedule that does not begin before the year
2027.
TEACHERS PLAN AND FIRST RESPONDERS PLAN HEALTHCARE FUNDING POLICY
A special funding situation exists for these plans. The State is statutorily responsible for contributions to the Teachers Plan and the
First Responders Plan that cover the retirees of other governmental entities. The State is the sole contributing entity for Teachers and
for the First Responders, therefore, making the contribution on behalf of the employing jurisdictions at a 45 percent level for the
current portion of the health plan costs. Plan members are not included in the Trust.
Public Law 2011, Chapter 380 Pt. Y § 2 established separate Irrevocable Trust Funds for Other Post-Employment Benefits to meet the
State’s unfunded liability obligations for retiree health benefits for eligible participants who are the beneficiaries of the irrevocable
trust funds. Annually, beginning with the fiscal year starting July 1, 2011, the Legislature shall appropriate funds to meet the State’s
obligations to retire the unfunded liability for eligible first responders in 30 years or less from July 1, 2007. Public Law 2013, Chapter
368 Pt. H §2 amended the starting date for funding teachers. As amended annually beginning with the fiscal year starting July 1, 2015,
the Legislature shall appropriate funds to meet the State’s obligations to retire the unfunded liability at June 30, 2006 for eligible
teachers in 30 years or less from July 1, 2007.
B-82
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Public Law 2019, Chapter 280 establishes a separate trust for the purpose of accumulating resources to assist in retiring the unfunded
liability of the first responders plan. Beginning June 30, 2020, all monies not necessary to fund the normal costs and administrative
costs of the program must be transferred from the Firefighters and Law Enforcement Officers Health Insurance Program Fund to the
trust at the end of each fiscal year.
GROUP LIFE INSURANCE FUNDING POLICY
Premium rates are those determined by the System’s Board of Trustees to be actuarially sufficient to pay anticipated claims and cover
administrative costs. For State employee, legislative and judicial classes, the premiums for retiree life insurance coverage are factored
into the premiums paid for Basic coverage while participants are active members. The State remits premiums at a single rate that
supports basic coverage for active and retired State employees. This rate is 82 cents per month for every $1,000 of coverage.
Premiums for retiree life insurance coverage for retired teachers are paid by the State based on a rate of 33 cents per $1,000 of
coverage per month during the post-employment retirement period.
CHANGES IN THE TOTAL OPEB LIABILITY
The changes in total OPEB liabilities are as follows:
(Expressed in Thousands)
Healthcare
Increase (Decrease)
First
Teachers Responders
Balances at June 30, 2020 $ 1,441,260 $ 27,506
Changes for the Year:
Service Cost 44,132 1,142
Interest 51,449 989
Contributions - Employee - (696)
Contributions - Non-Employer Contributing Entity (31,133) (242)
Administrative Expenses - 132
Differences Between Expected and Actual Experience 846 (210)
Changes in Assumptions - Discount Rate 399,437 3,305
Net Changes 464,731 4,420
Balances at June 30, 2021 $ 1,905,991 $ 31,926
Covered Payroll $ 1,276,975 $ 46,395
Total OPEB Liability as a Percentage of Covered Payroll 149.3 % 68.8 %
State's Proportionate Share of the Collective Total OPEB
Liability 80 % 24 %
The State's proportionate share for fiscal years ended June 30, 2021 and June 30, 2020 was estimated using the same share of implicit
subsidy for each school district's or municipality's OPEB Plan.
B-83
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
CHANGES IN NET OPEB LIABILITY
Changes in net OPEB liabilities are as follows:
SCHEDULE OF CHANGES IN NET OPEB LIABILITY
(Expressed in Thousands)
Healthcare Group Life Insurance
Component
State State Units
Employees Employees and Others Teachers
Total OPEB Liability
Service Cost $ (17,777) $ (898) $ (46) $ (1,247)
Interest (76,742) (6,748) (345) (7,181)
Differences Between Expected and Actual Experience (3,008) (671) (35) 117
Change in Proportion - 36 (36) -
Benefit Payments, Including Refunds of Member Contributions - Explicit 48,714 4,363 223 3,591
Benefit Payments, Including Refunds of Member Contributions - Implicit 22,486 - - -
Net Change in Total OPEB Liability (26,327) (3,918) (239) (4,720)
Beginning Total OPEB Liability (1,154,160) (97,312) (4,929) (102,191)
Ending Total OPEB Liability (1,180,487) (101,230) (5,168) (106,911)
Plan Fiduciary Net Position
Employer Contributions - Explicit (48,714) (4,598) (235) -
Employer Contributions - Implicit (22,486) - - -
Non-employer Contributions - - - (4,478)
Transfers - - - (3,131)
Net Investment Income (13,859) (1,664) (89) -
Changes in Proportion - 13 (13) -
Benefit Payments, Including Refunds of Member Contributions 71,200 4,363 223 3,591
Administrative Expense 3 355 19 644
Net Change in Plan Fiduciary Net Position (13,856) (1,531) (95) (3,374)
Beginning Plan Fiduciary Net Position (277,703) (35,179) (1,782) (63,656)
Ending Plan Fiduciary Net Position (291,559) (36,710) (1,877) (67,030)
Ending Net OPEB Liability $ (888,928) $ (64,520) $ (3,291) $ (39,881)
Proportion
June 30, 2021 (100.000000)% (95.146949)% (4.853051)% (100.000000)%
June 30, 2020 (100.000000)% (94.999635)% (5.000365)% (100.000000)%
Change - Increase (Decrease) 0.000000 % (0.147314)% 0.147314 % 0.000000 %
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability (24.698197)% (36.263953)% (36.319659)% (62.697010)%
B-84
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
ACTUARIAL METHODS AND ASSUMPTIONS
The projection of benefits is based on the terms of the substantive plan at the time of each valuation and include types of benefits in
force at the valuation date and the pattern of sharing of costs between the employer and plan members to that point. Actuarial
calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in
actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions were as follows:
State Health Insurance
The valuation date is June 30, 2019 rolled forward to June 30, 2020. Costs are developed using the entry age normal cost method
based on a level percentage of payroll. The participation rate for future retirees is 95 percent of active participants currently enrolled.
Actuarial assumptions used in the June 30, 2020 and June 30, 2019 actuarial valuations were based on the results of an actuarial
experience study conducted for the period of June 30, 2012 to June 30, 2015. Significant actuarial assumptions employed by the
actuary for funding purposes as of June 30, 2020 and June 30, 2019 include: a 6.75 percent investment rate of return, a 2.75 percent
inflation rate; and, annual salary increases, including inflation of 2.75 percent plus merit component based on employee’s years of
service. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll over a 30-year period on a closed
basis. The unfunded liability will be fully recognized by June 30, 2037. Assumption changes, plan changes and experience gains are
amortized over a 20 year fixed period. Experience losses are amortized over a 10 year fixed period. The initial medical trend rate had
been 6.20 percent at June 30, 2019 and 6.00 percent at June 30, 2020. The ultimate medical trend rate for both years was 4.29 percent
reached at 2075. The State actively manages premium increases within the statutory cap, so healthcare cost increases are limited to no
more than inflation plus 3 percent in any year. For active members and non-disabled retirees, the RP2014 Total Dataset Healthy
Annuitant Mortality Table was used. For State employees, rates are based on 104 percent and 120 percent for males and females,
respectively.
The long-term expected rate of return on Other Post-Employment Benefit Plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation)
are developed for each major class of assets. These ranges are combined to produce the long-term expected rate of return by weighting
the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
long-term real rates of return for each major asset class were benchmarked against returns by asset class as forecast by Horizon
Actuarial Services, LLC.
Beginning with this fiscal year, June 30, 2021, management adopted a change in methodology recommended by the actuary. The new
methodology better estimates actual self-insured plan premiums covered by the State on behalf of participants (explicit subsidy). Total
claims allocated to retirees represents the total benefit payment amount and the implied subsidy payments represent the difference.
The methodology will be used on a consistent basis going forward.
Group Life Insurance
The valuation date is June 30, 2020. Costs are developed using the individual entry age normal cost method based on a level
percentage of payroll. The participation rate for future retirees is 100 percent of those currently enrolled. Actuarial assumptions used
in the June 30, 2020 and June 30, 2019 actuarial valuations were based on the results of an actuarial experience study conducted for
the period of June 30, 2012 to June 30, 2015. Significant actuarial assumptions employed by the actuary for funding purposes as of
June 30, 2018 and June 30, 2017 include: a 6.75 percent investment rate of return, a 2.75 percent inflation rate; and, annual salary
increases, including inflation of 2.75 percent plus merit component based on employee’s years of service. The unfunded actuarial
accrued liability is being amortized as a level percentage of payroll over a 30-year period on a closed basis. As of June 30, 2020, there
were 17 years remaining in the amortization schedule for state employees and teachers. For active members and non-disabled retirees,
the RP2014 Total Dataset Healthy Annuitant Mortality Table was used. For State employees, rates are based on 104 percent and 120
percent for males and females, respectively. Teachers rates are based on 99 percent for both genders.
The long-term expected rate of return on Other Post-Employment Benefit Plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation)
are developed for each major class of assets. These ranges are combined to produce the long-term expected rate of return by weighting
the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
long-term real rates of return for each major asset class included in the target asset allocation as of June 30, 2020 are summarized in
the table in the plan section below.
The discount rate used to measure the total OPEB liability for the State Employee and Teacher Plan was 6.75 percent. The projection
of cash flows used to determine the discount rate assumed that employer and non-employer entity contributions will be made at
contractually required rates, actuarially determined. Based on these assumptions, the Plan’s fiduciary net position was projected to be
available to make all projected future benefit payments to current plan members. Therefore, the long-term expected rate of return on
investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
B-85
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Teachers Health Insurance
The valuation date is June 30, 2019 rolled forward to June 30, 2020. Costs are developed using the entry age normal cost method
based on a level percentage of payroll. 93.33 percent of all Teachers are assumed to be eligible to receive a State contribution at
retirement. 75 percent of active participants currently with coverage continue coverage at retirement. The State is currently funding the
plan on a pay-as-you-go basis. One third of active participants who have currently waived coverage elect coverage at retirement.
Actuarial assumptions used in the June 30, 2020 and June 30, 2019 actuarial valuations were based on the results of an actuarial
experience study conducted for the period of June 30, 2012 to June 30, 2015. Significant actuarial assumptions employed by the
actuary for funding purposes as of June 30, 2020 and June 30, 2019 include: using a 2.75 percent inflation rate and 3.00 percent
annual salary increases. Since the State’s portion of the Teachers’ postretirement medical plans are not being funded by assets in a
separate trust, GASB No. 75 requires that the discount rate be based on the index rate as of the measurement date of a 20-year tax-
exempt general obligation municipal bond index with an average rating of AA/Aa or higher. The State of Maine elected to determine
the discount rate using the Bond Buyer 20-Bond General Obligation Index. The discount rate was 2.21 percent as of the measurement
date, June 30, 2020, (3.50 percent as of June 30, 2019). The initial medical trend rate had been 6.20 percent at June 30, 2019 and 6.00
percent at June 30, 2020. The ultimate medical trend rate for both years was 4.29 percent reached at 2075. For active members and
non-disabled retirees, the RP2014 Total Dataset Healthy Annuitant Mortality Table was used. For Teachers rates are adjusted based on
99 percent for males and females.
First Responders Health Insurance
The valuation date is June 30, 2019 rolled forward to June 30, 2020. Costs are developed using the entry age normal cost method
based on a level percentage of payroll. 90 percent of all active members who currently have coverage are assumed to elect coverage at
retirement. No employee who has waived coverage will be assumed to be eligible for coverage at retirement. The State is currently
funding the plan on a pay-as-you-go basis. The valuation assumes the State will continue this policy. Since the State’s portion of the
First Responders’ postretirement medical plans are not being funded by assets in a separate trust, GASB No. 75 requires that the
discount rate be based on the index rate as of the measurement date of a 20-year tax-exempt general obligation municipal bond index
with an average rating of AA/Aa or higher. The State of Maine elected to determine the discount rate using the Bond Buyer 20-Bond
General Obligation Index. The discount rate was 2.21 percent as of the measurement date, June 30, 2020, (3.50 percent as of June 30,
2019). Actuarial assumptions used in the June 30, 2020 and June 30, 2019 actuarial valuations were based on the results of an
actuarial experience study conducted for the period of June 30, 2012 to June 30, 2015. Other significant actuarial assumptions
employed by the actuary for June 30, 2020 and June 30, 2019 include using a 2.75 percent inflation rate and 3.00 percent annual salary
increase. The initial medical trend rate had been 6.20 percent at June 30, 2019 and 6.00 percent at June 30, 2020. The ultimate
medical trend rate for both years was 4.29 percent reached at 2075. For active members and non-disabled retirees, the RP2014 Total
Dataset Healthy Annuitant Mortality Table was used. Rates were adjusted 104 percent for males and 120 percent based on females.
OPEB EXPENSE AND DEFERRALS
For the year ended June 30, 2021, the State recognized OPEB expense of $219,700. Costs related to non-State employees are charged
to the General Fund.
OPEB COSTS
(Expressed in Thousands)
SETP - State of Maine Healthcare OPEB Expense $ 66,938
SETP - Teachers Non-Employer Healthcare OPEB Expense 141,953
First Responders Healthcare OPEB Expense 545
Group Life Insurance OPEB Expense - State Employees 5,848
Group Life Insurance OPEB Expense - Teachers (grant expense) 4,416
$ 219,700
B-86
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Of State employee costs charged to governmental funds, 51 percent is charged to the General Fund, 20 percent to Other Special
Revenue Funds, 16 percent to the Highway Fund and 13 percent to Federal funds. At June 30, 2021, the State reported deferred
outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Healthcare
(Expressed in Thousands)
State Teachers First Responders
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Differences between expected and actual
experience demographic and economic $ 7,919 $ 31,595 $ 63,769 $ 3,078 $ - $ 2,252
Changes of assumptions 317 - 418,664 114,850 2,841 3,184
Net difference between projected and actual
earnings on OPEB plan investments 3,909 5,641 - - - -
State and component unit contributions
subsequent to the measurement date 75,095 - 28,719 - 658 -
Total $ 87,240 $ 37,236 $ 511,152 $ 117,928 $ 3,499 $ 5,436
For the Year Ended
2022 (8,840) 46,372 (1,022)
2023 (7,885) 46,372 (1,022)
2024 (8,383) 46,372 (1,022)
2025 (6) 56,880 (239)
2026 23 69,090 275
Thereafter - 99,419 435
Group Life Insurance
(Expressed in Thousands)
State Teachers
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual experience
demographic and economic $ 1,284 $ - $ 417 $ 104
Changes of assumptions 839 - 1,105 -
Net difference between projected and actual earnings
on OPEB plan investments - 52 - 149
Changes in proportion and differences between State
contributions and proportionate share of
contributions 239 93 - -
State and component unit contributions subsequent
to the measurement date 5,083 - 4,601 -
Total $ 7,445 $ 145 $ 6,123 $ 253
For the Year Ended
2022 215 (351)
2023 540 222
2024 678 468
2025 656 982
2026 128 (13)
Thereafter - (39)
B-87
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The long-term expected rate of return on OPEB plan assets was determined using a building-block method in which best-estimate
ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for
each major class of assets. These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real
rates of return for each major asset class included in the OPEB plan's target asset allocation are summarized in the following table.
State Employee Healthcare Group Life Insurance
Long-Term Long-Term
Expected Expected
Target Real Rate of Target Real Rate of
Asset Class: Allocation Return Allocation Return
U.S. Government Securities 9.00 % 2.30 % 9.00 % 2.30 %
Public Equity 70.00 % 6.00 % 70.00 % 6.00 %
Traditional Credit 16.00 % 3.00 % 16.00 % 3.00 %
Real Assets:
Real Estate 5.00 % 5.20 % 5.00 % 5.20 %
For the year ended June 30, 2021, the annual money-weighted average rate of return on investments, net of investment expense was
30.6 percent for both plans. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted
for the changing amounts actually invested.
The discount rate used to measure the collective total OPEB liability for the actuarial valuations varied by plan and is disclosed below.
The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current
contribution rate and that employer and non-employer entity contributions will be made at the actuarially determined, contractually
required rates. Based on the assumption, the OPEB plan's fiduciary net position was projected to be available to make all projected
future benefit payments to current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was
applied to all periods of projected benefit payments to determine the total OPEB liability.
B-88
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
SENSITIVITY ANALYSIS
The following tables show how the collective OPEB liabilities would change if the discount rate used was one percentage point lower
or one percentage point higher than the current rate. The discount rate used for the funded healthcare plan is 6.75 percent. The
discount rate used for unfunded healthcare plans is 2.21 percent. The discount rate used for funded group life insurance plans is 6.75
percent.
Discount Rate
(Expressed in Thousands)
Current
1% Decrease Discount Rate 1% Increase
Net OPEB Liabilities
State Employee Healthcare Plan $ 1,028,260 $ 888,928 $ 772,972
State Employee Group Life $ 78,598 $ 64,518 $ 53,004
State Employee Group Life - DCU $ 4,009 $ 3,293 $ 2,703
Teacher Group Life $ 55,956 $ 39,881 $ 26,862
Total OPEB Liabilities
Teacher Healthcare Plan $ 2,314,793 $ 1,905,991 $ 1,585,874
First Responders Healthcare Plan $ 34,801 $ 31,926 $ 29,327
Healthcare Cost Trend Rate
(Expressed in Thousands)
Current
1% Decrease Discount Rate 1% Increase
Net OPEB State Employee
Healthcare Plan $ 746,392 $ 888,928 $ 1,062,502
Total OPEB Teacher Healthcare
Plan $ 1,522,189 $ 1,905,991 $ 2,425,923
Total OPEB First Responder
Healthcare Plan $ 28,493 $ 31,926 $ 35,957
For all plans, the current trend rate is 6.00 percent grading down to 4.29 percent.
B-89
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Plan Information
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, principal objective is to
improve the usefulness of OPEB information in the external financial statements of State and local governments. GASB established
different reporting requirements for OPEB plans based on whether or not plan assets accumulated for benefits are placed in trusts (or
equivalent arrangements). Two OPEB Plans met the requirements for funded OPEB trusts or their equivalents: the State Employee
Healthcare Plan and the Group Life Insurance Plan for State Employees and Teachers. The other plans are funded on a pay-as-you-go
basis.
Information not already contained in this note disclosure at June 30, 2021 follows. The Trustees of the State Retiree Healthcare Plan
(SRHP) are the State Controller and State Treasurer.
Components of the Net OPEB Liability for the plans at June 30, 2021 were as follows:
(Expressed in Thousands)
State and
Teachers Group
State Employee Life Insurance
Healthcare Plan Benefit Plan
Total OPEB liability $ 1,236,901 $ 223,516
Plan fiduciary net position 382,842 140,600
State of Maine's net OPEB liability $ 854,059 $ 82,916
Plan fiduciary net position as a percentage
of the total OPEB liability 30.95 % 62.90 %
Actuarial assumptions for both funded OPEB plans used in the June 30, 2021 valuations were based on results from an actuarial
experience study for the period of June 30, 2016 to June 30, 2020. The individual entry age normal method is used to determine
liabilities. Asset amounts are taken as reported to the actuaries by the System without audit or change. Specific health and group life
insurance OPEB plans' actuarial assumptions are included in the plan specific section of this note. For the 2021 healthcare valuation,
actuaries decreased the initial medical trend rate from 6.00 percent to 5.90 percent.
The long-term expected rate of return on OPEB plan assets was determined using a building-block method in which best-estimate
ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for
each major class of assets. These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real
rates of return for each major asset class included in the OPEB plans' target asset allocation are summarized in the following table.
Long-Term
Target Expected Real
Allocation Rate of Return
Asset Class for the State Employee and
Teacher Group Life Insurance Benefit
Plan
Public Equity 70.0 % 6.0 %
Real Estate 5.0 % 5.2 %
Traditional Credit 16.0 % 3.0 %
U.S. Government Securities 9.0 % 2.3 %
Asset Class for State Employee
Healthcare Plan
Public Equity 70.0 % 6.0 %
Real Estate 5.0 % 5.2 %
Traditional Credit 16.0 % 3.0 %
U.S. Government Securities 9.0 % 2.3 %
B-90
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
For the year ended June 30, 2021, the annual money-weighted rate of return on investments, net of investment expense, was 30.6
percent for both plans. The money weighted rate of return expresses investment performance, net of investment expense, adjusted for
the changing amounts actually invested.
The discount rate used to measure the collective total OPEB liability for the actuarial valuations varied by plan and is disclosed below.
The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current
contribution rate and that employer and non-employer entity contributions will be made at actuarially determined, contractually
required rates. Based on these assumptions, the OPEB plans' fiduciary net position were projected to be available to make all
projected future benefit payments to current plan members. Therefore, the long-term expected rate of return on OPEB plan investments
was applied to all periods of projected benefit payments to determine the total OPEB liability.
The following table shows how the collective net OPEB liabilities would change if the discount rate used was one percentage point
lower or one percentage point higher than the current rate. The current rate used for both plans is 6.50 percent.
(Expressed in Thousands)
Current
Discount
1% Decrease Rate 1% Increase
State Employee Healthcare Plan $ 1,001,114 $ 854,059 $ 731,899
State Employee and Teacher Group Life
Insurance Benefit Plan $ 116,908 $ 82,916 $ 55,417
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following table shows how the collective net
OPEB liabilities would change if the healthcare rate used was one percentage point lower or one percentage point higher than the
current rate of 5.90 percent grading down to 4.29 percent.
(Expressed in Thousands)
Current
Discount
1% Decrease Rate 1% Increase
State Employee Healthcare Plan $ 693,700 $ 854,059 $ 1,050,563
NOTE 11 - LONG-TERM OBLIGATIONS
PRIMARY GOVERNMENT
The State records its liability for general obligation bonds in the Governmental Activities column on the Statement of Net Position.
Other long-term obligations recognized by the State include: revenue bonds issued by the Maine Governmental Facilities Authority, a
blended component unit; obligations under Certificates of Participation and other financing arrangements; loans payable to component
unit for repayment of bonds issued by the Maine Municipal Bond Bank on behalf of the Maine Department of Transportation and the
Liquor Operations Revenue Fund and compensated employee absences.
GENERAL OBLIGATIONS BONDS
Programs for which the State issues general obligation bonds include: adaptive equipment loan programs; environmental cleanup and
protection; highway and transportation related projects; agricultural and small business job creation; and acquisition, construction, and
renovation of major capital facilities including State parks and historic sites. General obligation bonds are secured by the full faith and
credit of the State. Debt service requirements are provided by legislative appropriation from the State’s general tax revenues and are
repaid in annual installments beginning not more than one year after issuance.
B-91
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Changes in general obligation bonds of the primary government during fiscal year 2021 were:
Primary Government - Changes in General Obligation Bonds
(Expressed in Thousands)
Balance Balance Due Within
July 1, 2020 Additions Reductions June 30, 2021 One Year
General Obligation Debt:
General Fund $ 570,490 $ 96,875 $ 77,700 $ 589,665 $ 83,845
Special Revenue Fund 2,210 - 2,210 - -
Unamortized Premiums:
General Fund 79,098 20,625 10,326 89,397 12,430
Total $ 651,798 $ 117,500 $ 90,236 $ 679,062 $ 96,275
Debt service requirements (principal and interest) for all outstanding general obligation bonds of the primary government, from June
30, 2021 until maturity, are summarized in the following table:
Future Debt Service on General Obligation Bonds
(Expressed in Thousands)
Fiscal Year Principal Interest Total
2022 $ 83,845 $ 26,684 $ 110,529
2023 89,875 23,483 113,358
2024 89,870 19,597 109,467
2025 78,575 15,626 94,201
2026 68,315 12,080 80,395
2027-2031 179,185 20,517 199,702
Total $ 589,665 $ 117,987 $ 707,652
Unamortized Premiums 89,397
Total Principal $ 679,062
B-92
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
General fund, special revenue and other general obligation bonds issued and outstanding at June 30, 2021 are as follows:
Primary Government - General Obligation Bonds Outstanding
(Expressed in Thousands)
Fiscal Year Maturities
Amounts Outstanding
Issued June 30, 2021 First Year Last Year Interest Rates
General Fund:
Series 2012 $ 49,265 $ 4,735 2013 2022 1.00% - 5.00%
Series 2014 112,945 33,880 2015 2024 0.20% - 5.00%
Series 2015 102,555 41,020 2016 2025 0.85% - 5.00%
Series 2016 97,705 48,850 2017 2026 1.00% - 5.00%
Series 2017 98,060 58,830 2018 2027 2.00% - 5.00%
Series 2019A 111,255 77,875 2019 2028 3.125% - 5.00%
Series 2019B 140,875 112,695 2020 2029 2.50% - 5.00%
Series 2020 114,905 114,905 2021 2030 1.25% - 5.00%
Series 2021 96,875 96,875 2022 2031 1.00% - 5.00%
589,665
Plus Unamortized Bond Premium 89,397
Total General Fund $ 679,062
AUTHORIZED UNISSUED BONDS
Any bonds not issued within five years of the date of ratification may not be issued after that date. Within two years after expiration of
the five-year period, the Legislature may extend, by a majority vote, the five-year period for an additional five years or may
deauthorize the bonds. If the Legislature fails to take action within those two years, the bond issue shall be considered to be
deauthorized and no further bonds may be issued. At June 30, 2021, general obligation bonds authorized and unissued totaled $67.1
million.
REVENUE BONDS OF THE MAINE GOVERNMENTAL FACILITIES AUTHORITY
The State included $377.8 million in other financing arrangements to reflect revenue bonds issued by the Maine Governmental
Facilities Authority (MGFA), a blended component unit. Payment of the bonds is subject to, and dependent upon, biennial
appropriations being made by the State Legislature. Debt issued by MGFA is not debt of the State or any political subdivision within
the State. The State is not obligated for such debt, nor is the full faith and credit of the State pledged for such debt. MGFA may not
issue securities in excess of $701.1 million outstanding, at any one time, except for the issuance of certain revenue refunding securities.
During the fiscal year ended June 30, 2021, MGFA issued $12.8 million in 2021A bonds with interest rates between 2.00 percent and
4.00 percent.
Also during the fiscal year ended June 30, 2021, MGFA issued $37.4 million in 2021B bonds with an average coupon rate of 1.67%,
to in-substance defease a total of $34.3 million of 2013A and 2011A series bonds. The net proceeds of approximately $36.9 million,
after payment of underwriting fees and other issuance costs, were used to purchase U.S. Government Securities which will provide for
all debt service payments on defeased bonds through their respective call dates, from fiscal year 2022 through fiscal year 2024. The
State in effect reduced aggregate debt service approximately $3.6 million over the next thirteen years and obtained an economic gain
(difference between the present values of the old and new debt service payments) of approximately $3.6 million.
At June 30, 2021, there was $34.3 million of MGFA in-substance defeased bonds outstanding.
B-93
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
CERTIFICATES OF PARTICIPATION AND OTHER FINANCING ARRANGEMENTS
The State uses financing companies, Certificates of Participation (COP’s), and lease/purchase agreements to finance construction of
certain State buildings, to purchase or generate software, and to purchase equipment and vehicles, including school buses. COP’s are
issued through a trustee, and the State is responsible for payments to the trustee that approximate the interest and principal payments
made to the certificate holders. The State and school districts maintain custody and use of the assets; however, the trustee holds a lien
as security until such time as the certificates are fully paid.
Neither COP’s nor the other financing arrangements constitute a legal debt, liability, or contractual obligation in excess of amounts
appropriated. The State’s obligation to make minimum payments or any other obligation under agreements is subject to, and dependent
upon, appropriations being made by the Legislature. The Legislature has no obligation to appropriate the money for future minimum
payments or other obligations under any agreement.
SHORT-TERM OBLIGATIONS
The State of Maine did not issue or retire Bond Anticipation Notes during fiscal year 2021. Short-term obligations are used to meet
temporary operating cash flow needs. At June 30, 2021 there were no outstanding Tax Anticipation Notes or Bond Anticipation
Notes.
OTHER LONG-TERM OBLIGATIONS
In general, expenditures and fund liabilities are not recorded in governmental funds for long-term obligations until amounts owed are
“due and payable.” Fund liabilities are recorded in the proprietary funds when obligations are incurred. In the Statement of Net
Position, the State has recorded long-term obligations for its compensated employee absences, net pension liability, other post-
employment benefit obligations, pollution remediation landfill closure and post-closure care costs.
Changes in other long-term obligations for governmental and business-type activities for the fiscal year ended June 30, 2021, are
summarized as follows:
Primary Government - Changes in Other Long-Term Obligations
(Expressed in Thousands)
Balance Balance Due Within
July 1, 2020 Additions Reductions June 30, 2021 One Year
Governmental Activities:
MGFA Revenue Bonds $ 383,935 $ 15,830 $ 21,980 $ 377,785 $ 19,388
COP's and Other Financing 37,849 29,490 13,815 53,524 10,380
Compensated Absences 61,772 15,912 9,359 68,325 10,347
Claims Payable 70,422 207,790 197,550 80,662 26,525
Capital Leases 53,722 2,792 7,027 49,487 5,300
Loans Payable to Component Unit 320,193 75,000 58,200 336,993 59,283
Total Governmental Activities $ 927,893 $ 346,814 $ 307,931 $ 966,776 $ 131,223
Business-Type Activities:
Compensated Absences $ 948 $ 156 $ 125 $ 979 $ 149
B-94
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Debt service requirements (principal and interest) for COP’s and other financing arrangements of the primary government, from June
30, 2021 until maturity, are summarized as follows:
Future Debt Service on MGFA Revenue Bonds, COPS and Other Financing Arrangements
(Expressed in Thousands)
Governmental Funds Internal Service Funds
Fiscal Year Principal Interest Total Principal Interest Total
2022 $ 5,146 $ 280 $ 5,426 $ 24,622 $ 15,200 $ 39,822
2023 4,412 196 4,608 25,666 14,126 39,792
2024 8,732 1,257 9,989 25,172 13,208 38,380
2025 7,456 320 7,776 24,406 12,313 36,719
2026 5,859 210 6,069 22,795 11,420 34,215
2027 - 2031 8,427 135 8,562 101,955 44,422 146,377
2032 - 2036 - - - 96,040 24,654 120,694
2037 - 2041 - - - 70,620 5,246 75,866
Total $ 40,032 $ 2,398 $ 42,430 $ 391,276 $ 140,589 $ 531,865
LOANS PAYABLE TO COMPONENT UNIT
The State of Maine has pledged various revenue streams, as security for Grant Anticipation Bonds (GARVEE) and Transportation
Infrastructure Revenue Bonds (TransCap) issued by the Maine Municipal Bond Bank (MMBB) on behalf of the Maine Department of
Transportation to provide financing for qualified transportation projects.
In addition, the State of Maine has also pledged the profit from the Alcoholic Beverages Enterprise Fund as security for $220.6 million
($193.8 million net of the debt service reserve) of Liquor Operations Revenue Bonds issued by MMBB. The bonds are special, limited
obligations of the MMBB.
Changes in GARVEE, TransCap and Liquor Operations revenue bonds during fiscal year 2021 were:
Primary Government - Changes in GARVEE, TransCap and Liquor Revenue Bonds Payable
(Expressed in Thousands)
Balance Balance Due Within
July 1, 2020 Additions Reductions June 30, 2021 One Year
Loans Payable to Components Unit:
Federal Funds $ 138,541 $ 75,000 $ 20,101 $ 193,440 $ 19,697
Special Revenue Fund 181,652 - 38,099 143,553 39,587
Total $ 320,193 $ 75,000 $ 58,200 $ 336,993 $ 59,284
Payment of principal and interest on the GARVEE bonds shall be subject to appropriation each year by the Legislature in an amount
sufficient to cover the principal and interest requirements of MMBB’s debt for these bonds. The State’s receipt of these funds is
subject to continuing federal appropriations. MMBB insured payments of principal and interest with a financial guaranty insurance
policy. The bonds do not constitute a legal debt or obligation of the State.
Principal and interest on TransCap bonds are payable solely from pledged revenues, pledged rights, and pledged TransCap funds and
accounts. Pledged revenues include certain motor vehicle registration and other fees, a portion of excise tax on gasoline and other
special fuel, and certain amounts required to be transferred from the Highway Fund. All pledged revenues are required to be
transferred to the TransCap Fund. The bonds do not constitute a legal debt or liability of the State.
Payment of principal and interest on the Liquor Operations Revenue bonds shall be made solely from the profit of the Alcoholic
Beverages Enterprise Fund. The bonds do not constitute a legal debt or obligation of the State.
B-95
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
GARVEE, TransCap and Liquor Operations Revenue bonds issued and outstanding at June 30, 2021 are as follows:
GARVEE, TransCap and Liquor Revenue Bonds Outstanding
(Expressed in Thousands)
Fiscal Year Maturities
Amounts Outstanding
Issued June 30, 2021 First Year Last Year Interest Rates
Federal Funds:
Series 2010B $ 24,085 $ 10,080 2018 2022 4.52% - 5.32%
Series 2014A 44,810 26,005 2015 2026 2.00% - 5.00%
Series 2016A 44,105 32,295 2017 2028 2.63% - 5.00%
Series 2018A 44,310 44,310 2023 2030 4.00% - 5.00%
Series 2020A 60,925 60,925 2021 2032 5.00%
Total Federal Funds $ 173,615
Special Revenue Fund:
Series 2009A 105,000 11,315 2010 2023 2.50% - 5.00%
Series 2009B 30,000 1,090 2010 2024 2.00% - 5.00%
Series 2011A 55,000 45,065 2012 2026 2.00% - 5.00%
Series 2013 220,660 74,095 2015 2024 1.07% - 4.35%
Series 2015A 54,680 47,135 2019 2024 4.00% - 5.00%
Total Special Revenue Funds $ 178,700
Total principal and interest requirements over the life of the 2010 GARVEE bonds are $35.8 million, with annual requirements of up
to $5.6 million; for 2014 GARVEE bonds total principal and interest requirements are $59.0 million, with annual requirements of up to
$5.0 million; for 2016 GARVEE bonds total principal and interest requirements are $58.0 million, with annual requirements up to $4.9
million; for 2018A GARVEE bonds total principal and interest requirements are $63.3 million, with annual requirements up to $6.7
million; for 2020A GARVEE bonds total principal and interest requirements are $81.9 million, with annual requirements up to $6.8
million. Total federal highway transportation funds received in federal fiscal year 2021 were $275.4 million. Current year payments to
MMBB for GARVEE bonds were $23.3 million (8.5 percent of federal highway transportation funds received).
Total principal and interest requirements over the life of the 2009A TransCap Revenue bond are $139.3 million, with annual
requirements up to $10.1 million; for the 2009B TransCap Revenue bonds total principal and interest requirements are $45.2 million,
with annual requirements up to $15.9 million. Total principal and interest requirements over the life of the 2011A TransCap Revenue
bond are $84.2 million, with annual requirements up to $20.3 million. Total principal and interest requirements over the life of the
2015A TransCap Revenue bond are $74.4 million, with annual requirements up to $16.6 million. Total revenue received for revenue
sources used as pledged revenues were $40.2 million in fiscal year 2021.
Total principal and interest requirements over the life of the 2013 Liquor Operation Revenue bond are $273.7 million, with annual
requirements up to $26.8 million. Current year payments to MMBB for the Liquor Operation bonds were $26.8 million. Total revenue
received from revenue sources used as pledged revenue were $60.7 million in fiscal year 2021.
OBLIGATIONS UNDER CAPITAL LEASES
The State leases various assets under non-cancelable leasing arrangements. Leases that constitute rental agreements are classified as
operating leases; the resulting expenditures are recognized as incurred over the lease term. Leases that are comparable to purchases
are classified as capital leases.
In the government-wide and proprietary fund statements, assets and liabilities resulting from capital leases are recorded at lease
inception. The principal portion of lease payments reduces the liability; the interest portion is expensed.
Most leases have cancellation clauses in the event that funding is not available. For reporting purposes, such cancellation clauses are
not considered because the likelihood that they will be exercised is considered remote. Some lease agreements include renewal or
purchase options. The effect of such options is reflected in the minimum lease payments only if it is considered reasonably assured
that an option will be exercised. Because the accounting treatment for installment purchase agreements is similar, such agreements are
reported with capital leases.
B-96
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Leases that exist between the State and the Maine Governmental Facilities Authority (MGFA), a blended component unit, are not
recorded as leases in this report. In their separately issued financial statements, MGFA records a lease receivable from the State.
Although payables and receivables technically exist between these parties, when combined for government-wide reporting, they are
eliminated. A long-term liability exists on the government-wide statements for the bonds issued by MGFA to construct the assets
associated with the leases. Future payments to MGFA are, therefore, not included in the schedule of lease commitments below.
At June 30, 2021 capital assets include capitalized buildings of $96.5 million in Governmental Activities, with related accumulated
depreciation of $52.2 million.
OBLIGATIONS UNDER OPERATING LEASES
The State is obligated under certain leases, accounted for as operating leases, in the proprietary funds. Operating leases do not give
rise to property rights or lease obligations, and therefore assets and liabilities related to the lease agreements are not recorded in the
State’s financial statements. Rental expense incurred under operating leases totaled $4.0 million during the year.
A summary of the operating and non-cancelable capital lease commitments to maturity follows:
Future Minimum Lease Payments
Capital and Operating Leases
(Expressed in Thousands)
Operating
Fiscal Year Capital Leases Leases
2022 $ 5,300 $ 3,714
2023 4,881 2,306
2024 4,338 2,052
2025 4,149 1,920
2026 4,002 1,706
2027-2031 14,841 4,882
2032-2036 9,313 2,319
2037-2041 6,764 710
2042-2046 5,239 756
2047-2051 2,399 697
2052-2056 - 237
Total Minimum Payments 61,226 $ 21,299
Less: Amount Representing Interest 11,739
Present Value of Future Minimum Payments $ 49,487
MGFA REVENUE BONDS, COP'S AND OTHER FINANCING ARRANGEMENTS
MGFA revenue bonds will be liquidated by the MGFA Internal Service Fund, from revenues received through lease agreements with
various governmental funds. The liability for loans payable to the component unit will be liquidated from the Federal Fund and
Highway Fund. The vast majority of COP’s and other financing arrangements will be liquidated by the internal service fund in which
the leases are recorded; the General and Highway Funds will pay relatively small amounts.
CLAIMS PAYABLE
Claims payable that represent Medicaid claims will be paid from the General Fund and Federal Fund. Claims payable that represent
workers’ compensation and retiree/employee health will be liquidated by the applicable governmental and internal service funds that
account for the salaries and wages of the related employees. Other claims and judgments attributable to governmental activities will be
liquidated by the General Fund and related special revenue funds.
COMPENSATED ABSENCES
In the government-wide statements and proprietary fund financial statements, compensated absences are reported as long-term
liabilities as required by GASB. In the governmental fund financial statements, vested or accumulated leave is reported as an
expenditure and fund liability when incurred upon retirement, termination or death. Sick and vacation payments made to terminated
employees as of June 30, 2021 but paid after the fiscal year end is also reported in the funds.
B-97
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
COMPONENT UNITS
Bonds payable of the discretely presented component units are legal obligations of the component units and are not general obligations
of the State. The following table summarizes bonds outstanding for selected material balances of discretely presented component units,
as reported in their separately issued financial statements, utilizing their respective fiscal year-ends:
Component Unit Bonds Outstanding
(Expressed in Thousands)
Component Unit Interest Rates Amount Maturity Dates
Finance Authority of Maine 2.120% - 5.050% $ 98,372 2021 - 2041
Maine Community College System 3.000% - 5.000% 16,389 2021 - 2036
Maine Health and Higher Educational Facilities Authority 0.359% - 5.250% 612,380 2021 - 2050
Maine Municipal Bond Bank 0.350% - 6.120% 1,692,363 2021 - 2049
Maine State Housing Authority 0.000% - 5.000% 1,600,739 2021 - 2053
Maine Turnpike Authority 2.000% - 5.250% 659,318 2021 - 2050
University of Maine System 0.310% - 5.000% 165,372 2021 - 2041
In periods of declining interest rates, Maine Health and Higher Educational Facilities Authority (MHHEFA) has refunded certain bond
obligations. The proceeds of any advance refunding bonds are primarily used to purchase U.S. Treasury obligations, the principal and
interest on which will be sufficient to pay the principal and interest, when due, of the defeased bonds.
On May 19, 2021 Maine Health and Higher Educational Facilities Authority (MHHEFA) issued $86.1 million in 2021A Reserve
Resolution bonds with an average interest rate of 4.265 percent, all of which was used to in-substance defease $1.1 million of 2010B
Reserve Resolution and $85.0 million in the 2011, 2014 and 2020 bond series. The net proceeds of approximately $97.5 million were
used to purchase U.S. Government securities which will provide for all future debt service payments on defeased bonds. The economic
benefits associated with the refunding inure to the respective institutions and not the Authority.
On May 19, 2021 MHHEFA issued $156.9 million in 2021B Reserve Resolution fund bonds with an average interest rate of 2.81
percent, all of which was used to in-substance defease certain maturities within the 2013 bond series. The net proceeds of
approximately $157.8 million, including other sources of funds and after payment of underwriting fees and other issuance costs, were
used to purchase U.S. Government securities which will provide for all future debt service payments on defeased bonds. The economic
benefits associated with the refunding inure to the respective institution and not the Authority.
At June 30, 2021, MHHEFA had approximately $60.5 million of defeased bonds remaining outstanding with respect to all advance-
refunding issues within the Reserve Fund Resolution.
In periods of declining interest rates, MMBB has refunded certain of its bond obligations, reducing aggregate debt service. Where
allowed, the bank retires outstanding bonds prior to their contractual maturity. In other cases, the proceeds of the refunding bonds were
principally used to purchase U.S. Government Treasury obligations that will provide for future payment on the debt. The U.S. Treasury
obligations are deposited with the trustees of the in-substance defeased bonds.
At June 30, 2021, the remaining balances of the 2011C General Tax-Exempt Fund Group in-substance defeased bonds total
approximately $42.4 million. At June 30, 2021, the remaining balances of the 2001D, 2002F and 2005D General Tax-Exempt Fund
Group in-substance defeased bonds total approximately $0.9 million.
For the period ended December 31, 2020, the Maine State Housing Authority redeemed prior to maturity $174.6 million of its
Mortgage Purchase Fund Group bonds from reserve funds, mortgage prepayments, surplus revenues and the proceeds of refunding
bonds. Mortgage Purchase Fund gains of $403 thousand were attributed to recognition of the related bond premium.
The Maine Turnpike Authority has a calendar year end. In November 2020, the Maine Turnpike Authority issued $130.0 million of
Series 2020 Revenue Bonds to pay a portion of the costs of various turnpike projects.
B-98
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The following table summarizes debt service requirements for outstanding bonds of the discretely presented component units:
Component Units Principal Maturities
(Expressed in Thousands)
Fiscal Year Ending FAME MMBB MCCS MSHA MTA UMS MHHEFA
2022 $ 4,315 $ 130,355 $ 850 $ 16,155 $ 17,350 $ 12,209 $ 29,875
2023 5,795 144,975 895 21,630 18,435 54,664 34,235
2024 6,355 144,775 935 57,235 19,360 11,880 35,330
2025 7,105 151,395 980 58,500 23,790 9,993 34,570
2026 7,325 134,965 960 49,535 25,030 10,269 31,330
2027 - 2031 31,615 464,801 5,635 312,700 158,585 40,496 158,445
2032 - 2036 20,625 225,735 4,223 348,385 103,665 20,400 132,770
2037 - 2041 10,395 133,320 - 269,625 90,390 484 93,550
2042 - 2046 - 18,870 - 229,565 80,415 - 49,945
2047 - 2051 - 3,500 - 187,325 57,005 - 12,330
2052 - 2056 - - - 27,675 - - -
Net Unamortized Premium (or
Deferred Amount) 4,842 139,672 1,911 22,409 65,293 4,977 -
Total Principal Payments $ 98,372 $ 1,692,363 $ 16,389 $ 1,600,739 $ 659,318 $ 165,372 $ 612,380
NOTE 12 - SELF - INSURANCE
A. RISK MANAGEMENT
The State maintains several types of insurance plans and accounts for them in two funds that are combined for financial statement
purposes as the Risk Management Fund. The Risk Management Division provides insurance advice and services to State
governmental agencies. The State-Administered Fund offers similar services to quasi-governmental entities. Statute requires the Self-
Insurance Fund to be replenished by appropriation if the fund balance drops below $1 million. The State-Administered Fund balance
has no similar provision; however, statutes prevent it from being used for any purpose other than providing insurance services.
Insurance plans offered include property, vehicle, boat and aircraft, tort, civil rights, employee bonds, police professionals, and a
variety of other insurance products. These plans have limits of liability of as much as $2 million per occurrence.
In some cases, the State purchases excess insurance to limit the State’s liability for insured events. For example, coverage for property
damage is $400 million per occurrence. The State retains $2 million of this risk per occurrence. A private insurance carrier covers the
remaining risk (excess insurance). Settled claims have not exceeded insurance coverage in any of the past three fiscal years.
B-99
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Coverage, risk retention, and excess insurance amounts for major types of insurance are listed below:
Risk Retention Excess
Coverage Per Per Insurance Per
Type of Insurance: Occurrence Occurrence Occurrence
Property* $400 million $2 million $400 million
Ocean Marine Boat Liability*1 10 million 10 thousand 10 million
Boiler and Machinery* 150 million 2 million 150 million
General Liability Including Employment Practices 400 thousand 400 thousand none
Police Professionals 400 thousand 400 thousand none
Vehicular Liability2 400 thousand 400 thousand 600 thousand
Bonding 500 thousand 500 thousand none
Foster Parents 300 thousand 300 thousand none
Inland Marine (various policies) 500 thousand 500 thousand none
Aircraft Liability*3 3 million none 3 million
Data Breach 400 thousand 10 thousand none
*These lines of insurance have commercial excess insurance covering losses above the risk retention amount up to the per occurrence amount listed.
All other insurance programs are wholly self-insured.
1 10 million is the maximum limit for per occurrence coverage. Some agencies have chosen $400 thousand.
2 Excess insurance is only for out of state travel.
3 $3 million is the maximum limit for per occurrence coverage. Some agencies have chosen $500 thousand.
The plan funds the cost of providing claims servicing and claims payment by charging a premium to each agency based on a review of
past losses and estimated losses for the current period.
All risk-financing liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably
estimated. Claims liabilities represent the estimated cost of claims as of March 31, 2020. This cost of claims includes case reserves,
the development of known claims, and the direct administrative expenses for settling specific claims.
Claims liabilities are determined on an actuarial basis. Biennial re-evaluation occurs to take into consideration recently settled claims,
the frequency of claims, and other economic and social factors. Because actual claims liabilities depend on such complex factors as
inflation, changes in legal doctrines, and damage awards, the process used in computing claims liability does not necessarily result in
an exact amount.
At March 31, 2021 and 2020 the present value of claims payable for the State's self-insurance plan was estimated at $11.9 million and
$11.7 million, respectively. The actuary calculated this based on the State's rate on investments.
Risk Management Fund
Changes in Claims Payable
(Expressed in Thousands)
2021 2020
Liability at Beginning of Year $ 11,702 $ 8,039
Current Year Claims and Changes in
Estimates 2,922 9,620
Claims/Fees Expense 2,723 5,957
Liability at End of Year $ 11,901 $ 11,702
As of June 30, 2021, fund assets of $27.2 million exceeded fund liabilities of $13.4 million by $13.8 million. The portion of this
amount that may be reserved for catastrophic losses has not been determined.
B. UNEMPLOYMENT INSURANCE
The State is self-insured for unemployment compensation. As a direct reimbursement employer, the State recognizes all costs for
unemployment compensation as claims are paid. These costs totaled $551 thousand for the fiscal year ended June 30, 2021.
B-100
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
C. WORKERS' COMPENSATION
Workers’ Compensation is accounted for in an Internal Service Fund. Interfund premiums are treated as quasi-external transactions.
Each State agency is charged a premium based on the number of employees to be covered plus an added amount to reduce the
unfunded liability. The Legislature, Legislative Council, and Law Library employees are self-insured for workers’ compensation
purposes. The State assumes the full risk of all claims filed for workers’ compensation.
Claims liabilities are actuarially determined based on estimates of the ultimate cost of claims, including future claim adjustment
expenses that have been incurred but not reported and claims reported but not settled. Because actual claims liabilities depend on such
complex factors as inflation, changes in legal doctrines, and damage awards, the process used in computing claims liability does not
necessarily result in an exact amount. Claims liabilities are re-evaluated periodically to take into consideration recently settled claims,
the frequency of claims, and other economic and social factors.
The balance of claims liabilities as of June 30, 2021 and 2020:
Workers' Compensation Fund
Changes in Claims Payable
(Expressed in Thousands)
2021 2020
Liability at Beginning of Year $ 47,431 $ 44,316
Current Year Claims and Changes in
Estimates 13,509 12,612
Claims Payments 9,779 9,497
Liability at End of Year $ 51,161 $ 47,431
Based on the actuarial calculation as of June 30, 2021, the State is liable for unfunded claims, and incurred but not reported claims, of
approximately $68.8 million. The discounted amount is $51.2 million and was calculated based on a 3.0 percent interest rate on
investments.
D. EMPLOYEE HEALTH INSURANCE
The employee health and retiree health insurance programs are accounted for in two Internal Service Funds. The State became self-
insured for employee and retiree health care coverage on July 1, 2003. A stop loss agreement provides catastrophic coverage for
individual claims exceeding $750 thousand.
The State retained third-party administration (TPA) services for claims administration, utilization review, and case management
services. Premium equivalents are developed with the technical assistance of the plan’s consulting actuary and paid by subscribers and
associated State departments.
There are two primary health plans available. A Preferred Provider Organization (PPO) plan is available to all active employees and
some retirees not eligible for Medicare Part A. A Medicare Advantage plan is available to Medicare eligible retirees. Total enrollment
averaged approximately 36,000 covered individuals. This total includes approximately 26,600 active employees, retirees and their
dependents in the PPO plan and 9,400 Medicare retirees and dependents.
The State maintains PPO plan funding through the accumulation of premiums from employee contract holders and from the
departments with whom they are employed. Claims and administrative expense are paid through these accumulated premiums based
on invoices remitted from the TPA.
B-101
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Expenses and liabilities for incurred but not reported claims, based on an actuarial analysis of claim lag pattern, have been recorded as
liabilities in the amount of $17.6 million. Changes in the Employee Health Insurance and Retiree Health Insurance claims liability for
the fiscal year ending June 30, 2021 follows:
(Expressed in Thousands)
Employee Retiree
Health Fund Health Fund
Liability at Beginning of Year $ 8,467 $ 2,822
Claims and Changes in Estimate 130,294 61,065
Claims Payments 125,561 59,487
Liability at End of Year $ 13,200 $ 4,400
The table above reflects actual activity of the employee health and retiree health insurance programs. In accordance with GASB
Statement No. 75, certain costs reported above were reclassified for financial statement purposes. Retiree healthcare costs of $48.7
million were reclassified from the internal service fund to the OPEB Trust Fund, a fiduciary fund. Additionally, $22.5 million of
active employee healthcare costs were reclassified from the internal service fund to the OPEB Trust Fund to reflect age-adjusted
claims.
NOTE 13 - JOINT VENTURES
Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose. The State of
Maine participates in two separate joint venture arrangements: the Tri-State Lotto Commission (Commission) and the Multi-State
Lottery Association (MUSL).
TRI-STATE LOTTO COMMISSION
The Commission was established in 1985 pursuant to passage into law of the Tri-State Lotto Compact by the States of Maine, New
Hampshire, and Vermont. The Commission is authorized and empowered to promulgate rules and regulations regarding the conduct of
lottery games, including ticket prices, prizes, and the licensing of agents under Title 8 MRSA C. 16.
The Commission is composed of one member from each of the participating states. Each member State’s commission appoints one of
its members to serve on the Commission and each member holds office at the pleasure of his or her appointing authority. The
Commission annually elects a chairman from among its members. The Commission designated that 50 percent of its sales revenue be
reserved for prize awards and agent bonuses.
A prize award liability is established when the winning ticket number is selected. If no winning ticket is selected, the available jackpot
is carried over to the following drawing. The Tri-State Lotto Compact requires that prizes not claimed within one year from the date of
the drawing be forfeited. All expired unclaimed prizes are credited to future prize pools. The Commission funds its jackpots through
annuity contracts purchased from insurance companies and U.S. Government Treasury Strips.
A proportional share of revenues and expenses are allocated to each State based on ticket sales made by each State. Exceptions are the
facility's management fee, which is based on a contracted percentage of operating revenue that varies from State to State, per diem
charges, advertising, and certain printing, travel, and miscellaneous costs, which are allocated based on actual charges generated by
each state.
B-102
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The Tri-State Lotto Commission financial report for fiscal year 2021, which may be obtained from the Bureau of Alcoholic Beverages
and Lottery Operations, 8 State House Station, Augusta, ME 04333-0008, includes the following selected financial information:
Tri-State Lotto Commission
(Expressed in Thousands)
Current Assets $ 14,984
Noncurrent Assets 17,792
Total Assets $ 32,776
Current Liabilities $ 13,546
Long-term Liabilities 12,803
Total Liabilities $ 26,349
Designated Prize Reserves $ 4,346
Reserve for Unrealized Gains 2,081
Total Net Position 6,427
Total Liabilities and Net Position $ 32,776
Total Revenue $ 90,546
Total Expenses 65,119
Gain (Loss) on Sale of Investment 3
Allocation to Member States 25,430
Change in Unrealized Gain (Loss) on Investments Held for
Resale (595)
Change in Net Position $ (595)
B-103
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Multi-State Lottery Association
The Maine State Lottery became a member of the Multi-State Lottery Association (MUSL) in July 2004. The MUSL currently has 38
member State lotteries, including the District of Columbia and the United States Virgin Islands. The MUSL is managed by a board of
directors, which is comprised of the lottery directors or their designee from each of the party States, and authorized to initiate,
promulgate, administer and carry out one or more lottery product offerings that will enhance the participating parties' lottery revenue.
Participating lotteries sell Powerball tickets, collect all revenues, and remit prize funds to the MUSL, net of lower tier prize awards.
The operating costs of the board are divided equally among all of the participating lotteries. Jackpot prizes payable in installments are
satisfied through investments purchased by the MUSL. The MUSL purchases US government obligations which are held in
irrevocable trusts established by the MUSL for the benefit of participating State lotteries. Each week the MUSL allocates 50 percent
of sales to the prize pool. If no winning ticket is selected, the available jackpot is carried over to the following jackpot drawing.
The Multi-State Lottery Association’s financial report for fiscal year 2021, which may be obtained from the Bureau of Alcoholic
Beverages and Lottery Operations, 8 State House Station, Augusta, ME 04333-0008, includes the following selected information:
Multi State Lottery Association
(Expressed in Thousands)
Cash and Cash Equivalents $ 657,859
Investments in US Government Securities 81,435
US Government Securities Held for Prize Annuities 54,030
Due from Party Lotteries 53,186
Other Assets 2,099
Total Assets $ 848,609
Amount Held for Future Prizes $ 775,201
Grand Prize Annuities Payable 55,815
Other Liabilities 5,380
836,396
Net Position, Unrestricted 12,213
Total Liabilities and Net Position $ 848,609
Total Revenue $ 1,324
Total Expenses 4,832
Excess (Deficit) of Revenues over Expenses (3,508)
Other Changes in Net Assets 1,011
Increase (Decrease) in Net Assets (2,497)
Net Position, beginning 14,710
Net Position, ending $ 12,213
B-104
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 14 - RELATED PARTY TRANSACTIONS
PRIMARY GOVERNMENT
The State of Maine entered into a memorandum of understanding with the Wells National Estuarine Research Reserve Management
Authority, a jointly governed organization, through the Bureau of Parks and Lands. These agreements outline each entity’s
responsibilities in relation to the operation of the Reserve and the management of the property included within the boundaries of the
Reserve. The agreement continues in effect from year to year until termination by either the Bureau or the Authority pursuant to
Articles 8 and 9.
Spurwink, a non-profit organization, received $58.5 million in funding from Health and Human Services programs and $3.5 million in
funding from the Department of Education during fiscal year 2021. A member of the Maine Senate served on the board of directors
during the fiscal year. This position receives no compensation.
The Maine Children's Trust received $10.2 million in from various Health and Human Services programs during fiscal year 2021. The
spouse of an employee of the Department of Economic and Community Development served on the Board of Directors during the
fiscal year. The board member received no compensation.
Children’s Center of Maine received $1.7 million in funding from the MaineCare Program during fiscal year 2021. The spouse of an
employee of the Department of Economic and Community Development served as the Director during the fiscal year. The Director’s
position is a full-time paid position.
The Maine Technology Institute (MTI), a component unit of the State of Maine, received $7.2 million in funding from the Department
of Economic and Community Development. The Director of MTI is an employee of the State of Maine. One board member is a
Commissioner of the State of Maine. One board member is a Deputy Commissioner of the State of Maine. The Board members
receive no compensation.
Community Concepts received $3.4 million in funding from the State of Maine. A member of the Legislature, an employee of
Community Concepts Finance Corporation, oversees the organization's loan pools with funds lent by the Finance Authority of Maine
(FAME) and housing counseling programs administered by the Maine State Housing Authority (MSHA) and the Bureau of Consumer
Credit Protection. FAME and MSHA are component units of the State of Maine.
COMPONENT UNITS
The State provided appropriations and grant monies to the following discretely presented component units: University of Maine
System, $260.0 million; Maine Community College System, $89.6 million; Maine Municipal Bond Bank (MMBB), $40.2 million;
Finance Authority of Maine, $20.3 million; and Maine State Housing Authority, $138.4 million.
FAME administers several revolving loan funds on behalf of the State of Maine. FAME recorded these funds, which total $29.0
million at June 30, 2021, as a liability in Amounts Held Under State Revolving Loan Programs in their fiduciary financial statements.
The state reports the asset as a receivable in the Special Revenue Fund. During fiscal year 2021, the State expended $2.2 million to
FAME for State revolving loan funds.
Title 20-A MRSA Chapter 419-A established the Maine State Grant Program as a fund under the jurisdiction of the Finance Authority
of Maine. All grant revenues under this fund must be distributed by FAME to students who meet the eligibility requirements for a
grant under this chapter. FAME paid approximately $8.1 million in grants to the University of Maine System (UMS) on behalf of
eligible students. The UMS reflected these as grant revenues from the State.
The Maine Turnpike Authority (MTA) pays the State for services rendered by the Maine State Police (MSP). MSP has a separate
troop responsible for patrolling the Maine Turnpike. MTA pays all costs associated with that troop. For fiscal year 2021, the amount
billed totaled $9.4 million.
B-105
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 15 - DEFERRED OUTFLOWS AND DEFERRED INFLOWS
The following table provides additional detail regarding deferred outflows of resources and deferred inflows of resources reported on
the government-wide Statement of Net Position:
(Expressed in Thousands)
Primary Government
Governmental Business-Type Component
Activities Activities Totals Units
Deferred Outflows of Resources:
Accumulated Decrease in Fair Value of Hedging
Derivatives $ - $ - $ - $ 18,409
Refunding of Debt 1,625 - 1,625 32,846
Pension Related 544,155 3,233 547,388 19,191
OPEB Related 614,147 1,312 615,459 24,009
Total Deferred Outflows of Resources $ 1,159,927 $ 4,545 $ 1,164,472 $ 94,455
Deferred Inflows of Resources:
Grant Income $ - $ - $ - $ 6,292
Loan Origination Fees - - - 442
Pension Related 33,283 2 33,285 5,684
OPEB Related 160,481 517 160,998 79,382
Total Deferred Inflows of Resources $ 193,764 $ 519 $ 194,283 $ 91,800
The following table provides additional detail regarding deferred inflows of resources reported on the Governmental Funds Balance
Sheet:
Governmental Funds
(Expressed in Thousands)
Other Other Total
Special Governmental Governmental
General Highway Federal Revenue Funds Funds
Deferred Inflows of Resources:
Tax Revenue or Assessments $ 208,041 $ 281 $ 11,424 $ 24,379 $ - $ 244,125
Total Deferred Inflows of Resources $ 208,041 $ 281 $ 11,424 $ 24,379 $ - $ 244,125
B-106
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 16 - TAX ABATEMENTS
For financial reporting purposes, a tax abatement is defined as an agreement between the government and an individual or entity
through which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific
action that contributes to the economic development or otherwise benefits the government or its citizens.
As of June 30, 2021, the State provided tax abatements through the following programs:
Pine Tree Development Employment Tax New Markets Capital
Program Name Zone Tax Credit Increment Financing Investment Tax Credit
Program Purpose The program encourages capital The program is designed to create The program is designed to
investment and job creation in and prevent loss of employment in encourage investment in qualified
designated industries and geographic designated industries and geographic businesses located in economically
areas within the state. areas within the state. distressed areas within the state.
Tax Types Abated Personal income, corporate income, State income tax withholding from Personal income, corporate income,
insurance premiums, bank franchise employee salary. insurance premiums, and bank
and sales taxes. franchise taxes.
Statutory Authority 36 M.R.S. §5219-W 36 M.R.S. §6754 36 M.R.S. §5219-HH
Eligibility Criteria Businesses apply to be certified as a Businesses apply for certification and A person must make a qualified
qualified business, agree to conduct a agree to hire at least five net new equity investment that has been
qualified business activity, and hire employees within two years. certified by the Finance Authority of
at least one net new employee within Maine, and execute a memorandum
two years. of agreement with the state.
Abatement Method Allowance of credit against taxes Qualified business applies for annual Allowance of credit against taxes.
attributable to qualified business reimbursement payment independent Taxpayer receives full amount of
activity, up to the amount of tax of any other tax reporting annual credit regardless of tax
liability (nonrefundable credit). requirements. liability (refundable credit).
Abatement Computation Credit equals 100 percent of the tax Reimbursement equals 30 - 80 The credit amount equals a total of
liability attributable to the qualified percent of qualified state-withheld 39 percent of the qualified
activity of a certified business for a taxes, depending on the investment, spread over a period of
period of five years. Businesses unemployment rate in the area where seven years in varying amounts each
located in certain areas receive a 50 the employee works, for a period of year.
percent credit for an additional five ten years.
years.
Recapture Provisions None. Any overpayment must be applied to The abatement amount may be
reduce future reimbursement recaptured upon 1) recapture of any
payments. Overpayments must be amount of the related federal NMTC
repaid if the business no longer credits; 2) early repayment of any
qualifies for future payments. portion of the principle amount that
forms the qualified equity
investment, or 3) failure to reinvest
less than 85% of the qualified equity
investment into a qualified business.
Estimated Revenue Reduction for $2,454,351 $13,150,686 $9,375,644
FYE 6/30/2021
Note: An estimate of PTDZ sales tax exemptions claimed at the point of purchase cannot be determined.
Source: Maine Revenue Services
B-107
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 17 - COMMITMENTS AND CONTINGENCIES
PRIMARY GOVERNMENT
LITIGATION
The State of Maine, its units, and its employees are parties to numerous legal proceedings, many of which are the result of normal
governmental operations. In the opinion of the Attorney General and other legal counsel representing the State, in all of the cases
listed, the State or its agencies or employees have valid defenses. Certain cases have the potential for liability in excess of $1 million.
Even if liability is found, the State should not expect to pay out the full amounts being sought against it in all of the cases. In any given
case, however, the State could incur a large judgment.
ACA Connects - America's Communication Assoc., et al. v. Frey. Trade associations are challenging on constitutional grounds 35-A
M.R.S. §9301, which restricts internet service providers from using, disclosing, or selling customers' personal information. Although
plaintiffs are not seeking monetary damages, an adverse judgement could result in an order requiring the State to pay plaintiffs'
attorneys' fees. The probability that this case will result in future losses to the State in excess of $1 million is undetermined at this time.
Bryan C. v. Lambrew, et al. Plaintiffs are six foster children in the Department of Health & Human Services (DHHS) custody and their
guardians ad litem. They make various allegations regarding the administration of psychotropic drugs to these six foster children and a
putative class of all other foster children in DHHS's custody, including overmedication, a lack of informed consent, inadequate record-
keeping and an inadequate secondary review process. Plaintiffs are seeking declaratory and injunctive relief. Plaintiffs are not seeking
monetary damages but, if they prevail, they could be awarded attorneys' fees in excess of $1 million. The probability that this case will
result in future losses to the State in excess of $1 million is undetermined at this time.
Carson, et al. v. Makin. Three famalies filed a lawsuit against the Commissioner of the Maine Department of Education alleging that a
state program that pays tuition for certain children who attend private schools violates the First Amendment and the Equal Protection
Clause because sectarian schools are excluded from the program. The case will be argued at the United States Supreme Court on
December 8, 2021. Although no monetary damages are sought, the plaintiffs may be entitled to attorneys' fees if they prevail. Because
of the duration of this litigation, such fees could be significant. The probability that this case will result in future losses to the State in
excess of $1 million is undetermined at this time.
Deferral of Federal Financial Participation. On December 28, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a
deferral notice to Maine DHHS for approximately $4.2 million in federal financial participation (FFP) for Medicaid expenditures for
the third quarter of 2020 (7/1-9/30/2020). CMS issued three additional deferrals, totaling approximately $11.8 million, for FFP for
Medicaid expenditures during the fourth quarter of 2020, and the first and second quarters of 2021 (10/1/2020-6/30/2021). The basis
for the deferral is CMS's contention that a service provider tax imposed on, among others, Private Non-Medical Institutions (36 M.R.S.
§2552) is an impermissible source of non-federal share. CMS will likely issue additional deferral notices for the subsequent quarters.
DHHS intends to appeal the deferrals, and the probability that the case will result in future losses to the State in excess of $1 million is
undetermined at this time.
Dr. Doe v. Maine Board of Dental Practice, et al. Dr. Doe has filed a lawsuit against the Maine Board of Dental Practice and 11
individuals in connection with the Board's emergency suspension of his license to practice medicine and subsequent disciplinary
proceedings. Dr. Doe alleges that agents and employees of the Board violated his due process rights. The probability that this case will
result in future losses to the State in excess of $1 million is undetermined at this time.
Irish, et al. v. Maine State Police, et. al. This lawsuit seeks damages for the fatal shooting of Kyle Hewitt, the kidnapping of Brittany
Irish and the shooting of Kimberly Irish by Anthony Lord. Plaintiffs allege that defendant police officers failed to protect against the
threat posed by Lord. The probability that this case will result in future losses to the State in excess of $1 million is undetermined at
this time.
Westcott v. DOC, et al. Michael Westcott alleges that while he was housed at Long Creek (then called Maine Youth Center), between
1995 and 2001, he was sexually assaulted by multiple unnamed staff members during unclothed body searches and that he was subject
to unconstitutional restraint, force, isolation and other abuses. The probability that this case will result in future losses to the State in
excess of $1 million is undetermined at this time.
Workday, Inc. v. Department of Administrative and Financial Services. Workday asserts breach of contract and tort claims against the
State of Maine but has not initiated litigation. If Workday does initiate litigation, the State has various defenses and would likely assert
counterclaims. The possibility that Workday's claim will result in future losses to the State in excess of $1 million is undetermined at
this time.
B-108
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The Office of the Attorney General is representing Maine Revenue Services (MRS) in a number of cases in which taxpayers are
challenging the assessment of taxes. In most of these cases, the taxpayers are not seeking refunds of taxes previously paid, but are
instead challenging taxes that were assessed but which the taxpayers have not paid. In some cases, the assessment at issue exceeds $1
million. The cases listed below are the only ones we are aware of in which taxpayers are seeking refunds that could exceed $1 million.
Express Scripts, Inc. v. State Tax Assessor. Taxpayers are challenging the method by which they are required to apportion certain sales
to Maine under the Maine Corporate Income Tax. If the taxpayers prevail, they may be entitled to a refund of approximately $1 million
from the State. The probability that this case will result in future losses to the State in excess of $1 million is undetermined at this time.
NextEra Energy Maine, LLC v. Maine Revenue Services. NextEra has appealed to the Maine Board of Tax Appeals two MRS
decisions denying corporate tax refunds totaling $4.6 million for tax years 2013, 2014 and 2015. NextEra claims that a Florida affiliate
was not part of its unitary business and that affiliate's income should not have been included in NextEra's apportionable Maine income.
The probability that this case will result in future losses to the State in excess of $1 million is undetermined at this time.
The Hershey Company et al. v. State Tax Assessor. Hershey has filed a Petition for Review against the State Tax Assessor challenging
the denial of a refund of all corporate taxes paid between 2014 and 2017, which totaled in excess of $2.8 million. Hershey claims that
under federal law, its limited activities in Maine, during the years at issue, protect it from state corporate income taxes. The probability
that this case will result in future losses to the State in excess of $1 million is undetermined at this time.
There are various lawsuits in which plaintiffs seek damages in excess of $1 million against the State or against State officials, and there
are various notices of claim which also specify damages in excess of $1 million where no lawsuit has been filed. In none of these
instances, in the view of the Attorney General, is there any reasonable possibility that the State’s liability could reach or exceed $1
million. Therefore, these suits have not been individually identified.
There are also, now pending, numerous workers’ compensation claims against various State agencies. Since most claims involve the
possibility for significant long-term damages, and since the test for demonstrating a causal relationship between the employment and
the illness or injury is not as rigorous as in ordinary civil cases, these cases involve the possibility of significant liability for the State.
Since possible damages include future medical costs and wage replacements for the employee (and in some cases spouse), it is difficult
to estimate the total potential liability to the State.
The Counsel for Employee Relations represents the State in cases with unions and/or employees. The cases listed below are the only
ones we are aware of in which the future loss could have a potential to exceed $1 million
American Federation of County State and Municipal Employees, Council 93 v. State of Maine (21-PPC-13). This is a Prohibited
Practice Complaint before the Maine Labor Relations Board, filed by the American Federation of County State and Municipal
Employees, Council 93, asserting that the State engaged in a prohibited labor practice when it repudiated several agreements signed in
the spring of 2020 by unilaterally ceasing to pay the employees in question the hazard pay stipends provided by the agreements. The
probability that this case will result in future losses to the State in excess of $1 million is undetermined at this time.
Maine Service Employees Association, SEIU, Local 1989 and State of Maine (Grievance # 2021-004-M). This is a grievance filed by
the Maine Service Employees Association, SEIU, Local 1989, asserting that the State violated various collective bargaining
agreements between the parties when it repudiated several agreements signed in the spring of 2020 by unilaterally ceasing to pay
employees in question the hazard pay stipends provided by the agreements. The probability that this case will result in future losses to
the State in excess of $1 million is undetermined at this time.
B-109
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
ENCUMBRANCES
Encumbrances are reported in the restricted, committed, and assigned fund balances of the governmental funds. General fund,
highway fund, federal fund, other special revenue fund and other governmental funds encumbrance balances are $88.8 million, $2.3
million, $657.7 million, $52.1 million and $15.3 million, respectively.
FEDERAL GRANTS
The State receives significant financial assistance from the federal government. The receipt of grants is generally dependent upon
compliance with terms and conditions of the grant agreements and applicable federal regulations, including the expenditure of
resources for allowable purposes. Grants are subject to the Federal Single Audit Act. Disallowances by federal officials as a result of
these audits may become liabilities of the State. The amount of expenditures that may be disallowed by the grantor agencies cannot be
determined at this time.
POLLUTION REMEDIATION
The Department of Environmental Protection (DEP) and Department of Transportation (DOT) have pollution remediation obligations
as defined by Governmental Accounting Standards Board (GASB) Statement No. 49. The State’s total amount of pollution
remediation obligation as of June 30, 2021 is $20.8 million. Superfund sites account for approximately $7.2 million. Superfund is the
federal government program to clean up hazardous waste sites.
The following are Superfund sites for which the State has recorded a liability for pollution remediation activities:
Eastland Woolen Mill – The State recorded a liability for pollution remediation activities of approximately $620 thousand. Currently
the State shares the costs with Environmental Protection Agency (EPA) in a cost-sharing ratio of 10 percent State, 90 percent EPA.
Beginning in September of 2018, the State assumed 100 percent of the operation and maintenance and long-term monitoring costs.
Eastern Surplus – The State recorded a liability for pollution remediation activities of approximately $2.0 million. Beginning in
August of 2012, the State assumed 100 percent of the operation, maintenance and monitoring costs. As of June 30, 2021, the State has
received $2.1 million in recoveries from the Department of Defense. The State expects to recover additional costs of $14 thousand.
Callahan Mine – The State recorded a liability for pollution remediation activities of approximately $4.5 million. Currently the State
shares the costs with EPA in a cost-sharing ratio of 10 percent State, 90 percent EPA. The State will assume 100 percent of the cost
for the operation and maintenance of the site.
The State recorded a liability for pollution remediation activities of approximately $13.4 million (net of unrealized recoveries of $298
thousand) related to five uncontrolled hazardous substance sites. The State expects to recover $0.45 million in costs. The
Uncontrolled Hazardous Substance Sites Program was created in response to the threats and potential threats to human health and the
environment posed primarily by abandoned hazardous waste sites. The Uncontrolled Hazardous Substance Sites program is the State’s
equivalent to the Federal Superfund Program.
The State has the knowledge and expertise to estimate the remediation obligation based on prior experience in identifying and funding
similar remediation activities. The standard requires the liability to be measured using the expected cash flow technique. The
remediation obligation estimates are subject to change over time. Cost may vary due to price fluctuations, changes in technology,
changes in potential responsible parties, results of environmental studies, changes to statues or regulations and other factors that could
result in revisions to these estimates. Prospective recoveries from responsible parties may reduce the State’s obligation.
MUNICIPAL SOLID WASTE LANDFILLS
Dolby Landfills – On September 16, 2011 the State entered into an agreement with Katahdin Paper Company (KPC) to acquire the
Dolby Landfill, a solid waste disposal facility, located in the Town of East Millinocket. The State, as a holder of the permits, is
responsible for closure and post closure monitoring and maintenance activities and costs.
The Dolby Landfill no longer accepts solid waste. In Calendar Year 2016, the first phase of a multi-year plan to cap approximately 100
acres at the facility was completed. The State allocated $6 million of current bond funds and anticipates another $6 million in bonds
funds to complete the closure of the facility. In addition to the closure of the facility, the State anticipates additional post-closure
maintenance and monitoring costs of approximately $15 million over the next 30 years. Actual costs may be higher due to inflation,
changes in technology or changes in applicable laws or regulations. The State’s total obligation related to the Dolby Landfill as of
June 30, 2021 is $21.9 million.
B-110
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
Title 38 M.R.S.A., §1310-F establishes within the Department of Environmental Protection (DEP) a cost-sharing program for the
closure and remediation of municipal solid waste landfills that pose a potential hazard and that meet other qualifying criteria. The law
provides for reimbursement of 75% of a municipality’s closure expenses. If initial closure of a landfill fails to protect public health
and the environment, DEP is obligated to reimburse up to 90% of a municipality’s subsequent remediation expenses. However, these
obligations are subject to the availability of funds approved for that purpose. In 2012, DEP through bonds had paid all of the
outstanding match requirements for closure, but had $2,568,654 in outstanding match obligation for remediation. Additionally, several
Municipalities needed to close their failing landfills early, but could not afford to do so without the state match for closure, which had
expired. To address this, in 2013 the legislature enacted a fee on disposal of certain Construction and Demolition Debris (CDD), and
in 2015 extended the eligibility date for reimbursement of closure costs from 2015 to 2025. There is no eligibility end date for
reimbursement of remediation costs. Therefore, DEP continues to incur new match cost obligations as additional qualifying landfills
close before the 2025 date, and as others undertake necessary remediation actions. As the CDD fee does not generate enough funding
to pay the Department’s cost share obligations in their entirety, the Department provides partial payments to municipalities on a
quarterly basis.
In FY21 the DEP received $1,257,059 from the CDD fee. As required, the entirety of this fee was used to reimburse municipalities
for eligible expenses. At the beginning of FY21, DEP’s total outstanding reimbursement obligation to municipalities was $3,187,658.
At the end of FY21, the outstanding match obligation was $2,217,009. Although the overall outstanding debt during the year
decreased, additional debt was incurred due to qualifying closure and remediation expenses which were submitted by municipalities
over the course of the year. DEP incurred the oldest outstanding match obligations in 2008.
SAND AND SALT STORAGE PROGRAM
The State estimates the potential aggregate cost to comply with the environmental requirements associated with the Sand and Salt
Storage program to be $800,000 thousand. The state no longer provides funding for municipal facilities.
POLLUTION ABATEMENT PROGRAM
Title 38 MRSA §411, §411-A, and §412 establish within DEP cost-sharing programs for pollution abatement projects. Subject to
funding by the Legislature and the approval of the Commissioner, the State may contribute to the planning of municipal pollution
abatement facilities; the design, engineering, and construction of private, commercial, and municipal pollution abatement facilities; and
make payments to the Maine Municipal Bond Bank to supply the State’s share of the revolving loan fund established by Title 30A
§6006-A. During the 2021 fiscal year, $2.71 million of general obligation bond funds and $2.46 million of Liquor Operation Revenue
Funds were expended for pollution abatement projects. As of June 30, 2021, amounts encumbered for pollution abatement projects
totaled $9.99 million, and general obligation bonds authorized for these projects, but not yet encumbered, totaled $13.59 million. As
of June 30, 2021, DEP estimates the total cost (federal, State, and local) of future projects to be $1 billion.
GROUND WATER OIL CLEAN-UP FUND
The Maine Ground and Surface Waters Clean-up and Response Fund is established in Title 38 MRSA § 551. Fund activities include,
but are not limited to, providing insurance to public and private entities for cleanup of oil spills. The program is funded by a per barrel
assessment on petroleum products imported into the State. Coverage is up to $750 thousand per occurrence for aboveground storage
tanks and $1 million per occurrence for underground storage tanks. Third party injury coverage may not exceed $200 thousand per
claimant.
Number of Priority Sites
Requiring Long-term Remediation
Calendar Year Ended December 31
Completed Remaining
2020 156 494
2019 137 530
2018 91 540
2017 117 519
2016 126 525
The annual average cost per spill over the past five years ranged between $18,000 and $47,500. The cost per spill can vary
significantly based on the location and type of fuel discharged.
B-111
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
CONSTRUCTION COMMITMENTS
A portion of the payment that is made to municipalities for General Purpose Aid to Local Schools is allocated for debt service.
Although the outstanding indebtedness for school construction projects is debt of the municipalities, the State subsidizes 51.78 percent
of the annual payments. As of June 30, 2021, outstanding commitments by municipalities for school bond issues that are eligible for
State subsidy totaled $1.035 billion.
At June 30, 2021, the Department of Transportation had contractual commitments of approximately $351.9 million for construction of
various highway projects. The State’s share of that amount is expected to be approximately $95.3 million. Of these amounts, $10.6
million has already been accrued. Federal and State funds plus bond proceeds are expected to fund these future expenditures.
TOBACCO SETTLEMENTS
On November 23, 1998, Maine along with 45 other states and six civil jurisdictions, collectively known under the Master Settlement
Agreement (MSA) as the "Settling States", entered into the MSA with certain Participating Tobacco Manufacturers (PMs). The MSA
is a settlement of lawsuits brought by many States against the four largest tobacco companies alleging multiple counts of misconduct
and claiming punitive and compensatory damages, including a claim for all the States' Medicaid costs caused by or related to tobacco
use. The MSA includes provisions to annually compensate the State for smoking-related Medicaid costs and to impose marketing and
advertising restrictions on PMs to protect public health. In this settlement, the PMs agreed, among other things, to make annual
payments to the states and jurisdictions based on their allocable share of the market. In return, the states agreed to relinquish claims to
further damages resulting from, among other things, Medicaid costs. Annual payments fluctuate subject to various adjustments and are
partially contingent on the passage and enforcement of a State statute imposing economic conditions related to the State's public health
claims on the Nonparticipating Manufacturers (NPMs) in the form of an annual escrow payment due from each NPM with in-state
sales. The NPM Adjustment is set forth in the Master Settlement Agreement (MSA). If the PMs claim an NPM Adjustment for a given
year and prove that they lost market share to the NPMs and it is determined that the MSA was a significant factor contributing to that
lost market share then an NPM Adjustment ‘shall apply’ unless a Settling State passed a qualifying statute and ‘diligently enforced’
that statute. In effect this means that the Allocated Payment to a Settling State that diligently enforced will not be reduced, but a
Settling State that did not diligently enforce its qualifying statute will be subject to a reduction in its payment due to the NPM
Adjustment. NPM Adjustment Due to the provisions of the MSA, if a State that is found not to have diligently enforced its qualifying
statute may lose up to its entire annual payment amount due to the NPM Adjustment for a given year.
The NPM Adjustment may be claimed each year and has been claimed for each completed calendar year since 2003. Frequently PMs
claim entitlement to the NPM Adjustment and either withhold the amount from their annual payments, or place the amount in what is
known as a 'disputed payment account'. Each year beginning in 2003 Maine's annual payments have been lower than calculated
because many of the PMs have claimed entitlement to the NPM Adjustment and either withheld money or routed it to the disputed
payments account. For the year 2003, the Adjustment claimed by the PMs, and calculated as set forth in the MSA, was approximately
18 percent of the total amount paid by the PM's and distributed among the Settling States. However, the total amount related to the
NPM Adjustment to which the PMs are entitled is dependent on the number of non-diligent states.
In addition, in the MSA, the PMs agreed to pay $8.6 billion in Strategic Contribution Payments (SCP) to certain states and
jurisdictions as compensation for their contribution to the overall settlement. Maine’s share of this total amount was approximately
$114 million. Maine received this amount in ten annual SCP payments which began in 2008 and ended in 2017.
In April 2021, Maine received an annual tobacco settlement payment of $48.6 million.
CONTINGENT LIABILITIES
Overpayments made by the Office for Family Independence (OFI) client services are recorded as accounts receivable in the State
financial statements. The total overpayments for Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition
Assistance Program (SNAP), applicable to federal funds, are $29.4 million as of June 30, 2021. All overpayments that are outstanding
for more than one year, $23.6 million, are fully reserved.
Federal regulations in the former Aid to Families with Dependent Children (AFDC) require States to continue collection efforts until
the full amount is recovered. The AFDC Program was repealed and replaced with the TANF Program effective October 1, 1996. The
federal portion of any AFDC overpayments (made prior to October 1, 1996) that are recovered, must be returned to the federal
government. For AFDC and TANF overpayment recoveries, made from October 1, 1996 and forward, States are not required to repay
any portion to the federal government. Instead, the full amount of the recovered overpayments is to be retained by the State and used
for TANF program costs during the grant year in which they are recovered, or later.
The liability for TANF and SNAP overpayments that may be recovered and remitted to the federal government or retained for program
costs cannot be determined at this time.
B-112
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
ESCHEAT PROPERTY
The State Abandoned Property Statute requires the deposit of certain defined and unclaimed assets into a state-managed Abandoned
Property Fund (Private Purpose Trust Fund). The State Statute provides that whenever the cash balance of the fund exceeds $.5
million at fiscal year-end, the excess must be remitted to the General Fund where it is reported as operating transfers from other funds.
At June 30, 2021, the Fund included $3.5 million of securities not yet liquidated that were not subject to transfer to the General Fund.
Net collections from inception (1979) to June 30, 2021 of approximately $274.5 million represent a contingent liability to the State
since claims for refund may be filed by the owners of such property.
A liability representing the probable amount of escheat property that will be reclaimed and paid to claimants and other third parties is
reported in the Fund. To the extent that the assets in the Fund are less than the claimant liability, a receivable (due from other funds) is
reported in that Fund and an equal liability (due to other funds) is reported in the General Fund. At June 30, 2021, the amount reported
in the Fund for claimant liability is $50.2 million. The General Fund shows a $46.2 million payable to the Escheat Fund.
CONSTITUTIONAL OBLIGATIONS
The State of Maine’s constitutional obligations represent nonexchange financial guarantees, as defined by GASB Statement No. 70,
Accounting and Financial Reporting for Nonexchange Financial Guarantees. The State acts as the guarantor for these ongoing
insurance and loan programs operated by 2 discrete component units. The Finance Authority of Maine’s mission covers commercial
financing and loan insurance to Maine businesses and assistance to Maine students and their parents to finance costs of attendance at
institutions of higher education. Maine State Housing Authority’s mission encompasses loans to Maine veterans and members of
Indian tribes or reservations. Details of the nonexchange financial guarantees are provided below.
Article 9, § 14-A, C, and D of the Maine State Constitution provides that the State may insure the payment of mortgage loans for
industrial, manufacturing, fishing, agricultural and recreational enterprises; mortgage loans for the acquisition, construction, repair and
remodeling of houses owned or to be owned by members of two tribes on several Indian reservations; and mortgage loans to resident
Maine veterans of the Armed Forces of the United States, including loans to a business organization owned in whole or in part by
resident Maine veterans. The aggregate of these obligations, at any one time, may not exceed $90 million, $1 million, and $4 million,
respectively. At June 30, 2021, loans outstanding pursuant to these authorizations are $80.2 million, less than $0.1 million, and $0.2
million, respectively. The State has not paid, nor does it expect to pay, any amounts as a result of these authorizations as of June 30,
2021.
Article 8, § 2, of the Maine State Constitution provides that the State may secure funds, through the issuance of bonds authorized by
the Governor, for loans to Maine students attending institutions of higher education. The amount of bonds issued and outstanding shall
not at any one time exceed $4 million in the aggregate. At June 30, 2021, no bonds were outstanding. The State has not paid, nor does
it expect to pay, any amount as a result of this authorization as of June 30, 2021.
MORAL OBLIGATIONS
The State of Maine, through statute, enables certain Authorities to establish capital reserve funds. These funds may be used to secure a
variety of financial undertakings including the issuance of bonds. The minimum amount of the capital reserve fund may be determined
by statute or set by the Authority. The statutes may also limit the amount of debt that may be secured by the capital reserve funds, and
allow the Authority to issue debt that is not secured by these funds.
On or before December first of each year, the Authorities are required to certify to the Governor the amount, if any, necessary to
restore any capital reserve fund to its required minimum. If there is a shortfall, the Governor is required to pay first from the
“Contingent Account” the amounts necessary for restoration. The Governor shall certify any remaining unpaid amounts to the
Legislature, which is then required to appropriate and pay the remaining amounts to the Authority during the then-current State fiscal
year.
These moral obligations are not considered to be “full faith and credit” obligations of the State, and voter approval of the underlying
bonds is not required. No capital reserve fund restorations have been made in the current or previous years.
B-113
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
The following summarizes information regarding outstanding moral obligations:
Moral Obligation Bonds
(Expressed in Thousands)
Required Obligation
Bonds Debt Debt
Issuer Outstanding Reserve Limit 1 Legal Citation
Maine Health and Higher Educational Facilities Authority $ 612,380 $ 58,000 NIL 22 MRSA § 2075
Finance Authority of Maine 37,028 - 765,500 10 MRSA §1032, 1053
- - 50,000 20-A MRSA §11449
- - 50,000 38 MRSA §2221
93,530 1,042 225,000 20-A MRSA §11424
Maine Municipal Bond Bank 1,241,625 150,618 NIL 30-A MRSA §6006
Maine State Housing Authority 1,555,700 85,039 2,150,000 30-A MRSA §4906
Total $ 3,540,263 $ 294,699
1 NIL indicates a "no limit" obligation.
COMPONENT UNITS
CONSTRUCTION CONTRACTS
At June 30, 2021, UMS and MCCS had outstanding commitments on uncompleted construction contracts. They totaled $52.4 million
and $3.4 million, respectively.
At December 31, 2020, the Maine Turnpike Authority had $53.5 million remaining in commitments on outstanding construction
projects for improvements and maintenance.
MORTGAGE COMMITMENTS
Mortgage commitments are agreements to lend provided there is no violation of any term or condition of the agreement. Generally,
once exercised, the loans made under the terms of such commitments are secured by a lien on the related property and other collateral
as deemed necessary. At December 31, 2020 Maine State Housing Authority (MSHA) had outstanding commitments to originate
multi-family loans of approximately $126.9 million.
MSHA, under its single-family program, enters into purchase agreements to lenders to purchase mortgage loans. At December 31,
2020, single-family loans being processed by lenders totaled $42.7 million.
INSURED LOAN COMMITMENTS
The Finance Authority of Maine (FAME) insures loans made by financial institutions to qualifying businesses under various insurance
programs. FAME is contingently liable for the insured portion of payments due on these loans. At June 30, 2021, FAME had
insurance outstanding for commercial loans under the Loan Insurance Program totaling approximately $117.4 million. At June 30,
2021, FAME was insuring loans with an aggregate outstanding principle balance approximating $1.1 million which were 90 or more
days delinquent. The aggregate insured balance of these loans was approximately $0.7 million at June 30, 2021. In addition, FAME
has entered into commitments to insure loans at some future date. At June 30, 2021, these commitments under the Loan Insurance
Program were approximately $17.0 million. FAME provides loan insurance on direct educational loans and consolidation loans made
by participating financial institutions in the Maine Private Education Loan Network. At June 30, 2021, approximately $20.1 million of
loans were insured under this program. Such loans are unsecured.
B-114
State of Maine Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2021
NOTE 18 - SUBSEQUENT EVENTS
PRIMARY GOVERNMENT
On July 21, 2021, MMBB issued $35.1 million of Transportation Revenue Refunding Series 2021A bonds with an average interest
rate of 5 percent to in-substance defease $43.7 million of various outstanding maturities of the 2011A bonds. The net proceeds of
approximately $44.6 million, including $7.1 million of premium and $2.9 million released from debt service reserve funds, and after
payment of underwriting and other issuance costs, were used to purchase U.S. Government securities which will provide for all future
debt service payments on the defeased bonds. All savings as a result of this refunding bond will inure to the State of Maine.
COMPONENT UNITS
Maine State Housing Authority (MSHA), has a December 31 fiscal year end. During calendar year 2021, MSHA issued at par $130.0
million of bonds in the General Mortgage Purchase Bond Resolution. MSHA redeemed, at par, $191.9 million of bonds in the General
Mortgage Purchase Bond Resolution during calendar year 2021. MSHA issued $54.0 million and redeemed $214.5 million of bonds,
in the Maine Energy, Housing & Economic Recovery Bond Resolution.
On August 31, 2021 Maine Health and Higher Educational Facilities Authority (MHHEFA) defeased certain maturities of Reserve
Resolution bonds with a par value of $13.7 million within series 2012A, 2014A, 2017B and 2020A General Resolution bonds with a
par value of $33.8 million within the series 2012, 2017A and 2017B bond issues with funds from other sources. The debt of the
General Bond Resolution is considered conduit debt and neither the Authority nor the State of Maine is under obligation for
repayment.
On September 21, 2021, MHHEFA defeased certain maturities of Reserve Resolution bonds with a par value of $0.7 million within the
2011C bond issues with funds from other sources. The economic benefits associated with the refunding inure to the respective
institutions and not the Authority.
On December 7, 2021 the Maine Turnpike Authority (MTA) signed a forward delivery agreement to refund the Series 2012
outstanding bonds in April 2022. MTA will issue $102.3 million of new bonds that defease $124.9 million of outstanding bonds for a
net present value savings of $25.3 million.
B-115
B-116
REQUIRED
SUPPLEMENTARY
INFORMATION
B-117
B-118
STATE OF MAINE
REQUIRED SUPPLEMENTARY INFORMATION
TABLE OF CONTENTS
PAGE
Required Supplementary Information - Budgetary Reporting
.....................................................................................................................................................................................................................................
Budgetary Comparison Schedule - Major Governmental Funds B-120
Budgetary Comparison Schedule - Budget to GAAP Reconciliation
.....................................................................................................................................................................................................................................
B-123
.....................................................................................................................................................................................................................................
Notes to Required Supplementary Information - Budgetary Reporting B-124
Required Supplementary Information - State Retirement Plans
.....................................................................................................................................................................................................................................
Schedule of Changes in the Net Pension Liability (Asset) - Judicial Pension Plan B-126
.....................................................................................................................................................................................................................................
Schedule of Changes in the Net Pension Liability (Asset) - Legislative Pension Plan B-128
Schedule of State Contributions -
.....................................................................................................................................................................................................................................
Single Employer Defined Benefit Pension Plans - Employer Contributions B-130
Schedule of Proportionate Share of the Net Pension Liability -
.....................................................................................................................................................................................................................................
State Employees and Teachers Plan - State Employees Only B-134
Schedule of State Contributions -
Cost-sharing Multiple Employer Defined Benefit Pension Plans - Employer Contributions
.....................................................................................................................................................................................................................................
State Employees and Teachers Plan - State Employees Only B-136
Schedule of Proportionate Share of the Net Pension Liability -
.....................................................................................................................................................................................................................................
State Employees and Teachers Plan - Teachers B-140
Schedule of State Contributions -
Cost-sharing Multiple Employer Defined Benefit Pension Plans - Employer Contributions
.....................................................................................................................................................................................................................................
State Employees and Teachers Plan - Teachers B-142
Required Supplementary Information - Other Post-Employment Benefit Plans
.....................................................................................................................................................................................................................................
Schedule of Changes in the Net OPEB Liability - Healthcare Plan - State Employees B-146
Schedule of Changes in the Net OPEB Liability - Group Life - State Employees
.....................................................................................................................................................................................................................................
B-147
.....................................................................................................................................................................................................................................
Schedule of Changes in Total OPEB Liability - Healthcare - Teachers B-148
.....................................................................................................................................................................................................................................
Schedule of Changes in Total OPEB Liability - Healthcare - First Responders B-149
Schedule of State Contributions -
.....................................................................................................................................................................................................................................
State Funded Healthcare and Group Life Insurance OPEB Plans B-150
Schedule of Investment Returns -
.....................................................................................................................................................................................................................................
State Funded Healthcare and Group Life Insurance OPEB Plans B-151
Required Supplementary Information - Infrastructure Assets
.....................................................................................................................................................................................................................................
Information about Infrastructure Assets Reporting Using the Modified Approach B-152
B-119
STATE OF MAINE
BUDGETARY COMPARISON SCHEDULE
MAJOR GOVERNMENTAL FUNDS
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
General Fund Highway Fund
Variance Variance
Original with Final Original Final with
Budget Final Budget Actual Budget Budget Budget Actual Final Budget
Revenues
Taxes $ 4,023,941 $ 4,119,682 $ 4,474,006 $ 354,324 $ 237,427 $ 211,285 $ 209,676 $ (1,609)
Assessments and Other 90,560 89,606 97,167 7,561 96,701 100,797 111,295 10,498
Federal Grants 2,029 2,208 103 (2,105) - - - -
Service Charges 44,179 50,692 56,791 6,099 6,211 6,221 4,901 (1,320)
Income from Investments 7,689 6,296 8,510 2,214 202 261 305 44
Miscellaneous Revenue 59,415 73,513 12,554 (60,959) 3,473 5,879 386 (5,493)
Total Revenues 4,227,813 4,341,997 4,649,131 307,134 344,014 324,443 326,563 2,120
Expenditures
Governmental Support & Operations 387,420 401,791 375,924 25,867 45,342 47,920 42,951 4,969
Economic Development & Workforce
Training 46,733 46,797 44,849 1,948 - - - -
Education 1,815,276 1,818,522 1,787,448 31,074 - - - -
Health and Human Services 1,468,768 1,343,102 1,182,121 160,981 - - - -
Business Licensing & Regulation - - - - - - - -
Natural Resources Development &
Protection 87,619 71,400 68,195 3,205 33 33 33 -
Justice and Protection 396,114 326,402 299,122 27,280 31,730 22,266 20,864 1,402
Arts, Heritage & Cultural Enrichment 9,231 9,331 9,162 169 - - - -
Transportation Safety & Development - 2,000 2,000 - 263,529 279,008 238,118 40,890
Total Expenditures 4,211,161 4,019,345 3,768,821 250,524 340,634 349,227 301,966 47,261
Revenues Over (Under)
Expenditures 16,652 322,652 880,310 557,658 3,380 (24,784) 24,597 49,381
Other Financing Sources (Uses)
Operating Transfers Net (140,405) (153,037) (550,747) (397,710) - (890) 1,980 2,870
Proceeds from Pledged Future
Revenues - - - - - - - -
Net Other Financing Sources
(Uses) (140,405) (153,037) (550,747) (397,710) - (890) 1,980 2,870
Excess of Revenues and Other
Sources Over (Under)
Expenditures and Other Uses $ (123,753) $ 169,615 $ 329,563 $ 159,948 $ 3,380 $ (25,674) $ 26,577 $ 52,251
Fund balances, beginning of year 923,048 46,431
Fund balances, end of year $ 1,252,611 $ 73,008
B-120
Federal Funds Other Special Revenue Fund
Variance Variance
Original with Original with
Budget Final Budget Actual Final Budget Budget Final Budget Actual Final Budget
$ - $ - $ - $ - $ 356,605 $ 358,019 $ 347,508 $ (10,511)
365 365 - (365) 187,715 182,945 172,820 (10,125)
3,749,178 7,337,912 5,658,881 (1,679,031) 12,757 13,414 12,492 (922)
6,194 6,704 - (6,704) 229,580 234,040 257,521 23,481
- - 4,969 4,969 711 1,054 961 (93)
256 256 4,252 3,996 171,553 289,404 661,310 371,906
3,755,993 7,345,237 5,668,102 (1,677,135) 958,921 1,078,876 1,452,612 373,736
5,987 273,037 15,027 258,010 234,508 260,056 238,843 21,213
122,096 2,094,962 1,653,825 441,137 78,529 87,854 49,479 38,375
346,800 932,008 515,888 416,120 47,924 53,850 22,820 31,030
2,986,167 3,221,249 3,006,711 214,538 661,627 806,025 525,934 280,091
123 124 67 57 76,796 76,654 61,530 15,124
51,212 72,389 58,423 13,966 157,977 181,145 115,749 65,396
95,425 368,963 193,833 175,130 65,269 70,898 47,273 23,625
4,402 6,788 4,079 2,709 2,207 2,162 1,096 1,066
256,361 315,095 284,101 30,994 128,900 178,766 88,383 90,383
3,868,573 7,284,615 5,731,954 1,552,661 1,453,737 1,717,410 1,151,107 566,303
(112,580) 60,622 (63,852) (124,474) (494,816) (638,534) 301,505 940,039
(5,523) (5,558) 8,373 13,931 145,050 153,496 177,295 23,799
- - - - 96,100 96,100 64,943 (31,157)
(5,523) (5,558) 8,373 13,931 241,150 249,596 242,238 (7,358)
$ (118,103) $ 55,064 $ (55,479) $ (110,543) $ (253,666) $ (388,938) $ 543,743 $ 932,681
987,809 516,610
$ 932,330 $ 1,060,353
B-121
B-122
STATE OF MAINE
BUDGETARY COMPARISON SCHEDULE
BUDGET TO GAAP RECONCILIATION
Fiscal Year Ended June 30, 2021
(Expressed in Thousands)
Special
General Highway Federal Revenue
Fund Fund Funds Fund
Fund Balances - Non-GAAP Budgetary Basis $ 1,252,611 $ 73,008 $ 932,330 $ 1,060,353
Basis Differences
Revenue Accruals/Adjustments:
Taxes Receivable 223,777 178 - 14,878
Other Receivables 41,784 2,539 149,790 58,670
Inventories 4,170 - 29,832 -
Due from Component Units - - - 104,922
Due from Other Governments - - 477,181 -
Due from Other Funds 63,490 22,698 5,579 358,952
Other Assets 384 - 380 229
Unearned Revenues - (3,101) (5,757) -
Deferred Inflows - Taxes and Assessment Revenues (208,041) (281) (11,424) (24,379)
Total Revenue Accruals/Adjustments 125,564 22,033 645,581 513,272
Expenditure Accruals/Adjustments:
Accounts Payable (168,713) (26,656) (372,030) (45,309)
Due to Component Units (3,355) (240) (8,038) (81,273)
Accrued Liabilities (21,386) (7,050) (5,294) (9,407)
Taxes Payable (309,213) (9) - -
Intergovernmental Payables - - (1,016,253) -
Due to Other Funds (89,912) (4,413) (114,364) (67,880)
Total Expenditure Accruals/Adjustments (592,579) (38,368) (1,515,979) (203,869)
Fund Balances - GAAP Basis $ 785,596 $ 56,673 $ 61,932 $ 1,369,756
B-123
STATE OF MAINE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY REPORTING
Fiscal Year Ended June 30, 2021
Statutory/Budgetary Presentation
In accordance with statute, the Governor presents a biennial budget for the General Fund and special revenue funds to the Legislature
for enactment or revision. Effective November 27, 1995, a State Constitutional Amendment provided the Governor a “line item” veto
of dollar amounts, allowing a dollar substitution for those amounts disapproved, as long as an appropriation or allocation is not
increased (or a deappropriation or deallocation decreased) either in the specified line or in any other line in the legislative document.
Another Constitutional Amendment requires the State to fund at least 90 percent of the annual cost of future mandates imposed on
local governments; any exception requires a two-thirds vote of the elected members of the House and Senate.
Once passed and signed, the budget becomes the financial plan for the next biennium. It includes proposed expenditures for all
departments and agencies, interest and debt redemption charges, and expenditures for capital projects to be undertaken and executed
during each fiscal year. The budget also includes anticipated revenues and any other means of financing expenditures. The State
Budget Officer is required to use the revenue projections of the Revenue Forecasting Committee in preparing the General Fund and
Highway Fund budgets.
Exceptional circumstances do not apply to new programs or program expansions that go beyond existing program criteria and
operation.
Detailed budgetary control is maintained at the program and line category level at which appropriations and allocations are approved
by the Legislature, principally through a quarterly allotment system. The State Budget Officer and the Governor must approve budget
revisions during the year, reflecting program changes or intradepartmental administrative transfers. Except in specific instances, only
the Legislature may transfer appropriations between departments. Increases in appropriation, allocation, or funding for new programs
are presented to the Legislature as a supplemental budget or separate pieces of legislation. For the year ended June 30, 2021, the
legislature decreased appropriations to the General Fund by $179.5 million.
Governmental funds use encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure
of funds are recorded to reserve a portion of the applicable appropriation or allocation. Unencumbered appropriations in the General
Fund and Highway Fund lapse at June 30 unless, by law, they are carried forward to a subsequent year. For financial statement
purposes, unless amounts would create deficits, fund balance is classified based on existing resources, if any, which will liquidate the
encumbrances outstanding at June 30 (shown as restrictions, commitments or assignments of fund balance).
The State’s budget is prepared primarily on a cash basis. Sales, income, corporate and fuel taxes include a modified accrual basis
adjustment to recognize revenues that are expected to be collected within 60 days of the end of the fiscal year. The Budgetary
Comparison Schedule is presented as Required Supplementary Information (RSI) in this report. Actual amounts in this schedule are
presented on a budgetary basis. Because this basis differs from accounting principles generally accepted in the United States of
America (GAAP), a reconciliation between the budgetary and GAAP basis is presented in the RSI.
The various funds and programs within funds utilize a number of different budgetary control processes. Annual legislative
appropriations and revenue estimates are provided for most “operating” funds.
The original executive budget and original legislative appropriations provide general purpose (unrestricted) revenue estimates in order
to demonstrate compliance with constitutional provisions. Revenues restricted by law or outside grantors to a specific program are
estimated at a level of detail consistent with controlling related expenditure accounts.
For programs financed from restricted revenues, spending authorization is generally contingent upon recognition of the related
revenue. Reductions of spending authority occur if revenues fall short of estimates. If revenues exceed the estimate, supplemental
appropriations are required before the additional resources can be spent.
The budgetary comparison schedule presented for the General Fund, the Highway Fund, the Federal Fund, and the Other Special
Revenue Fund presents the original and final appropriated budgets for fiscal year 2020 - 2021, as well as the actual resource inflows,
outflows and fund balances stated on the budgetary basis.
The original budget and related estimated revenues represent the spending authority enacted into law by the appropriation bills as of
June 17, 2019, and includes encumbrances carried forward from the prior year.
B-124
STATE OF MAINE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY REPORTING
Fiscal Year Ended June 30, 2021
Generally accepted accounting principles (GAAP) require that the final legal budget be reflected in the “final budget” column.
Therefore, updated revenue estimates available for appropriations as of June 30, 2021 rather than the amounts shown in the original
budget, are reported.
The final appropriations budget represents original and supplemental appropriations, carry-forwards, approved transfers, and executive
order reductions. Expenditures, transfers out, other financing uses, and encumbrances are combined and classified by policy area rather
than being reported by character and function as shown in the GAAP statements. This policy area classification is used to better reflect
organizational responsibility and to be more consistent with the budget process.
Compliance at the Legal Level of Budgetary Control
The Budgetary Comparison Schedules by Agency depict budgeted to actual expenditures at the Department level, which is the legal
level of budgetary control for all governmental funds. The schedules provide further detail at the agency level within departments for
transparency.
B-125
STATE OF MAINE
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY (ASSET)
JUDICIAL PENSION PLAN
Last Seven Fiscal Years
(Expressed in Thousands)
2021 2020 2019
Total Pension Liability
Service Cost $ 1,609 $ 1,597 $ 1,487
Interest 4,645 4,582 4,442
Changes in Benefit Terms - - -
Differences Between Expected and Actual Experience 943 (1,087) 469
Changes of Assumptions - - 698
Benefit Payments, Including Refunds of Member Contributions (4,317) (4,068) (3,805)
Net Change in Total Pension Liability 2,880 1,024 3,291
Beginning Total Pension Liability 69,317 68,293 65,002
Ending Total Pension Liability 72,197 69,317 68,293
Plan Fiduciary Net Position
Employer Contributions 716 1,213 1,179
Member Contributions 617 620 604
Net Investment Income 2,165 4,709 6,607
Transfers 765 (3) -
Benefit Payments, Including Refunds of Member Contributions (4,317) (4,068) (3,805)
Administrative Expense (69) (68) (62)
Net Change in Plan Fiduciary Net Position (123) 2,403 4,523
Beginning Plan Fiduciary Net Position 73,638 71,235 66,712
Ending Plan Fiduciary Net Position 73,515 73,638 71,235
Ending Net Pension Liability (Asset) $ (1,318) $ (4,321) $ (2,942)
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 101.8 % 106.2 % 104.3 %
Covered Payroll $ 8,054 $ 8,117 $ 7,894
Net Pension Liability (Asset) as a Percentage of Covered Payroll (16.4)% (53.2)% (37.3)%
B-126
2018 2017 2016 2015
$ 1,466 $ 1,397 $ 1,606 $ 1,518
4,358 4,155 3,863 3,736
- 2,017 28 17
(893) (1,746) 2,238 (292)
- 2,490 - 426
(3,652) (3,502) (3,384) (3,219)
1,279 4,811 4,351 2,186
63,723 58,912 54,561 52,375
65,002 63,723 58,912 54,561
1,144 1,078 979 932
585 550 550 528
7,800 130 1,055 8,416
- 6,343 - -
(3,652) (3,502) (3,384) (3,219)
(57) (48) (49) (42)
5,820 4,551 (849) 6,615
60,892 56,341 57,190 50,575
66,712 60,892 56,341 57,190
$ (1,710) $ 2,831 $ 2,571 $ (2,629)
102.6 % 95.6 % 95.6 % 104.8 %
$ 7,640 $ 7,188 $ 7,186 $ 6,742
(22.4)% 39.4 % 35.8 % (39.0)%
B-127
STATE OF MAINE
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY (ASSET)
LEGISLATIVE PLAN
Last Seven Fiscal Years
(Expressed in Thousands)
2021 2020 2019
Total Pension Liability
Service Cost $ 335 $ 297 $ 282
Interest 611 578 565
Changes in Benefit Terms - - -
Differences Between Expected and Actual Experience 414 239 (91)
Changes of Assumptions - - 100
Benefit Payments, Including Refunds of Member Contributions (698) (607) (460)
Net Change in Total Pension Liability 662 507 396
Beginning Total Pension Liability 9,067 8,560 8,164
Ending Total Pension Liability 9,729 9,067 8,560
Plan Fiduciary Net Position
Employer Contributions - - -
Member Contributions 157 221 154
Net Investment Income 391 845 1,176
Transfers (698) (607) -
Benefit Payments, Including Refunds of Member Contributions 366 45 (460)
Administrative Expense (14) (12) (11)
Net Change in Plan Fiduciary Net Position 202 492 859
Beginning Plan Fiduciary Net Position 13,248 12,756 11,897
Ending Plan Fiduciary Net Position 13,450 13,248 12,756
Ending Net Pension Liability (Asset) $ (3,721) $ (4,181) $ (4,196)
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 138.2 % 146.1 % 149.0 %
Covered Payroll $ 2,814 $ 2,660 $ 2,711
Net Pension Liability (Asset) as a Percentage of Covered Payroll (132.2)% (157.2)% (154.8)%
B-128
2018 2017 2016 2015
$ 265 $ 412 $ 451 $ 450
530 549 545 503
- - 4 4
158 (246) (508) (93)
- (147) - 86
(469) (446) (439) (318)
484 122 53 632
7,680 7,558 7,505 6,873
8,164 7,680 7,558 7,505
- - 4 4
202 138 193 140
1,366 48 206 1,622
- - - -
(469) (446) (439) (318)
(9) (8) (9) (8)
1,090 (268) (45) 1,440
10,807 11,075 11,120 9,680
11,897 10,807 11,075 11,120
$ (3,733) $ (3,127) $ (3,517) $ (3,615)
145.7 % 140.7 % 146.0 % 148.2 %
$ 2,651 $ 2,590 $ 2,528 $ 2,535
(140.8)% (120.7)% (139.0)% (142.6)%
B-129
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
SINGLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS
Last Eight Fiscal Years
(Expressed in Thousands)
2021 2020 2019
Judicial Pension Plan
Actuarially Determined Contribution $ 739 $ 716 $ 1,213
Contributions in Relation to the Actuarially Determined Employer Contribution (739) (716) (1,213)
Contribution Deficiency (Excess) $ - $ - $ -
Covered Payroll $ 8,312 $ 8,054 $ 8,117
Contributions as a percentage of covered payroll 8.89 % 8.89 % 14.94 %
Legislative Pension Plan
Actuarially Determined Contribution $ - $ - $ -
Contributions in Relation to the Actuarially Determined Employer Contribution - - -
Contribution Deficiency (Excess) $ - $ - $ -
Covered Payroll $ 2,802 $ 2,814 $ 2,660
Contributions as a Percentage of Covered Payroll 0.00 % 0.00 % 0.00 %
B-130
(continued)
2018 2017 2016 2015 2014
$ 1,179 $ 1,144 $ 1,078 $ 951 $ 932
(1,179) (1,144) (1,078) (951) (932)
$ - $ - $ - $ - $ -
$ 7,894 $ 7,640 $ 7,188 $ 7,186 $ 6,742
14.94 % 14.97 % 15.00 % 13.23 % 13.82 %
$ - $ - $ - $ - $ -
- - - - (4)
$ - $ - $ - $ - $ (4)
$ 2,711 $ 2,651 $ 2,590 $ 2,528 $ 2,535
0.00 % 0.00 % 0.00 % 0.00 % 0.16 %
B-131
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
SINGLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS (CONTINUED)
A complete description of the methods and assumptions used to determine contribution rates for the year ending June 30, 2021 can be
found in the June 30, 2018 actuarial valuation report.
Notes to Schedule
Key Methods and Assumptions Used to Determine
Contribution Rates
Valuation date June 30, 2017
June 30, 2021 actuarially determined contribution rates are calculated
based on 2018 liabilities developed as a roll-forward of the 2017
actuarial valuation, adjusted for expected experience and any assumption
or methodology changes during fiscal year end 2018 using assets as of
June 30, 2018.
Actuarial cost method Entry age normal
Asset valuation method 3-Year smoothed market
Amortization method Level percent of payroll, open 10-year amortization
Discount rate 6.75%
Amortization growth rate 2.75%
Price inflation 2.75%
Salary increases 2.75%
Retirement age Normal retirement age for State employees and teachers is age 60, 62 or
65. The normal retirement age is determined by whether a member had
met certain creditable service requirements on specific dates, as
established by statute.
Most recent review of plan experience 2020
Mortality 104 percent and 120 percent of the RP-2014 Total Dataset Healthy
Annuitant Mortality Table, respectively, for males and females.
B-132
Former and future actuarial assumptions:
Discount rate and other information Change in assumptions 2021: Demographic assumptions were changed
based on recommendations from the July 1, 2015 to June 30, 2020
experience study as well as the actuarial audit completed of the June 30,
2020 actuarial valuation, first effective with the development of the NPL
as of June 30, 2021. The annual rate of investment interest was also
reduced from 6.75 percent to 6.50 percent effective as of this same date.
Discount rate Change in assumptions 2018: The annual rate of investment return was
reduced from 6.875 percent used at funding to 6.75 percent. The impact
of this change is included in the TPL reconciliation as a change in
assumptions.
Other information Change in assumptions 2016: the amounts reported as changes of
assumptions were due to assumptions that were updated based on the
experience study covering the period from June 30, 2012 through June
30, 2015.
Benefit changes. By law, the COLA is based on the Consumer Price Index for Urban Consumers (CPI-U) as of June 30th applied to
the statutory COLA base. If the percentage is negative, then no adjustment is made in that year. In subsequent years the adjustment
that would have been made will be adjusted downward to the extent necessary to recoup the full actuarial value of not having made the
previous year's negative adjustment. This process of adjustment may occur over a multi-year period if needed to recoup the full
actuarial value of the negative CPI-U. Cost-of-living adjustments are effective September 1. Retirees are eligible to receive a cost-of-
living adjustment after being retired for at least 12 months, except that retirees with less than 10 years of service on July 1, 1993 who
retire prior to normal retirement age are not eligible to receive a cost-of-living adjustment until 12 months after reaching normal
retirement age. The maximum annual limit is 3% of up to the first $20,000 of annual benefit, indexed. This is a permanent increase in
retiree’s benefit. The $20,000 COLA base is indexed each year going forward by the same percentage as the COLA that is paid.
Per GASB Statement No. 68, governments should present information for those years for which information is available. If
information is not available, the government may implement them prospectively.
B-133
STATE OF MAINE
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
STATE EMPLOYEES AND TEACHERS PLAN - STATE EMPLOYEES ONLY
Last Seven Fiscal Years
(Expressed in Thousands)
2021 2020 2019
State Employees
Proportion of the Collective Net Pension Liability 95.090771 % 94.775523 % 94.652308 %
Proportionate Share (Amount) of the Collective Net Pension Liability $ 1,129,955 $ 991,147 $ 993,438
Covered Payroll $ 688,817 $ 627,615 $ 608,615
Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 164.04 % 157.92 % 163.23 %
Plan Fiduciary Net Position As a Percentage of the Total Pension Liability 77.30 % 79.41 % 78.70 %
Maine Community College System
Proportion of the Collective Net Pension Liability 4.295313 % 4.610452 % 4.695230 %
Proportionate Share (Amount) of the Collective Net Pension Liability $ 51,041 $ 48,215 $ 49,280
Covered Payroll $ 32,713 $ 31,535 $ 31,106
Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 156.03 % 152.89 % 158.43 %
Plan Fiduciary Net Position As a Percentage of the Total Pension Liability 77.30 % 79.41 % 78.70 %
Non-Major and Formerly Reported Component Units
Proportion of the Collective Net Pension Liability 0.613916 % 0.614025 % 0.652461 %
Proportionate Share (Amount) of the Collective Net Pension Liability $ 7,295 $ 6,421 $ 6,848
Covered Payroll $ 4,571 $ 4,115 $ 4,240
Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 159.59 % 156.04 % 161.51 %
Plan Fiduciary Net Position As a Percentage of the Total Pension Liability 77.30 % 79.41 % 78.70 %
Total SETP - State of Maine Employees
Proportion of the Collective Net Pension Liability 100.000000 % 100.000000 % 100.000000 %
Proportionate Share (Amount) of the Collective Net Pension Liability $ 1,188,292 $ 1,045,784 $ 1,049,566
Covered Payroll $ 726,101 $ 663,265 $ 643,961
Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 163.65 % 157.67 % 162.99 %
Plan Fiduciary Net Position As a Percentage of the Total Pension Liability 77.30 % 79.41 % 78.70 %
Notes to Schedule:
As of June 30, 2021, the SETP includes the State, 1 major component unit, 1 non-major component unit and 1 formerly reported
component unit in its definition of state employees. Totals for the non-major and formerly reported component unit have been
combined.
A complete description of the methods and assumptions used to determine contribution rates for the year ending June 30, 2021 can be
found in the June 30, 2018 actuarial valuation report.
Per GASB Statement No. 68, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-134
2018 2017 2016 2015
94.829879 % 94.498857 % 92.825250 % 92.853946 %
$ 1,080,168 $ 1,269,080 $ 950,597 $ 837,743
$ 601,904 $ 588,415 $ 520,115 $ 525,765
179.46 % 215.68 % 182.77 % 159.34 %
76.10 % 71.00 % 76.80 % 79.21 %
4.605776 % 4.969634 % 6.640831 % 6.618303 %
$ 52,462 $ 66,740 $ 68,007 $ 59,710
$ 30,867 $ 32,627 $ 32,008 $ 31,679
169.96 % 204.55 % 212.47 % 188.48 %
76.10 % 71.00 % 76.80 % 79.21 %
0.564345 % 0.531509 % 0.533919 % 0.527751 %
$ 6,428 $ 7,138 $ 5,468 $ 4,760
$ 3,700 $ 3,424 $ 3,927 $ 3,776
173.73 % 208.47 % 139.24 % 126.06 %
76.10 % 71.00 % 76.80 % 79.21 %
100.000000 % 100.000000 % 100.000000 % 100.000000 %
$ 1,139,058 $ 1,342,959 $ 1,024,072 $ 902,213
$ 636,471 $ 624,466 $ 556,050 $ 561,220
178.96 % 215.06 % 184.17 % 160.76 %
76.10 % 71.00 % 76.80 % 79.21 %
B-135
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
COST-SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS
STATE EMPLOYEES AND TEACHERS PLAN - STATE EMPLOYEES ONLY
Last Eight Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018
State Employees
Actuarially Determined Contribution $ 164,103 $ 155,628 $ 152,439 $ 148,115
Contributions in Relation to the Actuarially Determined Employer Contribution (164,103) (155,628) (152,439) (148,115)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll $ 726,579 $ 688,817 $ 627,615 $ 608,615
Contributions Recognized by the Pension Plan in Relation to the Actuarially Determined Employer
Contribution as a Percentage of Employer's Covered Payroll 22.59 % 22.59 % 24.29 % 24.34 %
Maine Community College System
Actuarially Determined Contribution $ 7,036 $ 7,030 $ 7,416 $ 7,347
Contributions in Relation to the Actuarially Determined Employer Contribution (7,036) (7,030) (7,416) (7,347)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll $ 32,619 $ 32,713 $ 31,535 $ 31,106
Contributions Recognized by the Pension Plan in Relation to the Actuarially Determined Employer
Contribution as a Percentage of Employer's Covered Payroll 21.57 % 21.49 % 23.52 % 23.62 %
Combined Non-major and Formerly Reported Component Units
Actuarially Determined Contribution $ 1,059 $ 1,005 $ 987 $ 1,021
Contributions in Relation to the Actuarially Determined Employer Contribution (1,059) (1,005) (987) (1,021)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll $ 4,768 $ 4,571 $ 4,115 $ 4,240
Contributions Recognized by the Pension Plan in Relation to the Actuarially Determined Employer
Contribution as a Percentage of Employer's Covered Payroll 22.21 % 21.99 % 23.99 % 24.08 %
Total SETP - State of Maine Employees
Actuarially Determined Contribution $ 172,198 $ 163,663 $ 160,842 $ 156,483
Contributions in Relation to the Actuarially Determined Employer Contribution (172,198) (163,663) (160,842) (156,483)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll $ 763,966 $ 726,101 $ 663,265 $ 643,961
Contributions Recognized by the Pension Plan in Relation to the Actuarially Determined Employer
Contribution as a Percentage of Employer's Covered Payroll 22.54 % 22.54 % 24.25 % 24.30 %
B-136
(continued)
2017 2016 2015 2014
$ 141,295 $ 136,139 $ 107,807 $ 117,380
(141,295) (136,139) (107,807) (117,380)
$ - $ - $ - $ -
$ 601,904 $ 588,415 $ 521,846 $ 525,765
23.47 % 23.14 % 20.66 % 22.33 %
$ 6,863 $ 7,159 $ 8,135 $ 3,133
(6,863) (7,159) (8,135) (3,133)
$ - $ - $ - $ -
$ 30,867 $ 32,627 $ 30,257 $ 31,679
22.23 % 21.94 % 26.89 % 9.89 %
$ 840 $ 766 $ 635 $ 522
(840) (766) (635) (522)
$ - $ - $ - $ -
$ 3,700 $ 3,424 $ 3,947 $ 3,776
22.70 % 22.37 % 16.09 % 13.82 %
$ 148,998 $ 144,064 $ 116,577 $ 121,035
(148,998) (144,064) (116,577) (121,035)
$ - $ - $ - $ -
$ 636,471 $ 624,466 $ 556,050 $ 561,220
23.41 % 23.07 % 20.97 % 21.57 %
B-137
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
COST-SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS
STATE EMPLOYEES AND TEACHERS PLAN - STATE EMPLOYEES ONLY (CONTINUED)
Notes to Schedule:
The SETP includes the State, 1 major component unit, 1 non-major component unit and 1 formerly reported component unit in its
definition of state employees. Totals for the non-major and formerly reported component unit have been combined.
Valuation date June 30, 2017
June 30, 2021 actuarially determined contribution rates are
calculated based on 2018 liabilities developed as a roll-forward
of the 2017 actuarial valuation, adjusted for expected experience
and any assumption or methodology changes during fiscal year
end 2018 using assets as of June 30, 2018.
Actuarial cost method Entry age normal
Asset valuation method 3-Year smoothed market
Amortization method Level Percentage of payroll, closed periods. Original UAL
amortized over a remaining eight years from July 1, 2020.
Subsequent layers of UAL are amortized over individual 20-year
periods.
Discount rate 6.75%
Amortization growth rate 2.75%
Price inflation 2.75%
Salary increases 2.75% plus merit component based on employee's years of
service.
Retirement age Normal retirement age for State employees and teachers is age
60, 62 or 65. The normal retirement age is determined by
whether a member had met certain creditable service
requirements on specific dates, as established by statute.
Mortality 104 percent and 120 percent of the RP-2014 Total Dataset
Healthy Annuitant Mortality Table, respectively, for males and
females.
A complete description of the methods and assumptions used to determine contribution rates for the year ending June 30, 2021 can be
found in the June 30, 2018 actuarial valuation report.
B-138
Former and future actuarial assumptions:
Discount rate and other assumptions Change in assumptions 2021: Demographic assumptions were
changed based on recommendations from the July 1, 2015 to
June 30, 2020 experience study as well as the actuarial audit
completed of the June 30, 2020 actuarial valuation, first effective
with the development of the NPL as of June 30, 2021. The
annual rate of investment interest was also reduced from 6.75
percent to 6.50 percent effective as of this same date.
Discount rate Change in assumptions 2018: The annual rate of investment
return was reduced from 6.875 percent used at funding to 6.75
percent. The impact of this change is included in the TPL
reconciliation as a change in assumptions.
Other information Change in assumptions 2016: the amounts reported as changes of
assumptions were due to assumptions that were updated based on
the experience study covering the period from June 30, 2012
through June 30, 2015.
Benefit changes. By law, the COLA is based on the Consumer Price Index for Urban Consumers (CPI-U) as of June 30th applied to
the statutory COLA base. If the percentage is negative, then no adjustment is made in that year. In subsequent years the adjustment
that would have been made will be adjusted downward to the extent necessary to recoup the full actuarial value of not having made the
previous year's negative adjustment. This process of adjustment may occur over a multi-year period if needed to recoup the full
actuarial value of the negative CPI-U. Cost-of-living adjustments are effective September 1. Retirees are eligible to receive a cost-of-
living adjustment after being retired for at least 12 months, except that retirees with less than 10 years of service on July 1, 1993 who
retire prior to normal retirement age are not eligible to receive a cost-of-living adjustment until 12 months after reaching normal
retirement age. The maximum annual limit is 3% of up to the first $20,000 of annual benefit, indexed. This is a permanent increase in
retiree’s benefit. The $20,000 COLA base is indexed each year going forward by the same percentage as the COLA that is paid.
Per GASB Statement No. 68, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-139
STATE OF MAINE
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
STATE EMPLOYEES AND TEACHERS PLAN - TEACHERS
Last Seven Fiscal Years
(Expressed in Thousands)
2021 2020 2019
Non-employer Contributing Entity's Proportion of:
Percentage of the Collective Net Pension Liability 95.704826 % 95.540502 % 95.298384 %
Amount of the Collective Net Pension Liability $ 1,632,252 $ 1,465,876 $ 1,349,443
Plan Fiduciary Net Position As a Percentage of the Total Pension Liability 83.10 % 84.50 % 85.20 %
Notes to Schedule:
Per GASB Statement No. 68, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-140
2018 2017 2016 2015
95.016790 % 95.002519 % 95.036038 % 95.069591 %
$ 1,452,536 $ 1,766,662 $ 1,350,118 $ 1,027,065
83.30 % 79.00 % 83.60 % 86.46 %
B-141
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
COST-SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS
STATE EMPLOYEES AND TEACHERS PLAN - TEACHERS
Last Eight Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018
Teachers - Non-Employer Contributions
Actuarially Determined Contribution $ 179,330 $ 174,530 $ 132,981 $ 129,422
Contributions in Relation to the Actuarially Determined Non-Employer Contribution (179,330) (174,530) (132,981) (129,422)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Employer Contributions
Actuarially Determined Contribution $ 67,031 $ 61,582 $ 56,761 $ 54,472
Contributions in Relation to the Actuarially Determined Employer Contribution (67,031) (61,582) (56,761) (54,472)
Contribution Deficiency (Excess) $ - $ - $ - $ -
Total SETP - Teachers
Actuarially Determined Contribution $ 246,361 $ 236,112 $ 189,742 $ 183,894
Contributions in Relation to the Actuarially Determined Employer Contribution (246,361) (236,112) (189,742) (183,894)
Contribution Deficiency (Excess) $ - $ - $ - $ -
B-142
(continued)
2017 2016 2015 2014
$ 116,080 $ 112,478 $ 147,048 $ 146,362
(116,080) (112,478) (147,048) (146,362)
$ - $ - $ - $ -
$ 47,659 $ 45,349 $ 38,404 $ 36,931
(47,659) (45,349) (38,404) (36,931)
$ - $ - $ - $ -
$ 163,739 $ 157,827 $ 185,452 $ 183,293
(163,739) (157,827) (185,452) (183,293)
$ - $ - $ - $ -
B-143
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
COST-SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS - EMPLOYER CONTRIBUTIONS
STATE EMPLOYEES AND TEACHERS PLAN - TEACHERS (CONTINUED)
Notes to Schedule:
Valuation date June 30, 2017
June 30, 2020 actuarially determined contribution rates are calculated
based on 2018 liabilities developed as a roll-forward of the 2017
valuation liability, adjusted for expected experience and any assumption
or methodology changes during fiscal year end 2018 using actual assets
at June 30, 2018.
Actuarial cost method Entry age normal
Asset valuation method 3-Year smoothed market
Amortization method Level Percentage of payroll, closed 16-year amortization of the UAL
prior to 2012 and individual, closed. level percent of payroll, 20-year
amortization of UAL arising each year beginning in 2012.
Discount rate 6.75%
Amortization growth rate 2.75%
Price inflation 2.75%
Salary increases 2.75% plus merit component based on employee's years of service.
Retirement age Normal retirement age for State employees and teachers is age 60, 62 or
65. The normal retirement age is determined by whether a member had
met certain creditable service requirements on specific dates, as
established by statute.
Mortality 99 percent of the RP-2014 Total Dataset Healthy Annuitant Mortality
Table for males and females.
A complete description of the methods and assumptions used to determine contribution rates for the year ending June 30, 2021 can be
found in the June 30, 2018 actuarial valuation report.
Discount rate and other information Change in assumptions 2021: Demographic assumptions were changed
based on recommendations from the July 1, 2015 to June 30, 2020
experience study as well as the actuarial audit completed of the June 30,
2020 actuarial valuation, first effective with the development of the NPL
as of June 30, 2021. The annual rate of investment interest was also
reduced from 6.75 percent to 6.50 percent effective as of this same date.
Discount rate Change in assumptions 2018: The annual rate of investment return was
reduced from 6.875 percent used at funding to 6.75 percent. The impact
of this change is included in the TPL reconciliation as a change in
assumptions.
Other information Change in assumptions 2016: the amounts reported as changes of
assumptions were due to assumptions that were updated based on the
experience study covering the period from June 30, 2012 through June
30, 2015.
B-144
Benefit changes. By law, the COLA is based on the Consumer Price Index for Urban Consumers (CPI-U) as of June 30th applied to
the statutory COLA base. If the percentage is negative, then no adjustment is made in that year. In subsequent years the adjustment
that would have been made will be adjusted downward to the extent necessary to recoup the full actuarial value of not having made the
previous year's negative adjustment. This process of adjustment may occur over a multi-year period if needed to recoup the full
actuarial value of the negative CPI-U. Cost-of-living adjustments are effective September 1. Retirees are eligible to receive a cost-of-
living adjustment after being retired for at least 12 months, except that retirees with less than 10 years of service on July 1, 1993 who
retire prior to normal retirement age are not eligible to receive a cost-of-living adjustment until 12 months after reaching normal
retirement age. The maximum annual limit is 3% of up to the first $20,000 of annual benefit, indexed. This is a permanent increase in
retiree’s benefit. The $20,000 COLA base is indexed each year going forward by the same percentage as the COLA that is paid.
Per GASB Statement No. 68, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-145
STATE OF MAINE
SCHEDULE OF CHANGES IN
THE NET OPEB LIABILITY
HEALTHCARE PLAN - STATE EMPLOYEES
Last Five Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018 2017
Total OPEB Liability
Beginning Total Liability $ 1,180,487 $ 1,226,111 $ 1,199,512 $ 1,161,320 $ 1,143,542
Service Cost 18,311 17,777 17,425 16,917 12,246
Interest 78,426 81,020 79,128 76,921 75,650
Differences Between Expected and Actual Experience 6,689 (56,455) 20,875 17,725 -
Changes of Assumptions Discount Rate 28,083 - - - -
Changes of Assumptions Others - 652 - 5,241 -
Benefit Payments, Including Refunds of Member
Contributions - Explicit (48,155) (71,199) (70,524) (58,347) (54,118)
Benefit Payments, Including Refunds of Member
Contributions - Implicit (26,940) (17,419) (20,305) (20,265) (16,000)
Net Change in Total OPEB Liability 56,414 (45,624) 26,599 38,192 17,778
Ending Total OPEB Liability 1,236,901 1,180,487 1,226,111 1,199,512 1,161,320
Plan Fiduciary Net Position
Beginning Plan Fiduciary Net Position 291,559 277,703 256,860 233,596 203,088
Employer Contributions - Explicit 50,155 71,199 72,524 60,347 58,118
Employer Contributions - Implicit 26,940 17,419 20,305 20,265 16,000
Net Investment Income 89,286 13,859 18,846 21,270 26,513
Benefit Payments, Including Refunds of Member
Contributions (75,095) (88,618) (90,829) (78,612) (70,118)
Administrative Expense (3) (3) (3) (6) (5)
Net Change in Plan Fiduciary Net Position 91,283 13,856 20,843 23,264 30,508
Ending Plan Fiduciary Net Position 382,842 291,559 277,703 256,860 233,596
Ending Net OPEB Liability $ 854,059 $ 888,928 $ 948,408 $ 942,652 $ 927,724
Plan Fiduciary Net Position as Percentage of the Total OPEB
Liability 31.0 % 24.7 % 22.6 % 21.4 % 20.1 %
Covered Payroll $ 736,411 $ 687,595 $ 626,384 $ 612,195 $ 574,663
Net OPEB Liability as a Percentage of Covered Payroll $ 116.0 $ 129.3 $ 151.4 $ 154.0 $ 161.4
This information relates to the OPEB Plan, not the employer's plan.
Per GASB Statement No. 75, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-146
STATE OF MAINE
SCHEDULE OF CHANGES IN
THE NET OPEB LIABILITY
GROUP LIFE INSURANCE PLAN - STATE EMPLOYEES AND TEACHERS
Last Five Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018 2017
Total OPEB Liability
Beginning Total Liability $ 213,309 $ 204,432 $ 196,263 $ 183,723 $ 175,647
Service Cost 2,683 2,191 2,132 2,122 2,065
Interest 13,847 14,275 13,155 12,531 12,015
Differences Between Expected and Actual Experience - 589 - 1,957 -
Changes of Assumptions Discount Rate 291 - - 3,200 -
Benefit Payments, Including Refunds of Member
Contributions - Explicit (6,614) (8,178) (7,118) (7,270) (6,004)
Net Change in Total OPEB Liability 10,207 8,877 8,169 12,540 8,076
Ending Total OPEB Liability 223,516 213,309 204,432 196,263 183,723
Plan Fiduciary Net Position
Beginning Plan Fiduciary Net Position 105,617 100,617 94,287 86,883 77,416
Employer and Non-Employer Contributions 9,867 9,311 7,756 7,639 6,921
Net Investment Income 32,552 4,886 6,418 7,805 9,886
Benefit Payments, Including Refunds of Member
Contributions (6,614) (8,178) (7,118) (7,270) (6,004)
Administrative Expense (822) (1,019) (726) (770) (1,336)
Net Change in Plan Fiduciary Net Position 34,983 5,000 6,330 7,404 9,467
Ending Plan Fiduciary Net Position 140,600 105,617 100,617 94,287 86,883
Ending Net OPEB Liability $ 82,916 $ 107,692 $ 103,815 $ 101,976 $ 96,840
Plan Fiduciary Net Position as Percentage of the Total OPEB
Liability 62.9 % 49.5 % 49.2 % 48.0 % 47.3 %
Covered Payroll $ 1,525,193 $ 1,484,373 $ 1,380,619 $ 1,343,669 $ 1,277,009
Change - Increase (Decrease) 5.4 % 7.3 % 7.5 % 7.6 % 7.6 %
Per GASB Statement No. 75, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-147
STATE OF MAINE
SCHEDULE OF CHANGES IN
TOTAL OPEB LIABILITY
HEALTHCARE PLAN - TEACHERS
Last Five Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018 2017
Total OPEB Liability
Beginning Total Liability $ 1,441,260 $ 1,235,862 $ 1,248,326 $ 1,323,731 $ 1,323,731
Service Cost 44,132 33,787 35,795 42,214 -
Interest 51,449 48,502 45,495 38,521 -
Contribution - Non-Employer Contributing Entity (31,133) (33,032) (26,855) (28,848) -
Differences Between Expected and Actual Experience 846 59,296 (5,178) - -
Changes of Assumptions Discount Rate 399,437 90,624 (61,721) (170,420) -
Changes of Assumptions - Others - 6,221 - - -
Differences Between Expected and Actual Investment
Earnings - - - 43,128 -
Net Change in Total OPEB Liability 464,731 205,398 (12,464) (75,405) -
Ending Total OPEB Liability $ 1,905,991 $ 1,441,260 $ 1,235,862 $ 1,248,326 $ 1,323,731
Covered Payroll $ 1,276,975 $ 1,260,742 $ 1,156,592 $ 1,149,126 $ 1,125,444
Total OPEB Liability as Percentage of Covered Payroll 149.3 % 114.3 % 106.9 % 107.5 % 117.6 %
State's Proportionate Share of the Collective Total OPEB 80 % 75 % 74 % 83 % 83 %
This plan is funded on a pay-as-you go basis. The State's proportionate share for fiscal years June 30, 2017 through June 30, 2020 was
estimated assuming the same share of implicit subsidy for each school district's OPEB Plan.
Per GASB Statement No. 75, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-148
STATE OF MAINE
SCHEDULE OF CHANGES IN
TOTAL OPEB LIABILITY
HEALTHCARE PLAN - FIRST RESPONDERS
Last Five Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018 2017
Total OPEB Liability
Beginning Total Liability $ 27,506 $ 19,232 $ 18,980 $ 26,052 $ -
Service Cost 1,142 751 776 1,836 -
Interest 989 763 698 786 -
Changes in Benefit Terms - 8,247 - - -
Contribution - Employee (696) (592) (617) (618) -
Contribution - Non-Employer Contributing Entity (242) (48) (5) (78) -
Administrative Expenses 132 92 98 99 -
Differences Between Expected and Actual Experience (210) (863) (191) (2,909) -
Changes of Assumptions Discount Rate 3,305 939 (507) (1,325) -
Changes of Assumptions - Others - (1,015) - (4,863) -
Net Change in Total OPEB Liability 4,420 8,274 252 (7,072) -
Ending Total OPEB Liability $ 31,926 $ 27,506 $ 19,232 $ 18,980 $ 26,052
Covered Payroll $ 46,395 $ 66,360 $ 64,427 $ 62,551 $ 55,651
Total OPEB Liability as Percentage of Covered Payroll 68.8 % 41.4 % 29.9 % 30.3 % 46.8 %
State's Proportionate Share of the Collective Total OPEB 24 % 23 % 13 % 23 % 23 %
The plan does not accumulate assets in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits.
This plan is funded on a pay-as-you go basis. The State's proportionate share for fiscal years June 30, 2017 through June 30, 2020 was
estimated assuming the same share of implicit subsidy for each municipality's OPEB Plan.
Per GASB Statement No. 75, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-149
STATE OF MAINE
SCHEDULE OF STATE CONTRIBUTIONS
STATE FUNDED HEALTHCARE AND GROUP LIFE INSURANCE OPEB PLANS
Last Five Fiscal Years
(Expressed in Thousands)
2021 2020 2019 2018 2017
State Employee Healthcare
Actuarially Determined Contribution $ 58,819 $ 56,241 $ 71,363 $ 71,179 $ 69,000
Contributions in Relation to the Actuarially Determined
Employer Contribution 77,095 88,618 92,829 80,612 74,000
Contribution Deficiency (Excess) $ (18,276) $ (32,377) $ (21,466) $ (9,433) $ (5,000)
Covered Payroll $ 736,411 $ 687,595 $ 626,384 $ 612,195 $ 582,934
Contributions as a Percentage of Covered Payroll 10.47 % 12.89 % 14.82 % 13.17 % 12.69 %
State Employee and Teacher Group Life Insurance
Benefit Plan
Actuarially Determined Contribution $ 10,965 $ 10,671 $ 9,040 $ 8,806 $ 8,240
Contributions in Relation to the Actuarially Determined
Employer Contribution 9,867 9,310 7,756 7,638 6,921
Contribution Deficiency (Excess) $ 1,098 $ 1,361 $ 1,284 $ 1,168 $ 1,319
Covered Payroll $ 1,525,193 $ 1,484,373 $ 1,380,619 $ 1,343,669 $ 1,277,009
Contributions as a Percentage of Covered Payroll 0.65 % 0.63 % 0.56 % 0.57 % 0.54 %
Notes to Schedule:
Actuarial assumptions for both plans:
Costs are developed using the individual entry age normal cost method based on a level percentage of payroll. Price inflation is
estimated at 2.75 percent and salary increases mirror that rate plus a merit component. Asset valuation methods include 3-year
smoothed market. Their investment advisor changes interest rates simultaneously. The investment rate of interest declined from 6.875
percent in 2017 to 6.75 percent in 2018. For the valuation ended June 30, 2021, the discount rate further declined to 6.50 percent.
Prior to 2021, valuations were based on the July 1, 2012 to June 30, 2015 experience study and the RP2014 Total Dataset Healthy
Annuitant Mortality table. 2021 demographic assumptions changed based on recommendations from the July 1, 2015 to June 30, 2020
experience study as well as the actuarial audit completed of the June 30, 2020 actuarial valuation. Mortality rates were revised using
the 2010 Public Plan General Benefits-Weighted Healthy Retiree Mortality Table, for males and females, projected generationally
using the RPEC_2020 model. The unfunded actuarial liability is being amortized as a level percentage of payroll over a 30-year
period on a closed basis. The unfunded liability will be fully recognized by June 30, 2037.
State Health Insurance
The valuation date is June 30, 2021. The participation rate for future retirees is 95 percent of active participants currently enrolled.
Assumption changes, plan changes and experience gains are amortized over a 20-year fixed period. Experience losses are amortized
over a 10-year fixed period. The medical trend rate had been 6.80 at June 30, 2016. Every year thereafter through June 30, 2020, the
medical trend rate dropped by .20. At June 30, 2021, the medical trend rate was 5.90. The ultimate medical trend rate is 4.29 percent
reached at 2075. The State actively manages premium increases within the statutory cap, so healthcare cost increases are limited to no
more than inflation plus 3 percent in any year. Beginning with this fiscal year, June 30, 2021, management adopted a change in
methodology recommended by the actuary. The new methodology better estimates actual self-insured plan premiums covered by the
State on behalf of participants (explicit subsidy). Total claims allocated to retirees represents the total benefit payment amount and the
implied subsidy payments represent the difference.
Group Life Insurance
The valuation date is June 30, 2021. The ADC is calculated in advance of the completion of the prior biennial valuation and thus rolled
forward from prior results. In this case, ADC’s for 2020 and 2021 are based on the June 30, 2016 valuation rolled forward and
adjusted for changes in assumptions. The participation rate for future retirees is 100 percent of those currently enrolled.
Per GASB Statement No. 74, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-150
STATE OF MAINE
SCHEDULE OF INVESTMENT RETURNS
STATE FUNDED HEALTHCARE AND GROUP LIFE INSURANCE OPEB PLANS
Last Five Fiscal Years
2021 2020 2019 2018 2017
Annual money-weighted rate of return, net of investment
expense 30.60 % 6.00 % 6.60 % 9.00 % 12.88 %
Notes to Schedule:
Per GASB Statement No. 74, governments should present information for those years for which information is available. If information
is not available, the government may implement them prospectively.
B-151
STATE OF MAINE
INFORMATION ABOUT INFRASTRUCTURE ASSETS REPORTING USING THE MODIFIED APPROACH
As allowed by GASB Statement No. 34, the State has adopted an alternative process for recording depreciation expense on selected
infrastructure assets. Under this process, the State does not record depreciation expense nor are amounts capitalized in connection
with improvements to those assets, unless the improvements expand the capacity or efficiency of an asset. Assets accounted for under
the modified approach include 8,799 highway miles or 17,874 lane miles of roads and 3,016 bridges having a total deck area of 12.4
million square feet that the State is responsible to maintain.
In order to utilize the modified approach, the State is required to:
Maintain an asset management system that includes an up-to-date inventory of eligible infrastructure.
Perform condition assessments of eligible assets and summarize the results using a measurement scale.
Estimate each year the annual amount to maintain and preserve the assets at the condition level established and disclosed
by the State.
Document that the assets are being preserved at, or above, the established condition level.
Roads and bridges maintained by the Department of Transportation are accounted for using the modified approach.
HIGHWAYS
Measurement Scale for Highways
The Maine Department of Transportation (MDOT) uses six indicators to determine the condition of highway adequacy. The six
indicators and their relative point weighting are listed in the table below.
Point Rating
Data Element (%) Description
Pavement Condition Rating (PCR) 45 PCR is defined as the composite condition of the pavement on a roadway only,
and is compiled from the severity and extent of pavement distresses such as
cracking, rutting and patching. It is the key indicator used to determine the
optimum time to treat a particular section of road. Points decrease as PCR
decreases
Safety 20 Statewide crash rates are used to allocate points. Locations with high rates get
fewer points.
Backlog (Built vs. Unbuilt 15 A “Built” road is one that has been constructed to a modern standard, usually
roadway) post 1950. This includes adequate drainage, base, and pavement to carry the
traffic load, and adequate sight distance and width to meet current safety
standards. “Unbuilt” (backlog) is defined as a roadway section that has not been
built to modern standards. Yes or No (15 or 0).
Annual Average Daily Traffic 10 This ratio measures how intensely a highway is utilized. As a highway facility’s
divided by the hourly highway AADT/C ratio increases, the average speed of vehicles on that facility tends to
capacity (AADT/C) decrease. This decrease in average speed is evidence of reduced mobility. As
congestion increases, points decrease (0-10).
Posted Speed 5 Lower speeds equal fewer points
Paved Shoulder 5 In general, roadways with paved shoulders perform at a higher level and last
longer than those without shoulders or with only gravel shoulders. Yes or No (5
or 0).
100
B-152
STATE OF MAINE
INFORMATION ABOUT INFRASTRUCTURE ASSETS REPORTING USING THE MODIFIED APPROACH
BRIDGES
MDOT uses four separate factors to obtain a numerical value used to indicate the ability of bridges to remain in service at the current
level of usage. The numeric value is a percentage ranging from 0 percent to represent an entirely insufficient or deficient bridge, and
100 percent to represent an entirely sufficient bridge. The four indicators and their relative point weighting are listed in the table
below. The composite numeric value is based on the sufficiency rating formula in the Recording and Coding Guide for Structure
Inventory and Appraisal of the Nation’s Bridges.
Point Rating
Data Element (%) Description
Structural Adequacy and Safety 55 This category considers inventory rating, superstructure, substructure and
culverts.
Serviceability and Functional 30 Serviceability and functional obsolescence that addresses the number of lanes,
Obsolescence average daily traffic, roadway width, bridge width, deck condition, under
clearances, waterway adequacy, alignment, and defense highway designation.
Essentiality for Public Use 15 This considers detour length, average daily traffic, and defense highway
designation.
Special Reduction (13) The sufficiency rating also includes consideration of special reductions for
detour length, safety features, and type of structure.
Assessed Conditions
The following table shows adequacy ratings for maintenance levels from Excellent to Poor.
Adequacy Rating Total
Excellent 80 - 100
Good 70 - 80
Fair 60 - 70
Poor 0 - 60
MDOT intends to maintain highways and bridges at an adequacy rating of 60 or higher. The following table shows adequacy ratings
achieved by MDOT.
Fiscal Year Highways Bridges
2021 74.0 74.7
2020 74.0 75.0
2019 70.0 74.0
B-153
STATE OF MAINE
INFORMATION ABOUT INFRASTRUCTURE ASSETS REPORTING USING THE MODIFIED APPROACH
Comparison of Estimated-to-Actual Preservation Costs
The following table presents the State’s preservation costs for the past five fiscal years. It also shows the estimate of spending
necessary to preserve and maintain the roads and bridges at, or above, a sufficiency rating of 60 for both highways and bridges (in
millions).
Actual Preservation Costs
(Expressed in millions)
2021 2020 2019 2018 2017
Highways $ 157.4 $ 148.3 $ 119.6 $ 124.8 $ 123.3
Bridges 34.9 32.0 13.2 16.4 18.8
Total $ 192.3 $ 180.3 $ 132.8 $ 141.2 $ 142.1
Estimated Preservation Costs
(Expressed in millions)
2021 2020 2019 2018 2017
Highways $ 150.0 $ 130.0 $ 112.0 $ 133.0 $ 142.2
Bridges 35.0 15.0 13.5 21.0 23.7
Total $ 185.0 $ 145.0 $ 125.5 $ 154.0 $ 165.9
Transportation Bonds
Transportation bonds, approved by referendum, are issued to fund improvements to highways and bridges. Of the amount authorized
by PL 2019, Chapter 673, $83 million in General Fund bonds were spent during FY2021. Of the amount authorized by PL 2019,
Chapter 532, $35 million in General Fund bonds were spent during FY2021.
B-154
STATE OF MAINE
INDEPENDENT AUDITOR’S REPORTS
ON INTERNAL CONTROL AND COMPLIANCE
FOR THE YEAR ENDED JUNE 30, 2021
C-1
C-2
STATE OF MAINE
OFFICE OF THE STATE AUDITOR
66 STATE HOUSE STATION
AUGUSTA, ME 04333-0066
TEL: (207) 624-6250
B. Melissa Perkins, CPA
Acting State Auditor
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Troy D. Jackson
President of the Senate
Honorable Ryan M. Fecteau
Speaker of the House of Representatives
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the State of Maine as of and for the year ended June 30, 2021, and the related notes to the financial
statements, which collectively comprise the State of Maine’s basic financial statements, and have issued
our report thereon dated December 10, 2021. Our report includes a reference to other auditors who audited
the financial statements of the following component units: Child Development Services, Efficiency Maine
Trust, Finance Authority of Maine, Maine Community College System, Maine Governmental Facilities
Authority, Maine Health and Higher Educational Facilities Authority, Maine Maritime Academy, Maine
Municipal Bond Bank, Maine Public Employees Retirement System, Maine State Housing Authority,
Maine Turnpike Authority, Midcoast Regional Redevelopment Authority, Northern New England
Passenger Rail Authority, and the University of Maine System, as described in our report on the State of
Maine’s financial statements. This report does not include the results of the other auditors’ testing of
internal control over financial reporting or compliance and other matters that are reported on separately by
those auditors.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the State of Maine’s internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the State of Maine’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the State of Maine’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have
not been identified. However, as described in the accompanying Schedule of Findings and Questioned
C-3
Costs, we did identify certain deficiencies in internal control that we consider to be material weaknesses
and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity’s
financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the
deficiency described in the accompanying Schedule of Findings and Questioned Costs as item 2021-011 to
be a material weakness.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with governance.
We consider the deficiencies described in the accompanying Schedule of Findings and Questioned Costs
as items 2021-001 through 2021-010 and 2021-012 through 2021-014 to be significant deficiencies.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the State of Maine’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the financial statements. However, providing an opinion on compliance with those provisions
was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed an instance of noncompliance that is required to be reported under Government Auditing
Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item
2021-011.
State of Maine’s Response to Findings
The State of Maine’s response to the findings identified in our audit is described in the accompanying
Schedule of Findings and Questioned Costs. The State of Maine’s response was not subjected to the
auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion
on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
B. Melissa Perkins, CPA
Acting State Auditor
Augusta, Maine
December 10, 2021
C-4
STATE OF MAINE
OFFICE OF THE STATE AUDITOR
66 STATE HOUSE STATION
AUGUSTA, ME 04333-0066
TEL: (207) 624-6250
Jacob B. Norton, CIA B. Melissa Perkins, CPA
State Auditor Deputy State Auditor
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
THE UNIFORM GUIDANCE
Honorable Members of the Legislative Council for the 130th Legislature
Report on Compliance for Each Major Federal Program
We have audited the State of Maine’s compliance with the types of compliance requirements
described in the OMB Compliance Supplement (including its Addendum) that could have a direct
and material effect on each of the State of Maine’s major Federal programs for the year ended
June 30, 2021. The State of Maine’s major Federal programs are identified in the Summary of
Auditor’s Results section (E-3 to E-4) of the accompanying Schedule of Findings and Questioned
Costs (E-28 to E-154).
The State of Maine’s basic financial statements include the operations of the following component
units: Child Development Services, Efficiency Maine Trust, Finance Authority of Maine, Maine
Community College System, Maine Governmental Facilities Authority, Maine Health and Higher
Educational Facilities Authority, Maine Maritime Academy, Maine Municipal Bond Bank, Maine
Public Employees Retirement System, Maine State Housing Authority, Maine Turnpike Authority,
Midcoast Regional Redevelopment Authority, Northern New England Passenger Rail Authority,
and the University of Maine System. The Federal awards that these component units received are
not included in the Schedule of Expenditures of Federal Awards for the year ended June 30, 2021.
Our audit, described below, did not include the operations of these component units because the
component units engaged other auditors to perform an audit in accordance with the Uniform
Guidance, if required.
Management’s Responsibility
Management is responsible for compliance with Federal statutes, regulations, and the terms and
conditions of its Federal awards applicable to its Federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the State of Maine’s major
Federal programs based on our audit of the types of compliance requirements referred to above.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and the
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audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major Federal program occurred.
An audit includes examining, on a test basis, evidence about the State of Maine’s compliance with
those requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our qualified and unmodified opinions
on compliance for major Federal programs. However, our audit does not provide a legal
determination of the State of Maine’s compliance.
Basis for Qualified Opinion on the SNAP Cluster
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding the SNAP Cluster (ALN 10.551, 10.561) as described
in finding number 2021-043 for Eligibility and Special Tests and Provisions. Compliance with
such requirements is necessary, in our opinion, for the State of Maine to comply with the
requirements applicable to that program.
Qualified Opinion on the SNAP Cluster
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
SNAP Cluster for the year ended June 30, 2021.
Basis for Qualified Opinion on the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC)
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding the Special Supplemental Nutrition Program for
Women Infants, and Children (WIC) (ALN 10.557) as described in finding numbers 2021-018 for
Cash Management, 2021-019 for Subrecipient Monitoring, 2021-041 for Reporting, and 2021-042
for Cash Management and Subrecipient Monitoring. Compliance with such requirements is
necessary, in our opinion, for the State of Maine to comply with the requirements applicable to
that program.
Qualified Opinion on the Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC)
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) for the year
ended June 30, 2021.
Basis for Qualified Opinion on Unemployment Insurance (UI)
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Unemployment Insurance (UI) (ALN 17.225) as
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described in finding numbers 2021-021 for Allowable Costs/Cost Principles and Eligibility, and
2021-022 for Reporting. Compliance with such requirements is necessary, in our opinion, for the
State of Maine to comply with the requirements applicable to that program.
Qualified Opinion on Unemployment Insurance (UI)
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
Unemployment Insurance (UI) for the year ended June 30, 2021.
Basis for Qualified Opinion on the Emergency Rental Assistance Program
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding the Emergency Rental Assistance Program (ALN
21.023) as described in finding number 2021-029 for Reporting. Compliance with such
requirements is necessary, in our opinion, for the State of Maine to comply with the requirements
applicable to that program.
Qualified Opinion on the Emergency Rental Assistance Program
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
Emergency Rental Assistance Program for the year ended June 30, 2021.
Basis for Qualified Opinion on Immunization Cooperative Agreements
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Immunization Cooperative Agreements (ALN
93.268) as described in finding numbers 2021-035 for Special Tests and Provisions and 2021-041
for Reporting. Compliance with such requirements is necessary, in our opinion, for the State of
Maine to comply with the requirements applicable to that program.
Qualified Opinion on Immunization Cooperative Agreements
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
Immunization Cooperative Agreements for the year ended June 30, 2021.
Basis for Qualified Opinion on Epidemiology and Laboratory Capacity for Infectious Diseases
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Epidemiology and Laboratory Capacity for Infectious
Diseases (ELC) (ALN 93.323) as described in finding number 2021-041 for Reporting.
Compliance with such requirements is necessary, in our opinion, for the State of Maine to comply
with the requirements applicable to that program.
Qualified Opinion on Epidemiology and Laboratory Capacity for Infectious Diseases
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
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Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) for the year ended
June 30, 2021.
Basis for Qualified Opinion on Temporary Assistance for Needy Families (TANF)
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Temporary Assistance for Needy Families (TANF)
(ALN 93.558) as described in finding numbers 2021-040 for Activities Allowed or Unallowed and
Allowable Costs/Cost Principles, 2021-041 for Reporting, 2021-042 for Cash Management and
Subrecipient Monitoring, and 2021-043 for Eligibility and Special Tests and Provisions.
Compliance with such requirements is necessary, in our opinion, for the State of Maine to comply
with the requirements applicable to that program.
Qualified Opinion on Temporary Assistance for Needy Families (TANF)
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
Temporary Assistance for Needy Families (TANF) for the year ended June 30, 2021.
Basis for Qualified Opinion on the Medicaid Cluster
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding the Medicaid Cluster (ALN 93.775, 93.777, 93.778)
as described in finding numbers 2021-050 and 2021-051 for Special Tests and Provisions, and
2021-052 for Eligibility. Compliance with such requirements is necessary, in our opinion, for the
State of Maine to comply with the requirements applicable to that program.
Qualified Opinion on the Medicaid Cluster
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
Medicaid Cluster for the year ended June 30, 2021.
Basis for Qualified Opinion on the Children’s Health Insurance Program (CHIP)
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding the Children’s Health Insurance Program (CHIP)
(ALN 93.767) as described in finding numbers 2021-051 for Special Tests and Provisions and
2021-052 for Eligibility. Compliance with such requirements is necessary, in our opinion, for the
State of Maine to comply with the requirements applicable to that program.
Qualified Opinion on the Children’s Health Insurance Program (CHIP)
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the
Children’s Health Insurance Program (CHIP) for the year ended June 30, 2021.
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Basis for Qualified Opinion on Disaster Grants – Public Assistance (Presidentially Declared
Disasters)
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Disaster Grants – Public Assistance (Presidentially
Declared Disasters) (ALN 97.036) as described in finding numbers 2021-059 for Cash
Management, 2021-060 for Subrecipient Monitoring, and 2021-061 and 2021-062 for Reporting.
Compliance with such requirements is necessary, in our opinion, for the State of Maine to comply
with the requirements applicable to that program.
Qualified Opinion on Disaster Grants – Public Assistance (Presidentially Declared Disasters)
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on Disaster
Grants – Public Assistance (Presidentially Declared Disasters) for the year ended June 30, 2021.
Basis for Qualified Opinion on Presidential Declared Disaster Assistance to Individuals and
Households - Other Needs
As described in the accompanying Schedule of Findings and Questioned Costs, the State of Maine
did not comply with requirements regarding Presidential Declared Disaster Assistance to
Individuals and Households – Other Needs (ALN 97.050) as described in finding number
2021-022 for Reporting. Compliance with such requirements is necessary, in our opinion, for the
State of Maine to comply with the requirements applicable to that program.
Qualified Opinion on Presidential Declared Disaster Assistance to Individuals and Households
- Other Needs
In our opinion, except for the noncompliance described in the preceding Basis for Qualified
Opinion paragraph, the State of Maine complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on
Presidential Declared Disaster Assistance to Individuals and Households – Other Needs for the
year ended June 30, 2021.
Unmodified Opinion on Each of the Other Major Federal Programs
In our opinion, the State of Maine complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its other
major Federal programs identified in the Summary of Auditor’s Results section of the
accompanying Schedule of Findings and Questioned Costs for the year ended June 30, 2021.
Other Matters
The results of our auditing procedures disclosed other instances of noncompliance, which are
required to be reported in accordance with the Uniform Guidance and which are described in the
accompanying Schedule of Findings and Questioned Costs as finding numbers 2021-023,
2021-024, 2021-045, and 2021-055. Our opinion on each major Federal program is not modified
with respect to these matters.
The State of Maine’s response to the noncompliance findings identified in our audit is described
in the accompanying Schedule of Findings and Questioned Costs. The State of Maine’s response
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was not subjected to the auditing procedures applied in the audit of compliance and, accordingly,
we express no opinion on the response.
Report on Internal Control over Compliance
Management of the State of Maine is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In
planning and performing our audit of compliance, we considered the State of Maine’s internal
control over compliance with the types of requirements that could have a direct and material effect
on each major Federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major Federal
program and to test and report on internal control over compliance in accordance with the Uniform
Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, we do not express an opinion on the effectiveness of the State of
Maine’s internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies and therefore, material
weaknesses or significant deficiencies may exist that have not been identified. However, as
discussed below, we did identify certain deficiencies in internal control over compliance that we
consider to be material weaknesses and significant deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a Federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a Federal program will not be prevented, or detected and corrected, on
a timely basis. We consider the deficiencies in internal control over compliance described in the
accompanying Schedule of Findings and Questioned Costs as finding numbers 2021-011,
2021-018, 2021-019, 2021-021, 2021-022, 2021-029, 2021-035, 2021-040 through 2021-044,
2021-050 through 2021-054, and 2021-059 through 2021-062 to be material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a
Federal program that is less severe than a material weakness in internal control over compliance,
yet important enough to merit attention by those charged with governance. We consider the
deficiencies in internal control over compliance described in the accompanying Schedule of
Findings and Questioned Costs as finding numbers 2021-012 through 2021-017, 2021-020,
2021-023 through 2021-028, 2021-030 through 2021-034, 2021-036 through 2021-039, 2021-045
through 2021-049, 2021-055 through 2021-058, and 2021-063 to be significant deficiencies.
The State of Maine’s response to the internal control over compliance findings identified in our
audit is described in the accompanying Schedule of Findings and Questioned Costs. The State of
Maine’s response was not subjected to the auditing procedures applied in the audit of compliance
and, accordingly, we express no opinion on the response.
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The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose.
Jacob B. Norton, CIA Augusta, Maine
State Auditor March 31, 2022
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STATE OF MAINE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
D-1
D-2
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
Department of Agriculture
10.025 Plant and Animal Disease, Pest Control, and Animal Care 27,092 345,033 372,126
10.163 Market Protection and Promotion 255,087 - 255,087
10.170 Specialty Crop Block Grant Program - Farm Bill 458,830 37,935 496,766
10.178 Storage and Distribution Trade Mitigation Program Foods 302,000 - 302,000
1
10.215 Sustainable Agriculture Research and Education - 9,020 9,020
10.475 Cooperative Agreements with States for Intrastate Meat and Poultry Inspection - 387,538 387,538
COVID-19 - Cooperative Agreements with States for Intrastate Meat and Poulty
10.475 Inspection - 5,954 5,954
10.534 CACFP Meal Service Training Grants 17,163 26,315 43,479
10.535 SNAP Fraud Framework Implementation Grant - 48,157 48,157
10.542 COVID-19 - Pandemic EBT Food Benefits - 6,301,700 6,301,700
10.545 Farmers’ Market Supplemental Nutrition Assistance Program Support Grants - 19,560 19,560
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children 5,002,327 7,259,485 12,261,813 *
10.557 COVID-19 - Special Supplemental Nutrition Program for Women, Infants, and Children - 1,338,412 1,338,412 *
10.558 Child and Adult Care Food Program 8,243,345 125,915 8,369,260
10.560 State Administrative Expenses for Child Nutrition - 1,390,941 1,390,941
10.572 WIC Farmers' Market Nutrition Program (FMNP) 13,836 36,285 50,121
10.576 Senior Farmers Market Nutrition Program 724,289 80,674 804,962
10.578 WIC Grants To States (WGS) - 1,152,656 1,152,656
10.582 Fresh Fruit and Vegetable Program 2,037,443 77,698 2,115,141
10.652 Forestry Research - 501,909 501,909
10.652 COVID-19 - Forestry Research - 156 156
10.664 Cooperative Forestry Assistance 254,179 1,139,340 1,393,519
10.674 Wood Utilization Assistance - 17,789 17,789
10.676 Forest Legacy Program - 88,794 88,794
10.680 Forest Health Protection - 56,869 56,869
10.689 Community Forest and Open Space Conservation Program (CFP) - 1,500 1,500
10.691 Good Neighbor Authority - 11,748 11,748
10.691 COVID-19 - Good Neighbor Authority - 177 177
10.902 Soil and Water Conservation 2,000 10,167 12,167
10.904 Watershed Protection and Flood Prevention 10,456 - 10,456
10.912 Environmental Quality Incentives Program 17,390 7,677 25,068
10.914 Wildlife Habitat Incentive Program - 42,097 42,097
SNAP Cluster
10.551 Supplemental Nutrition Assistance Program - 374,133,544 374,133,544 *
State Administrative Matching Grants for the Supplemental Nutrition Assistance
10.561 Program 3,538,834 13,916,307 17,455,141 *
SNAP Cluster Total 3,538,834 388,049,851 391,588,685
Food Distribution Cluster
10.565 Commodity Supplemental Food Program 4,088,064 42,837 4,130,901
10.568 Emergency Food Assistance Program (Administrative Costs) 484,745 243,536 728,281
10.568 COVID-19 - Emergency Food Assistance Program (Administrative Costs) 883,314 13,983 897,298
10.569 Emergency Food Assistance Program (Food Commodities) 7,984,580 - 7,984,580
Food Distribution Cluster Total 13,440,703 300,357 13,741,060
Child Nutrition Cluster
10.555 National School Lunch Program 342,349 5,249,869 5,592,217
10.555 COVID-19 - National School Lunch Program 4,027,786 - 4,027,786
10.559 Summer Food Service Program for Children 67,721,570 568,585 68,290,155
10.579 Child Nutrition Discretionary Grants Limited Availability 82,361 - 82,361
Child Nutrition Cluster Total 72,174,066 5,818,453 77,992,519
Department of Agriculture Total 106,519,040 414,690,164 521,209,204
Department of Commerce
11.407 Interjurisdictional Fisheries Act of 1986 - 180,269 180,269
5
11.417 Sea Grant Support - 16,715 16,715
11.419 Coastal Zone Management Administration Awards 324,537 2,439,907 2,764,445
11.454 Unallied Management Projects - 7,061 7,061
11.472 Unallied Science Program 157,184 1,270,767 1,427,951
6
11.473 Office for Coastal Management 29,101 42,511 71,613
7
11.474 Atlantic Coastal Fisheries Cooperative Management Act - 1,062,990 1,062,990
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-3 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
11.549 State and Local Implementation Grant Program - 140,790 140,790
Economic Development Cluster
11.307 Economic Adjustment Assistance - 91,690 91,690
Economic Development Cluster Total - 91,690 91,690
Department of Commerce Total 510,823 5,252,699 5,763,522
Department of Defense
State Memorandum of Agreement Program for the Reimbursement of Technical
12.113 Services - 432,892 432,892
12.400 Military Construction, National Guard - 8,374,700 8,374,700
12.401 National Guard Military Operations and Maintenance (O&M) Projects - 24,371,193 24,371,193
Department of Defense Total - 33,178,785 33,178,785
Department of Housing And Urban Development
14.171 Manufactured Home Dispute Resolution - 20,681 20,681
Community Development Block Grants/State's program and Non-Entitlement Grants in
14.228 Hawaii 9,797,890 294,048 10,091,938
COVID-19 - Community Development Block Grants/State's program and Non-
14.228 Entitlement Grants in Hawaii 8,349,121 128,462 8,477,583
14.267 Continuum of Care Program 7,494,277 - 7,494,277
14.401 Fair Housing Assistance Program State and Local - 215,225 215,225
Department of Housing And Urban Development Total 25,641,288 658,417 26,299,705
Department of the Interior
15.608 Fish and Wildlife Management Assistance 74,963 3,427 78,390
15.614 Coastal Wetlands Planning, Protection and Restoration 64,674 2,373 67,047
15.615 Cooperative Endangered Species Conservation Fund - 55,242 55,242
15.616 Clean Vessel Act 307,108 75,309 382,418
15.622 Sportfishing and Boating Safety Act - 53,365 53,365
15.634 State Wildlife Grants 6,063 709,514 715,577
15.657 Endangered Species Conservation – Recovery Implementation Funds - 42,640 42,640
2
15.663 National Fish and Wildlife Foundation 45,442 8,648 54,090
15.676 Youth Engagement, Education, and Employment - 3,751 3,751
15.810 National Cooperative Geologic Mapping - 194,598 194,598
15.810 COVID-19 - National Cooperative Geologic Mapping - 281 281
15.817 National Geospatial Program: Building The National Map - 355,510 355,510
15.904 Historic Preservation Fund Grants-In-Aid 100,124 610,658 710,782
15.916 Outdoor Recreation Acquisition, Development and Planning 398,738 - 398,738
15.925 National Maritime Heritage Grants 3,386 6,250 9,636
3
15.931 Conservation Activities by Youth Service Organizations - 6,528 6,528
15.980 National Ground-Water Monitoring Network - 73,623 73,623
Fish and Wildlife Cluster
15.605 Sport Fish Restoration 27,065 3,732,848 3,759,913
15.611 Wildlife Restoration and Basic Hunter Education 99,792 7,377,398 7,477,191
Fish and Wildlife Cluster Total 126,858 11,110,246 11,237,104
Department of the Interior Total 1,127,356 13,311,964 14,439,320
Department of Justice
16.017 Sexual Assault Services Formula Program 180,495 23,587 204,081
16.034 Coronavirus Emergency Supplemental Funding Program - 6,403 6,403
16.034 COVID-19 - Coronavirus Emergency Supplemental Funding Program 179,881 377,036 556,917
16.540 Juvenile Justice and Delinquency Prevention 100,089 142,014 242,103
16.543 Missing Children's Assistance - 323,836 323,836
16.544 Youth Gang Prevention - 30,332 30,332
16.554 National Criminal History Improvement Program (NCHIP) - 332,978 332,978
16.575 Crime Victim Assistance 7,909,204 555,547 8,464,751
16.576 Crime Victim Compensation - 193,878 193,878
16.585 Drug Court Discretionary Grant Program - 4,717 4,717
16.588 Violence Against Women Formula Grants 739,293 128,629 867,922
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-4 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
4
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program - 485 485
16.593 Residential Substance Abuse Treatment for State Prisoners 724 18,756 19,480
16.606 State Criminal Alien Assistance Program - 60,904 60,904
16.609 Project Safe Neighborhoods 5,308 6,710 12,018
16.710 Public Safety Partnership and Community Policing Grants - 304,669 304,669
16.738 Edward Byrne Memorial Justice Assistance Grant Program 213,119 509,193 722,312
16.741 DNA Backlog Reduction Program - 406,015 406,015
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program - 225,902 225,902
16.745 Criminal and Juvenile Justice and Mental Health Collaboration Program - 58,760 58,760
16.812 Second Chance Act Reentry Initiative 252,046 - 252,046
16.816 John R. Justice Prosecutors and Defenders Incentive Act - 32,734 32,734
16.922 Equitable Sharing Program - 59,335 59,335
Department of Justice Total 9,580,158 3,802,419 13,382,577
Department of Labor
17.002 Labor Force Statistics - 1,073,969 1,073,969
17.005 Compensation and Working Conditions - 142,226 142,226
17.225 Unemployment Insurance - 323,128,139 323,128,139 *
17.225 COVID-19 - Unemployment Insurance - 1,036,454,302 1,036,454,302 *
17.235 Senior Community Service Employment Program 284 21,239 21,523
17.245 Trade Adjustment Assistance - 693,263 693,263
17.261 WIA/WIOA Pilots, Demonstrations, and Research Projects - 322,730 322,730
17.271 Work Opportunity Tax Credit Program (WOTC) - 113,584 113,584
17.273 Temporary Labor Certification for Foreign Workers - 171,438 171,438
17.277 WIOA National Dislocated Worker Grants / WIA National Emergency Grants 2,393,426 144,101 2,537,527
17.285 Apprenticeship USA Grants - 226,712 226,712
17.503 Occupational Safety and Health State Program - 586,165 586,165
17.504 Consultation Agreements - 694,893 694,893
17.600 Mine Health and Safety Grants - 96,449 96,449
WIOA Cluster
17.258 WIA/WIOA Adult Program 2,123,839 245,427 2,369,265
17.259 WIA/WIOA Youth Activities 1,935,624 471,378 2,407,002
17.278 WIA/WIOA Dislocated Worker Formula Grants 1,865,929 1,076,919 2,942,848
WIOA Cluster Total 5,925,392 1,793,723 7,719,116
Employment Service Cluster
17.207 Employment Service/Wagner-Peyser Funded Activities - 3,333,016 3,333,016
17.801 Disabled Veterans' Outreach Program (DVOP) - 499,386 499,386
17.804 Local Veterans' Employment Representative Program - 356,255 356,255
Employment Service Cluster Total - 4,188,657 4,188,657
Department of Labor Total 8,319,102 1,369,851,590 1,378,170,692
Department of Transportation
20.106 Airport Improvement Program - 573,412 573,412
20.106 COVID-19 - Airport Improvement Program - 69,000 69,000
Metropolitan Transportation Planning and State and Non-Metropolitan Planning and
20.505 Research 2,282 107,541 109,824
20.509 Formula Grants for Rural Areas 1,062,923 329,062 1,391,985
20.509 COVID-19 - Formula Grants for Rural Areas 13,892,139 1,000,000 14,892,139
20.530 Public Transportation Innovation 37,957 - 37,957
20.614 National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants - 47,503 47,503
20.615 E-911 Grant Program - 150,310 150,310
20.700 Pipeline Safety Program State Base Grant - 444,264 444,264
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants 160,128 - 160,128
20.721 PHMSA Pipeline Safety Program One Call Grant - 46,738 46,738
20.933 National Infrastructure Investments - 318,516 318,516
20.934 Nationally Significant Freight and Highway Projects - 3,135,061 3,135,061
Transit Services Programs Cluster
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities 318,968 1,044,001 1,362,969
Transit Services Programs Cluster Total 318,968 1,044,001 1,362,969
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-5 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
Highway Safety Cluster
20.600 State and Community Highway Safety 341,663 794,701 1,136,364
20.616 National Priority Safety Programs 493,752 2,509,450 3,003,201
Highway Safety Cluster Total 835,415 3,304,150 4,139,565
Highway Planning and Construction Cluster
20.205 Highway Planning and Construction - 240,400,926 240,400,926
20.205 COVID-19 - Highway Planning and Construction - 14,637,520 14,637,520
20.219 Recreational Trails Program 480,843 70,898 551,741
Highway Planning and Construction Cluster Total 480,843 255,109,344 255,590,186
Federal Transit Cluster
20.500 Federal Transit Capital Investment Grants - 2,184,642 2,184,642
20.507 Federal Transit Formula Grants 393,785 - 393,785
20.507 COVID-19 - Federal Transit Formula Grants 4,090,587 - 4,090,587
20.526 Bus and Bus Facilities Formula Program 1,307,141 509,095 1,816,236
Federal Transit Cluster Total 5,791,513 2,693,737 8,485,250
Federal Motor Carrier Safety Assistance Cluster
20.218 Motor Carrier Safety Assistance - 1,510,491 1,510,491
Motor Carrier Safety Assistance High Priority Activities Grants and Cooperative
20.237 Agreements - 939,152 939,152
Federal Motor Carrier Safety Assistance Cluster Total - 2,449,643 2,449,643
Department of Transportation Total 22,582,169 270,822,281 293,404,450
Department of the Treasury
21.016 Equitable Sharing - 264,856 264,856
21.019 COVID-19 - Coronavirus Relief Fund 564,001,042 206,447,549 770,448,591 *
21.023 COVID-19 - Emergency Rental Assistance Program 66,700,000 - 66,700,000 *
21.U01 NAEP Grant - 109,673 109,673
Department of the Treasury Total 630,701,042 206,822,078 837,523,121
Equal Employment Opportunity Commission
30.001 Employment Discrimination Title VII of the Civil Rights Act of 1964 - 272,574 272,574
Equal Employment Opportunity Commission Total - 272,574 272,574
Institute Of Museum And Library Services
45.310 Grants to States 26,000 1,949,391 1,975,391
Institute Of Museum And Library Services Total 26,000 1,949,391 1,975,391
National Endowment For The Arts
45.025 Promotion of the Arts Partnership Agreements 668,710 238,612 907,322
45.025 COVID-19 - Promotion of the Arts Partnership Agreements 388,600 - 388,600
National Endowment For The Arts Total 1,057,310 238,612 1,295,922
National Endowment For The Humanities
45.149 Promotion of the Humanities Division of Preservation and Access - 87,630 87,630
National Endowment For The Humanities Total - 87,630 87,630
National Science Foundation
8
47.050 Geosciences - 626 626
National Science Foundation Total - 626 626
Department of Veterans Affairs
64.203 Veterans Cemetery Grants Program - 1,337,886 1,337,886
64.U01 Veterans Affairs - 125,862 125,862
Department of Veterans Affairs Total - 1,463,748 1,463,748
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-6 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
Environmental Protection Agency
66.032 State Indoor Radon Grants - 14,468 14,468
Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose
66.034 Activities Relating to the Clean Air Act - 274,667 274,667
66.040 State Clean Diesel Grant Program 490,181 81,666 571,847
66.204 Multipurpose Grants to States and Tribes - 1,790 1,790
66.432 State Public Water System Supervision - 940,321 940,321
66.444 Lead Testing in School and Child Care Program Drinking Water - 121,837 121,837
66.454 Water Quality Management Planning 48,832 73,476 122,307
66.461 Regional Wetland Program Development Grants - 138,047 138,047
66.472 Beach Monitoring and Notification Program Implementation Grants - 224,695 224,695
66.605 Performance Partnership Grants 745,715 6,613,528 7,359,243
66.608 Environmental Information Exchange Network Grant Program and Related Assistance - 27,732 27,732
Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative
66.802 Agreements - 88,474 88,474
66.804 Underground Storage Tank Prevention, Detection and Compliance Program - 326,934 326,934
66.805 Leaking Underground Storage Tank Trust Fund Corrective Action Program - 538,233 538,233
66.809 Superfund State and Indian Tribe Core Program Cooperative Agreements - 119,931 119,931
66.817 State and Tribal Response Program Grants - 680,451 680,451
66.818 Brownfields Assessment and Cleanup Cooperative Agreements 213,979 16,509 230,488
Drinking Water State Revolving Fund Cluster
66.468 Capitalization Grants for Drinking Water State Revolving Funds - 1,542,084 1,542,084
Drinking Water State Revolving Fund Cluster Total - 1,542,084 1,542,084
Environmental Protection Agency Total 1,498,706 11,824,841 13,323,548
Department of Energy
81.041 State Energy Program - 481,700 481,700
81.138 State Heating Oil and Propane Program - 12,901 12,901
Department of Energy Total - 494,601 494,601
Department of Education
84.002 Adult Education - Basic Grants to States 1,567,161 353,663 1,920,824
84.010 Title I Grants to Local Educational Agencies 48,037,979 619,412 48,657,391 *
84.011 Migrant Education State Grant Program 808,233 129,261 937,494
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth - 33,790 33,790
84.048 Career and Technical Education -- Basic Grants to States 5,762,237 671,911 6,434,148
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States - 297,637 297,637
84.126A Rehabilitation Services Vocational Rehabilitation Grants to States - 11,237,332 11,237,332
84.126B Rehabilitation Services Vocational Rehabilitation Grants to States - 2,268,777 2,268,777
84.144 Migrant Education Coordination Program 11,406 20,088 31,494
84.161 Rehabilitation Services Client Assistance Program - 502 502
84.177 Rehabilitation Services Independent Living Services for Older Individuals Who are Blind - 336,769 336,769
School Safety National Activities (formerly, Safe and Drug-Free Schools and
84.184 Communities-National Programs) 169 1,033,363 1,033,532
84.196 Education for Homeless Children and Youth 411,060 80,911 491,971
84.245 COVID-19 - Tribally Controlled Postsecondary Career and Technical Institutions - 51,604 51,604
84.287 Twenty-First Century Community Learning Centers 4,311,756 234,494 4,546,249
84.358 Rural Education 1,175,922 26,842 1,202,764
84.365 English Language Acquisition State Grants 567,194 - 567,194
Supporting Effective Instruction State Grant (formerly Improving Teacher Quality State
84.367 Grants) 9,303,688 107,629 9,411,317
84.369 Grants for State Assessments and Related Activities - 1,525,309 1,525,309
84.372 Statewide Longitudinal Data Systems - 468,311 468,311
84.377 School Improvement Grants 32,663 278,912 311,575
84.421 Disability Innovation Fund (DIF) 1,382,717 354,651 1,737,368
84.424 Student Support and Academic Enrichment Program 4,984,668 838,011 5,822,679
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-7 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
84.425B COVID-19 - Education Stabilization Fund - Rethink K-12 Education Models - 139,559 139,559 *
84.425C COVID-19 - Education Stabilization Fund - Governor's Emergency Education Relief Fund 14,700 5,609,276 5,623,976 *
COVID-19 - Education Stabilization Fund - Elementary and Secondary School Emergency
84.425D Relief Fund 17,066,924 1,774,218 18,841,143 *
84.425R COVID-19 - Education Stabilization Fund - Emergency Assistance Non-Public Schools - 1,781 1,781 *
84.426 Randolph-Sheppard - Financial Relief and Restoration Payments - 3,504 3,504
Special Education Cluster (IDEA)
84.027 Special Education Grants to States 42,983,422 4,452,941 47,436,363
84.173 Special Education Preschool Grants 1,302,859 3,406 1,306,266
Special Education Cluster (IDEA) Total 44,286,281 4,456,347 48,742,628
Department of Education Total 139,724,759 32,953,862 172,678,621
National Archives And Records Administration
89.003 National Historical Publications and Records Grants - 30,333 30,333
National Archives And Records Administration Total - 30,333 30,333
U.S. Election Assistance Commission
90.404 2018 HAVA Election Security Grants - 89,951 89,951
90.404 COVID-19 - 2018 HAVA Election Security Grants - 939,511 939,511
U.S. Election Assistance Commission Total - 1,029,462 1,029,462
Northern Border Regional Commission
9
90.601 Northern Border Regional Development 26,049 186,076 212,125
Northern Border Regional Commission Total 26,049 186,076 212,125
Department of Health And Human Services
Special Programs for the Aging Title VII, Chapter 3 Programs for Prevention of Elder
93.041 Abuse, Neglect, and Exploitation 19,071 1,210 20,281
Special Programs for the Aging Title VII, Chapter 2 Long Term Care Ombudsman
93.042 Services for Older Individuals 68,749 - 68,749
COVID-19 - Special Programs for the Aging Title VII, Chapter 2 Long Term Care
93.042 Ombudsman Services for Older Individuals - 78,680 78,680
Special Programs for the Aging Title III, Part D Disease Prevention and Health Promotion
93.043 Services 97,676 - 97,676
93.048 Special Programs for the Aging Title IV and Title II Discretionary Projects 222,936 28,066 251,002
93.048 COVID-19 - Special Programs for the Aging Title IVand Title II Discretionary Projects - 183,726 183,726
93.052 National Family Caregiver Support, Title III, Part E 690,123 - 690,123
93.052 COVID-19 - National Family Caregiver Support, Title III, Part E 303,575 - 303,575
93.069 Public Health Emergency Preparedness - 4,909,551 4,909,551
93.070 Environmental Public Health and Emergency Response - 1,262,218 1,262,218
93.071 Medicare Enrollment Assistance Program 170,339 41,933 212,272
Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness
93.074 (PHEP) Aligned Cooperative Agreements - 112,906 112,906
Cooperative Agreements to Promote Adolescent Health through School-Based HIV/STD
93.079 Prevention and School-Based Surveillance - 32,242 32,242
93.090 Guardianship Assistance - 663,315 663,315
93.090 COVID-19 - Guardianship Assistance - 63,755 63,755
93.092 Affordable Care Act (ACA) Personal Responsibility Education Program - 203,562 203,562
93.103 Food and Drug Administration Research - 408,319 408,319
Comprehensive Community Mental Health Services for Children with Serious Emotional
93.104 Disturbances (SED) - 548,623 548,623
93.110 Maternal and Child Health Federal Consolidated Programs - 412,915 412,915
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs - 250,121 250,121
93.127 Emergency Medical Services for Children - 122,208 122,208
Cooperative Agreements to States/Territories for the Coordination and Development of
93.130 Primary Care Offices - 183,865 183,865
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-8 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
93.136 Injury Prevention and Control Research and State and Community Based Programs 800,029 2,674,244 3,474,273
COVID-19 - Injury Prevention and Control Research and State and Community Based
93.136 Programs - 12,969 12,969
93.137 Community Programs to Improve Minority Health Grant Program 8,012 34,305 42,316
93.150 Projects for Assistance in Transition from Homelessness (PATH) 299,302 19,874 319,176
93.165 Grants to States for Loan Repayment Program - 170,000 170,000
Childhood Lead Poisoning Prevention Projects State and Local Childhood Lead
93.197 Poisoning Prevention and Surveillance of Blood Lead Levels in Children - 496,411 496,411
93.234 Traumatic Brain Injury State Demonstration Grant Program - 70,863 70,863
93.241 State Rural Hospital Flexibility Program - 301,656 301,656
Substance Abuse and Mental Health Services Projects of Regional and National
93.243 Significance 706,714 1,431,442 2,138,155
93.268 Immunization Cooperative Agreements - 18,295,509 18,295,509 *
93.268 COVID-19 - Immunization Cooperative Agreements 264,488 541,895 806,383 *
93.270 Adult Viral Hepatitis Prevention and Control - 68,091 68,091
93.301 Small Rural Hospital Improvement Grant Program - 286,223 286,223
93.301 COVID-19 - Small Rural Hospital Improvement Grant Program - 1,433,389 1,433,389
93.305 National State Based Tobacco Control Programs - 44,723 44,723
Early Hearing Detection and Intervention Information System (EHDI-IS) Surveillance
93.314 Program - 136,341 136,341
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) - 1,767,483 1,767,483 *
93.323 COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 7,863,861 17,981,945 25,845,806 *
93.324 State Health Insurance Assistance Program 363,141 83,107 446,248
The Healthy Brain Initiative: Technical Assistance to Implement Public Health Actions
related to Cognitive Health, Cognitive Impairment, and Caregiving at the State and Local
93.334 Levels - 9,806 9,806
93.336 Behavioral Risk Factor Surveillance System - 267,984 267,984
COVID-19 - Public Health Emergency Response: Cooperative Agreement for Emergency
93.354 Response: Public Health Crisis Response - 2,157,855 2,157,855
93.369 ACL Independent Living State Grants 396,705 15,261 411,966
93.387 National and State Tobacco Control Program 28,070 809,741 837,811
93.426 Improving the Prevention and Management of Diabetes and Cardiovascular Disease - 1,576,421 1,576,421
93.434 Preschool Development Grants - 239,727 239,727
93.464 ACL Assistive Technology 129,796 166,614 296,410
93.471 Title IV-E Kinship Navigator Program 227,034 - 227,034
The Affordable Care Act: Building Epidemiology, Laboratory, and Health Information
Systems Capacity in the Epidemiology and Laboratory Capacity for Infectious Disease
93.521 (ELC) and Emerging Infections Program (EIP) Cooperative Agreements; PPHF - 350 350
93.556 Promoting Safe and Stable Families 542,608 479,902 1,022,510
93.558 Temporary Assistance for Needy Families 32,831,760 46,685,890 79,517,650 *
93.563 Child Support Enforcement - 20,306,556 20,306,556
93.569 Community Services Block Grant 4,166,095 187,729 4,353,825
93.569 COVID-19 - Community Services Block Grant 1,098,103 81,636 1,179,739
93.586 State Court Improvement Program - 255,033 255,033
93.597 Grants to States for Access and Visitation Programs - 85,671 85,671
93.599 Chafee Education and Training Vouchers Program (ETV) - 86,047 86,047
93.603 Adoption and Legal Guardianship Incentive Payments 72,058 413,405 485,463
93.630 Developmental Disabilities Basic Support and Advocacy Grants 645,434 - 645,434
93.643 Children's Justice Grants to States 14,016 24,020 38,037
93.645 Stephanie Tubbs Jones Child Welfare Services Program 194,238 905,039 1,099,277
93.645 COVID-19 - Stephanie Tubbs Jones Child Welfare Services Program - 32,104 32,104
93.658 Foster Care Title IV-E 36,429 29,173,248 29,209,677
93.658 COVID-19 - Foster CareTitle IV-E - 486,419 486,419
93.659 Adoption Assistance - 22,525,400 22,525,400
93.659 COVID-19 - Adoption Assistance - 1,892,106 1,892,106
Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment
93.664 (SUPPORT) for Patients and Communities Act - 498,900 498,900
COVID-19 - Emergency Grants to Address Mental and Substance Use Discorders During
93.665 COVID-19 - 46,731 46,731
93.667 Social Services Block Grant 5,671,949 7,992,789 13,664,738
93.669 Child Abuse and Neglect State Grants 800 121,746 122,546
See accompanying Notes to the Schedule of Expenditures of Federal Awards D-9 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
Family Violence Prevention and Services/Domestic Violence Shelter and Supportive
93.671 Services 760,443 19,450 779,893
COVID-19 - Family Violence Prevention and Services/Domestic Violence Shelter and
93.671 Supportive Services - 137,709 137,709
93.674 Chafee Foster Care Independence Program 133,464 373,465 506,929
93.674 COVID-19 - Chafee Foster Care Independence Program - 248,967 248,967
93.687 Maternal Opioid Misuse ModelMaine Maternal Opioid Model (MaineMOM) - 489,627 489,627
State Public Health Approaches for Ensuring Quitline Capacity – Funded in part by
93.735 Prevention and Public Health Funds (PPHF) - 59,720 59,720
93.747 Elder Abuse Prevention Interventions Program - 287,789 287,789
93.747 COVID-19 - Elder Abuse Prevention Interventions Program - 389 389
93.767 Children's Health Insurance Program - 32,541,769 32,541,769 *
93.767 COVID-19 - Children's Health Insurance Program - 1,891,836 1,891,836 *
93.788 Opioid STR 5,385,911 1,229,540 6,615,452
93.800 Organized Approaches to Increase Colorectal Cancer Screening - 174,859 174,859
93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities - 332 332
93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program 5,266,185 301,425 5,567,610
93.889 National Bioterrorism Hospital Preparedness Program - 619,537 619,537
93.889 COVID-19 - National Bioterrorism Hospital Preparedness Program - 341,895 341,895
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations - 1,640,476 1,640,476
93.913 Grants to States for Operation of State Offices of Rural Health - 157,594 157,594
93.917 HIV Care Formula Grants 146,768 1,934,299 2,081,067
93.917 COVID-19 - HIV Care Formula Grants - 77,395 77,395
93.940 HIV Prevention Activities Health Department Based 314,921 564,452 879,373
Human Immunodeficiency Virus (HIV)/Acquired Immunodeficiency Virus Syndrome
93.944 (AIDS) Surveillance - 239,870 239,870
Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health
93.946 Initiative Programs - 169,967 169,967
93.958 Block Grants for Community Mental Health Services 3,720,531 346,943 4,067,475
93.959 Block Grants for Prevention and Treatment of Substance Abuse 5,882,765 2,045,515 7,928,280
93.977 Preventive Health Services Sexually Transmitted Diseases Control Grants 54,660 95,031 149,691
93.982 Mental Health Disaster Assistance and Emergency Mental Health - 1,567,394 1,567,394
93.991 Preventive Health and Health Services Block Grant 36,764 1,307,282 1,344,047
93.994 Maternal and Child Health Services Block Grant to the States 25,000 3,121,779 3,146,779
Medicaid Cluster
93.775 State Medicaid Fraud Control Units - 905,797 905,797 *
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII)
93.777 Medicare - 3,830,114 3,830,114 *
COVID-19 - State Survey and Certification of Health Care Providers and Suppliers (Title
93.777 XVIII) Medicare - 509,139 509,139 *
93.778 Medical Assistance Program - 2,370,386,193 2,370,386,193 *
93.778 COVID-19 - Medical Assistance Program - 176,804,425 176,804,425 *
Medicaid Cluster Total - 2,552,435,669 2,552,435,669
Head Start Cluster
93.600 Head Start - 130,431 130,431
Head Start Cluster Total - 130,431 130,431
CCDF Cluster
93.575 Child Care and Development Block Grant 108,040 28,600,029 28,708,069
93.575 COVID-19 - Child Care and Development Block Grant - 12,084,299 12,084,299
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund - 5,956,976 5,956,976
CCDF Cluster Total 108,040 46,641,304 46,749,344
Aging Cluster
Special Programs for the Aging Title III, Part B Grants for Supportive Services and Senior
93.044 Centers 1,668,913 507,016 2,175,929
COVID-19 - Special Programs for the Aging Title III, Part B Grants for Supportive Services
93.044 and Senior Centers 609,437 - 609,437
93.045 Special Programs for the Aging Title III, Part C Nutrition Services 2,218,740 - 2,218,740
93.045 COVID-19 - Special Programs for the Aging Title III, Part C Nutrition Services 1,754,360 - 1,754,360
93.053 Nutrition Services Incentive Program 612,595 - 612,595
Aging Cluster Total 6,864,046 507,016 7,371,061
Department of Health And Human Services Total 86,632,612 2,844,582,539 2,931,215,151
See accompanying Notes to the Schedule of Expenditures of Federal Awards D - 10 Asterisks indicate audited programs *
STATE OF MAINE
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Federal Agency
Amounts
Provided to Direct
ALN Clusters and Program Titles Subrecipients** Expenditures ALN Total
Corporation For National And Community Service
94.003 State Commissions - 258,306 258,306
94.006 AmeriCorps 1,147,194 278,937 1,426,131
94.008 Commision Investment Fund - 224,312 224,312
94.021 Volunteer Generation Fund 191,424 75,321 266,745
Corporation For National And Community Service Total 1,338,618 836,876 2,175,494
Social Security Administration
Disability Insurance/SSI Cluster
96.001 Social Security Disability Insurance - 7,675,678 7,675,678
Disability Insurance/SSI Cluster Total - 7,675,678 7,675,678
Social Security Administration Total - 7,675,678 7,675,678
Department of Homeland Security
97.008 Non-Profit Security Program 910 - 910
97.012 Boating Safety Financial Assistance - 999,850 999,850
97.032 Crisis Counseling - 614,995 614,995
97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) 294,048 12,013 306,061 *
97.036 COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) 19,567,237 20,017,273 39,584,510 *
97.039 Hazard Mitigation Grant 75,873 4,702 80,575
97.041 National Dam Safety Program - 70,674 70,674
97.042 Emergency Management Performance Grants 2,128,725 1,408,865 3,537,590
97.045 Cooperating Technical Partners - 160,198 160,198
97.047 Pre-Disaster Mitigation 73,004 - 73,004
COVID - 19 Presidential Declared Disaster Assistance to Individuals and Households -
97.050 Other Needs - 106,951,944 106,951,944 *
97.067 Homeland Security Grant Program 3,254,947 6,554,498 9,809,445
Department of Homeland Security Total 25,394,744 136,795,011 162,189,756
-
-
Total Federal Expenditures 1,060,679,777 5,358,812,259 6,419,492,035
**Amounts Provided to Subrecipients may include non-cash distributions of food commodities or other donated items.
1
10.215 University Of Vermont
2
15.663 National Fish & Wildlife Foundation
3
15.931 Appalachian Trail Commission
4
16.590 Cumberland County
5
11.417 Atlantic Offshore Lobstermen'S Assocation
6
11.473 The Nature Conservancy
7
11.474 Atlantic State Marine Fisheries Commission
8
47.050 Hood College
9
90.601 Northern Border Regional Commission
See accompanying Notes to the Schedule of Expenditures of Federal Awards D - 11 Asterisks indicate audited programs *
STATE OF MAINE
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2021
Purpose of the Schedule
The accompanying Schedule of Expenditures of Federal Awards (Schedule) is a supplementary schedule
to the State’s basic financial statements (BFS) and is presented for purposes of additional analysis. Total
expenditures for each federal financial assistance program as identified by the Assistance Listing Number
(ALN) are shown. Federal financial assistance programs, which have not been assigned a ALN number,
have been identified using the two-digit federal agency number and a suffix containing a “U”. Federal
award amounts aggregated by federal agency, direct and pass-through amounts are reported by the
primary recipient to prevent overstatement of expenditures of federal awards. This schedule is required
by Title 2 U.S. Code of Federal Regulations §200, Uniform Administrative Requirements Cost Principles
and Audit Requirements for Federal Awards (Uniform Guidance).
1. Significant Accounting Policies
A. Reporting Entity – The reporting entity is defined in Note 1 to the BFS. The accompanying
Schedule includes all federal financial assistance programs of the State of Maine reporting entity
for the fiscal year ended June 30, 2021, with the exception of the discrete component units
identified in Note 1 to the BFS. The discrete component units engaged other auditors.
B. Basis of Presentation – The information in the accompanying Schedule of Expenditures of
Federal Awards is presented in accordance with the Uniform Guidance.
1) Federal Awards – A federal award is defined by the Uniform Guidance as federal
financial assistance and federal cost-reimbursement contracts that non-federal agencies
receive directly or indirectly from federal agencies or pass-through entities. Federal
financial assistance is defined as assistance that non-federal entities receive or administer
in the form of grants, loans, loan guarantees, property, cooperative agreements, interest
subsidies, insurance, food commodities, direct appropriations and other assistance.
Accordingly, non-cash federal assistance is included in federal financial assistance and,
therefore, is reported on the Schedule of Expenditures of Federal Awards. Federal
financial assistance does not include direct federal cash assistance to individuals.
2) Type A and Type B Programs – Levels of expenditures to be used in defining Type A
and Type B federal financial assistance programs are specified by the Uniform Guidance.
Type A programs for the State of Maine are those programs that equal or exceed $19.3
million in expenditures, distributions, or issuances for the year ended June 30, 2021.
Programs audited as major programs are marked with asterisks in the accompanying
schedule.
C. Basis of Accounting – The information presented in the Schedule of Expenditures of Federal
Awards is presented primarily on the cash basis of accounting, which is consistent with the other
Federal grant reports. The fund level financial statements are reported on the modified accrual
basis of accounting. Consequently, the schedule’s data may not be directly traceable to the
financial statements.
D-12
2. Indirect Costs
The State of Maine did not elect to use the 10% de minimis indirect cost rate with the exception
of the following program:
20.700 Pipeline Safety Program State Base Grant
3. Unemployment Insurance Program
The expenditures reported on the Schedule for Unemployment Insurance (ALN 17.225) include:
State Funds $ 273,117,051
Federal Funds 1,086,465,390
ALN 17.225 Total 1,359,582,441
Subsidy from ALN 21.019
Coronavirus Relief Fund 56,743,390
Maine’s UI Program Total $ 1,416,325,831
4. Supplemental Nutrition Assistance Program
In response to the COVID-19 pandemic, the Supplemental Nutrition Assistance Program (SNAP,
ALN 10.551) issued emergency allotment benefits. However, the State of Maine is unable to
identify the amount of emergency allotment expenditures. Therefore, emergency allotment
expenditures are included in regular SNAP expenditures on the Schedule of Expenditures of
Federal Awards.
5. Noncash Awards
The State of Maine is the recipient of federal financial assistance programs that do not result in
cash receipts or disbursements. Noncash awards received by the State are included in the
Schedule of Expenditures of Federal Awards as follows:
Noncash
ALN Assistance Listing Awards
10.551 SNAP (Supplemental Nutrition Assistance Program) $374,133,544
10.555 National School Lunch Program $5,146,881
10.565 Commodity Supplemental Food Program $3,375,044
10.569 Emergency Food Assistance Program $7,984,580
10.664 Cooperative Forestry Assistance $437,567
10.542 COVID-19 – Pandemic EBT Food Benefits $6,301,700
93.268 Immunization Grants $15,304,574
97.067 Homeland Security Grant Program $5,417,446
D-13
6. Donated Personal Protective Equipment
In response to the COVID 19 pandemic, the federal government donated PPE with an estimated
fair market value of $3,862,000 (rounded, per ACFR adjustment GOVG024) to the State of
Maine. Per the 2021 Compliance Supplement (page 8-VII-2), this amount is not included in the
Schedule of Expenditures of Federal Awards and is not subject to Audit. Therefore, this amount
is unaudited.
7. Disaster Grants – Public Assistance
After a Presidential-Declared Disaster, FEMA provides a Public Assistance Grant to reimburse
eligible costs associated with repair, replacement, or restoration of disaster-damaged facilities;
and costs associated with the State of Maine’s response to the COVID-19 public health
emergency. The federal government reimburses in the form of cost-shared grants which requires
state matching funds. For the year ended June 30, 2021, the amount included in the
accompanying schedule for Disaster Grants – Public Assistance (ALN 97.036) includes
$8,400,503 of approved eligible expenditures that were incurred in a prior year.
D-14
STATE OF MAINE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Section I – Summary of Auditor’s Results
E-1
E-2
SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements:
Type of auditor’s report issued: Unmodified
Internal control over financial reporting:
Material weaknesses identified? YES NO
Significant deficiencies identified that were not
considered to be material weaknesses? YES NO
Noncompliance material to financial statements
noted? YES NO
Federal Awards:
Internal control over major programs:
Material weaknesses identified? YES NO
Significant deficiencies identified that were not
considered to be material weaknesses? YES NO
Type of auditor’s report issued on compliance for major programs:
Unmodified
Coronavirus Relief Fund
Education Stabilization Fund (ESF)
Title I Grants to Local Educational Agencies
Qualified
Children’s Health Insurance Program (CHIP)
Disaster Grants – Public Assistance (Presidentially Declared Disasters)
Emergency Rental Assistance Program
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
Immunization Cooperative Agreements
Medicaid Cluster
Presidential Declared Disaster Assistance to Individuals and Households – Other Needs
SNAP Cluster
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
Temporary Assistance for Needy Families (TANF)
Unemployment Insurance (UI)
Any audit findings that are required to be reported in
accordance with Uniform Guidance, 2 CFR 200.516? YES NO
Clusters Identified as Major Programs:
ALN Name of Federal Program or Cluster
SNAP Cluster
10.551 Supplemental Nutrition Assistance Program
10.561 State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program
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Medicaid Cluster
93.775 State Medicaid Fraud Control Units
93.777 State Survey and Certification of Health Care Providers and Suppliers
(Title XVIII) Medicare
93.778 Medical Assistance Program
Other Major Programs:
10.557 Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC)
17.225 Unemployment Insurance (UI)
21.019 Coronavirus Relief Fund
21.023 Emergency Rental Assistance Program
84.010 Title I Grants to Local Educational Agencies
84.425 Education Stabilization Fund (ESF)
93.268 Immunization Cooperative Agreements
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases
(ELC)
93.558 Temporary Assistance for Needy Families (TANF)
93.767 Children’s Health Insurance Program (CHIP)
97.036 Disaster Grants – Public Assistance (Presidentially Declared
Disasters)
97.050 Presidential Declared Disaster Assistance to Individuals and
Households – Other Needs
Dollar threshold used to distinguish between type A and type B programs: $19,258,476
Does the auditee qualify as low risk? YES NO
Summary of Questioned Costs:
Federal Agency Federal Program Known Finding
Questioned Number
Costs
U.S. Department of Health and Temporary Assistance for $8,377 2021-040
Human Services Needy Families (TANF) $224 2021-045
Medicaid Cluster Undeterminable 2021-055
U.S. Department of Labor Unemployment Insurance (UI) $2,032,324 2021-021
U.S. Department of Treasury Coronavirus Relief Fund $27,169 2021-023
$4,867 2021-024
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STATE OF MAINE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Section II – Index to Financial Statement Findings
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E-6
State of Maine
Fiscal Year 2021
Index to Financial Statement Findings
Finding
Finding # Brief Summary of Finding Type Page
Internal control over lottery receivable reconciliations needs
2021-001 SD E-11
improvement
________ over ________ within the ________ system needs
2021-002 improvement (The content of this finding has been redacted. SD E-13
This appears as blank underlining)
Internal control over financial reporting of OFI overpayments
2021-003 SD E-14
needs improvement
Internal control over accounting for personal protective
2021-004 SD E-16
equipment inventory needs improvement
________ over the ________ system needs improvement (The
2021-005 content of this finding has been redacted. This appears as blank SD E-19
underlining)
________ over ________ and ________ for the ________
2021-006 system needs improvement (The content of this finding has SD E-20
been redacted. This appears as blank underlining)
________ over the ________ and ________ system needs
2021-007 improvement (The content of this finding has been redacted. SD E-21
This appears as blank underlining)
Internal control over the valuation of the allowance for
2021-008 uncollectible fines and fees for Judicial Branch receivables SD E-22
needs improvement
Internal control over financial reporting of unemployment
2021-009 SD E-24
insurance receivables needs improvement
________ over ________ and ________ for the ________
2021-010 system needs improvement (The content of this finding has SD E-27
been redacted. This appears as blank underlining)
________ over the ________ system needs improvement (The
2021-011 content of this finding has been redacted. This appears as blank MW E-28
underlining)
________ over the ________ system needs improvement (The
2021-012 content of this finding has been redacted. This appears as blank SD E-29
underlining)
________ over the Office of Information Technology’s
2021-013 ________ procedures needs improvement (The content of this SD E-30
finding has been redacted. This appears as blank underlining)
________ over ________ needs improvement (The content of
2021-014 this finding has been redacted. This appears as blank SD E-31
underlining)
Legend of Abbreviations:
MW Material Weakness
SD Significant Deficiency
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E-8
STATE OF MAINE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Section II – Financial Statement Findings
E-9
E-10
(2021-001)
Title: Internal control over lottery receivable reconciliations needs improvement
Prior Year Findings:
FY20
2020-002
State Department: Administrative and Financial Services
State Bureau: General Government Service Center
Type of Finding: Significant deficiency
Criteria: Governmental Accounting, Auditing, and Financial Reporting (GAAFR), Part 5,
Section A: Internal Control
The GAAFR states that sound internal control policies require general ledger accounts to be
supported by subsidiary accounts which are periodically reconciled both to internal and external
records.
Condition: The Maine State Liquor and Lottery Commission has a contract with a gaming vendor
to administer instant ticket and draw games. The General Government Service Center (GGSC)
relies on vendor reports to record revenue generated from the sale of tickets.
In fiscal year 2021, internal control was not in place to ensure that the overall balance of accounts
receivable recorded in the State’s general ledger reconciled to the contracted vendor’s report of
lottery accounts receivable by retail customer. There is an accumulated discrepancy within an
estimated range of $4 to $6 million. An accounts receivable reconciliation was not performed at
any point during fiscal year 2021. GGSC did not perform alternative procedures to corroborate
the valuation of the accounts receivable balance.
Context: According to the State’s financial records, as of June 30, 2021, the accounts receivable
balance for the State Lottery Fund was $36.2 million.
Cause: Subsidiary reports provided by the vendor require time-consuming manual manipulation
to ensure an accurate reconciliation.
Effect: Lack of timely reconciliations increase the risk that the State’s accounting records are
incomplete or inaccurate.
Recommendation: We recommend that GGSC continue to work with the vendor to provide
appropriately designed receivable reports in a timely manner. We further recommend that GGSC
establish procedures to ensure timely reconciliations of accounts receivable are performed until
such deliverables are satisfied.
Corrective Action Plan: See F-5
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Management’s Response: The Department agrees with this finding; however, we are unable, at
this point, to confirm or refute the accumulated discrepancy until the conclusion of the ongoing
engagement with our contractor. Due to the complexity of Lottery operations compounded by an
inability to hold regular meetings in person due to the pandemic, the engagement has been
extended. It is now planned that by March 31, 2022, a streamlined accounting process, an updated
current procedure manual and requisite training will be concluded. Processes will be in place to
provide a monthly reconciliation of Accounts Receivable by retailer.
Contact: Janre Mullins, Director, General Government Service Center, DAFS, 207-624-7399
(State Number: 21-0305-01)
E-12
(2021-002) Confidential finding, see below for more information
Title: ________ over ________ within the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings: None
State Department: Administrative and Financial Services
State Bureau: Office of the State Controller
Type of Finding: Significant deficiency
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-5
Management’s Response: ________
Contact: Kimberly Hall, ERP Business Systems Analyst, OSC, 207-626-8427
(State Number: 21-0901-01)
E-13
(2021-003)
Title: Internal control over financial reporting of OFI overpayments needs improvement
Prior Year Findings:
FY20
2020-005
State Department: Administrative and Financial Services (DAFS)
Health and Human Services (DHHS)
State Bureau: Office of the State Controller, a Unit of DAFS
Health and Human Services Service Center, a Unit of DAFS
Office for Family Independence, a Unit of DHHS
Type of Finding: Significant deficiency
Criteria: 45 CFR 75.426
Bad debts (debts which have been determined to be uncollectible), including losses (whether actual
or estimated) arising from uncollectible accounts and other claims, are unallowable.
Condition: The Office for Family Independence (OFI) tracks improper payments made to, or on
behalf of, clients in a subsidiary ledger. These payments, totaling $32 million in Federal and State
dollars at June 30, 2021 and dating back to 1983, are for services provided to Temporary
Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP)
clients. OFI provides the fiscal year end subsidiary ledger to the Office of the State Controller
(OSC) for financial reporting.
OSC records the overpayments made by the State for OFI client services as a receivable owed by
the client to whom the service was provided. The collectability of receivables is evaluated, and an
allowance is established based on that evaluation. At the end of fiscal year 2021, management
estimated that $25.7 million is uncollectible, with $23.7 million in the Federal Fund and $2 million
in the General Fund. The $23.7 million was recorded and disclosed as an allowance for
uncollectible accounts within the Federal Fund, and the related $23.7 million expense associated
with the allowance was also recorded in the Federal Fund. The related expense should have been
recorded in the General Fund since Federal funds cannot be used to pay for bad debts (debts which
have been determined to be uncollectible).
Context: Of the total $25.7 million management estimate of the allowance for uncollectible
accounts, $23.7 million was recorded in the Federal Fund and should have been recorded in the
General Fund.
Cause: Policies and procedures utilized by the Departments do not provide guidance over financial
reporting for identified overpayments (improper payments) made to OFI clients.
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Effect: In the State’s financial statements, an expenditure of $23.7 million is reported in the
Federal Fund and should be reported in the General Fund.
Recommendation: We recommend that the Department record the amount deemed uncollectible
from clients in the General Fund and that Federal dollars are not utilized for bad debts (debts which
have been determined to be uncollectible).
Corrective Action Plan: See F-6
Management’s Response: Management disagrees with this finding. The receivable balance in
question primarily originates from two Federal programs: Temporary Assistance for Needy
Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP).
The U.S. Department of Health and Human Services’ Office of Family Assistance provides
guidance on the recovery of overpayments for the TANF program. Program Instruction
TANF-ACF-PI-2006-03 (Collecting and Repaying Overpayments Made to Families under the Aid
to Families with Dependent Children (AFDC) Program and the Temporary Assistance for Needy
Families (TANF) Program) makes it clear that as of October 1, 1996 the collection of
overpayments should be utilized for program purposes. It is implicit in these same instructions that
no liability is created for the State for uncollected funds. It is for these reasons that recording a
general fund liability for TANF overpayments would be erroneous.
The recovery of overpayments for SNAP households is covered by 7 CFR 273.18 (a)(2). This CFR
specifies that claims against households, the action required to be established for the overpayment
of benefits, is specifically identified as a Federal debt. This proclamation would preclude the State
from recording this as a general fund liability.
In addition to the citations provided above, the Office of the State Controller requested and
received confirmation that supports our position that recording a liability is not necessary from the
Federal Office of Administration for Children and Families, and, the U.S. Department of
Agriculture for the TANF and SNAP programs, respectively.
Contact: Sandra Royce, Director of Financial Reporting, OSC, 207-626-8451
Auditor’s Concluding Remarks: This finding is over OSC’s reporting of bad debts (debts which
have been determined to be uncollectible). OSC has determined that $25.7 million is uncollectible.
OSC recorded the Federal portion ($23.7 million) of these bad debts as expenditures in the Federal
Fund, which is unallowable. Furthermore, Management’s Response does not address financial
reporting, rather, it erroneously focuses on improper payment recovery.
The finding remains as stated.
(State Number: 21-0203-02)
E-15
(2021-004)
Title: Internal control over accounting for personal protective equipment inventory needs
improvement
Prior Year Findings: None
State Department: Administrative and Financial Services (DAFS)
Health and Human Services (DHHS)
State Bureau: Office of the State Controller, a Unit of DAFS
General Government Service Center, a Unit of DAFS
Bureau of General Services, a Unit of DAFS
Maine Center for Disease Control & Prevention, a Unit of DHHS
Type of Finding: Significant deficiency
Criteria: 2 CFR 200.303; Governmental Accounting Standards Board (GASB) 62; State
Administrative and Accounting Manual (SAAM) 35.10
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
GASB 62 classifies inventory as a current asset and details the accounting for inventory
consumption and acceptable inventory valuation methods. For inventory purposes, cost may be
determined under any one of several assumptions regarding flow of cost factors such as average
cost; first-in, first-out (FIFO); and last-in, first-out (LIFO) and should be adjusted to the lower of
cost or market value when the utility of the goods is no longer commensurate with its cost.
Section 35.10 of the SAAM requires agencies to develop and implement policies to safeguard,
control, and account for inventories. This includes selecting an inventory valuation method;
planning, conducting and reconciling physical inventories with inventory records; and performing
other duties necessary to account for and report inventories. Consumable inventories on-hand
exceeding $25,000 must be physically counted, valued, and recorded in the general ledger.
Condition: As part of the State’s public health emergency response to the COVID-19 pandemic,
the State made several bulk purchases of personal protective equipment (PPE) in multiple
warehouses at various locations. These expenditures were funded by Disaster Grants – Public
Assistance and Coronavirus Relief Funds. At fiscal year-end, a majority of these purchases had
not been distributed to State agencies or local hospitals and clinics and remained on hand in the
warehouses.
Procedures for valuing and recording inventory in the State’s accounting system do not conform
with U.S. Generally Accepted Accounting Principles (GAAP) or the SAAM:
E-16
• An inventory valuation method has not been assigned (average cost, FIFO, or LIFO) to
inventory assets and an evaluation has not been made as to whether the inventory should
be presented at lower of cost or market value.
• Year-end physical inventory procedures were not documented and the auditor was unable
to obtain evidence that a year-end physical inventory was performed.
• On hand inventory was not recorded in the State’s accounting system during the year as a
current asset and the year-end value of those inventory assets was not reported to the Office
of the State Controller (OSC) until requested by the Office of the State Auditor.
• Year-end accounting entries recorded by OSC did not appropriately recognize revenues
and expenses of inventory sale transactions in the Internal Service Funds or year-end
inventory values in the Federal Fund.
Context: The State purchased approximately $34 million of PPE in fiscal year 2021 and $9 million
of PPE in fiscal year 2020 utilizing Federal funds. Inventory at June 30, 2021, was reported at
$26 million. In addition, the State received donated PPE valued at approximately $4 million in
fiscal year 2021, $1 million of which was held as inventory at June 30, 2021.
Cause:
• The emergency response to the COVID-19 pandemic was focused on acquiring and
distributing PPE as quickly as possible, not on accounting and valuing inventory on hand
for financial reporting purposes.
• Lack of procedures at OSC to ensure that the agency’s inventory management system was
adequate to produce required reports for assurance over year-end financial reporting.
Effect:
• Noncompliance with GAAP and State accounting policies
• Internal Service Fund expenses are understated by $13 million and revenues are
understated by $7 million.
• Federal Fund inventory is overstated by $7 million and expenses are understated by
$7 million.
• Potential increased risk of loss and waste of Federally-funded purchases
• Potential increased risk of error and fraud when receiving inventory
Recommendation: We recommend that OSC develop policies and procedures to ensure inventory
is appropriately valued and recorded in accordance with GAAP and the SAAM. Donated
inventory should be assigned a fair value upon receipt and accounted for in the same manner as
other inventory assets. We also recommend that warehouse personnel perform a comprehensive
year-end physical inventory count and maintain documentation of the results.
Corrective Action Plan: See F-6
Management’s Response: The Office of the State Controller (OSC) has existing policies and
procedures that are documented in the SAAM Manual and the year end closing package. OSC
usually relies on the State agencies to follow these procedures; however, OSC acknowledges that
more proactive efforts could have been taken to address the elevated risks associated with the
E-17
unique circumstances of the past year. OSC will work with State agencies to better understand the
process they follow and offer to help them meet the requirements for financial reporting.
The PPE Central Warehouse was established under a state of emergency in just three weeks. This
accelerated schedule resulted in certain administrative items to receive a lower priority. Going
forward, the Bureau of General Services (BGS) will fully utilize the existing inventory
management system to track inventory, record dollar values and record shipping/inventory-related
documents. This system will be utilized consistently for all existing and ongoing inventory
deliveries and counts. This information will be forwarded quarterly to the General Government
Service Center (GGSC) to provide for compilation and forwarding to OSC. Lastly, donated
inventory will be assigned a fair value upon receipt and accounted for in a manner similar to other
inventory assets.
The Maine Center for Disease Control & Prevention (Maine CDC) agrees with the
recommendation for warehouse personnel to perform a comprehensive year-end physical
inventory count and maintain documentation of the results; however, the operational needs of the
COVID19 pandemic response precluded the Maine CDC from shutting down the warehouse to
perform a physical inventory at this fiscal year end.
OSC Contact: Stacey Thomas, Financial Management Coordinator, 207-626-8431
BGS Contact: Andrew Giroux, Director of Central Services, 207-287-2923
GGSC Contact: Janre Mullins, Director, 207-624-7399
Maine CDC Contact: Veronica Robichaud, Chief Operating Officer, 207-287-2923
(State Number: 21-0320-01)
E-18
(2021-005) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19 FY18
Redacted Redacted Redacted
State Department: Education
State Bureau: School Finance and Operations
Type of Finding: Significant deficiency
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-7
Management’s Response: ________
Contact: Joanne Allen, Director of School Finance & Operations, DOE, 207-957-6796
Auditor’s Concluding Remarks: ________
(State Number: 21-0909-01)
E-19
(2021-006) Confidential finding, see below for more information
Title: ________ over ________ and ________ for the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20
Redacted
State Department: Education
State Bureau: School Finance and Operations
Type of Finding: Significant deficiency
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-7
Management’s Response: ________
Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
(State Number: 21-0909-02)
E-20
(2021-007) Confidential finding, see below for more information
Title: ________ over the ________ and ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20
Redacted
State Department: Judicial Branch
State Bureau: Administrative Office of the Courts
Type of Finding: Significant deficiency
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-7
Management’s Response: ________
Contact: Dennis Corliss, Chief of Finance and Administration, State of Maine Judicial Branch,
207-822-0709
Auditor’s Concluding Remarks: ________
(State Number: 21-0903-01)
E-21
(2021-008)
Title: Internal control over the valuation of the allowance for uncollectible fines and fees for
Judicial Branch receivables needs improvement
Prior Year Findings:
FY20
2020-007
State Department: Judicial Branch
Administrative and Financial Services (DAFS)
State Bureau: Administrative Office of the Courts, a Unit of the Judicial Branch
Office of the State Controller, a Unit of DAFS
Type of Finding: Significant deficiency
Criteria: 5 MRSA 1547; State Administrative and Accounting Manual 80.30.05
Accounting and reporting activities of the State of Maine are required by statute to be in
conformance with U.S. Generally Accepted Accounting Principles (GAAP). Accounting
estimates used in the financial statements require the use of judgment by management which
should be based on actual knowledge and experience with historical and current data. Annual
review of these estimates and the circumstances that give rise to the estimates is necessary.
Condition: The valuation of the allowance for uncollectible fines and fees for Judicial Branch
receivables reported on the State’s financial statements is not supported.
The Office of the State Controller (OSC) receives the receivables aging report provided by the
Judicial Branch Revenue Manager. OSC automatically deems receivables outstanding for more
than 180 days as uncollectible and records the allowance in the State’s financial statements. OSC
could not provide their documented considerations to support this methodology.
The Office of the State Auditor (OSA) requested current and historical collection data from the
Judicial Branch’s Chief of Finance and Administration in order to evaluate OSC’s estimate. The
Judicial Branch chose not to provide collection data, citing lack of resources.
Context: Fines and fees receivables for the Judicial Branch totaled $29 million as of June 30,
2021. The financial statements present receivables net of the allowance for uncollectible amounts
of $25.6 million, resulting in a presentation of approximately $3.6 million.
Cause:
• Lack of documented policies and procedures to support management’s considerations in
developing the estimate
• Lack of supervisory oversight
• Lack of resources
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Effect: Potential misstatement of the allowance for uncollectible amounts, the resulting net
balance of fines and fees receivable, and the separately disclosed amount for the allowance for
uncollectible amounts in Note 6 of the financial statements
Recommendation: We recommend that OSC and the Judicial Branch coordinate to:
• establish a formal documented method to estimate the allowance for uncollectible
receivables based on current and historical collection experience, and other factors used to
support professional judgment. This includes documenting how the estimates are
calculated, and how relevant data and other information is incorporated into the model.
• implement a secondary review of the estimate calculation, logic, and other supporting
information. This ensures that multiple persons are responsible for the development of the
estimates, which reduces the risk of management bias.
Corrective Action Plan: See F-8
Management’s Response: The Administrative Office of the Courts and OSC agree with the
process description. Judicial provides the aging report and OSC calculates the reserve. OSC is
responsible for determining the estimates in the financial statements. The accounting estimates are
based on subjective, as well as, objective factors; therefore, professional judgement is required to
estimate an amount for uncollectible receivables using an aging methodology, which is considered
a common and acceptable method within the industry. Management's opinion is that this method
is conservative, not overly sensitive to variations, is consistent with historical patterns and is not
overly subjective or susceptible to bias. Applying this methodology, OSC accumulates relevant,
sufficient, and reliable data on which to base the estimate. Additionally, we believe that the
estimate is presented in conformity with the applicable accounting principles and that disclosure
is adequate. The OSC will continue to reserve 100% of all fines over 180 days old, which has been
the acceptable method for many years.
Contact: Sandra Royce, Director of Financial Reporting, OSC, 207-626-8451
Auditor’s Concluding Remarks: As stated in the finding, OSC did not provide documented
considerations for the valuation assumptions and methodology used to estimate the allowance for
uncollectible fines and fees. Furthermore, the Judicial Branch chose not to provide collection data
upon OSA’s request, citing lack of resources. We continue to recommend that the Judicial Branch
and OSC work together to establish a formal, documented method to estimate the allowance for
uncollectible accounts based on current and historical collection experience, and other factors used
to support professional judgment.
The finding remains as stated.
(State Number: 21-0203-01)
E-23
(2021-009)
Title: Internal control over financial reporting of unemployment insurance receivables needs
improvement
Prior Year Findings:
FY20 FY19
2020-009 2019-004
State Department: Labor (MDOL)
Administrative and Financial Services (DAFS)
State Bureau: Unemployment Compensation, a Unit of MDOL
Security and Employment Service Center, a Unit of DAFS
Office of the State Controller, a Unit of DAFS
Type of Finding: Significant deficiency
Criteria: 2 CFR 200.303; 5 MRSA 1547; State Administrative and Accounting Manual 80.30.05
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Agencies are required by statute to prepare, submit, and retain auditable supporting documentation
for all information submitted to the Office of the State Controller (OSC) for financial reporting
purposes.
Accounting and reporting activities of the State of Maine are required by statute to be in
conformance with U.S. Generally Accepted Accounting Principles (GAAP). Accounting
estimates used in the financial statements require the use of judgment by management which
should be based on actual knowledge and experience with historical and current data. Annual
review of these estimates and the circumstances that give rise to the estimates is necessary.
Condition: The Maine Department of Labor (MDOL) utilizes the outsourced ReEmployME
information system for processing and storage of data related to the Unemployment Insurance (UI)
program. ReEmployME stores extensive financial and programmatic data, including records of
balances owed to the State by individuals and employers. Detailed reports of receivables balances
are necessary for financial reporting purposes. MDOL cannot provide an accounts receivable
report from ReEmployME containing records for each debtor as of June 30, 2021.
The related valuations of the allowances for uncollectible UI receivables reported on the State’s
financial statements are not supported. The estimated allowances for uncollectible accounts
related to benefit overpayment receivables, unemployment tax receivables, and UI penalties and
interest receivables are all based on the same assumption. Receivables outstanding for more than
one year are automatically deemed uncollectible, rather than applying assumptions supported by
data and evidence for each classification of receivables.
E-24
OSC’s review and analysis of the estimated allowances is not sufficient. The supporting
documentation for this analysis does not include management’s considerations of historical data,
detailed collections activity, or current economic trends, including the unprecedented impacts of
the COVID-19 pandemic initially seen in the fourth quarter of fiscal year 2020 that persisted for
much of fiscal year 2021.
Context: UI receivables for the Employment Security Trust Fund totaled $111.1 million as of
June 30, 2021, reduced by the estimated allowance for uncollectible accounts of $61.0 million.
This results in management’s presentation of $50.1 million in net UI receivables, not including
interest and penalties as described in the following paragraph.
As of June 30, 2021, a receivable for interest and penalties related to UI totaling $57.94 million
was included in the Other Special Revenue Fund, reduced by the estimated allowance for
uncollectible accounts of $57.90 million. The allowance represents 99.93 percent of the total
balance, and results in management’s net presentation of $43 thousand in UI receivables for
interest and penalties.
Cause:
• Management has identified long-term and ongoing information system limitations that
have not been resolved which inhibit functionality for receivables reporting.
• Lack of documented policies and procedures to:
o generate and retain detailed UI receivables information for financial reporting
purposes; and
o support management’s considerations in developing the estimated allowances for
uncollectible accounts.
• Lack of supervisory oversight
Effect: Potential misstatement of UI receivables balances, the allowances for uncollectible
accounts which are also separately disclosed in Note 6 of the financial statements, and the resulting
net receivables balances
Recommendation: We recommend that MDOL and the Security and Employment Service Center
generate and retain detailed receivables reports, including collections activity, throughout the fiscal
year for proper financial reporting of receivables balances. The reports should also be utilized to
establish a formal, documented method to estimate the allowances for uncollectible accounts. The
methodology should incorporate current and historical collection experience and other factors used
to support professional judgment. MDOL personnel should perform a detailed secondary review
of the methodology and calculated estimates for the allowances for uncollectible accounts.
In addition, we recommend that OSC request and analyze detailed collection data from MDOL as
part of their review of the estimated allowances to reduce the risk of management bias and to prove
the allowances are reasonable, complete, and accurate.
Corrective Action Plan: See F-8
E-25
Management’s Response: The Departments agree that detailed receivables reports should be
generated and retained during the fiscal year. OSC will provide guidance to DOL to develop a
reporting mechanism that will provide a more detailed analysis of the activity of the receivable
balances. OSC is responsible for determining the estimates in the financial statements. The
accounting estimates are based on subjective, as well as, objective factors; therefore, professional
judgement is required to estimate an amount for uncollectible receivables using an aging
methodology, which is considered a common and acceptable method within the industry.
Management's opinion is that this method is not overly sensitive to variations, is consistent with
historical patterns and is not overly subjective or susceptible to bias. Applying this methodology,
OSC and the Department of Labor (DOL) accumulate relevant, sufficient, and reliable data on
which to base the estimate. Additionally, we believe that the estimate is presented in conformity
with the applicable accounting principles and that disclosure is adequate. OSC recently performed
a five-year trend analysis of historical collections with information provided by DOL. The OSC
compared the percentages and the assumptions used in the past and updated the reserve percentages
accordingly. The OSC will continue to use the rolling year trend analysis with the actual collection
data, as provided by the DOL, to update the reserve percentage. DOL implemented a new system
and OSC will continue to review the reserve process to ensure the allowance continues to be valued
properly.
Contact: Stacey Thomas, Financial Management Coordinator, OSC, 207-626-8431
(State Number: 21-0308-01)
E-26
(2021-010) Confidential finding, see below for more information
Title: ________ over ________ and ________ for the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19
Redacted Redacted
State Department: Transportation (DOT)
Administrative and Financial Services (DAFS)
State Bureau: Finance and Administration, a Bureau of DOT
Office of Information Technology, a Unit of DAFS
Type of Finding: Significant deficiency
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-9
Management’s Response: ________
Contact: Kathleen Malcolm, Financial Processing Director, DOT, 207-624-3292
(State Number: 21-0908-01)
E-27
(2021-011) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19
Redacted Redacted
State Department: Labor
State Bureau: Unemployment Compensation
Federal Agency: U.S. Department of Labor
U.S. Department of Homeland Security
Assistance Listing Title: Unemployment Insurance (UI) (COVID-19)
Presidential Declared Disaster Assistance to Individuals and
Households - Other Needs (COVID-19)
Assistance Listing Number (CFDA): 17.225; 97.050
Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine;
4522DRMESPLW
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Material weakness
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-9
Management’s Response: ________
Contact: Kimberly Smith, Deputy Commissioner, Department of Labor, 207-621-5096
Auditor’s Concluding Remarks: ________
(State Number: 21-0907-01)
E-28
(2021-012) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19
Redacted Redacted
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Agriculture
U.S. Department of Health and Human Services
Assistance Listing Title: SNAP Cluster
Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 10.551, 10.561; 93.558
Federal Award Identification Number: SNAP Benefits, Maine;
1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Allowable costs/cost principles
Reporting
Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-9
Management’s Response: ________
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: ________
(State Number: 21-0905-01)
E-29
(2021-013) Confidential finding, see below for more information
Title: ________ over the Office of Information Technology’s ________ procedures needs
improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20
Redacted
State Department: Administrative and Financial Services
State Bureau: Office of Information Technology
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Allowable costs/cost principles
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-9
Management’s Response: ________
Contact: Nathan Willigar, Chief Information Security Officer, OIT, 207-458-1320
Auditor’s Concluding Remarks: ________
(State Number: 21-0900-02)
E-30
(2021-014) Confidential finding, see below for more information
Title: ________ over ________ needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19 FY18 FY17
Redacted Redacted Redacted Redacted
State Department: Administrative and Financial Services
State Bureau: Office of Information Technology
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-10
Management’s Response: ________
Contact: Nathan Willigar, Chief Information Security Officer, OIT, 207-458-1320
(State Number: 21-0900-01)
E-31
E-32
STATE OF MAINE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Section III - Indexes to Federal Program Findings
E-33
INDEXES TO FEDERAL PROGRAM FINDINGS
Index to Federal Findings by Federal Program and Finding Type ........................................ E-35
Index to Federal Findings by State Agency and Federal Compliance Area .......................... E-41
Four findings (2021-011 through 2021-014) included in Section II – Financial Statement
Findings also relate to Section III – Federal Findings and Questioned Costs and will be
included in the following indexes.
E-34
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
SNAP Cluster
ALN 10.551, 10.561
________ over the ________ system needs improvement (The
2021-012 content of this finding has been redacted. This appears as blank SD E-29
underlining)
Internal control over the issuance of SNAP benefits needs
2021-015 SD E-47
improvement
Internal control over EBT reconciliation procedures needs
2021-016 SD E-49
improvement
________ over the ________ system needs improvement (The
2021-017 content of this finding has been redacted. This appears as blank SD E-51
underlining)
Internal control over Income Eligibility and Verification MW
2021-043 E-108
System procedures needs improvement MNC
Internal control over the eligibility determination process needs
2021-054 MW E-132
improvement
________ over the ________ system needs improvement (The
2021-058 content of this finding has been redacted. This appears as blank SD E-143
underlining)
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
ALN 10.557
MW
2021-018 Internal control over cash balances needs improvement E-52
MNC
Internal control over subrecipient monitoring needs MW
2021-019 E-55
improvement MNC
2021-020 Internal control over subrecipient awards needs improvement SD E-57
MW
2021-041 Internal control over special reporting needs improvement E-103
MNC
Internal control over subrecipient cash management needs MW
2021-042 E-105
improvement MNC
Unemployment Insurance (UI)
ALN 17.225
________ over the ________ system needs improvement (The
2021-011 content of this finding has been redacted. This appears as blank MW E-28
underlining)
MW
Internal control over Unemployment Insurance claim payments MNC
2021-021 QC E-59
needs improvement
($2,032,324/
$29,100,000)
Unemployment Insurance continued on next page
E-35
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
Unemployment Insurance continued from previous page
Internal control over agency Schedule of Expenditures of MW
2021-022 E-67
Federal Awards submissions needs improvement MNC
Coronavirus Relief Fund
ALN 21.019
SD
Internal control over education expenditures charged to the QC
2021-023 E-69
Coronavirus Relief Fund needs improvement ($27,169 /
UN)
SD
Internal control over payroll transfers to the Coronavirus Relief QC
2021-024 E-72
Fund needs improvement ($4,867 /
UN)
Internal control over subrecipient risk evaluation procedures
2021-025 SD E-75
needs improvement
________ over ________ needs improvement (The content of
2021-026 this finding has been redacted. This appears as blank SD E-78
underlining)
________ over the ________ system needs improvement (The
2021-027 content of this finding has been redacted. This appears as blank SD E-79
underlining)
________ over ________, ________, and ________ needs
2021-028 improvement (The content of this finding has been redacted. SD E-80
This appears as blank underlining)
Emergency Rental Assistance Program
ALN 21.023
MW
2021-029 Internal control over special reporting needs improvement E-81
MNC
Internal control over suspension and debarment procedures
2021-030 SD E-83
needs improvement
Title I Grants to Local Educational Agencies
ALN 84.010
________ over the ________ system needs improvement (The
2021-027 content of this finding has been redacted. This appears as blank SD E-79
underlining)
________ over ________, ________, and ________ needs
2021-028 improvement (The content of this finding has been redacted. SD E-80
This appears as blank underlining)
Internal control over Title I, Part A award allocations needs
2021-031 SD E-85
improvement
Title I Grants to Local Educational Agencies continued on next page
E-36
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
Title I Grants to Local Educational Agencies continued from previous page
2021-032 Internal control over special reporting needs improvement SD E-87
Education Stabilization Fund (ESF)
ALN 84.425
________ over the ________ system needs improvement (The
2021-027 content of this finding has been redacted. This appears as blank SD E-79
underlining)
________ over ________, ________, and ________ needs
2021-028 improvement (The content of this finding has been redacted. SD E-80
This appears as blank underlining)
2021-032 Internal control over special reporting needs improvement SD E-87
2021-033 Internal control over cash management needs improvement SD E-89
Internal control over agency Schedule of Expenditures of
2021-034 SD E-91
Federal Awards submissions needs improvement
Immunization Cooperative Agreements
ALN 93.268
________ over ________ needs improvement (The content of
2021-026 this finding has been redacted. This appears as blank SD E-78
underlining)
MW
2021-035 Internal control over provider monitoring needs improvement E-93
MNC
________ over the ________ system needs improvement (The
2021-036 content of this finding has been redacted. This appears as blank SD E-95
underlining)
________ over ________, ________, and ________ needs
2021-037 improvement (The content of this finding has been redacted. SD E-96
This appears as blank underlining)
MW
2021-041 Internal control over special reporting needs improvement E-103
MNC
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
ALN 93.323
________ over ________ needs improvement (The content of
2021-026 this finding has been redacted. This appears as blank SD E-78
underlining)
2021-038 Internal control over reporting needs improvement SD E-97
2021-039 Internal control over subrecipient awards needs improvement SD E-99
MW
2021-041 Internal control over special reporting needs improvement E-103
MNC
E-37
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
Temporary Assistance for Needy Families (TANF)
ALN 93.558
________ over the ________ system needs improvement (The
2021-012 content of this finding has been redacted. This appears as blank SD E-29
underlining)
________ over the ________ system needs improvement (The
2021-017 content of this finding has been redacted. This appears as blank SD E-51
underlining)
MW
Internal control over payments made to and on behalf of TANF MNC
2021-040 QC E-101
clients needs improvement
($8,377 /
$667,074)
MW
2021-041 Internal control over special reporting needs improvement E-103
MNC
Internal control over subrecipient cash management needs MW
2021-042 E-105
improvement MNC
Internal control over Income Eligibility and Verification MW
2021-043 E-108
System procedures needs improvement MNC
________ over the ________ system needs improvement (The
2021-044 content of this finding has been redacted. This appears as blank MW E-110
underlining)
SD
Internal control over cash benefits paid to TANF clients needs QC
2021-045 E-111
improvement ($224 /
$112,657)
Internal control over TANF client child support sanction
2021-046 SD E-113
procedures needs improvement
Internal control over TANF performance reporting and work
2021-047 SD E-115
participation procedures needs improvement
Internal control over subrecipient risk evaluation procedures
2021-048 SD E-117
needs improvement
Internal control over subrecipient audit procedures needs
2021-049 SD E-119
improvement
Internal control over the eligibility determination process needs
2021-054 MW E-132
improvement
________ over the ________ system needs improvement (The
2021-058 content of this finding has been redacted. This appears as blank SD E-143
underlining)
Children’s Health Insurance Program (CHIP)
ALN 93.767
Internal control over cases opened due to potential fraud, abuse MW
2021-051 E-125
or questionable practices needs improvement MNC
Children’s Health Insurance Program (CHIP) continued on next page
E-38
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
Children’s Health Insurance Program (CHIP) continued from previous page
Internal control over compliance with eligibility determination MW
2021-052 E-127
requirements needs improvement MNC
Internal control over the eligibility determination process needs
2021-054 MW E-132
improvement
________ over the ________ system needs improvement (The
2021-058 content of this finding has been redacted. This appears as blank SD E-143
underlining)
Medicaid Cluster
ALN 93.775, 93.777, 93.778
________ over the Office of Information Technology’s
2021-013 ________ procedures needs improvements (The content of this SD E-30
finding has been redacted. This appears as blank underlining)
________ over ________ needs improvement (The content of
2021-014 this finding has been redacted. This appears as blank SD E-31
underlining)
Internal control over Hospital and Long Term Care Facility MW
2021-050 E-121
audits needs improvement MNC
Internal control over cases opened due to potential fraud, abuse MW
2021-051 E-125
or questionable practices needs improvement MNC
Internal control over compliance with eligibility determination MW
2021-052 E-127
requirements needs improvement MNC
Internal control over Medicare Part B premium payments needs
2021-053 MW E-130
improvement
Internal control over the eligibility determination process needs
2021-054 MW E-132
improvement
Internal control over cost of care assessments needs SD
2021-055 QC E-135
improvement
(UN / UN)
Internal control over deceased client cases and claims analysis
2021-056 SD E-138
needs improvement
Internal control over the outsourced medical claims coding
2021-057 SD E-141
process needs improvement
________ over the ________ system needs improvement (The
2021-058 content of this finding has been redacted. This appears as blank SD E-143
underlining)
Disaster Grants – Public Assistance (Presidentially Declared Disasters)
ALN 97.036
MW
2021-059 Internal control over cash management needs improvement E-145
MNC
Disaster Grants–Public Assistance (Presidentially Declared Disasters) continued on next page
E-39
State of Maine
Fiscal Year 2021
Index to Federal Findings
By Federal Program and Finding Type
Program / Finding
Finding # Brief Summary of Finding Type/QC Page
Disaster Grants–Public Assistance (Presidentially Declared Disasters) continued from previous page
Internal control over subrecipient audit procedures needs MW
2021-060 E-147
improvement MNC
Internal control over Schedule of Expenditures of Federal MW
2021-061 E-149
Awards reporting needs improvement MNC
MW
2021-062 Internal control over special reporting needs improvement E-151
MNC
Internal control over subrecipient risk evaluation procedures
2021-063 SD E-153
needs improvement
Presidential Declared Disaster Assistance to Individuals and Households – Other Needs
ALN 97.050
________ over the ________ system needs improvement (The
2021-011 content of this finding has been redacted. This appears as blank MW E-28
underlining)
Internal control over agency Schedule of Expenditures of MW
2021-022 E-67
Federal Awards submissions needs improvement MNC
Legend of Abbreviations:
MNC Material Noncompliance
MW Material Weakness
SD Significant Deficiency
QC Questioned Costs (Known/Likely)
UN Undeterminable
E-40
State of Maine
Fiscal Year 2021
Index to Federal Findings
By State Agency and Federal Compliance Area
Equipment and Real Property Management Procurement and Suspension and Debarment
Matching, Level of Effort, Earmarking
Activities Allowed or Unallowed Allowable Costs/Cost Principles Special Tests and Provisions
Period of Performance Subrecipient Monitoring
Cash Management Program Income
Eligibility Reporting
Finding # Program Name Page
Department of Administrative and Financial Services
2021-013 Medicaid Cluster ✓ E-30
2021-014 Medicaid Cluster ✓ ✓ E-31
2021-018 WIC ✓ E-52
Unemployment Insurance
(UI), Presidential Declared
2021-022 Disaster Assistance to ✓ E-67
Individuals and Households
– Other Needs
2021-024 Coronavirus Relief Fund ✓ ✓ E-72
2021-026 Multiple Programs ✓ E-78
Education Stabilization
2021-033 ✓ E-89
Fund (ESF)
2021-053 Medicaid Cluster ✓ E-130
Disaster Grants – Public
2021-061 Assistance (Presidentially ✓ E-149
Declared Disasters)
Department of Defense, Veterans and Emergency Management
Disaster Grants – Public
2021-059 Assistance (Presidentially ✓ E-145
Declared Disasters)
Disaster Grants – Public
2021-060 Assistance (Presidentially ✓ E-147
Declared Disasters)
Disaster Grants – Public
2021-061 Assistance (Presidentially ✓ E-149
Declared Disasters)
Department of Defense, Veterans and Emergency Management continued on next page
E-41
State of Maine
Fiscal Year 2021
Index to Federal Findings
By State Agency and Federal Compliance Area
Equipment and Real Property Management Procurement and Suspension and Debarment
Matching, Level of Effort, Earmarking
Activities Allowed or Unallowed Allowable Costs/Cost Principles Special Tests and Provisions
Period of Performance Subrecipient Monitoring
Cash Management Program Income
Eligibility Reporting
Finding # Program Name Page
Department of Defense, Veterans and Emergency Management continued from previous page
Disaster Grants – Public
2021-062 Assistance (Presidentially ✓ E-151
Declared Disasters)
Disaster Grants – Public
2021-063 Assistance (Presidentially ✓ E-153
Declared Disasters)
Department of Economic and Community Development
Emergency Rental
2021-029 ✓ E-81
Assistance Program
Emergency Rental
2021-030 ✓ E-83
Assistance Program
Department of Education
2021-023 Coronavirus Relief Fund ✓ E-69
2021-027 Multiple Programs ✓ ✓ E-79
2021-028 Multiple Programs ✓ ✓ E-80
Title I Grants to Local
2021-031 ✓ ✓ ✓ E-85
Educational Agencies
Education Stabilization
Fund (ESF), Title I Grants
2021-032 ✓ E-87
to Local Educational
Agencies
Education Stabilization
2021-034 ✓ E-91
Fund (ESF)
Department of Health and Human Services
2021-012 SNAP Cluster, TANF ✓ ✓ ✓ E-29
Department of Health and Human Services continued on next page
E-42
State of Maine
Fiscal Year 2021
Index to Federal Findings
By State Agency and Federal Compliance Area
Equipment and Real Property Management Procurement and Suspension and Debarment
Matching, Level of Effort, Earmarking
Activities Allowed or Unallowed Allowable Costs/Cost Principles Special Tests and Provisions
Period of Performance Subrecipient Monitoring
Cash Management Program Income
Eligibility Reporting
Finding # Program Name Page
Department of Health and Human Services continued from previous page
2021-015 SNAP Cluster ✓ ✓ E-47
2021-016 SNAP Cluster ✓ E-49
2021-017 SNAP Cluster, TANF ✓ E-51
2021-018 WIC ✓ E-52
2021-019 WIC ✓ E-55
2021-020 WIC ✓ E-57
2021-025 Coronavirus Relief Fund ✓ E-75
Immunization Cooperative
2021-035 ✓ E-93
Agreements
Immunization Cooperative
2021-036 ✓ ✓ E-95
Agreements
Immunization Cooperative
2021-037 ✓ ✓ E-96
Agreements
Epidemiology and
2021-038 Laboratory Capacity for ✓ E-97
Infectious Diseases (ELC)
Epidemiology and
2021-039 Laboratory Capacity for ✓ E-99
Infectious Diseases (ELC)
2021-040 TANF ✓ ✓ E-101
2021-041 Multiple Programs ✓ E-103
2021-042 TANF, WIC ✓ ✓ E-105
2021-043 SNAP Cluster, TANF ✓ ✓ E-108
2021-044 TANF ✓ ✓ ✓ E-110
2021-045 TANF ✓ ✓ E-111
2021-046 TANF ✓ E-113
2021-047 TANF ✓ ✓ E-115
2021-048 TANF ✓ E-117
Department of Health and Human Services Continued on next page
E-43
State of Maine
Fiscal Year 2021
Index to Federal Findings
By State Agency and Federal Compliance Area
Equipment and Real Property Management Procurement and Suspension and Debarment
Matching, Level of Effort, Earmarking
Activities Allowed or Unallowed Allowable Costs/Cost Principles Special Tests and Provisions
Period of Performance Subrecipient Monitoring
Cash Management Program Income
Eligibility Reporting
Finding # Program Name Page
Department of Health and Human Services continued from previous page
2021-049 TANF ✓ E-119
2021-050 Medicaid Cluster ✓ E-121
2021-051 Medicaid Cluster, CHIP ✓ E-125
2021-052 Medicaid Cluster, CHIP ✓ E-127
2021-053 Medicaid Cluster ✓ E-130
2021-054 Multiple Programs ✓ ✓ E-132
2021-055 Medicaid Cluster ✓ E-135
2021-056 Medicaid Cluster ✓ ✓ E-138
2021-057 Medicaid Cluster ✓ E-141
2021-058 Multiple Programs ✓ ✓ E-143
Department of Labor
Unemployment Insurance
(UI), Presidential Declared
2021-011 Disaster Assistance to ✓ ✓ E-28
Individuals and Households
– Other Needs
Unemployment Insurance
2021-021 ✓ ✓ E-59
(UI)
Unemployment Insurance
(UI), Presidential Declared
2021-022 Disaster Assistance to ✓ E-67
Individuals and Households
– Other Needs
E-44
STATE OF MAINE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Section III – Federal Findings and Questioned Costs
E-45
E-46
(2021-015)
Title: Internal control over the issuance of SNAP benefits needs improvement
Prior Year Findings:
FY20 FY19
2020-019 2019-013
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Agriculture
Assistance Listing Title: SNAP Cluster
Assistance Listing Number (CFDA): 10.551, 10.561
Federal Award Identification Number: SNAP Benefits, Maine
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.403
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Costs must be necessary and reasonable for the performance of the Federal award.
Condition: The Department receives date of death (DOD) information from the Maine Center for
Disease Control & Prevention (MeCDC) on a quarterly basis and from the Social Security
Administration on a weekly basis. The Office of the State Auditor (OSA) obtained DOD
information from MeCDC and compared it to clients who received Supplemental Nutrition
Assistance Program (SNAP) benefits during fiscal year 2021.
Of the cases that had benefit issuances after the client’s DOD, OSA identified 665 cases where
SNAP benefits were issued in excess of 30 days following the client’s DOD. In 16 of the 665
cases, the benefits were issued 140 days or more after the client’s DOD.
Context: In fiscal year 2021, the State provided approximately 117,000 SNAP eligible clients with
$374 million in Federal benefits. Of the 117,000 SNAP eligible clients, approximately 1,400 had
a DOD in fiscal year 2021.
E-47
Cause:
• Lack of adequate procedures
• Lack of supervisory oversight
Effect:
• Benefits paid on behalf of deceased clients may go undetected.
• Potential questioned costs and disallowances
Recommendation: We recommend that the Department improve procedures to ensure that DOD
information is received, reviewed, and updated in the eligibility system on a biweekly or monthly
basis to prevent incorrect issuances of benefits.
Corrective Action Plan: See F-10
Management’s Response: Although we agree with this finding, it should be noted that all of the
exceptions found were prior to the implementation of a revised standard operating procedure
governing the Date of Death processing which was implemented near the end of the audit period,
on April 26, 2021. This repeat finding has been fully addressed.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1108-02)
E-48
(2021-016)
Title: Internal control over EBT reconciliation procedures needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Agriculture
Assistance Listing Title: SNAP Cluster
Assistance Listing Number (CFDA): 10.551, 10.561
Federal Award Identification Number: SNAP Benefits, Maine
Compliance Area: Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 7 CFR 274.4
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department shall account for all electronic benefits transfer (EBT) issuance through a
reconciliation of total funds entered into, exiting from, and remaining in the EBT system each day.
Condition: SNAP benefit information is transmitted to Electronic Payment Processing and
Information Control (EPPIC), the EBT system. When EBT purchases are completed by
Supplemental Nutrition Assistance Program (SNAP) clients, Federal funds are automatically
drawn by EPPIC using the Automated Standard Application for Payments (ASAP) system to pay
retailers.
The Department could not provide evidence that daily reconciliation procedures were performed
during fiscal year 2021 for total funds entered into, exiting from, and remaining in EPPIC.
Context: In fiscal year 2021, the State provided approximately 117,000 SNAP clients with $374
million in Federal benefits.
Cause:
• Lack of supervisory oversight to ensure required reconciliations are completed
• The staff member responsible for performing this Federal requirement does not have access
to the ASAP system which is needed to perform the daily reconciliation. Access to the
ASAP system was requested but was never granted to the staff member.
E-49
Effect: Discrepancies between systems could go undetected which could result in an overdraw or
underdraw of Federal funds.
Recommendation: We recommend that the Department implement procedures and provide
oversight to ensure that all required reconciliations are completed daily.
Corrective Action Plan: See F-10
Management’s Response: The Department agrees with this finding. These reconciliations were
not completed during the audit period. The Department has been and will continue to work with
our Federal partners to gain access to the ASAP system for both the EBT manager and Assistant
Director of Business Technology to ensure business continuity in the event of planned or
unplanned absences. Once both have access, those reconciliations will be completed, and
reconciliations will be documented daily in accordance with Federal Regulations.
Contact: Don Ellis, Assistant Director of Business Technology, DHHS, 207-624-4155
(State Number: 21-1108-01)
E-50
(2021-017) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19
Redacted Redacted
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Agriculture
U.S. Department of Health and Human Services
Assistance Listing Title: SNAP Cluster
Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 10.551, 10.561; 93.558
Federal Award Identification Number: SNAP Benefits, Maine;
1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-10
Management’s Response: ________
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: ________
(State Number: 21-0905-04)
E-51
(2021-018)
Title: Internal control over cash balances needs improvement
Prior Year Findings:
FY20 FY19
2020-021 2019-021
State Department: Health and Human Services
Administrative and Financial Services
State Bureau: Maine Center for Disease Control & Prevention
Health and Human Services Service Center
Federal Agency: U.S. Department of Agriculture
Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) (COVID-19)
Assistance Listing Number (CFDA): 10.557
Federal Award Identification Number: 204ME743W5003, 204ME701W1003,
204ME701W1006, 214ME7435003,
214ME701W1003, 214ME701W1006,
214ME721W6006, 214ME721W6003
Compliance Area: Cash management
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting
Manual (SAAM) Section 50.40.80
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Financial records must adequately identify the source and application of funds and provide
accountability for all funds, property, and other assets related to the Federally-funded activities.
The Department must minimize the time between the drawdown of Federal funds and the
disbursement of these funds for Federal program purposes. The timing and amount of fund
transfers must be as close as administratively feasible to the Department’s actual cash outlay for
program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more
than seven business days.
Condition: The Department of Health and Human Services (DHHS) Service Center assumed
responsibility for the drawdown of funds for the WIC Breastfeeding Peer Counsel grant and the
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WIC Nutrition Services Administration (NSA) Administrative grant in October 2020. The WIC
Finance Manager retained responsibility for the drawdown of Federal funds for the WIC Food
grant. The Service Center also assumed responsibility of grant tracking for all WIC grants in
October 2020.
The Service Center utilizes a cash on hand analysis to ensure that the WIC program complies with
Federal and State regulations. The analysis used by the Service Center combined all WIC grants
into one analysis. The Office of the State Auditor performed a separate analysis for each WIC
grant which resulted in:
• the Breastfeeding Peer Counsel and WIC NSA Administrative grants having a negative
cash balance ranging from $10,000 to $1.1 million throughout the fiscal year; and
• the WIC Food grant having an excess cash balance ranging from $900,000 to $1.2 million
throughout the fiscal year.
Context: In fiscal year 2021, the average business days cash on hand for the WIC grants were as
follows:
• The Breastfeeding Peer Counsel and WIC NSA Administrative grants had an average
business days cash on hand of negative 22 days.
• The WIC Food grant had an average business days cash on hand of 24 days.
Cause:
• Lack of adequate procedures to ensure that the cash balances for each individual grant are
considered before requesting Federal funds
• Lack of staff resources available to reconcile and remediate prior year cash balances
• Lack of supervisory oversight
Effect:
• The Federal government may impose more stringent program-specific cash management
requirements based on noncompliance.
• The State could potentially incur an interest liability on excess Federal cash balances.
• Until a reconciliation of related financial activity is completed, the Department will not
know whether funds need to be returned to the Federal government for all, a portion, or
none of the excess cash balance, and the Department will not know whether a General Fund
appropriation is needed to clear the negative cash balance for administrative costs in the
Federal Fund.
• Noncompliance with Federal and State regulations
Recommendation: We recommend that the Department:
• implement procedures and establish oversight to ensure that the individual grant cash
balances are considered separately for the WIC NSA Administrative and WIC Food grants
when requesting Federal funds in accordance with 31 CFR 205.33;
• complete a separate reconciliation of the cash balances for all grants issued for the WIC
program to determine the cause and remediation for both the negative and excess cash
balances; and
• review its staffing needs to ensure there are adequate resources allocated to the
reconciliation and remediation of both the negative and excess cash balances.
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Corrective Action Plan: See F-10
Management’s Response: The Department and its Service Center agree with this finding. The
Service Center will modify the current grant cash balance analysis to include separating the WIC
NSA Admin and the WIC Food grants. This will be completed by March of 2022. They will also
finalize grant reconciliations for the WIC Food grants from 2017 to present. This will be completed
by December of 2022.
Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626
(State Number: 21-1113-03)
E-54
(2021-019)
Title: Internal control over subrecipient monitoring needs improvement
Prior Year Findings:
FY20 FY19
2020-022 2019-019
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Federal Agency: U.S. Department of Agriculture
Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) (COVID-19)
Assistance Listing Number (CFDA): 10.557
Federal Award Identification Number: 204ME743W5003, 204ME701W1003,
204ME701W1006, 214ME7435003,
214ME701W1003, 214ME701W1006,
214ME721W6006, 214ME721W6003
Compliance Area: Subrecipient monitoring
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 7 CFR 246.19
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department shall establish an ongoing management evaluation system which includes the
monitoring of local agency operations, the review of local agency financial and participation
reports, the development of corrective action plans to resolve program deficiencies, the monitoring
of implementation of the corrective action plans, and on-site visits. The results of such actions
must be documented.
Monitoring of local agencies must encompass evaluation of management, certification, nutrition
education, breastfeeding promotion and support, participant services, civil rights compliance,
accountability, financial management systems, and food delivery systems.
The Department must conduct monitoring reviews of each local agency at least once every two
years. Monitoring must include on-site reviews of a minimum of 20 percent of the clinics in each
local agency, or one clinic, whichever is greater.
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Condition: The Department is required to perform management evaluation reviews (MERs) of
each local agency at least once every two years. The Department performed full-year MERs for
five of the eight local agencies during fiscal year 2021. In the Office of the State Auditor’s
(OSA’s) testing:
• one local agency MER due in May 2019 was not performed until September 2020;
• one local agency MER due in August 2019 was not performed until July 2020;
• one local agency MER due in October 2019 was not performed until December 2020;
• one local agency MER due in February 2020 was not performed until April 2021; and
• one local agency MER due in April 2020 was not performed until May 2021.
For all exceptions noted above, the finance portion of the review was not completed.
Two local agency MERs due to be performed in fiscal year 2021 were completed subsequent to
fiscal year end. OSA did not perform audit testing on these two local agency MERs.
Prior year follow-up procedures over one local agency MER that was due but not fully completed
in fiscal year 2020 found that the finance portion of the review had not been completed as of audit
testing in February 2022.
Context: The Department provided $5 million to eight local agencies in fiscal year 2021.
Cause:
• Unfilled vacancies from fiscal year 2019 created a backlog of reviews.
• Lack of staff resources available to perform the financial portion of the MERs
• Lack of supervisory oversight
Effect:
• The Federal program may not be effectively and efficiently administered.
• Potential questioned costs and disallowances
Recommendation: We recommend that the Department:
• implement a process to ensure that the backlog of reviews are completed;
• review its staffing needs to ensure there are adequate resources allocated to the MER
process to ensure all portions of the reviews are fully completed; and
• implement additional oversight procedures to ensure all portions of the reviews are fully
completed.
Corrective Action Plan: See F-11
Management’s Response: The Department agrees with this finding. The Department will
implement a process to complete the MERs as time allows and prioritize current year MERs to
ensure compliance with the regulation. The Department has hired additional staff to assist with the
completion of the MERs. The Department will meet at least quarterly to check on the progress of
the MERs.
Contact: Ginger Roberts-Scott, Senior Health Program Manager, DHHS, 207-287-5342
(State Number: 21-1113-04)
E-56
(2021-020)
Title: Internal control over subrecipient awards needs improvement
Prior Year Findings:
FY20 FY19
2020-024 2019-020
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Division of Contract Management
Federal Agency: U.S. Department of Agriculture
Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) (COVID-19)
Assistance Listing Number (CFDA): 10.557
Federal Award Identification Number: 204ME743W5003, 204ME701W1003,
204ME701W1006, 214ME7435003,
214ME701W1003, 214ME701W1006,
214ME721W6006, 214ME721W6003
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Awards to subrecipients must include Federal award information that enables subrecipients to
identify the source of the Federal award.
Condition: The Division of Contract Management (DCM) is responsible for the preparation of
subrecipient grant awards. The program information in the awards provided to subrecipients is
the responsibility of the Maine Center for Disease Control & Prevention (MeCDC). MeCDC
communicates the award information by providing it for upload to the Department of Health and
Human Services grants database.
DCM then utilizes that database to prepare subrecipient awards and sends drafted subrecipient
awards to program personnel at MeCDC for final review. The subrecipient awards must include
accurate Federal award identification information to ensure that subrecipients can properly identify
the source of the subrecipient awards.
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For the eight subrecipients who administer the WIC program, all eight subrecipient awards:
• incorrectly identified the Center for Disease Control and Prevention as the Federal
awarding agency for the WIC Administrative grant. The U.S. Department of Agriculture
is the Federal awarding agency.
• incorrectly identified the Federal Award Identification Number for the WIC Breastfeeding
Peer Counsel grant.
For one subrecipient who administers the WIC program, the subrecipient award incorrectly
identified the Federal Award Identification Number for the WIC Administrative grant.
Context: In fiscal year 2021, the Department provided $5 million to the eight subrecipients that
administer the WIC program.
Cause:
• Lack of adequate internal controls
• Lack of supervisory oversight
Effect: Federal pass-through funds may not be correctly reported by subrecipients.
Recommendation: We recommend that DCM and MeCDC collaborate on implementation of
additional procedures to ensure subrecipient awards are complete, accurate and in accordance with
Federal regulations.
Corrective Action Plan: See F-11
Management’s Response: The Department agrees with this finding. The Division of Contract
Management will collaborate with MeCDC to implement controls to ensure subrecipient awards
are complete, accurate and in accordance with Federal regulations.
Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075
(State Number: 21-1113-02)
E-58
(2021-021)
Title: Internal control over Unemployment Insurance claim payments needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17 FY16 FY15 FY14
2020-026 2019-027 2018-023 2017-006 2016-005 2015-031 2014-039
State Department: Labor
State Bureau: Unemployment Compensation
Federal Agency: U.S. Department of Labor
Assistance Listing Title: Unemployment Insurance (UI) (COVID-19)
Assistance Listing Number (CFDA): 17.225
Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Material weakness
Material noncompliance
Questioned costs
Questioned Costs: Known questioned costs totaling $2,032,324 in Federal Unemployment
Insurance (UI) benefit payments were identified in audit procedures. The details of these totals
are included in the Effect section. Likely questioned costs totaling $29.1 million were projected
within each entitlement program by dividing the identified ineligible benefit payments by the total
benefit payments tested to establish an error rate. The individual error rates were then applied to
each entitlement program’s benefit payment totals for fiscal year 2021 to project likely questioned
costs.
Criteria: 2 CFR 200.303; 20 CFR 615.8; Middle Class Tax Relief and Job Creation Act of 2012;
Social Security Act (SSA) Title III, Section 303; Unemployment Insurance Program Letter (UIPL)
No. 5-13; Coronavirus Aid, Relief, and Economic Security (CARES) Act; 26 MRSA 1190 through
1199; Emergency Unemployment Insurance Stabilization & Access Act, Section 4102;
Unemployment Insurance Program Letter (UIPL) No. 13-20; Continued Assistance for
Unemployed Workers Act of 2020; Consolidated Appropriations Act, 2021; American Rescue
Plan Act of 2021
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
A State administering UI must have State laws and policies in place that are consistent with Federal
provisions and required by 20 CFR 615.8; the Middle Class Tax Relief and Job Creation Act of
2012; SSA Title III, Section 303; and UIPL No. 5-13, as follows:
E-59
• Standards for claim filing and processing including appeals and reviews, communication
with claimants and employers, eligibility standards and disqualifications, and Interstate
Benefit Payments and agreements
• Standards for reasonable work search criteria and policies requiring performance of
internal audits of work search activity
• Standards for program integrity outlining procedures for identification and recovery of
overpayments and penalties, including recovery through offset of future benefit payments
In March 2020, as a nationwide response to the effects of the COVID-19 pandemic, including
rapidly increasing unemployment rates, the Federal Coronavirus Aid, Relief, and Economic
Security (CARES) Act was signed into law. The CARES Act created three temporary Federal
unemployment compensation entitlement programs that continued in fiscal year 2021, as follows:
• Pandemic Unemployment Assistance (PUA) provides UI benefits for individuals who are
not eligible for regular UI benefits and are unemployed, partially unemployed, or unable
or unavailable to work due to COVID-19. Covered individuals include the self-employed,
independent contractors, part-time workers, and others not normally eligible to receive
regular UI benefits.
• Pandemic Emergency Unemployment Compensation (PEUC) provides an additional 13
weeks of UI benefits for unemployed workers who have exhausted regular UI benefits.
This was extended to 24 weeks through enactment of the Consolidated Appropriations Act
signed into law at the end of December 2020.
• Federal Pandemic Unemployment Compensation (FPUC) initially provided an additional
$600 weekly to all unemployed workers receiving traditional UI benefits, PUA or PEUC.
This was changed to $300 weekly in December 2020 through enactment of the
Consolidated Appropriations Act.
On March 17, 2020, the Governor of Maine signed emergency legislation that defines exceptions
and waivers to requirements of the State’s UI program. The legislation established as 26 MRSA
1199:
• waives the requirement for the ability and availability to work in order to provide benefits
to individuals who are under medical quarantine or temporary layoff due to mandated
pandemic-related closures;
• waives the usual one week waiting period for individuals dislocated or temporarily laid off
due to mandated pandemic-related closures; and
• expands temporary leaves of absence qualifications to include medical quarantine or
isolation restrictions, a COVID-19 exposure or infection, or pandemic-related dependent
care needs as long as claimants maintain contact with employers and are expected to return
to work.
Subsequent to the establishment of 26 MRSA 1199, Section 4102 of the Emergency
Unemployment Insurance Stabilization and Access Act (EUISAA) was enacted. This provides
states with the ability to modify or waive certain aspects of their unemployment compensation law
as needed to respond to the spread of COVID-19. These provisions include work search, waiting
week, good cause, and employer experience rating. A state’s regular eligibility requirements
regarding work search, waiting week, good cause, and employer experience rating may be
modified or waived for a temporary period of time in response to the spread of COVID-19, so long
E-60
as the state has supporting documentation of the waivers or modifications, such as emergency
legislation and Executive Orders in effect for the given period. This is also outlined in Section 5
of UIPL No. 13-20 for emergency flexibilities in response to COVID-19.
On September 17, 2020, the Governor of Maine signed additional emergency legislation that
reinstated the requirement to conduct work search activities for all UI claimants as of
October 4, 2020. The legislation reestablished eligibility requirements set forth in 26 MRSA 1192
Sections (2) and (3) except for individuals in quarantine or isolation due to COVID-19.
The Federal Consolidated Appropriations Act signed into law at the end of December 2020 granted
extensions of the PUA, PEUC, and FPUC programs to March 2021. This Act also included the
Continued Assistance for Unemployed Workers Act which extended the emergency flexibilities
identified above; extended the PEUC benefit period to 24 weeks; decreased the FPUC weekly
benefit from $600 to $300; and established several new requirements for the CARES Act
programs, including identity verification and submission of documentation substantiating
employment or self-employment for PUA claims.
The Federal American Rescue Plan Act signed into law in March 2021 granted additional
extensions of the PUA, PEUC, and FPUC programs through September 2021.
Condition:
ReEmployME System:
Internal control over UI benefit claim payments includes reliance on controls within the
ReEmployME information system. The Maine Department of Labor (MDOL) has a service
agreement with a vendor for the management and operation of ReEmployME. ReEmployME is
used by MDOL to process claims and store claimant information. The Office of the State Auditor
(OSA) identified a material weakness for the ReEmployME system as issued in finding number
2021-011. This finding has been redacted in accordance with paragraph 6.63 of the U.S.
Government Accountability Office’s Government Auding Standards as the details are confidential
under the provisions of 5 MRSA 244-C(3).
The system’s embedded controls over claimant eligibility include, but are not limited to:
• verification that all information is submitted as required by the UI benefit application,
• automated application of the required one week waiting period prior to providing benefits,
• automated generation of employer verification forms for initial claimant applications,
• automated processing of monetary determinations of benefit amounts, and
• a requirement for weekly certifications by the claimant of the ability and availability to
work and submission of work search information prior to weekly claim payment
processing.
ReEmployME’s system controls only verify that there is input into required fields which does not
ensure that benefit payments to ineligible claimants are prevented or detected prior to the issuance
of benefits. The system is also programmed to proceed with claims processing even when a
claimant certifies that all requirements have not been met. In addition, the system cannot verify
that employer information entered for verification or work search requirements is legitimate or
reasonable. The ReEmployME system generates reports to identify claims requiring follow-up
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procedures by Department personnel; however, formal review and completion of such procedures
is at the Department’s discretion.
Department Controls:
The Department has complementary controls in place over claimant eligibility, including:
• internal work search audits performed by MDOL personnel required for one percent of
weekly claims, and
• establishment of a Benefits Quality Control (BQC) Unit who is tasked with investigating
a prescribed number of UI paid claims and denied claims each week.
The establishment of new Federal entitlement programs and the enactment of emergency
legislation required extensive claims processing modifications by MDOL. In an effort to expedite
benefit payments to the citizens of Maine, the Department suspended the following controls over
eligibility for all UI entitlement programs starting in March 2020:
• Requirements for weekly certifications of claimant ability and availability for work and
work search information
• Requirement for a one week waiting period prior to payment of benefits
• Work search audits
• Weekly BQC Unit investigations of paid and denied claims
The Federal government provided authorization to suspend operations of the BQC Unit in fiscal
year 2020 and into fiscal year 2021 to realign resources for fraudulent claim investigations. MDOL
also suspended other embedded system controls and work search audits. Written authorization
from the Federal government was not received prior to suspension; however, Federal legislation
was subsequently enacted to authorize the Department’s suspension of controls. In accordance
with the State and Federal legislation noted above, MDOL reimplemented controls surrounding
eligibility throughout fiscal year 2021, including full reinstatement of traditional work search
requirements in May 2021.
Audit Testing Results:
As part of the initial eligibility determination process, State UI law requires MDOL to confirm
claimant separation from employment through correspondence with a claimant’s most recent
employer. OSA’s test of 60 regular UI claimants’ initial eligibility noted the following exceptions:
• For two claimants, letters to confirm separation were not sent to former employers.
• For two claimants, separation letters were sent to former employers, but were not sent to
the claimants’ most recent employers as required by State UI law.
o In both cases, it was subsequently discovered that the claimant was working while
collecting UI benefits, but not self-reporting wages to MDOL as required by program
guidelines for use in calculating and issuing partial benefit payments. OSA recognizes
that MDOL has established a quarterly wage crossmatch with employer-reported wage
data; however, this is not effective in preventing weekly benefit payments to ineligible
claimants for the extended periods leading up to quarterly crossmatches.
o One of these claimants was deemed ineligible to receive benefits as a result of
fraudulent claims activity that was identified by MDOL subsequent to the issuance of
benefits.
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In OSA’s test of 60 regular UI claimants’ continuing eligibility, two claimants were deemed
ineligible to receive benefits, one of which was identified by MDOL subsequent to the issuance of
benefit payments. In addition, noncompliance with work search requirements was identified for
two claimants. MDOL fully reimplemented the requirements for traditional work search activities
in May 2021. This reimplementation prohibited submission of part-time employment to satisfy
work search requirements; however, these two claimants submitted part-time employment as work
search activities in June 2021.
In OSA’s test of 60 PUA claimants, nine claimants were deemed ineligible to receive benefits.
MDOL stopped benefit payments and established overpayments for all nine claimants. The nine
exceptions included:
• eight claimants who did not provide proof of employment prior to issuance of benefits and
were later deemed ineligible. OSA recognizes that MDOL received guidance from U.S.
DOL stating that benefit payments should not be held while awaiting documentation;
however, benefits were ultimately issued to ineligible claimants and therefore, are
considered exceptions.
• one claimant who was identified as fraudulent subsequent to the issuance of benefits.
In OSA’s test of 60 PEUC claimants, one claimant was deemed ineligible to receive benefits and
was identified as a fraudulent claim by MDOL subsequent to the issuance of benefits. Benefit
payments were stopped and an overpayment was established.
The Office of the State Auditor selected non-statistical random samples.
Data Analytics:
Additional audit procedures included data analytics relating to claimant eligibility. These
procedures revealed that:
• 10 ineligible claimants received UI benefit payments from various entitlement programs
after their dates of death. These benefit payments totaled over $38,000 through the end of
fiscal year 2021.
• based on an analysis of claimant dates of birth, the following claimants received UI benefits
during fiscal year 2021:
• 8 claimants under the age of 10; and
• 638 claimants over the age of 80, including:
o 608 claimants between the ages of 80 and 89;
o 27 claimants between the ages of 90 and 99; and
o 3 claimants over the age of 100.
MDOL does not have adequate procedures in place to identify and review claimant dates of death
as well as the reasonableness of claimant age prior to the issuance of benefit payments.
Context: The UI program provided $323 million in State UI benefits and $1 billion in Federal UI
benefits during fiscal year 2021. Total UI benefits increased by $261 million from the prior year,
which is a direct result of the COVID-19 pandemic.
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Cause:
• Lack of resources due to the COVID-19 pandemic response prioritization
• Lack of adequate controls over initial and continuing claimant eligibility determinations
• Lack of adequate supervisory oversight over information system application controls
• Lack of adequate policies and procedures to identify and review claimant dates of death
and questionable claimant ages prior to the issuance of benefit payments
Effect:
• Known Federal questioned costs of $2.03 million comprised of:
• $1.96 million in fraudulent benefit payments;
• approximately $39,000 in benefit payments to claimants deemed ineligible in audit
testing; and
• approximately $31,000 in Federal UI benefit payments to claimants after dates of death.
• Potential liability, and applicable interest, due to the Federal government for claims paid
to ineligible or fraudulent Federal UI benefit claimants
• Potential questioned costs and disallowances
• The Federal government may impose stricter requirements or eliminate Federal funding
available to the State.
• Noncompliance with Federal regulations
Recommendation: We recommend that the Department implement additional control procedures,
including information system application controls and data analytics procedures, to ensure that
eligibility requirements are met and adequately supported prior to issuance of benefit payments.
While OSA recognizes the efforts of the Department to maintain program integrity while
responding to the extraordinary impacts of a global pandemic, the existing control environment
does not provide, and has not historically provided, assurance that all eligibility requirements are
met and adequately supported prior to the issuance of benefit payments.
Corrective Action Plan: See F-11
Management’s Response: The Department partially agrees with this finding.
The finding states that the Department’s system does not ensure that benefit payments to ineligible
claimants are prevented or detected prior to the issuance of payments. The Department collects the
necessary information to determine initial and ongoing eligibility. It is important to note that both
federal and state law prohibit the withholding of payment from someone who is already receiving
benefits when a potential eligibility issue is identified. The Department must gather additional
information and issue a written determination, which also includes notification of the right to
appeal the determination. In the meantime, payments must be made. If the Department issues a
determination that the individual was ineligible, an overpayment is created, and repayment is
required.
The finding further states that the Department has insufficient controls in place to detect possible
unreported employment or wages when a transitional (back-to-back) benefit year is filed. The
Department will research the availability of any additional tools or programming needed to detect
wages reported by employers that have not been reported by claimants when a transitional benefit
E-64
year is filed. Given the time difference that occurs between when a claim is filed and when an
employer is statutorily required to report wages or employment, overpayments that occur when
the claimant willfully misrepresents facts cannot be completely avoided. In those circumstances,
the repayment of benefits also includes interest and penalties.
The finding also states that working part-time should not have been considered as a work search
activity after the Department’s return to more traditional work search activities in May 2021.
Maine was one of the first states to restore a work search requirement under the Pandemic – many
continued a work search waiver through all of 2021. The Department began partially lifting a work
search in 2020, and then moved closer to pre-Pandemic allowed work search activities in May
2021. Though working part-time was not considered a qualified work search activity prior to the
pandemic, continued concerns regarding COVID-19 infection, lack of childcare, remote schooling,
and businesses opening but not immediately returning to full employment, informed the
Department’s decision to continue our earlier decision to allow acceptance of part-time work to
satisfy the work search requirement beyond May 2021. This encouraged those who had been
unemployed for an extended period to maintain a connection to the workforce by accepting part
time work. Neither Maine law nor rules fully define what constitutes a work search, this is set by
the Department. People were notified of the change in the activities that would be accepted as
satisfying the work search by email, website, and the press.
The finding furthermore states that the Department erred in paying benefits to individuals
collecting on the Pandemic Unemployment Assistance (PUA) program pending receipt of required
proof of employment documentation (POE). When the guidance around PUA POE was released
in UIPL 16-20, change 4, the Department reached out via e-mail to USDOL through their dedicated
COVID-19 inbox to ask whether claimants should be paid pending receipt of PUA POE. The
response from USDOL clearly stated the Department should not hold up benefits pending receipt
of PUA POE. States are required to follow federal guidance on these federal programs.
The finding states the Department needs additional controls for claims filed after a claimant’s date
of death, as well around the claimant’s age when filing a claim for benefits. The Department agrees
that the current crossmatch with the state’s Vital Records office that identifies deceased claimants
should be enhanced. As with reporting of quarterly wages, there are timing differences that cannot
be avoided, and overpayments cannot be completely ruled out. Overpayments, penalties, and
prosecutions are all considered when it is determined someone falsely filed for benefits using a
deceased person’s information. Regarding the age of the individual filing for benefits, controls will
be reviewed and enhanced where appropriate. Of the three claimants identified as being over 100
years old, two were eligible for the benefits they received. The third required a correction to the
person’s date of birth.
Contact: Laura Boyett, Director, Bureau of Unemployment Compensation, DOL, 207-621-5156
Auditor’s Concluding Remarks are on the following page.
E-65
Auditor’s Concluding Remarks: Management’s Response states that the Department collects
necessary information to determine initial and continuing claimant eligibility prior to benefit
issuance; however, several exceptions included in the finding were the result of a failure to solicit
or collect required documentation in support of eligibility for claimants across multiple entitlement
programs.
Regarding Management’s Response relating to transitional benefit years, this finding identified
four claimants where correspondence was not sent to former employers, including two with
transitional benefit year filings.
Management’s Response further states that Maine law does not fully define what constitutes work
search activities. OSA recognizes that 26 MRSA 1192 Section (2) states that claimants must
“provide evidence of work search efforts in a manner and form as prescribed by the Department
of Labor.” In September 2020, the Governor of Maine signed emergency legislation that reinstated
the requirement to conduct work search activities for all UI claimants as of October 4, 2020. The
legislation restored all eligibility requirements set forth in 26 MRSA 1192 except for individuals
in quarantine or isolation due to COVID-19. While the emergency legislation specifically
addresses an expanded definition of “work search” to include work-related activities such as
attending skill development seminars or networking events, part-time employment is not
addressed. Part-time employment was not a permissible work search activity prior to the
COVID-19 pandemic; therefore, it would not be included in the full reinstatement of eligibility
requirements ordered by the Governor and effective October 4, 2020.
For PUA eligibility, OSA acknowledges that MDOL received guidance from U.S. DOL stating
that benefit payments should not be held while awaiting documentation; however, benefits were
ultimately issued to claimants who did not provide proof of employment prior to issuance of PUA
and were later determined to be ineligible. MDOL did not have controls in place to prevent
payments to ineligible claimants and/or detect and correct such payments in a timely manner.
Timing differences for weekly claim filings and claimant dates of death cannot be entirely
prevented; however, existing controls can be enhanced to prevent overpayments, including an
increased frequency and review of the crossmatch with State Vital Records. Regarding ages of
individuals filing for benefits, implementation of additional controls such as routine data analytics
to identify outliers would assist in preventing, or detecting and correcting, payments to ineligible
claimants.
The finding remains as stated.
(State Number: 21-1302-01)
E-66
(2021-022)
Title: Internal control over agency Schedule of Expenditures of Federal Awards submissions
needs improvement
Prior Year Findings: None
State Department: Labor
Administrative and Financial Services
State Bureau: Unemployment Compensation
Security and Employment Service Center
Office of the State Controller
Federal Agency: U.S. Department of Labor
U.S. Department of Homeland Security
Assistance Listing Title: Unemployment Insurance (UI) (COVID-19)
Presidential Declared Disaster Assistance to Individuals and
Households - Other Needs (COVID-19)
Assistance Listing Number (CFDA): 17.225; 97.050
Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine;
4522DRMESPLW
Compliance Area: Reporting
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.510
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the
period covered by the State’s financial statements which must include the total Federal awards
expended. At a minimum, the SEFA must provide total Federal awards expended for each
individual Federal program and the Assistance Listing Number (ALN).
Condition: The Department must complete and submit exhibits and related schedules to the Office
of the State Controller (OSC) at the close of each fiscal year to report Federal award information
for inclusion on the State’s SEFA. OSC is responsible for compiling this information on behalf of
the State.
In fiscal year 2021, the Department received funding for Lost Wages Supplemental Payment
Assistance (LWSPA) under ALN 97.050 Presidential Declared Disaster Assistance to Individuals
and Households - Other Needs. At the close of the fiscal year, the Department and its Service
E-67
Center provided a summary of Federal expenditures to OSC that identified amounts as LWSPA.
In compiling and preparing the SEFA, OSC erroneously reported LWSPA as ALN 17.225
Unemployment Insurance (UI) expenditures. Subsequent supervisory review procedures did not
detect this error. As a result, LWSPA funding from the U.S. Department of Homeland Security
was omitted from the State’s fiscal year 2021 SEFA when provided to the Office of the State
Auditor (OSA) for audit purposes. This error was discovered by OSA while reviewing UI program
activity and was subsequently corrected by OSC.
Context: LWSPA expenditures totaling $106.9 million were incorrectly reported on the SEFA as
UI expenditures, resulting in an omission of a Federal program and an overstatement of UI
expenditures.
Cause:
• Lack of adequate internal control relating to Department SEFA submissions to OSC
• Lack of adequate review procedures
Effect: Incomplete or inaccurate amounts by Federal program and ALN on the SEFA would result
in noncompliance with Federal regulations if undetected. The SEFA is submitted to the Federal
government and may be used for programmatic, policy or statistical purposes.
Recommendation: We recommend that the Department and Service Center work with the Office
of the State Controller to improve SEFA submission and subsequent review procedures to ensure
Federal program expenditures are reported accurately.
Corrective Action Plan: See F-12
Management’s Response: The Departments agree with this finding. An administrative oversight
resulted in the reporting of one grant’s expenditures as part of another grant on the SEFA. It is
important to note that these expenditures were appropriately recorded separately under each ALN
in the state’s accounting system. The element of completeness for the total of expenditures was
considered; however, the completeness by grant was not adequately reviewed. Going forward an
additional control will be implemented, verifying that each ALN is accurately presented on the
SEFA.
Contact: Thomas Randall, Financial Coordinator/Audit Analyst, OSC, 207-626-8492
(State Number: 21-1302-02)
E-68
(2021-023)
Title: Internal control over education expenditures charged to the Coronavirus Relief Fund needs
improvement
Prior Year Findings: None
State Department: Education
State Bureau: Office of Federal Emergency Relief Programs
Federal Agency: U.S. Department of the Treasury
Assistance Listing Title: Coronavirus Relief Fund (COVID-19)
Assistance Listing Number (CFDA): 21.019
Federal Award Identification Number: SLT0029, SLT0081
Compliance Area: Allowable costs/cost principles
Type of Finding: Significant deficiency
Questioned costs
Questioned Costs: The Office of the State Auditor (OSA) tested a sample of 60 payments to
subrecipients and contractors charged to the Coronavirus Relief Fund (CRF). OSA identified one
exception with known questioned costs totaling $27,169. Likely questioned costs cannot be
determined due to the variety of activity within the subrecipient expenditure population. The
projection of questioned costs utilizing the error rate related to the known exception and amounts
tested would not produce a reasonable estimate of likely questioned costs.
Criteria: 2 CFR 200.303; Coronavirus Aid, Relief, and Economic Security (CARES) Act
Section 5001; Consolidated Appropriations Act, 2021; Federal Register Volume 86, Issue 10
(January 15, 2021)
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Section 5001 of the CARES Act outlines the following criteria for use of funds from CRF:
• Costs must be necessary expenditures incurred due to the public health emergency with
respect to Coronavirus Disease 2019 (COVID-19);
• Costs were not accounted for in the State’s budget most recently approved as of the date
of enactment of the CARES Act (March 27, 2020 for the State of Maine); and
• Costs must be incurred during the period that begins on March 1, 2020, and ends on
December 31, 2020.
The original period of performance for CRF as established by the CARES Act was extended to
December 31, 2021, through enactment of the Consolidated Appropriations Act in December
2020.
E-69
Final Treasury Guidance for the CRF was published in the Federal Register, Volume 86, Issue 10
in January 2021. The guidance includes information specific to real property and equipment
acquisitions, by stating that the use of payments to acquire or improve property is limited to that
which is necessary due to the COVID-19 public health emergency.
Condition: In April 2020, the State was advanced $1.25 billion in Federal funds from the CRF as
part of the CARES Act. The Department of Education (DOE) requested and received Federal
Coronavirus Relief Funding from the Department of Administrative and Financial Services and
the Governor’s Office to administer DOE programs in response to the COVID-19 pandemic. DOE
receives, reviews, and approves funding requests and subsequent reimbursements of CRF for
Local Education Agencies (LEAs).
OSA tested a sample of 60 payments to CRF subrecipients and contractors, which included 33
reimbursements to LEAs. Included in the 33 reimbursements was an April 2021 reimbursement
of $27,169 for the purchase of a new 2020 GEM e6 electric vehicle for school campus athletics.
Supporting documentation for the reimbursement did not provide adequate evidence to support
that this was a necessary expenditure incurred due to the public health emergency as required by
Federal guidance.
The Office of the State Auditor selected a non-statistical random sample.
OSA completed additional procedures over LEA funding requests in December 2020, which was
the original end of the CRF period of performance prior to an extension. Through these
procedures, OSA identified $1.9 million in approved CRF reimbursements to LEAs for property
and equipment acquisitions, including a truck, tractor, utility vehicles, snow removal equipment,
permanent buildings, and building expansions. Supporting documentation for the reimbursements
may or may not provide adequate evidence to support that these were necessary expenditures
incurred due to the public health emergency.
Context: DOE’s CRF payments to LEAs accounted for $259 million of the $777.4 million in CRF
expenditures in fiscal year 2021.
Cause:
• Lack of established policies and procedures to ensure that only necessary expenditures are
charged to the Federal program
• Lack of explicit Federal guidance surrounding CRF allowability
Effect:
• Potential noncompliance with Federal regulations
• Known and potential questioned costs and disallowances
Recommendation: We recommend that DOE review expenditures reimbursed to LEAs using
CRF, including the above noted expenditures, to ensure that documentation supports the necessity
of the costs in relation to the public health emergency and that only allowable costs are funded by
the CRF. All unallowable costs should be transferred out of the CRF.
E-70
Corrective Action Plan: See F-12
Management’s Response: The Department partially agrees with this finding. The Office of
Federal Emergency Relief Programs has written justification of the projects and expenses that were
proposed by the school administrative units to prepare, prevent, and respond to the COVID-19
pandemic. Each written justification was reviewed and discussed to determine allowability,
reasonableness, and necessity during our team review sessions. The Office of Federal Emergency
Relief Programs conferred with the guidance and with our US. Department of Education’s program
officer throughout the review process. The Office of Federal Emergency Relief Programs made
the required determination related to the statutory requirements and nature of the funding but failed
to document those decisions separately from the application approvals. We acknowledge that the
discussions to determine allowability, reasonableness, and necessity for the intended use may not
have been fully documented due to the emergency needs and time-sensitive nature of the funding.
Once the applications were approved, the school may submit for reimbursement to cover approved
costs that were incurred between March 1, 2020 and June 30, 2021. The reimbursement requests
were reviewed by the Office of Federal Emergency Relief Programs and only purchases that
aligned to the projects in the approved application were processed for payment. The process
complied with US Treasury guidance on use of CRF in the following ways: The expenses to be
covered through CRF reflect critical and time sensitive needs; the expenses are directly due to the
Covid-19 pandemic; the expenses were not previously budgeted items and will not supplant
existing resources; and the expenses will not be reimbursed by any other funding source. The
approved projects and expenses were the documented justification for the expenses that were
approved in the invoice review process. While the Office of Federal Emergency Relief Programs
acknowledges that documentation of the discussion about the determination for allowability,
reasonableness and necessity should have been maintained, the Office can confirm that these
expenses were: to prepare, prevent, and respond to COVID-19; for an allowable use; and, were
reasonable and necessary.
Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180
Auditor’s Concluding Remarks: Supporting documentation provided by the State’s Office of
Federal Emergency Relief Programs for the reimbursement of $27,169 for a campus athletics
vehicle did not provide adequate evidence that this was a necessary, reasonable, and allowable
expenditure incurred due to the public health emergency.
Without documentation and evidence to substantiate that the expenditures noted in the Condition
are for critical and time sensitive needs directly arising from the public health emergency, OSA
cannot determine that the reimbursements were in fact to prepare for, prevent, and respond to
COVID-19; were allowable; and were reasonable and necessary.
The finding remains as stated.
(State Number: 21-1690-05)
E-71
(2021-024)
Title: Internal control over payroll transfers to the Coronavirus Relief Fund needs improvement
Prior Year Findings: None
State Department: Administrative and Financial Services
State Bureau: Corrections Service Center
Security and Employment Service Center
Office of the State Controller
Federal Agency: U.S. Department of the Treasury
Assistance Listing Title: Coronavirus Relief Fund (COVID-19)
Assistance Listing Number (CFDA): 21.019
Federal Award Identification Number: SLT0029, SLT0081
Compliance Area: Allowable costs/cost principles
Period of performance
Type of Finding: Significant deficiency
Questioned costs
Questioned Costs: The Office of the State Auditor (OSA) tested a sample of 60 payroll
transactions charged to the Coronavirus Relief Fund (CRF). OSA identified known questioned
costs totaling $4,867. Likely questioned costs cannot be determined. The known questioned costs
were a result of a nonroutine component included in the audit test sample; therefore, the projection
of questioned costs utilizing the error rate related to the known exceptions and amounts tested
would not produce a reasonable estimate of likely questioned costs.
Criteria: 2 CFR 200.303; Coronavirus Aid, Relief, and Economic Security (CARES) Act
Section 5001; Federal Register Volume 86, Issue 10 (January 15, 2021); Consolidated
Appropriations Act, 2021
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Section 5001 of the CARES Act outlines the following criteria for use of funds from CRF:
• Costs must be necessary expenditures incurred due to the public health emergency with
respect to Coronavirus Disease 2019 (COVID-19);
• Costs were not accounted for in the State’s budget most recently approved as of the date
of enactment of the CARES Act (March 27, 2020 for the State of Maine); and
• Costs must be incurred during the period that begins on March 1, 2020 and ends on
December 31, 2020.
E-72
The U.S. Department of the Treasury (Treasury) published final guidance for CRF in the Federal
Register, Volume 86, Issue 10, dated January 15, 2021. The Federal Register’s CRF Guidance
establishes the following:
• Payments from the CRF are not administered as part of a traditional grant program and
thus the Cost Principles provisions of the Uniform Guidance applicable to grant agreements
do not apply. As a result, the authoritative guidance for allowability of CRF costs falls to
the Treasury’s Guidance as published in the Federal Register.
• A cost is considered incurred when the performance or delivery of services related to an
obligation occurs, and payment of funds need not be made at that time.
• The intent behind the Fund was not to provide general fiscal assistance to state
governments but rather to assist them with COVID-19 related necessary expenditures.
The original period of performance for CRF as established by the CARES Act was extended to
December 31, 2021, through enactment of the Consolidated Appropriations Act in December
2020.
Condition: In April 2020, the State was advanced $1.25 billion in Federal funds from the CRF as
part of the CARES Act. The Governor’s Office administers the CRF in conjunction with the Office
of the State Controller (OSC) and other State agencies.
During fiscal year 2021, on behalf of the Department of Corrections and the Department of Public
Safety, the Corrections Service Center (CSC) and the Security and Employment Service Center
(SESC) prepared and processed journal transfers of payroll expenditures from the General Fund
to CRF. In OSA’s test of 60 payroll transactions within the journal transfers to CRF, the following
exceptions were noted:
• In November 2020, CSC prepared and processed a journal transfer of payroll expenditures
to the CRF which included a vacation time and compensatory time payout to an employee
upon termination. This termination payout included $3,421 for vacation time and
compensatory time earned and accrued by the employee prior to March 1, 2020.
• In December 2020, SESC prepared and processed a journal transfer of payroll expenditures
to the CRF which included a compensatory time payout to a current employee. This payout
totaled $1,446 and represented compensatory time earned and accrued by the employee
prior to March 1, 2020.
The leave payouts noted above relate to obligations that the State incurred as leave time was earned
by the employee. Leave time earned throughout employment and incurred prior to March 1, 2020,
is not within the covered period of performance for CRF allowability. The reporting of such leave
payout expenses in other Federal grant award programs would be allowable under the Uniform
Guidance, but where CRF payments are not classified as such, special consideration must be given
to the required period of performance and related allowability.
The Office of the State Auditor selected a haphazard sample.
Context: CSC transferred $72.8 million Department of Corrections payroll expenditures and
SESC transferred $22.1 million Department of Public Safety payroll expenditures to CRF during
E-73
fiscal year 2021. Payroll expenditures accounted for $118.5 million of the $777.4 million in CRF
expended during fiscal year 2021.
Cause:
• Controls were not adequate to ensure that payroll transfers were in compliance with
evolving Federal guidance for the newly established CRF program.
• The State believes the above noted exceptions were allowable based on its interpretation
of Federal guidance surrounding CRF payroll costs.
Effect:
• Known questioned costs that the State may be required to repay to the Federal government
if it is not able to replace such costs with allowable costs incurred by December 31, 2021
• Noncompliance with Federal regulations
Recommendation: We recommend that SESC, CSC and OSC review payroll expenditures
transferred to the CRF to ensure that only allowable costs are funded by the CRF. All unallowable
costs, including the vacation time and compensatory time payouts noted above, should be
transferred out of the CRF and charged to the originating fund.
Corrective Action Plan: See F-12
Management’s Response: The Departments disagree with this finding. Payroll costs are incurred
when the service is provided; however, the cost of leave benefits (including vacation, sick and
compensatory time) is not incurred until claimed by the employee. The cost of benefits in question
were claimed by substantially dedicated public safety employees during the period of performance
in accordance with CRF guidance.
Contact: Shirley Browne, Deputy State Controller, Office of the State Controller, 207-626-8423
Auditor’s Concluding Remarks: The State is liable for and obligated to pay the cost of leave
benefits as leave is earned by employees. The leave benefit payouts noted as exceptions and
reported as questioned costs were earned throughout employment prior to March 1, 2020;
therefore, the obligations existed prior to the start of the CRF period of performance and do not
meet allowability requirements.
The finding remains as stated.
(State Number: 21-1690-02)
E-74
(2021-025)
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Division of Audit
Division of Contract Management
Federal Agency: U.S. Department of the Treasury
Assistance Listing Title: Coronavirus Relief Fund (COVID-19)
Assistance Listing Number (CFDA): 21.019
Federal Award Identification Number: SLT0029, SLT0081
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to evaluate each subrecipient’s risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of determining the
appropriate subrecipient monitoring procedures described in 2 CFR 200.332.
Condition: In April 2020, the State was advanced $1.25 billion in Federal funds from the
Coronavirus Relief Fund (CRF) as part of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act. The Department requested and received Federal Coronavirus Relief Funding from
the Department of Administrative and Financial Services and the Governor’s Office to administer
Health and Human Services (HHS) programs in response to the COVID-19 pandemic. The
Department then passed through CRF to subrecipients to help support these HHS programs.
The Office of the State Auditor tested a sample of 60 subrecipients paid by various State agencies
under the CRF program, including three HHS subrecipients, to ensure that proper subrecipient
monitoring was performed as required by Federal regulations. HHS subrecipient monitoring
procedures included providing Federal award information in grant award agreements,
communicating program guidelines, establishing reporting requirements, providing technical
assistance, and communicating with the subrecipients to discuss program performance; however,
the Department could not provide evidence to demonstrate that monitoring procedures were
established in response to an evaluation of the subrecipient’s risk of noncompliance with CRF
subrecipient awards for the three HHS subrecipients tested.
E-75
The Office of the State Auditor selected a non-statistical random sample.
Context: The State passed through $564 million in CRF to subrecipients in fiscal year 2021, which
included $14.1 million to 161 HHS subrecipients.
Cause:
• Competing priorities related to an increase in aid requests as a result of COVID-19
• Lack of adequate procedures
Effect:
• Without a documented process, subrecipient risk evaluation procedures may not be
consistently followed and documentation may not be adequately maintained.
• Subrecipients that are deemed higher risk may not be monitored on a more frequent basis.
Conversely, subrecipients that are deemed lower risk may not be monitored on a less
frequent basis, which would free resources and time to dedicate towards other higher risk
subrecipients.
Recommendation: We recommend that the Department implement procedures to maintain
adequate documentation of subrecipient risk assessments, including the evaluation of each
subrecipient’s risk of noncompliance specifically for the purposes of determining the appropriate
subrecipient monitoring to be performed.
Corrective Action Plan: See F-13
Management’s Response: The Department disagrees with this finding. In the middle of a
pandemic the Department contracted with many new providers in order to prevent the spread of
COVID-19 infections by creating local prevention plans and providing education to businesses
and towns. Many of these contracts were limited period contracts (4 months) and guidance from
the Federal government was to promote flexibility in the disbursement of these funds. The
Department, knowing that the timing of contracting and disbursing these funds was critical and
that many of these providers were new to contracting with the State, recognized these providers as
"high risk". Recognizing these providers as "high risk", the Department utilized 2 of the 3
suggested monitoring tools in the Uniform Guidance based on the assessment of risk posed by the
subrecipients. Those tools, 1) providing subrecipients with training and technical assistance and 2)
arranging for agreed-upon procedures engagements, which is built into the Department's Maine
Uniform Accounting and Auditing Practices for Community Agencies (MAAP) were required and
performed for all of these subrecipients. The third monitoring tool identified in the Uniform
Guidance related to high risk subrecipients, performing on-site visits of subrecipient's program
operations, was not practical in the middle of the pandemic.
Contact: Tony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834
Auditor’s Concluding Remarks: The Department disagrees with the finding; however, the
deficiencies identified in the Condition are not disputed in Management’s Response. Despite the
COVID-19 pandemic and its impact on HHS programs, Federal regulations requiring pass-through
entities to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations,
E-76
and the terms and conditions of the subaward for purposes of determining the appropriate
subrecipient monitoring remained in effect.
In addition, the Department asserts that subrecipients were recognized as “high risk” in relation to
noncompliance with CRF subrecipient awards. The Department did not provide evidence,
including subrecipient risk evaluations demonstrating a high risk designation, to support this
assertion.
The finding remains as stated.
(State Number: 21-1690-04)
E-77
(2021-026) Confidential finding, see below for more information
Title: ________ over ________ needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings: None
State Department: Administrative and Financial Services
State Bureau: Office of the State Controller
Office of Information Technology
Federal Agency: U.S. Department of the Treasury
U.S. Department of Health and Human Services
Assistance Listing Title: Coronavirus Relief Fund (COVID-19)
Immunization Cooperative Agreements (COVID-19)
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
(COVID-19)
Assistance Listing Number (CFDA): 21.019; 93.268; 93.323
Federal Award Identification Number: SLT0029, SLT0081;
NH23IP922604; NU50CK000523
Compliance Area: Allowable costs/cost principles
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-13
Management’s Response: ________
Contact: Soumia Tber, Payroll, Personnel Authorization Supervisor, OSC, 207-626-8420
(State Number: 21-0902-01)
E-78
(2021-027) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings: None
State Department: Education
State Bureau: School Finance and Operations
Federal Agency: U.S. Department of Education
Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19)
Title I Grants to Local Educational Agencies
Coronavirus Relief Fund (COVID-19)
Assistance Listing Number (CFDA): 84.425D; 84.010; 21.019
Federal Award Identification Number: S425D200004, S425D210004;
S010A180019, S010A190019
S010A200019; SLT0081,
SLT0029
Compliance Area: Allowable costs/cost principles
Reporting
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-13
Management’s Response: ________
Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
(State Number: 21-0909-03)
E-79
(2021-028) Confidential finding, see below for more information
Title: ________ over ________, ________, and ________ needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings: None
State Department: Education
State Bureau: School Finance and Operations
Federal Agency: U.S. Department of Education
Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19)
Title I Grants to Local Educational Agencies
Coronavirus Relief Fund (COVID-19)
Assistance Listing Number (CFDA): 84.425D; 84.010; 21.019
Federal Award Identification Number: S425D200004, S425D210004;
S010A180019, S010A190019
S010A200019; SLT0081,
SLT0029
Compliance Area: Allowable costs/cost principles
Reporting
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-14
Management’s Response: ________
Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
(State Number: 21-0909-04)
E-80
(2021-029)
Title: Internal control over special reporting needs improvement
Prior Year Findings: None
State Department: Economic and Community Development
State Bureau: Commissioner’s Office
Federal Agency: U.S. Department of the Treasury
Assistance Listing Title: Emergency Rental Assistance Program (COVID-19)
Assistance Listing Number (CFDA): 21.023
Federal Award Identification Number: ERA0299, ERA0434
Compliance Area: Reporting
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 170
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of
$30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency
Act (FFATA) Subaward Reporting System.
Condition: When a subaward exceeding the first-tier threshold is awarded to a subrecipient, the
Department must collect and enter data into the FFATA Subaward Reporting System. The
Department did not report its subawards under the Emergency Rental Assistance (ERA) program
in the reporting system in fiscal year 2021.
Context: In fiscal year 2021, the Department disbursed $66.7 million in first-tier subawards from
the ERA program to a subrecipient. First-tier subawards account for 100 percent of the program’s
fiscal year expenditures.
Cause:
• Competing priorities related to an increase in aid requests as a result of COVID-19
• Lack of resources
• Lack of policies and procedures
Effect: Noncompliance with Federal regulations
E-81
Recommendation: We recommend that the Department implement policies and procedures to
ensure that FFATA reporting is completed for all subawards that meet or exceed the first-tier
threshold.
Corrective Action Plan: See F-14
Management’s Response: The Department agrees with this finding. Due to the evolving reporting
requirements for the Emergency Rental Assistance program the Department did not identify the
FFATA requirements and did not submit accordingly. Existing policies and procedures will be
modified to ensure FFATA reporting is completed for all subawards that meet or exceed the first-
tier threshold.
Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496
(State Number: 21-1695-01)
E-82
(2021-030)
Title: Internal control over suspension and debarment procedures needs improvement
Prior Year Findings: None
State Department: Economic and Community Development
State Bureau: Commissioner’s Office
Federal Agency: U.S. Department of the Treasury
Assistance Listing Title: Emergency Rental Assistance Program (COVID-19)
Assistance Listing Number (CFDA): 21.023
Federal Award Identification Number: ERA0299, ERA0434
Compliance Area: Procurement and suspension and debarment
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 180.220; 2 CFR 180.300
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Non-Federal entities are prohibited from contracting with or making subawards under covered
transactions to parties that are suspended or debarred. “Covered transactions” include contracts for
goods and services awarded under a non-procurement transaction (e.g., grant or cooperative
agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified
in 2 CFR 180.220.
When a non-Federal entity enters a covered transaction with an entity at a lower tier, the non-
Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from
participating in the transaction. This verification may be accomplished by (1) checking the System
for Award Management (SAM) Exclusions, (2) collecting a certification from the entity, or (3)
adding a clause or condition to the covered transaction with that entity.
Condition: In fiscal year 2021, the Department entered into a Memorandum of Understanding
with one subrecipient to administer the Emergency Rental Assistance (ERA) program. The
Department did not obtain assurance that the subrecipient was not suspended or debarred before
entering into the covered transaction.
Context: The Department advanced this subrecipient $66.7 million to administer the ERA
program in fiscal year 2021.
Cause: The Department does not have procedures in place to ensure that subrecipients are not
suspended or debarred from receiving Federal assistance.
E-83
Effect: The State could enter into a covered transaction with a suspended or debarred party, which
could result in Federal disallowances.
Recommendation: We recommend that the Department establish procedures to verify that
subrecipients are not suspended, debarred, or otherwise excluded from participating in Federal
programs prior to issuing subawards.
Corrective Action Plan: See F-14
Management’s Response: The Department agrees with this finding. The arrangement with the
subrecipient was made through a Memorandum of Understanding that failed to incorporate the
standard suspension and debarment language included in the normal State of Maine contract. The
Department will implement policies and procedures to ensure that future engagements made with
subrecipients through the use of a Memorandum of Understanding will incorporate the required
suspension and debarment language. The Department will update the Memorandum of
Understanding with the subrecipient administering the Emergency Rental Assistance program to
obtain assurance that the subrecipient is not suspended or debarred.
Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496
(State Number: 21-1695-02)
E-84
(2021-031)
Title: Internal control over Title I, Part A award allocations needs improvement
Prior Year Findings: None
State Department: Education
State Bureau: Learning Systems
Federal Agency: U.S. Department of Education
Assistance Listing Title: Title I Grants to Local Educational Agencies
Assistance Listing Number (CFDA): 84.010
Federal Award Identification Number: S010A200019
Compliance Area: Eligibility
Matching, level of effort, earmarking
Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 34 CFR 200.70 through 78; 34 CFR 200.100
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is responsible for adjusting the U.S. Department of Education (DOE) grant
allocations to school districts for eligible charter schools, to reserve funds for school improvement
activities, and to maintain hold harmless protection limits.
Condition: Title I Grants to Local Educational Agencies (Title I, Part A) funds are distributed to
school districts to support the education of Maine’s economically disadvantaged students. The
allocation of grant funds is calculated annually utilizing a spreadsheet. The allocation spreadsheet
adjusts the U.S. DOE’s grant allocations to account for eligible new districts, set aside funds for
school improvement activities, and to maintain hold harmless protection limits. Department
procedures require a supervisory review of the allocation spreadsheet using a reviewer checklist
to ensure the spreadsheet formulas are calculating correctly and certain programmatic
requirements are met.
The Title I, Part A grant allocation spreadsheet for the 2020-2021 school year was not reviewed
by a supervisor as required by Department procedures.
Context: The Department provided $48 million of Title I, Part A funds to Maine school districts
in fiscal year 2021.
E-85
Cause:
• Lack of supervisory oversight due to management turnover
• Established policies and procedures were not adhered to due to a change in the control
environment resulting from the COVID-19 pandemic.
Effect:
• Undetected errors in the grant allocation spreadsheet could negatively impact the ability
of school districts to respond to the unique needs of economically disadvantaged students.
• Other Federal programs rely on Title I, Part A grant allocations to determine school district
funding. An undetected error in the grant allocation spreadsheet could impact school
district funding over multiple Federal programs.
• Potential noncompliance with eligibility and earmarking requirements
Recommendation: We recommend that the Department enhance existing policies and procedures
to ensure supervisory review of the Title I, Part A grant allocation prior to finalizing allocations of
grant funding to school districts.
Corrective Action Plan: See F-14
Management’s Response: The Department agrees with this finding. The ESEA Federal Programs
Department has policies and procedures in place to complete a comprehensive supervisory review
checklist, which verifies the accuracy of Title I funding, prior to school district allocations. This
finding was the result of turnover in management and the need for Department employees to work
remotely due to the COVID-19 pandemic. Based on these causes, the ESEA team is reviewing and
updating the policies and procedures, where necessary, regarding the supervisory review of all
Title allocations, including Title I, prior to finalizing allocations of grant funding to school
districts.
Contact: Cheryl L. Lang, ESEA Federal Programs Director, DOE, 207-441-8059
(State Number: 21-1208-01)
E-86
(2021-032)
Title: Internal control over special reporting needs improvement
Prior Year Findings: None
State Department: Education
State Bureau: Commissioner’s Office
Learning Systems
Federal Agency: U.S. Department of Education
Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19)
Title I Grants to Local Educational Agencies
Assistance Listing Number (CFDA): 84.425D; 84.010
Federal Award Identification Number: S425D210004; S010A200019
S010A190019, S010A180019
Compliance Area: Reporting
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 170
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of
$30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency
Act (FFATA) Subaward Reporting System.
Condition: When a subaward exceeding the first-tier subaward threshold is awarded to a
subrecipient, the Department must collect and enter data into the FFATA subaward Reporting
System.
In the Office of the State Auditor’s test of 60 subawards that exceeded the first-tier subaward
threshold, the following FFATA reporting exceptions were identified:
• 27 subawards under the Education Stabilization Fund program listed an incorrect project
description.
• One subaward totaling $147,794 was reported with an incorrect Data Universal Numbering
System (DUNS) number.
• Two subawards totaling $397,174 were incorrectly reported for Education in the
Unorganized Territories (EUT). These are not subrecipient subawards as the EUT is
governed by the State.
• One subaward totaling $162,266 was reported twice.
E-87
Additionally, the Department could not provide evidence that the FFATA reports were reviewed
by a secondary person prior to submission in the FFATA Subaward Reporting System to ensure
that information entered was accurate and complete.
The Office of the State Auditor selected a non-statistical random sample.
Context: During fiscal year 2021, the Department obligated $219.4 million in first-tier subawards
to 188 subrecipients from the Education Stabilization Fund and Title I Grants to Local Educational
Agencies programs. Of the 188 subrecipients, 182 subrecipients had subawards that exceeded the
first-tier subaward threshold. These 182 subawards totaled approximately $218.2 million in fiscal
year 2021.
Cause:
• Lack of supervisory review
• Lack of policies and procedures
Effect: Inaccurate, incomplete, or untimely information was and may continue to be reported to
the Federal government. This information may be used for programmatic, policy or statistical
purposes.
Recommendation: We recommend that the Department implement policies and procedures to
ensure all subawards that meet or exceed the first-tier threshold are reported accurately, timely,
and in accordance with Federal regulations. We also recommend that the Department retain
documentation of supervisory review for each FFATA report submitted in the FFATA Subaward
Reporting System.
Corrective Action Plan: See F-15
Management’s Response: The Department agrees with this finding. The Department will
implement a procedure to ensure subawards that meet or exceed the first-tier threshold are reported
accurately, timely and in accordance with Federal regulations. Additionally, FFATA reports will
be reviewed by a second party for completeness and accuracy and documentation of the review
will be retained.
Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161
(State Number: 21-1235-03)
E-88
(2021-033)
Title: Internal control over cash management needs improvement
Prior Year Findings: None
State Department: Administrative and Financial Services
State Bureau: General Governmental Service Center
Federal Agency: U.S. Department of Education
Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19)
Assistance Listing Number (CFDA): 84.425C
Federal Award Identification Number: S425C200004; S425C210004
Compliance Area: Cash management
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting
Manual (SAAM) Section 50.40.80
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Financial records must adequately identify the source and application of funds and provide
accountability for all funds, property, and other assets related to the Federally funded activities.
The Department must minimize the time between the drawdown of Federal funds and the
disbursement of these funds for Federal program purposes. The timing and amount of fund
transfers must be as close as administratively feasible to the Department’s actual cash outlay for
program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more
than seven business days.
Condition: The General Government Service Center (GGSC) provides services including human
resources, payroll and accounting and finance to the Department of Education (DOE).
The GGSC requests Federal funds in order to reimburse ESF program expenditures multiple times
each week. In December 2020, $6 million of program expenditures that had previously been
reimbursed under the ESF Governor’s Emergency Education Relief program were recategorized
as eligible Coronavirus Relief Fund expenditures. The GGSC did not immediately return the funds
that were received for these expenditures and continued to draw additional Federal funds under
the ESF. As a result, the State’s Federal cash balances for the ESF program exceeded the State’s
administratively feasible threshold of seven business days for approximately two months.
E-89
Context: In fiscal year 2021, there were approximately 236 Federal grant drawdowns totaling
$26 million for the ESF.
Cause:
• Lack of adequate policies and procedures
• Lack of staff resources available to process grant drawdowns and monitor cash balances
due to the increased number of COVID-19 grants managed
• Lack of supervisory oversight
Effect: The Federal government may impose more stringent program-specific cash management
requirements based on noncompliance.
Recommendation: We recommend that the Department develop and implement policies and
procedures to address the identification and timely return of excess grant funds to the Federal
government. We also recommend the Department review its staffing needs to ensure there are
adequate resources to process and provide supervisory oversight over the increased workload from
COVID-19 grants.
Corrective Action Plan: See F-15
Management’s Response: The Department agrees with this finding. The Department will
implement additional policies and procedures to ensure the timely return of excess grant funds as
well as providing supervisory oversight of these transactions.
Contact: Laurie Andre, GGSC Deputy Director, Accounting, GGSC, 207-592-0725
(State Number: 21-1235-01)
E-90
(2021-034)
Title: Internal control over agency Schedule of Expenditures of Federal Awards submissions
needs improvement
Prior Year Findings: None
State Department: Education
State Bureau: Commissioner’s Office
Federal Agency: U.S. Department of Education
Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19)
Assistance Listing Number (CFDA): 84.425D
Federal Award Identification Number: S425D200004, S425D210004
Compliance Area: Reporting
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.331; 2 CFR 200.510
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the
period covered by the State’s financial statements. This schedule must separately identify
subrecipient expenditures and direct program expenditures. Subrecipient expenditures are
reimbursements made to pass-through entities who have responsibility for eligibility
determinations and programmatic decision making.
Condition: The Department awarded stipends to over 100 educators under the Elementary and
Secondary School Emergency Relief (ESSER) program, a sub-program of the ESF. The stipends
were awarded to support the creation of content for the Maine Online Opportunities for Sustained
Education (MOOSE) online learning platform. The MOOSE platform was developed to support
Maine’s students and educators during the COVID-19 pandemic. Stipends totaling $855,750 were
paid to educators for the MOOSE platform during fiscal year 2021.
The Department is responsible for working with the General Governmental Service Center
(GGSC) to communicate Federal award expenditures to the Office of the State Controller (OSC)
for inclusion in the annual SEFA. The MOOSE stipends were originally reported on the SEFA as
subrecipient expenditures. The educators that created content for this platform do not meet the
definition of a subrecipient; therefore, these expenditures should have been reported as direct
program expenditures.
E-91
Context: In fiscal year 2021, the ESSER program originally reported $17.9 million of subrecipient
expenditures and $917,468 of direct expenditures on the SEFA.
Cause:
• Inaccurate coding of direct expenditures
• Lack of adequate internal control relating to Department SEFA submissions to OSC
• Lack of adequate review procedures
Effect: Incomplete or inaccurate expenditure reporting on the SEFA would result in
noncompliance with Federal regulations if undetected. The SEFA is submitted to the Federal
government and may be used for programmatic, policy or statistical purposes.
Recommendation: We recommend that the Department and its Service Center work with OSC to
improve SEFA submission and subsequent review procedures to ensure Federal program
expenditures are reported accurately.
Corrective Action Plan: See F-15
Management’s Response: The Department agrees with this finding. The Department will
coordinate the review of expenditures with the GGSC prior to submission of the SEFA report to
ensure all expenditures are reported accurately.
Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161
(State Number: 21-1235-02)
E-92
(2021-035)
Title: Internal control over provider monitoring needs improvement
Prior Year Findings:
FY20 FY19
2020-034 2019-032
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Immunization Cooperative Agreements
Assistance Listing Number (CFDA): 93.268
Federal Award Identification Number: NH23IP922604
Compliance Area: Special tests and provisions
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 42 USC 1396; Vaccines for Children Program Operations Guide
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to ensure effective control and accountability for all vaccines under
the Vaccines for Children (VFC) program. This was previously achieved through annual provider
site visits. In March 2020, the U.S. Center for Disease Control (CDC) suspended site visits in
response to COVID-19 and approved the Department to work under a modified plan. The
Department’s modified plan requires the following:
• Ensure providers complete the annual vaccine storage and handling training published by
the U.S. CDC;
• Request data logger reports for providers with an upcoming or overdue site visit to ensure
vaccines have been stored at the appropriate temperature and temperatures have been
accurately recorded; and
• Ensure providers are compliant with entering temperatures and reconciling vaccine
inventory at least once every 30 days.
Condition: The Office of the State Auditor (OSA) reviewed compliance with the processes that
replaced provider site visits and found the following:
E-93
• A complete list of providers that were identified as overdue or coming due within the
Provider Engagement, Analytics & Reporting (PEAR) portal during fiscal year 2021 could
not be provided. The PEAR system cannot produce a point in time report and the
Department did not retain reports. As a result, OSA was unable to test a sample of data
logger reports.
• The Department could not provide documentation of follow-up communications with
noncompliant providers regarding monthly reconciliations and temperature logging for 3
of the 60 providers selected for testing.
• The Department did not maintain adequate documentation of supervisory review over the
three required areas of provider monitoring.
The Office of the State Auditor selected a non-statistical random sample.
Context: In fiscal year 2021, 375 VFC providers received vaccines valued at $15.3 million.
Cause:
• Lack of policies and procedures
• Lack of documented supervisory oversight
Effect:
• Noncompliance with Federal regulations
• Potential for improper vaccine storage and waste
Recommendation: We recommend that the Department implement procedures to ensure that
provider monitoring and adequate supervisory oversight is completed, documented and
maintained.
Corrective Action Plan: See F-16
Management’s Response: The Department agrees with this finding. This finding is directly
related to an alternative plan developed by the State of Maine during FY2021 when on-site VFC
Compliance Visits were temporarily suspended. The Department will update procedures to ensure
provider monitoring is documented and records are maintained. The Department will update
procedures to ensure supervisory oversight is completed, documented, and maintained.
Contact: Jessica Shiminski, Health Program Manager, 207-287-7087
(State Number: 21-1118-01)
E-94
(2021-036) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19
Redacted Redacted
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Immunization Cooperative Agreements
Assistance Listing Number (CFDA): 93.268
Federal Award Identification Number: NH23IP922604
Compliance Area: Allowable costs/cost principles
Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-16
Management’s Response: ________
Contact: Tonya Philbrick, Senior Health Program Manager, Maine Center for Disease Control &
Prevention, DHHS, 207-287-2541
(State Number: 21-0906-01)
E-95
(2021-037) Confidential finding, see below for more information
Title: ________ over ________, ________, and ________ needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20
Redacted
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Immunization Cooperative Agreements
Assistance Listing Number (CFDA): 93.268
Federal Award Identification Number: NH23IP922604
Compliance Area: Allowable costs/cost principles
Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Corrective Action Plan: See F-16
Management’s Response: ________
Contact: Danielle Sherwood, ImmPact Manager, DHHS, 207-287-2586
(State Number: 21-0906-02)
E-96
(2021-038)
Title: Internal control over reporting needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Maine Center for Disease Control & Prevention
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
(COVID-19)
Assistance Listing Number (CFDA): 93.323
Federal Award Identification Number: NU50CK000523
Compliance Area: Reporting
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; Coronavirus Aid, Relief, and Economic Security (CARES) Act Section
18115; Paycheck Protection Program and Health Care Enhancement Act of 2020 (PL 116-139);
Coronavirus Response and Relief Supplemental Appropriations Act of 2020 (PL 116-260)
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must ensure that every laboratory that performs or analyzes a test that is intended
to detect or diagnose a possible case of COVID-19 reports the results from each test to the U.S.
Department of Health and Human Services.
Condition: During fiscal year 2021, the Maine Center for Disease Control & Prevention (MeCDC)
was required to complete the following reports:
• Quarterly and annual performance reports for three separate Federal awards
• Quarterly special reports for jurisdictional testing
The Office of the State Auditor selected five quarterly reports and three annual reports for testing
and identified the following exceptions:
• All reports were filed without documentation of approval by a secondary person prior to
submission.
• Supporting documentation could not be provided to verify the accuracy and completeness
of the filed reports.
• Documentation could not be provided to verify that the reports were filed timely.
The Office of the State Auditor selected a non-statistical random sample.
E-97
Context: During fiscal year 2021, twelve quarterly performance reports, three annual performance
reports, and one quarterly special report were required to be filed.
Cause:
• Lack of adequate internal controls
• Lack of supervisory oversight
• Lack of staff resources due to a significant increase in workload
Effect:
• Incorrect or incomplete data may be reported to the Federal government.
• Potential Federal noncompliance due to performance and special reports not filed timely
Recommendation: We recommend that MeCDC implement a documented process over the
completion, filing, review and retention of performance and special reports.
Corrective Action Plan: See F-16
Management’s Response: The Department agrees with this finding. The Division of Disease
Surveillance, within the Maine Center for Disease Control and Prevention, will put into place an
effective process to ensure quarterly and annual progress and special reports are accurate,
complete, reviewed, and recorded when filed.
Contact: Sara Robinson, Senior Program Manager, DHHS, 207-287-4610
(State Number: 21-1156-02)
E-98
(2021-039)
Title: Internal control over subrecipient awards needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Division of Contract Management
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
(COVID-19)
Assistance Listing Number (CFDA): 93.323
Federal Award Identification Number: NU50CK000523
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Awards to subrecipients must include Federal award information that enables subrecipients to
identify the source of the Federal award.
Condition: The Division of Contract Management (DCM) is responsible for the preparation of
subrecipient grant awards. The program information in the awards provided to subrecipients is
the responsibility of the Maine Center for Disease Control & Prevention (MeCDC). MeCDC
communicates the award information by providing it for upload to the Department of Health and
Human Services grants database.
DCM then utilizes that database to prepare the subrecipient awards and sends the drafted
subrecipient awards to program personnel at MeCDC for final review. The subrecipient awards
must include accurate Federal award identification information to ensure that subrecipients can
properly identify the source of the award.
For the two for-profit subrecipients who administer the ELC program, both subrecipient awards
did not include the required Federal award information.
Context: In fiscal year 2021, the Department provided $8 million to 46 subrecipients that
administer the ELC program.
Cause: Lack of established procedures over for-profit subrecipient awards
E-99
Effect: Federal pass-through funds may not be correctly reported by subrecipients.
Recommendation: We recommend that DCM and MeCDC collaborate on implementation of
additional procedures to ensure for-profit subrecipient awards are complete, accurate and in
accordance with Federal regulations.
Corrective Action Plan: See F-17
Management’s Response: The Department agrees with this finding. The Division of Contract
Management will collaborate with the MeCDC to implement controls to ensure subrecipient
awards are complete, accurate and in accordance with Federal regulations.
Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075
(State Number: 21-1156-03)
E-100
(2021-040)
Title: Internal control over payments made to and on behalf of TANF clients needs improvement
Prior Year Findings:
FY20 FY19 FY18
2020-039 2019-040 2018-031
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Activities allowed or unallowed
Allowable costs/cost principles
Type of Finding: Material weakness
Material noncompliance
Questioned costs
Questioned Costs: The Office of the State Auditor (OSA) tested a sample of payments to TANF
clients for services other than direct cash benefits and payments to providers on behalf of TANF clients.
OSA identified known questioned costs totaling $8,377. Likely questioned costs totaling $667,074
were projected by dividing the identified known overpayment in our sample by total payments tested
to establish an error rate, then applying that error rate to total payments to TANF clients for these
services and payments to providers on behalf of TANF clients in fiscal year 2021.
Criteria: 2 CFR 200.303; 2 CFR 200.403; 45 CFR 263.11
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
To be allowable under Federal awards, costs must be necessary and reasonable for the performance of
the Federal award and be adequately documented.
The Department must use Federal TANF funds for expenditures that are reasonably calculated to
accomplish the purposes of TANF. Use of funds in violation of this is considered misuse of funds.
Condition: The Department issues TANF payments directly to a TANF client for various items and
services. The Department also issues TANF payments directly to providers on behalf of TANF clients
for services rendered such as childcare and transportation. OSA tested 60 payments and found that:
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• one payment overpaid a provider by $526 for Transitional Child Care. Upon further review,
OSA found that an additional $6,030 was overpaid to the childcare provider during fiscal year
2021.
• one payment overpaid a provider by $279 for childcare services. Upon further review, OSA
found that an additional $1,116 was overpaid to the childcare provider during fiscal year 2021.
• two payments overpaid TANF clients a total of $426 ($276 for automobile insurance and $150
for clothing). An advance allowance was issued to each TANF client; however, neither TANF
client submitted a receipt substantiating the purchase as required.
The Office of the State Auditor selected a non-statistical random sample.
Context: In fiscal year 2021, payments to TANF clients for services other than direct cash benefits
and payments to providers on behalf of TANF clients totaled approximately $8 million.
Cause:
• Lack of adequate procedures
• Lack of supervisory oversight
Effect:
• Known questioned costs
• Potential future questioned costs and disallowances
• Noncompliance with Federal regulations
Recommendation: We recommend that the Department implement procedures to ensure that
payments made to TANF clients and providers are accurate, allowable, and adequately documented.
We further recommend that the Department increase monitoring procedures over these payments.
Corrective Action Plan: See F-17
Management’s Response: The Department agrees with the condition statement and
recommendations.
Regarding client payments: During SFY 2021, the Department formalized and implemented additional
supervisory case readings (two per worker per week) and call monitoring (two calls a week, randomly
selected). In addition, the Work Support Team Supervisor conducts partial reviews of approximately
25 percent of the cases worked on a daily basis. The Department will provide additional guidance to
eligibility and other related workers regarding notification to the Work Support Team when the
Department receives information that may affect payments.
Regarding provider payments: The Department will examine the existing internal controls over
payments, billing, invoice structures and mechanisms, including monitoring, to determine if the errors
discovered were related to human error and/or lack of training or clarity in existing vendor payment
controls.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1111-06)
E-102
(2021-041)
Title: Internal control over special reporting needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Division of Contract Management
Federal Agency: U.S. Department of Health and Human Services
U.S. Department of Agriculture
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
(COVID-19)
Immunization Cooperative Agreements (COVID-19)
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC) (COVID-19)
Assistance Listing Number (CFDA): 93.558; 93.323; 93.268; 10.557
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF;
NU50CK000523; NH23IP922604;
204ME743W5003, 204ME701W1003,
204ME701W1006, 214ME7435003,
214ME701W1003, 214ME701W1006,
214ME721W6006, 214ME721W6003
Compliance Area: Reporting
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 170
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000
in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA)
Subaward Reporting System.
Condition: When a subaward exceeding the first-tier subaward threshold is awarded to a subrecipient,
the Department must collect and enter data into the FFATA Subaward Reporting System. Instead of
entering data into the FFATA Subaward Reporting System when the obligating action
(subaward/subcontract) exceeded the first-tier subaward threshold as required by Federal regulations,
the Department reported when a Federal program’s individual Federal Award Identification Number
(FAIN) exceeded the first-tier subaward threshold. There can be numerous FAINs within one
subaward.
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Audit testing of the 27 subawards with Federal funds that exceeded the first-tier subaward threshold
revealed that:
• 15 subawards totaling $8.5 million were not reported timely;
• 11 subawards totaling $25.7 million were not reported correctly;
• 5 subawards totaling $450,000 were not reported at all; and
• 1 subaward totaling $175,000 was reported with the incorrect Data Universal Numbering
System (DUNS) number.
Additionally, the Department could not provide evidence that any of the FFATA reports were reviewed
prior to submission in the FFATA Subaward Reporting System to ensure that information entered was
accurate and complete.
The Office of the State Auditor selected a non-statistical random sample.
Context: During fiscal year 2021, the Department disbursed $45.7 million in first-tier subawards to
76 subrecipients from the TANF, ELC, Immunization Cooperative Agreements, and WIC programs.
Of the 76 subrecipients, 63 subrecipients received subawards exceeding the first-tier subaward
threshold. These 63 subawards totaled approximately $45.5 million in fiscal year 2021.
Cause:
• Misinterpretation of Federal regulations
• Lack of adequate procedures
• Lack of supervisory review
Effect:
• Inaccurate, incomplete, and untimely information was and may continue to be reported to the
Federal government. This information may be used for programmatic, policy or statistical
purposes.
• Noncompliance with Federal regulations
Recommendation: We recommend that the Department implement policies and procedures to ensure
all subawards that meet or exceed the first-tier subaward threshold are reported accurately, timely, and
in accordance with Federal regulations. We further recommend that the Department retain
documentation of supervisory review for each FFATA report submitted in the FFATA Subaward
Reporting System.
Corrective Action Plan: See F-17
Management’s Response: The Department agrees with this finding. The Department will revisit its
process to ensure all subawards are reported accurately, timely, and in accordance with Federal
regulations. Additionally, the Department will ensure documentation of the supervisory review is
retained.
Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075
(State Number: 21-1100-01)
E-104
(2021-042)
Title: Internal control over subrecipient cash management needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17
2020-042 2019-035 2018-026 2017-009
State Department: Health and Human Services
State Bureau: Division of Contract Management
Federal Agency: U.S. Department of Health and Human Services
U.S. Department of Agriculture
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) (COVID-19)
Assistance Listing Number (CFDA): 93.558; 10.557
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF;
204ME743W5003, 204ME701W1003,
204ME701W1006, 214ME7435003,
214ME701W1003, 214ME701W1006,
214ME721W6006, 214ME721W6003
Compliance Area: Cash management
Subrecipient monitoring
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.305
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to monitor cash drawdowns by their subrecipients to ensure that the
time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s
actual disbursement for program purposes is minimized.
Condition: The Department did not monitor subrecipients to ensure they were drawing Federal
funds in accordance with cash management requirements.
For cost-settled subawards, Department procedures include making equal advance monthly
payments and then reconciling those amounts to the quarterly financial reports submitted by the
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subrecipient. This procedure does not take into consideration the time elapsing between the
payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for
program purposes.
For “cost-settled by invoice” (reimbursement) subawards, Department procedures do not require
obtaining documentation to support the monthly invoices submitted by the subrecipient for costs
that were already paid by the subrecipient, thus verifying it was for reimbursement and not advance
payment.
Context: In fiscal year 2021, the Department provided:
• $32.8 million to subrecipients from TANF grant funds of $79.5 million. TANF’s
subawards are either cost-settled, cost-settled by invoice, or fee for service.
• $5 million to subrecipients from WIC grant funds of $13.6 million. All of WIC’s
subawards are cost-settled.
Cause:
• Misinterpretation of Federal regulations. 2 CFR 200.305(b)(1) references that the timing
and amount of advance payments must be as close as is administratively feasible to the
actual disbursements by the non-Federal entity. The Department interpreted this Federal
requirement to mean it applied to the State; however, the requirement is directed towards
non-Federal entities other than states.
• Lack of adequate subrecipient monitoring procedures. In addition to monitoring the total
amount paid to subrecipients, the Department is required to monitor the timing between
when the subrecipient receives Federal funds from the Department and when the
subrecipient disburses those funds for program purposes.
Effect:
• Noncompliance with subrecipient cash management requirements
• Federal programs may not be effectively and efficiently administered.
• The Federal government may require the implementation of more stringent subrecipient
cash management procedures.
Recommendation: We recommend that the Department implement monitoring procedures to
ensure that:
• the time elapsing between the payment of Federal funds to the subrecipient and the
subrecipient’s actual disbursement for program purposes is minimized for cost-settled
subawards.
• the payment of Federal funds to the subrecipient is for reimbursement purposes, and not
for advance payment, for “cost-settled by invoice” subawards.
Corrective Action Plan: See F-17
Management’s Response: The Department disagrees with this finding. The Department reviews
budgeted expenses to determine their timing and nature (one time, recurring, allowability); reviews
quarterly expense reports and alters payments to meet immediate cash needs, and finally, monitors
subrecipient single audits to ensure there are no cash management findings. Additionally, our
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subrecipient's programs are tested more frequently and at a lower threshold than the threshold for
single audits in accordance with the Maine Uniform Accounting and Auditing Practices for
Community Agencies (MAAP). The Department's approach is administratively reasonable and
does minimize the time elapsing between the payment of Federal funds to the subrecipient and the
subrecipient’s actual disbursement for program purposes given administrative and operational
needs. We believe we have procedures in place that can be corroborated by the fact that our
subrecipients do not receive single audit findings related to cash management.
Contact: Jim Lopatosky, Director, Division of Contract Management, DHHS, 207-287-5075
Auditor’s Concluding Remarks: The subrecipient monitoring procedures outlined in
Management’s Response do not ensure that subrecipients are drawing funds in accordance with
Federal cash management requirements.
• Reviewing budgeted expenses is not monitoring the subrecipient’s compliance with cash
management requirements as the subrecipient has not disbursed the funds yet.
• The Department does not obtain documentation to support the timing of the subrecipient’s
expenditures reported on the quarterly expense reports and to substantiate compliance.
• Though reviewing the subrecipient’s MAAP audits and Single Audits for findings is
beneficial:
o both types of audits are usually completed towards the end or after the grant award
period.
o MAAP audit requirements do not require testing of all subawards. Therefore, the
subrecipient’s cash management may or may not be tested by the subrecipient’s auditor.
o it is not guaranteed that cash management will be selected for testing by the
subrecipient’s auditor; therefore, relying on the subrecipient’s auditor to discover cash
management issues is not an adequate procedure to monitor the subrecipient’s
compliance with that requirement.
The finding remains as stated.
(State Number: 21-1111-03)
E-107
(2021-043)
Title: Internal control over Income Eligibility and Verification System procedures needs
improvement
Prior Year Findings:
FY20 FY19
2020-043 2019-037
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Agriculture
U.S. Department of Health and Human Services
Assistance Listing Title: SNAP Cluster
Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 10.551, 10.561; 93.558
Federal Award Identification Number: SNAP Benefits, Maine;
1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Eligibility
Special tests and provisions
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 7 CFR 272.8; 45 CFR 205.56
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to comply with Federal Income Eligibility and Verification System
(IEVS) exchange rules and regulations in accordance with program agreements. The Department
is required to resolve all discrepancies identified through IEVS reports within 45 days of receipt.
Condition: IEVS is used to exchange information among State and Federal agencies to verify
various information needed to determine eligibility for Federal financial assistance. This
information is updated in the Automated Client Eligibility System (ACES) to ensure eligibility
determinations are made based on current information.
IEVS generates various discrepancy reports on a weekly, monthly and quarterly basis. The
Department is required to resolve all discrepancies identified through IEVS reports within 45 days
of receipt.
E-108
Of the 194 IEVS discrepancies tested:
• 61 discrepancies were not addressed in ACES;
• 11 discrepancies were addressed between 4 and 40 days late;
• 2 discrepancies were not correctly addressed in ACES; and
• the Office of the State Auditor (OSA) was unable to confirm if one discrepancy was
updated correctly in ACES.
OSA selected 44 discrepancies which were deemed significant by OSA and a non-statistical
random sample of 25 discrepancies from each of the 6 IEVS reports, for a total of 194 discrepancies
examined.
Context: A total of 184 IEVS reports are required to be generated annually. The number of
discrepancies on each report can vary from zero to almost 20,000.
Cause:
• Lack of supervisory oversight
• Lack of resources available to respond to the significant increase in discrepancies due to
the COVID-19 pandemic
Effect:
• IEVS information may not be updated timely in ACES, which could result in incorrect
eligibility determinations.
• Failure to participate in IEVS information exchange may result in the U.S. Department of
Health and Human Services penalizing the State for up to two percent of the grant award.
Recommendation: We recommend that the Department enhance oversight procedures to ensure
IEVS discrepancies are properly resolved and documented on a timely basis.
Corrective Action Plan: See F-18
Management’s Response: With only three disagreements regarding the discrepancies cited in the
Condition statement above, the Department agrees with this finding. Four standard operating
procedures governing IEVS reporting were modified in fiscal year 2021. However, largely due to
the pandemic, combined with manual processing, we did witness an uptick in errors. The
Department has created a Technology Roadmap workgroup and IEVS automation is a component
of this project.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: Of the 75 discrepancies identified in the Condition, the
Department disagrees with three of them. The Department did not provide adequate
documentation to support their disagreement with these three discrepancies.
The finding remains as stated.
(State Number: 21-1111-01)
E-109
(2021-044) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20 FY19 FY18
Redacted Redacted Redacted
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Allowable costs/cost principles
Reporting
Special tests and provisions
Type of Finding: Material weakness
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
Management’s Response: ________
Corrective Action Plan: See F-18
Management’s Response: ________
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-0905-03)
E-110
(2021-045)
Title: Internal control over cash benefits paid to TANF clients needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Activities allowed or unallowed
Allowable costs/cost principles
Type of Finding: Significant deficiency
Questioned costs
Questioned Costs: The Office of the State Auditor (OSA) tested a sample of payments issued to
TANF clients as direct cash benefits. OSA identified known questioned costs totaling $224.
Likely questioned costs totaling $112,657 were projected by dividing the identified known
overpayment in our sample by total payments tested to establish an error rate, then applying that
error rate to total payments issued to TANF clients as direct cash benefits in fiscal year 2021.
Criteria: 2 CFR 200.303; 2 CFR 200.403; 45 CFR 263.11
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
To be allowable under Federal awards, costs must be necessary and reasonable for the performance
of the Federal award and be adequately documented.
The Department must use Federal TANF funds for expenditures that are reasonably calculated to
accomplish the purposes of TANF. Use of funds in violation of this is considered misuse of funds.
Condition: The Department issues monthly payments to TANF clients as direct cash benefits to
provide temporary assistance to families while they work towards becoming self-sufficient. OSA
selected 60 payments for testing and found that one payment overpaid a TANF client by $224.
Though this TANF client’s case was referred to another division for overpayment in September
2020, the Department has not recouped any of the identified overpayment as of audit testing in
March 2022.
The Office of the State Auditor selected a non-statistical random sample.
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Context: In fiscal year 2021, payments issued to TANF clients as direct cash benefits totaled
approximately $18.5 million.
Cause:
• Lack of adequate procedures
• Lack of supervisory oversight
Effect:
• Known questioned costs
• Potential future questioned costs and disallowances
• Noncompliance with Federal regulations
Recommendation: We recommend that the Department implement procedures to ensure that
payments made to TANF clients are accurate, allowable, and adequately documented. We further
recommend that the Department increase monitoring procedures over these payments.
Corrective Action Plan: See F-18
Management’s Response: The Department disagrees with this finding. The Office of the State
Auditor correctly identified an error; however, the Department has controls in place and identified
the error timely. The case was referred for overpayment during the fiscal year.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: Although the case was referred for a prior overpayment in
September 2020, which was documented in the TANF client’s electronic case record, the
Department subsequently issued another payment (the $224 overpayment identified in the
Condition), indicating a lack of adequate controls. As of audit testing in March 2022, the
overpayment referral remains listed as pending in the TANF client’s electronic case record, 18
months after the initial overpayment was referred to another division, and the Department has not
recouped any of the identified overpayment.
The finding remains as stated.
(State Number: 21-1111-07)
E-112
(2021-046)
Title: Internal control over TANF client child support sanction procedures needs improvement
Prior Year Findings:
FY20
2020-040
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 45 CFR 264.30; 42 USC 608(a)(2)
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
If the Department determines that an individual is not cooperating with child support enforcement
requirements, the Department is required to sanction the individual by deducting an amount equal
to not less than 25 percent from the TANF assistance that would otherwise be provided to the
family of the individual, and may deny the family any TANF assistance.
Condition: The Department’s Division of Support Enforcement and Recovery (DSER) is
responsible for enforcing child support requirements. DSER sends email notifications (sanction
requests) to TANF personnel when individuals not cooperating with child support enforcement
requirements are identified. If TANF personnel determine that the individual needs to be
sanctioned after reviewing the individual’s case, they will process the sanction request in the
Automated Client Eligibility System (ACES).
Federal guidance requires the Office of the State Auditor (OSA) to develop audit procedures to
test a sample of cases referred by DSER. When OSA requested the list of sanction requests from
DSER for testing purposes, the Department provided a list that was generated based on
noncooperation dates entered in the Child Support Enforcement of Maine (CSEME) system.
However, noncooperation dates were not consistently entered into CSEME by DSER personnel
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during fiscal year 2021, resulting in an incomplete list. In March 2021, the Department sent DSER
personnel a reminder that the noncooperation date needs to be entered when requesting a sanction.
Context: DSER personnel transmit sanction requests through email to a general inbox that
receives other notifications and collects approximately 400 emails per day. The sanction requests
are then forwarded by a designated supervisor to the appropriate TANF personnel to be processed
in ACES. For fiscal year 2021, DSER provided a list of 403 sanction requests to OSA. The
number of sanction requests that were made but omitted from the DSER list is unknown.
Cause:
• Lack of resources. The Department is unable to obtain a complete listing of sanction
requests from DSER without dedicating a significant amount of time and resources sorting
through the general email inbox.
• Lack of established procedures to ensure that all noncooperation dates are entered in
CSEME. Additionally, reminding staff that the noncooperation date needs to be entered in
CSEME prior to transmitting a sanction request through email does not guarantee that all
noncooperation dates will be in CSEME.
Effect:
• Noncompliant clients may be paid benefits that they are not entitled to receive.
• Failure to comply with sanction requirements may result in the U.S. Department of Health
and Human Services penalizing the State for up to five percent of the grant award.
Recommendation: We recommend that the Department establish procedures to ensure that all
sanction requests are maintained in a central repository so that they can be easily retrieved for
tracking and review purposes.
Corrective Action Plan: See F-19
Management’s Response: The Department agrees with the condition statement noted in the audit
finding for the audit period ending June 30, 2021.
The Department implemented a solution to this issue during the audited year, in March of 2021,
as represented by a direct communication to staff as well as subsequent communications including
a SOP governing this process.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1111-02)
E-114
(2021-047)
Title: Internal control over TANF performance reporting and work participation procedures needs
improvement
Prior Year Findings:
FY20 FY19 FY18 FY17
2020-041 2019-039 2018-028 2017-012
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Reporting
Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 45 CFR 261.60 through 261.62; 45 CFR 265.7 and 265.8
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must maintain adequate documentation, perform adequate verification, and
implement other control procedures for TANF client work participation. Work participation
activities include unsubsidized employment, job search and job readiness, job skills training
directly related to employment, vocational education, and other work-related programs.
The Department must report the actual hours that a work-eligible TANF client participates in these
work-related activities, on the ACF-199 TANF Data Report and the ACF-209 SSP-MOE Data
Report on a quarterly basis. These reports are required by the Federal government.
Condition: The Department reported incorrect work participation information on the ACF-199
and ACF-209 reports. Of the 120 clients tested, inaccurate work participation data was reported
for 28 clients, including inaccurate:
• countable months towards the Federal time limit of 60 months,
• unsubsidized employment hours,
• job search and job readiness hours,
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• work experience hours,
• vocational education training hours,
• job skills training directly related to employment hours, and
• education to employment with no high school diploma hours.
The Office of the State Auditor selected a non-statistical random sample.
Context: The Department must maintain adequate documentation, verification, and internal
control procedures to ensure the accuracy of information reported to the Federal government and
used to calculate work participation rates. In fiscal year 2021, the number of clients reported on
the ACF-199 report ranged from approximately 11,000 to 13,000 clients, and the number of clients
reported on the ACF-209 report ranged from approximately 36,000 to 42,000 clients.
Cause:
• Lack of adequate procedures to ensure work participation data is accurately reflected in the
Automated Client Eligibility System (ACES) and FedcapCARES case management system
and reported correctly in the quarterly Federal performance reports
• Lack of supervisory oversight
Effect:
• Incorrect work participation data reported to the Federal government may affect the Federal
requirement for TANF’s State Maintenance of Effort.
• The Federal government may penalize the State by an amount not less than one percent
and not more than five percent of the grant award for violation of work verification plan
requirements.
Recommendation: We recommend that the Department implement procedures to ensure that the
information reported on the ACF-199 and ACF-209 reports is accurate and complete prior to
submission to the Federal government. This should include increased systematic monitoring to
improve the reliability of work participation data that is reported to the Federal government.
Corrective Action Plan: See F-19
Management’s Response: The Department agrees with this finding and recommendations
regarding the 28 cases containing errors. The Department will investigate and identify the source
or cause of errors found which led to incorrect month counts. The Department will modify the
existing Quality Review Tool. Additionally, we will review, and edit if necessary, the existing
procedures governing this process.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1111-05)
E-116
(2021-048)
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17
2018-030
2020-044 2019-038 2017-013
2018-032
State Department: Health and Human Services
State Bureau: Office for Family Independence
Office of Child and Family Services
Division of Contract Management
Division of Audit
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to evaluate each subrecipient’s risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of determining the
appropriate subrecipient monitoring described in 2 CFR 200.332.
Condition: The Department has established subrecipient monitoring procedures depending on
whether the subrecipient is competitively bid or not.
If a subaward is competitively bid, the Department seeks input from the Department of Health and
Human Services Service Center, the Department’s Division of Audit, and the Division of Contract
Management regarding known issues with the provider who submitted the bid. Those responses
are collected and provided to the evaluation team which consists of various program personnel.
The subaward agreement is then drafted and the level of subrecipient monitoring is included in the
agreement.
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If a subaward is not competitively bid, the subaward agreement is drafted based on the level of
subrecipient monitoring that the Department has established for the provided services.
For the seven TANF subrecipients selected for testing:
• two subrecipients competitively bid on the subaward. For those subrecipients:
o no documentary evidence could be provided to support that feedback was solicited
from other Bureaus for any known issues or prior noncompliance for one subrecipient.
o no documentary evidence could be provided to support the level of subrecipient
monitoring that was completed for both subrecipients.
• five subrecipients did not competitively bid on the subaward. For those five subrecipients,
no documentary evidence could be provided to support the level of subrecipient monitoring
that was completed.
The Office of the State Auditor selected a non-statistical random sample.
Context: The Department provided $32.8 million to TANF subrecipients during fiscal year 2021.
Cause: Lack of adequate policies and procedures to ensure that subrecipient risk evaluation
documentation is retained
Effect:
• Without a documented process, subrecipient risk evaluation procedures may not be
consistently followed and documentation may not be adequately maintained.
• Subrecipients that are deemed higher risk may not be monitored on a more frequent basis.
Conversely, subrecipients that are deemed lower risk may not be monitored on a less
frequent basis, which would free resources and time to dedicate towards other higher risk
subrecipients.
Recommendation: We recommend that the Department implement and document procedures that
outline the collaborative process with all Bureaus. This policy should require evaluation of each
subrecipient’s risk of noncompliance specifically for the purposes of determining the appropriate
subrecipient monitoring to be performed.
Corrective Action Plan: See F-19
Management’s Response: The Department agrees with this finding. Although there are several
layers of risk evaluation built into the subrecipient monitoring process, the Department agrees that
there should be a policy regarding the evaluation of risk to determine the appropriate subrecipient
monitoring.
Contact: Tony Madden, Deputy Director – Division of Audit, DHHS, 207-287-2834
(State Number: 21-1111-04)
E-118
(2021-049)
Title: Internal control over subrecipient audit procedures needs improvement
Prior Year Findings: None
State Department: Health and Human Services
State Bureau: Division of Audit
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.558
Federal Award Identification Number: 1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
When a subrecipient’s Federal award expenditures are expected to equal or exceed $750,000
during the fiscal year, the Department must verify that the subrecipient is audited as required by
Subpart F of 2 CFR 200.
Condition: The Department requires subrecipients to submit their Single Audit to the
Department’s Division of Audit (DOA). DOA maintains a database to track when subrecipient
Single Audit reports are due and ensures that they are received.
The Office of the State Auditor tested eight TANF subrecipients that had a Single Audit due in
fiscal year 2021 and identified that one TANF subrecipient submitted their Single Audit to the
Federal Audit Clearinghouse (FAC) nine months past the Single Audit due date. DOA did not
obtain the Single Audit for that subrecipient until seven months past the date of submission to the
FAC. In addition, documentation could not be provided to support that DOA contacted the TANF
subrecipient when the Single Audit was late.
Context: A Single Audit was due in fiscal year 2021 for eight TANF subrecipients that received
$22.1 million of Federal funds in fiscal year 2020.
Cause:
• Lack of adequate procedures
• Lack of supervisory oversight
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Effect: Noncompliance with Federal regulations
Recommendation: We recommend that the Department implement procedures to ensure that
subrecipients that expend $750,000 or more in Federal awards complete and submit a Single Audit
within the required time requirements.
Corrective Action Plan: See F-19
Management’s Response: The Department agrees with this finding. The Department has already
begun implementing new procedures regarding the subrecipient monitoring to ensure Single
Audits are received timely.
Contact: Tony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834
(State Number: 21-1100-02)
E-120
(2021-050)
Title: Internal control over Hospital and Long Term Care Facility audits needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17 FY16 FY15 FY14
2020-048 2019-047 2018-049 2017-025 2016-025 2015-005 2014-003
State Department: Health and Human Services
State Bureau: Division of Audit
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Special tests and provisions
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 42 CFR 447.253(g); Maine State Plan under Title XIX of the Social
Security Act (TN No. 13-020); MaineCare Benefits Manual, Chapter III, Sections 45, 50 and 67
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to provide for the periodic audits of the financial and statistical records
of participating providers.
The Maine State Plan under Title XIX of the Social Security Act (TN No. 13-020) requires the
Division of Audit to perform and issue an interim or final Cost Settlement Report within 12 months
of receipt of the cost report from the Hospital Facility provider.
The MaineCare Benefits Manual (MCBM) Chapter III, Sections 45, 50 and 67 outline the
documentation and support required to be included in a provider’s annual cost report filing
submission to the Division of Audit. The Division of Audit’s requirements for reviewing the cost
reports and performing uniform desk reviews is also outlined. Section 67 states that the Division
of Audit must perform a uniform desk review on each Nursing Facility (NF) cost report submission
within 365 days of receipt of an acceptable cost report filing.
Condition: The Division of Audit did not issue Hospital and Long Term Care Facility (LTCF)
audits in accordance with Federal regulations. LTCF audits include both audits of NFs and
Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IIDs).
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Hospitals
The Maine State Plan under Title XIX of the Social Security Act (TN No. 13-020) requires the
Division of Audit to perform an interim or final Cost Settlement Report within 12 months of receipt
of the cost report submitted by the provider.
The population of Hospital Facility audits due for completion in fiscal year 2021 was 36, of which
one was issued 12 days late.
LTCF – Nursing Facilities
The MCBM states uniform desk reviews shall be completed within 365 days after receipt of an
acceptable cost report filing, including financial statements and other information requested from
the provider except in unusual situations including, but not limited to, delays in obtaining
necessary information from a provider. Unless the Division of Audit intends to schedule an on-
site audit or an unusual situation referenced above exists, a written summary report of findings and
adjustments shall be issued upon completion of the uniform desk review.
The population of NF uniform desk reviews due for issuance in fiscal year 2021 was 44. Of those
44 uniform desk reviews, 14 were issued 13 to 238 days late and 30 had not been issued at the time
of audit testing.
LTCF – ICF/IIDs
The MCBM requires providers to submit cost reports annually based on the facility’s fiscal year
end. 42 CFR 447.253(g) states “[the agency] must provide for the periodic audits of the financial
and statistical records of participating providers.” Furthermore, 2 CFR 200.303 requires a non-
Federal agency to “establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Neither 42 CFR nor the MCBM specifies a specific timeframe to complete an audit of a ICF/IID
cost report. The Division of Audit has stated its understanding of the periodic requirement to be
that all ICF/IID cost report audits must be completed “at some point in time.”
There are 16 facilities in the State that fall into the category of ICF/IID requiring audits of their
annually submitted cost reports. The Division of Audit issued 21 ICF/IID cost report audits, in
relation to 14 facilities, in fiscal year 2021. Of these 21 audits, 2 were issued in under 365 days
and 19 were issued in a range of 401 to 940 days after receipt of the cost report. The average time
between the receipt of the cost report and the completion of the related audit for audits issued in
fiscal year 2021 was 590 days.
Context: The Department provided $861.8 million in Federal Medicaid funding and $119.5
million in State Medicaid funding to hospitals and LTCFs during fiscal year 2021 as follows:
• Hospital Facilities:
o $595.1 million Federal funding
o $62.4 million State funding
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• Nursing Facilities:
o $237.6 million Federal Funding
o $57.1 million State Funding
• ICF/IID:
o $29.1 million Federal Funding
Cause: Lack of resources
Effect: Noncompliance with Federal and State regulations
Recommendation: We recommend that the Department reallocate resources so additional levels
of personnel can be directed to address the backlog of audits and uniform desk reviews. Additional
resources and staff auditors will enable the Department to perform and issue Hospital and LTCF
audits on a timely basis in compliance with statutory guidelines. Lengthy backlogs in the internal
audit function risk staleness of data and untimely remedial action.
Corrective Action Plan: See F-19
Management’s Response: The Department partially agrees with this finding.
The Department agrees with this finding in regard to LTCF - Nursing Facilities and Hospitals. The
delay in completing the Nursing Facilities audits is the result of staff shortages and competing
priorities due to COVID-19 funds which required audit resources to reconcile interim payments.
While hospitals were not completed within the one-year timeline identified in policy, one audit
being 12 days late should not be considered material. The hospital audits are tracked on a weekly
basis and staff are dedicated to completing the audits. We are currently on pace to complete them
all within the one-year timeline; therefore, no corrective action is necessary.
The Department disagrees with this finding in regard to LTCF - ICF/IID's. The ICF/IID audits do
not have a specific time requirement in MBM for completion. The federal regulations only require
that periodic audits of financial records occur. All ICF/IID cost reports submitted to the
Department are recorded in a database and tracked for audit purposes. All cost reports are audited
as resources are available. We have worked with our Federal partners who have agreed with our
interpretation of the regulation and the timing of our audits for the ICF/IIDs.
Contact: Herb Downs, Director, Division of Audit, DHHS, 207-287-2778
Auditor’s Concluding Remarks: 42 CFR 447.253(f-g) states “[the agency] must provide for the
filing of uniform cost reports by each participating provider [and] periodic audits of the financial
and statistical records of participating providers.” The Department is correct in its assertion that
the regulation does not define a timeframe for either the filing of uniform cost reports by providers
or the audit of financial and statistical records; however, two factors must be considered:
Auditor’s Concluding Remarks are on the following page.
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• The Department requires that providers submit cost reports annually. The periodic audit
of a facility’s financial and statistical records should follow the same pattern as the periodic
submission of those financial and statistical records. Failure to do so leads to delays in
identifying funds due to or due from the provider.
• The Department’s interpretation that there is no deadline for performing audits of the
financial and statistical records of ICF/IIDs leads to an open-ended timeframe where audits
are never required to be completed.
Delays in identifying funds due to a provider could lead to financial hardship for the facility and
threaten the care Medicaid clients receive. Delays in identifying funds due from a facility postpone
recoupment of overpayments by the State and postpone Federal reimbursement for those funds.
Furthermore, delays in performing audits prevents the Department from providing reasonable
assurance that the Department is managing the Federal award as required by 2 CFR 200.303.
The finding remains as stated.
(State Number: 21-1106-01)
E-124
(2021-051)
Title: Internal control over cases opened due to potential fraud, abuse or questionable practices
needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17 FY16
2020-051 2019-048 2018-052 2017-027 2016-032
State Department: Health and Human Services
State Bureau: Office of MaineCare Services
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Children’s Health Insurance Premium (CHIP) (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778; 93.767
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
2005ME5021, 2105ME5021
Compliance Area: Special tests and provisions
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 42 CFR 455.13 through 15; MaineCare Benefits Manual, Sections 1.17
and 1.18
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
When the State Medicaid Agency receives a complaint of Medicaid fraud or abuse or identifies
questionable practices, it must conduct a preliminary investigation to determine whether there is
sufficient basis to warrant a full investigation. Additionally, if the preliminary investigation is
indicative of fraud, waste, or abuse the State Medicaid Agency must take appropriate actions to
fully investigate the abuse and/or refer the case to the Medicaid Fraud Control Unit.
Condition: The Office of the State Auditor (OSA) judgmentally selected ten cases related to
potential fraud, abuse or questionable practices based upon the age of the case or the amount of
identified recoupment. In OSA’s test of ten cases, five cases were found to be inactive for an
extended period, ranging from 304 to 2,173 days. There was no evidence of monitoring or
supervisory review during that extended period.
Of the remaining population of cases, a non-statistical random sample of 60 cases was selected.
In OSA’s test of 60 cases, no exceptions were identified.
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Context: In fiscal year 2021, the State paid approximately $3.3 billion to providers, including
approximately $2.2 billion in Federal funds.
Cause:
• Lack of resources
• Lack of procedures to ensure that cases are continually monitored
Effect:
• Fraud, abuse or questionable practices may remain undetected.
• Costs that should be recovered may not be identified.
Recommendation: We recommend that the Department establish procedures to identify inactive
cases to ensure case reviews and investigations are completed in accordance with regulatory
requirements and Department procedures.
Corrective Action Plan: See F-20
Management’s Response: The Department agrees that the cases identified lacked documentation
to support the reason for an extended period of non-activity. Three of the five cases identified have
been subsequently closed and require no additional action. The remaining two cases are being
addressed by the Program Manager. Procedures will be established to run a quarterly report and
evaluate outstanding cases for closure or reassignment.
Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS, 207-287-2093
(State Number: 21-1106-03)
E-126
(2021-052)
Title: Internal control over compliance with eligibility determination requirements needs
improvement
Prior Year Findings:
FY20 FY19 FY18 FY17
2020-052 2019-046 2018-043 2017-018
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Children’s Health Insurance Program (CHIP) (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778; 93.767
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP;
2005ME5021, 2105ME5021
Compliance Area: Eligibility
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303: 42 CFR 435: MaineCare Eligibility Manual
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
42 CFR 435 requires that the Department must:
• include in each applicant’s case record facts to support the agency’s decision on their
application;
• maintain policies and procedures to ensure that eligibility is determined in a manner
consistent with the best interests of the applicant or beneficiary;
• establish procedures for obtaining, using, and verifying information relevant to
determinations as to eligibility and the amount of assistance; and
• verify the individual’s citizenship and identity.
42 CFR 435.10 states that a State plan must specify the groups to whom Medicaid is provided and
the conditions of eligibility for individuals in those groups.
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The MaineCare Eligibility Manual, Part 2 Section 3.2, details specific criteria for identity
verification and document retention.
Condition: Eligibility Specialists record applicant information in the Automated Client Eligibility
System (ACES), which is used to determine eligibility. Supporting documents are maintained in
electronic case records.
In the Office of the State Auditor’s (OSA’s) test of 60 clients with Medicaid Modified Adjusted
Gross Income (MAGI)-based MaineCare coverage in fiscal year 2021:
• the identity was not recorded as verified in ACES for 17 clients; included in this are three
clients whose electronic case record contained source documents supporting identity.
• the identity of four clients was recorded as verified in ACES, but supporting documents
listed as verified were not retained in the electronic case record.
• the electronic case record for one client contained an application and demographic
documents for another client not related to the case owner.
In OSA’s test of 60 clients with CHIP-based MaineCare coverage in fiscal year 2021:
• the identity was not recorded as verified in ACES for 30 clients; and
• the identity of five clients was recorded as verified in ACES, but supporting documents
listed as verified were not retained in the electronic case record.
The Office of the State Auditor selected non-statistical random samples.
42 CFR 435.407 indicates that the State may rely, without further documentation of citizenship or
identity, on a verification of citizenship made by a Federal agency; however, the MaineCare
Eligibility Manual does not allow for this and details specific requirements for the verification of
identity and retention of documents. In order to be in compliance with 42 CFR 435.10, the
Department must adhere to the requirements it has established and outlined in the MaineCare
Eligibility Manual for eligibility determination.
The Office of the State Auditor also issued finding numbers 2021-054, Internal control over the
eligibility determination process needs improvement, and 2021-058, ________ over the ________
system needs improvement.
Context: In fiscal year 2021, the State provided approximately 360,000 Medicaid/CHIP clients
with $2.2 billion in Federal benefits.
Cause:
• Lack of supervisory oversight
• Lack of client identity verification policies and procedures to ensure adherence to
requirements set forth in the MaineCare Eligibility Manual and 42 CFR 435
Effect:
• Benefits could potentially be provided to ineligible individuals.
• Noncompliance with Federal and State regulations
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Recommendation: We recommend that the Department establish policies and procedures to
ensure that the identity of an applicant is verified, and supporting documents are maintained in the
electronic case records in accordance with program requirements.
Corrective Action Plan: See F-20
Management’s Response: The Department disagrees with this finding. OSA has misinterpreted
MaineCare policy by excluding the eligibility system (ACES) as part of the electronic case record.
Electronic data sources are required per federal regulations and documentation of citizenship and
identity verifications are stored within ACES. The requirement to verify identity is part of
Medicaid citizenship verification requirements. Maine verifies citizenship and identity through
electronic data matches in accordance with 42 CFR §435.949; the results of this match are stored
in ACES. The state cannot request paper documentation from applicants after successful
electronic verification for the purpose of storing it in another system, nor can we establish more
restrictive verification requirements than those allowed by federal regulations. This was a prior
year finding (2020-052) that the Department disagreed with and the cognizant agency, CMS,
agreed with the Department's position and closed the finding.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: Federal requirements for evidence of citizenship and identity
are established in 42 CFR 435.407. States are provided the options of relying on, without further
documentation of citizenship or identity, a verification of citizenship made by a Federal agency or
another State agency, or requiring further documentary evidence of citizenship and/or identity.
The MaineCare Eligibility Manual, Part 2 Section 3.2, details the Department’s decision to require
applicants to submit documentary evidence of identity beyond verification of citizenship made by
a Federal agency or another State agency. In addition, the MaineCare Eligibility Manual, Part 2
Section 2, VIII, B, states that “copies of citizenship and identification documents shall be
maintained in the case record or electronic database.” We agree that ACES is part of the electronic
case record, and where appropriate documentation was recorded in ACES, no exception was taken;
however, the exceptions noted are for instances where copies of documentation were required to
be maintained in the electronic case record and were not.
To ensure compliance with the requirements of the Federal awards, the Department must adhere
to the procedures established for obtaining, using, verifying, and maintaining information relevant
for eligibility determinations and the amount of assistance in accordance with 42 CFR 435.
The finding remains as stated.
(State Number: 21-1106-09)
E-129
(2021-053)
Title: Internal control over Medicare Part B premium payments needs improvement
Prior Year Findings:
FY20 FY19
2020-053 2019-050
State Department: Health and Human Services
Administrative and Financial Services
State Bureau: Office for Family Independence
Office of Information Technology
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Allowable costs/cost principles
Type of Finding: Material weakness
Questioned Costs: None
Criteria: 2 CFR 200.303; 42 CFR 431.625
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
42 CFR 431.625 outlines eligibility criteria which, if met, allows the State to pay a portion of the
Federal Medicare Part B premium on behalf of the client and claim Federal financial participation
in the payment. Clients may be deemed eligible by the Federal government as indicated by a
Federal Buy-In code, or by the State as indicated by eligibility status in the Automated Client
Eligibility System (ACES).
Condition: The Department receives monthly invoices from the Centers for Medicare and
Medicaid Services (CMS) for Medicare Part B premiums. CMS provides a separate detailed listing
of Medicaid members that supports the invoice to the Office of Information Technology (OIT).
OIT produces a Monthly Reconciliation Report identifying potential discrepancies between the
CMS detailed listing and the Department’s eligibility information recorded in ACES. Office for
Family Independence (OFI) personnel use this reconciliation report to identify clients for whom
payment should not be made.
The Monthly Reconciliation Report and related documentation covering the CMS invoices
received in four of the twelve months in fiscal year 2021 could not be provided by OFI. Of the
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eight reports provided, seven did not demonstrate completion of review or documentation of
corrective action.
In the Office of the State Auditor’s sample of 60 premium payments, one premium was paid by
the Department on behalf of a client who was coded eligible on the CMS invoice but was coded
not eligible in ACES. Further procedures determined that the client had been incorrectly coded in
ACES and that the payment was allowable. The Monthly Reconciliation Report did not identify
this discrepancy.
The Office of the State Auditor selected a non-statistical random sample.
Context: In fiscal year 2021, approximately $108 million in Federal funds and $46 million in State
funds were paid to CMS for Medicare Part B premiums.
Cause:
• Lack of supervisory oversight
• The Monthly Reconciliation Report is not adequately designed to identify all discrepancies.
Effect:
• Potential Medicare Part B premiums paid by the State for ineligible clients
• Potential questioned costs and disallowances
• Noncompliance with Federal regulations
Recommendation: We recommend that the Department establish procedures to ensure the
production, review and follow up to Monthly Reconciliation Reports, and that the Department
improve procedures for the documentation and retention of those reports. We further recommend
that the Department design the Monthly Reconciliation Report to identify all discrepancies.
Corrective Action Plan: See F-21
Management’s Response: The Department agrees with this finding. We continue to address this
repeat finding as evidenced by two substantial edits to the standard operating procedures governing
Medicare Part B Buy-in reconciliation during the fiscal year. Additional work on this front
includes consolidation of legacy tasks previously conducted by the IEVS team migrating to the
ACES Helpdesk. Related, we have also conducted a transaction code review to ensure all CMS
codes requiring state action are appropriately captured on these reports.
The Department is reviewing Information Technology processes in order to determine where
system changes may enhance and further automate reconciliation for individuals with SSI and
Medicare premium changes.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1106-06)
E-131
(2021-054)
Title: Internal control over the eligibility determination process needs improvement
Prior Year Findings:
FY20 FY19
2020-054 2019-052
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
U.S. Department of Agriculture
Assistance Listing Title: Medicaid Cluster (COVID-19)
Children’s Health Insurance Program (CHIP) (COVID-19)
SNAP Cluster
Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP;
2005ME5021, 2105ME5021;
SNAP Benefits, Maine;
1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Material weakness
Questioned Costs: None
Criteria: 2 CFR 200.303
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Condition: The Department did not have a documented process in place throughout fiscal year
2021 to ensure information entered into the Automated Client Eligibility System (ACES) is
accurate and complete.
Eligibility specialists manually enter information into ACES and initiate computerized eligibility
determinations. Documentation supports that there is no process in place to ensure the accuracy
of manually entered data used in eligibility determination.
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Supervisors perform a case review of one eligibility determination per eligibility specialist per
month. Supervisors and senior program management have the ability to monitor phone
interactions between eligibility specialists and clients in real time.
Prior to February 2021, case reviews and call monitoring activities were not formalized or tracked.
In February 2021, the Department implemented formal, documented case review and call
monitoring procedures using standardized forms. Components of the formal case review include
a review of the accuracy of data entry and resulting eligibility determinations, and appropriateness
of processes.
However, the Department does not have a process in place to review a random selection of cases,
track specific issues identified in the reviews, identify common errors, and determine if those
errors had a broader impact on eligibility determinations. Cases subject to review are judgmentally
selected by supervisors. With approximately 300 eligibility specialists, case reviews are only
performed for approximately one percent of all eligibility determinations. Identified errors are
corrected in individual case files, but the results of case reviews are not monitored to identify
common issues.
The Office of the State Auditor (OSA) also issued finding numbers 2021-052, Internal control
over compliance with eligibility determination requirements needs improvement, and 2021-058,
________ over the ________ system needs improvement.
Context: In fiscal year 2021, the State provided approximately:
• 360,000 Medicaid/CHIP clients with $2.2 billion in Federal benefits;
• 117,000 SNAP clients with $374 million in Federal benefits; and
• 16,000 TANF clients with $27 million in Federal benefits.
Cause: Lack of adequate procedures to prevent, or detect and correct, errors and inaccuracies
affecting the overall population of eligibility determinations
Effect:
• Individuals not eligible for services could be deemed eligible or eligible individuals could
be deemed ineligible.
• Potential questioned costs and disallowances
Recommendation: We recommend that the Department enhance the formal case review
procedures that were implemented to increase the number of case reviews performed and include
a systematic, random selection of cases for review. This will ensure that a representative sample
of eligibility determinations are objectively reviewed. We further recommend that the Department
implement procedures to track errors and inaccuracies identified through the review process,
determine common issues and areas of concern, and apply those results to the broader population
of eligibility determinations. This will ensure that eligibility determinations are performed
accurately.
Corrective Action Plan: See F-21
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Management’s Response: The Department disagrees with this finding. The systems we have in
place are both necessary and sufficient in meeting programmatic requirements to ensure accurate
eligibility determinations are being made. There has been no citation of federal regulation
provided by OSA during this review that contradicts this. The Department would like to note:
1. Supervisors do a minimum of 1 case reading per month and a minimum of 1 call monitoring per
week for staff on phones. It is commonplace for them to do more, especially for a new employee,
or known coaching issues. 2. Prior to 2021, these case readings were tracked by supervisors and
units, and were tracked centrally on our Streamline Management Y-Drive. 3. Phone calls can be
referenced by Supervisors in real time OR afterwards, via recording. 4. Prior to 2021 specifics of
case reading and call monitoring were formalized, with specific expectations in multiple
categories, which were followed up on by coaching staff if not all of the expectations were met.
However, with a goal of continuous improvement, we were already working on an enhanced
system to track Case Reading and Call Monitoring performance statewide which will supersede
and further improve upon current practice. A new program and procedure have already been
written and are in the process of being vetted and approved by Regional personnel for
implementation. This example of continuous quality improvement will lead to a more holistic
understanding of trends and training needs.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: The results of OSA’s fiscal year 2021 testing of client eligibility
determination requirements, as documented in finding 2021-052, identified material
noncompliance with Federal regulations. The existing control environment as described by the
Department did not prevent, or detect and correct, this noncompliance. In addition, OSA requested
evidence to support the Department’s tracking of deficiencies identified through case reading and
call monitoring procedures, the application of those results to the broader population of eligibility
determinations to track the frequency and cause of deficiencies, and the implementation of broad-
based corrective action taken in response to those findings. The Department did not provide
evidence that this occurred.
The Department did not demonstrate the establishment and maintenance of effective internal
control over Federal awards that provides reasonable assurance that the Department is managing
awards in compliance with Federal statutes, regulations, and the terms and conditions of awards
as required by 2 CFR 200.303.
The finding remains as stated.
(State Number: 21-1106-02)
E-134
(2021-055)
Title: Internal control over cost of care assessments needs improvement
Prior Year Findings:
FY20 FY19 FY18 FY17 FY16 FY15 FY14
2020-049 2019-045 2018-053 2017-017 2016-030 2015-012 2014-019
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Allowable costs/costs principles
Type of Finding: Significant deficiency
Questioned Costs: Undeterminable. Incorrectly calculated cost of care (COC) assessments may
result in an overpayment or underpayment to the providers when the State makes a payment for
long-term care. Since there is not always a claim for every assessment, a projection of questioned
costs cannot be reasonably estimated.
Criteria: 2 CFR 200.303; 42 CFR 435.725; Families First Coronavirus Response Act (FFCRA)
Section 6008(b)(3); MaineCare Eligibility Manual, Part 14, Section 6
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must reduce its payment to an institution for service provided to an individual by
the amount that remains after deducting certain amounts from the member’s total income. This
remaining amount is the member’s maximum share of the cost, known as COC.
Section 6008(b)(3) under the FFCRA prohibits states that claimed the temporary increase of
Medicaid Federal Medical Assistance Percentages from making increases to a beneficiary’s
required financial responsibility prior to November 2, 2020.
Condition: A COC assessment represents the required contribution that a MaineCare recipient
must pay toward care in a long-term care facility. The Office for Family Independence (OFI) is
responsible for calculating COC assessments for Medicaid for all members in the State.
A COC deduction represents the amount of assessment that was deducted from a paid claim.
Members may have an assessment calculated but may never have a claim with a deduction utilizing
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that assessment. The Office of MaineCare Services (OMS) is responsible for applying assessments
to submitted claims prior to payment.
The Office of the State Auditor (OSA) selected a non-statistical random sample of 60 COC
assessments and related deductions from paid claims. Three exceptions for COC assessments that
were not adjusted correctly after notification of a change in income or expense were identified as
follows:
• One COC was lower than it should have been by $30. The assessment was $1,477 and
should have been $1,507 for six months during the fiscal year. This member had six claims
where the incorrect COC was applied.
• One COC was lower than it should have been by $106. The assessment was $655 and
should have been $761 for January 2021. This member did not have a qualifying claim for
January 2021.
• One COC was lower than it should have been by $2. The assessment was $731 and should
have been $733 for all 12 months of the fiscal year. This member had 12 claims where the
incorrect COC was applied.
OSA judgmentally selected three COC assessments that increased prior to November 2, 2020, to
test for compliance with FFCRA criteria and noted the following:
• One COC increased $197 from $1,275 to $1,472 for October 2020.
• One COC increased $30 from $641 to $671 for the months of August and September 2020.
Context: In fiscal year 2021, approximately:
• 34,000 COC assessments were calculated by OFI;
• 9,700 members had COC assessments; and
• $521 million was paid to nursing facilities and residential care facilities.
Cause:
• Increased oversight procedures for manually adjusted COC assessments were not in place
for the entire fiscal year.
• System enhancements to reduce the number of COC assessments that require manual
adjustments were not in place for the entire fiscal year.
• Lack of supervisory oversight for COC assessments that increased prior to
November 2, 2020
Effect:
• Inaccurate COC assessments and retroactive changes may result in overpayments or
underpayments for members or the State.
• Potential questioned costs and disallowances
• Noncompliance with the FFCRA
Recommendation: We recommend that the Department monitor newly implemented procedures
and system enhancements to ensure that COC assessments are accurately calculated and that
manually adjusted assessments have proper oversight. We further recommend that the Department
review COC assessments that increased prior to November 2, 2020, and determine appropriate
steps to ensure compliance with the FFCRA.
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Corrective Action Plan: See F-21
Management’s Response: The Department agrees with this finding and has a quality assurance
process for monitoring manually adjusted cost of care assessments as reflected in the standard
operating procedures which underwent a major revision, effective June 30, 2020. This new
business process was in effect for the entire audited year. From the sample that was tested, the
Department achieved a 95% compliance rate and will commit to continuing to achieve at least
95%. No corrective action is necessary.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
(State Number: 21-1106-07)
E-137
(2021-056)
Title: Internal control over deceased client cases and claims analysis needs improvement
Prior Year Findings:
FY20
2020-056
State Department: Health and Human Services
State Bureau: Office for Family Independence
Office of MaineCare Services
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Allowable costs/costs principles
Eligibility
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.403
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Costs must be necessary and reasonable for the performance of the Federal award.
Condition: The Office for Family Independence (OFI) is responsible for maintaining complete
and accurate client information in the Automated Client Eligibility System (ACES). Information
entered into ACES is relied on by the Office of MaineCare Services (OMS) to approve, deny,
process, and analyze claims.
OFI relies on numerous data sources for identifying and providing client date of death (DOD)
information for input into ACES. In some cases where the exact DOD may not be immediately
available, the DOD is entered as the last day of the month so that OFI can close the case of a known
deceased client in a timely manner. OFI did not have a process in place for the entire fiscal year
to identify and correct this information once a known DOD was provided. Audit procedures
identified 13 clients with a DOD that was inconsistent with the actual DOD as provided by Maine
Center for Disease Control & Prevention vital records.
OMS has established procedures to identify claims paid with a service date after DOD. These
procedures include staff review of claims and identification of appropriate action for any claim
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that was improperly paid, as certain claims with service dates after death are allowable. The Office
of the State Auditor (OSA) identified an additional 65 claims that had service dates after death but
were not identified by OMS procedures.
OSA analyzed the entire population of medical claims paid in fiscal year 2021.
Context: The Federal Medicaid program processed approximately $1.8 billion in paid medical
claims in fiscal year 2021.
Cause:
• Lack of procedures to ensure DOD information is entered accurately and appropriately
updated in ACES
• Lack of adequate procedures to ensure all claims paid after a client’s DOD are identified
Effect:
• Claims paid on behalf of deceased clients may go undetected.
• Potential questioned costs and disallowances
Recommendation: We recommend that OFI implement procedures to identify and correct DOD
information when a known DOD is not initially provided. We further recommend that OFI
implement oversight to ensure DOD information is accurately entered into ACES.
We recommend that OMS enhance existing procedures to ensure that all claims with service dates
after a client’s DOD are identified for review to detect any claims that are not allowable.
Corrective Action Plan: See F-22
Management’s Response:
OFI Response: While the Department acknowledges 13 exceptions were found during the audit
period ending June 30, 2021, it should be noted that all of these occurred prior to our updated
standard operating procedure governing Date of Death processing which was implemented on
April 26, 2021.
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
OMS Response: The Department has procedures in place among multiple units to identify and
recover claims paid with dates of service after the date of death. Starting in February 2019, the
Adjustment Unit receives updates from the Change Management Unit when there is a change to
a member’s date of death and then adjusts/reverses any affected claims. The Program Integrity
Unit runs an annual DOD report (implemented in November 2020) to identify and recover any
overpayments. For context regarding the efficacy of the Department’s current procedures, there
was an error rate of .000003 for claims with dates of service after the date of death.
Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS, 207-287-2093
Auditor’s Concluding Remarks are on the following page.
E-139
Auditor’s Concluding Remarks: As stated in the Condition, OSA identified 65 claims that had
service dates after death but were not identified by OMS procedures. Therefore, OMS procedures
are not adequate to ensure claims are identified and reviewed.
The finding remains as stated.
(State Number: 21-1106-08)
E-140
(2021-057)
Title: Internal control over the outsourced medical claims coding process needs improvement
Prior Year Findings:
FY20
2020-059
State Department: Health and Human Services
State Bureau: Office of MaineCare Services
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Title: Medicaid Cluster (COVID-19)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP
Compliance Area: Special tests and provisions
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; Social Security Act Section 1903(r); National Correct Coding Initiative
(NCCI) Medicaid Policy Manual; NCCI Medicaid Technical Guidance Manual
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
State Medicaid Agencies (SMAs) are required to incorporate National Correct Coding Initiative
(NCCI) methodologies into State Medicaid programs. States are required to completely and
correctly implement six Medicaid NCCI methodologies to ensure that only proper payment of
allowable procedures is reimbursed, including the use of specific edit files.
Condition: The NCCI was established by the Centers for Medicare and Medicaid Services (CMS)
in an effort to promote correct coding by preventing coding errors and code manipulation and
reducing improper payments and improper payment rates. The CMS NCCI Policy Manual states
that SMAs must download specific confidential NCCI edit files available on the secure portal,
known as MII RISSNET, rather than using publicly available files. SMAs must ensure that they
or their vendors are using the appropriate Medicaid NCCI edits to adjudicate Medicaid claims.
The Office of MaineCare Services (OMS) contracts with a vendor to process medical claims. The
vendor updates the claims processing system to incorporate the NCCI edit files; however, the
vendor is not obtaining and applying the specific confidential files from MII RISSNET as required
by CMS.
E-141
Context: OMS processed approximately $1.8 billion in Federal medical claims in fiscal year 2021.
Cause: OMS determined that the benefit of utilizing the correct coding files did not support the
time and expense required to implement the change.
Effect:
• Incorrect coding could result in payment of unallowable claims or denial of allowable
claims.
• Potential questioned costs and disallowances
• Noncompliance with Federal regulations
Recommendation: We recommend that OMS devote the necessary resources to facilitate claims
processing using the MII RISSNET files as required by CMS.
Corrective Action Plan: See F-22
Management’s Response: The Department agrees with this finding. A Change Request has been
made with the vendor to process claims using the MII RISSNET files. OMS is currently evaluating
the Change Request development schedule and estimates that this will be completed and deployed
by September of 2022.
Currently the MIHMS NCCI reference tables are updated by publicly available files found on the
Medicaid website. CMS requires States to update the MIHMS NCCI reference tables with NCCI
edit files that are available on the Medicaid Integrity Institute (MII) secure portal (RISSNET). The
Change Request was also created to set up a process to update the MIHMS NCCI reference tables
with the RISSNET NCCI edit files.
Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS, 207-287-2093
(State Number: 21-1106-05)
E-142
(2021-058) Confidential finding, see below for more information
Title: ________ over the ________ system needs improvement
Pursuant to paragraph 6.63 of the U.S. Government Accountability Office’s Government Auditing Standards (also
known as the Yellow Book), we omitted details from this finding as they are confidential under the provisions of 5
MRSA 244-C (3). Though the content of this finding has been redacted, which appears as blank underlining, we
provided the Department(s) with detailed information regarding the specific condition we identified, as well as the
related criteria, context, causes, effects, and our specific recommendations for improvement.
Prior Year Findings:
FY20
Redacted
State Department: Health and Human Services
State Bureau: Office for Family Independence
Federal Agency: U.S. Department of Health and Human Services
U.S. Department of Agriculture
Assistance Listing Title: Medicaid Cluster (COVID-19)
Children’s Health Insurance Program (CHIP) (COVID-19)
SNAP Cluster
Temporary Assistance for Needy Families (TANF)
Assistance Listing Number (CFDA): 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Federal Award Identification Number: 2005ME5MAP, 2105ME5MAP;
2005ME5021, 2105ME5021;
SNAP Benefits, Maine;
1801METANF, 1901METANF,
2001METANF, 2101METANF
Compliance Area: Allowable costs/cost principles
Eligibility
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: ________
Condition: ________
Context: ________
Cause: ________
Effect: ________
Recommendation: ________
E-143
Corrective Action Plan: See F-22
Management’s Response: ________
Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
Auditor’s Concluding Remarks: ________
(State Number: 21-0905-02)
E-144
(2021-059)
Title: Internal control over cash management needs improvement
Prior Year Findings: None
State Department: Defense, Veterans and Emergency Management
State Bureau: Maine Emergency Management Agency
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Title: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) (COVID-19)
Assistance Listing Number (CFDA): 97.036
Federal Award Identification Number: 354DRMEP1SME500, 4367DRMEP1SME500,
4522DRMEP1SME500
Compliance Area: Cash management
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting
Manual (SAAM) Section 50.40.80
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Financial records must adequately identify the source and application of funds and provide
accountability for all funds, property, and other assets related to the Federally funded activities.
The Department must minimize the time between the drawdown of Federal funds and the
disbursement of these funds for Federal program purposes. The timing and amount of fund
transfers must be as close as is administratively feasible to the Department’s actual cash outlay for
program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more
than seven business days.
Condition: The Maine Emergency Management Agency (MEMA) did not minimize the time
between drawdown and disbursement of Federal funds. In the Office of the State Auditor’s testing
of 25 drawdowns:
• the cash balance was not taken into consideration when requesting any of the Federal
drawdowns; and
• eight of the disbursements for program costs ranged from 10 to 48 days after the Federal
funds were received.
The Office of the State Auditor selected a judgmental and a non-statistical random sample.
E-145
Context: During fiscal year 2021, MEMA expended approximately $39.8 million in Disaster
Grants – Public Assistance grant funds.
Cause:
• Lack of adequate policies and procedures
• Lack of staff resources available to process grant drawdowns and monitor cash balances
due to the increased number of COVID-19 grants managed by the agency
Effect:
• The Federal government may impose more stringent program-specific cash management
requirements based on noncompliance.
• Noncompliance with Federal and State regulations
Recommendation: We recommend that the Department develop and implement policies and
procedures to ensure that Federal cash is requested based on immediate cash needs which includes
consideration of existing cash balances. We also recommend the Department review its staffing
needs to ensure there are adequate resources to process and provide supervisory oversight over the
increased workload from COVID-19 grants.
Corrective Action Plan: See F-23
Management’s Response: The Department agrees with this finding. We are working to improve
the cash management procedures and to implement the necessary reconciliation and draw
processes.
Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
(State Number: 21-1502-01)
E-146
(2021-060)
Title: Internal control over subrecipient audit procedures needs improvement
Prior Year Findings: None
State Department: Defense, Veterans and Emergency Management
State Bureau: Maine Emergency Management Agency
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Title: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) (COVID-19)
Assistance Listing Number (CFDA): 97.036
Federal Award Identification Number: 4354DRMEP1SME500, 4367DRMEP1SME500,
4522DRMEP1SME500
Compliance Area: Subrecipient monitoring
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
When a subrecipient’s Federal award expenditures are expected to equal or exceed $750,000
during the fiscal year, the Department must verify that the subrecipient is audited as required by
Subpart F of 2 CFR 200.
Condition: Maine Emergency Management Agency (MEMA) uses a spreadsheet to track when
subrecipient Single Audit reports are due in order to ensure that they are received and reviewed as
required.
The Office of the State Auditor tested 11 subrecipients. MEMA could not provide evidence to
verify that any of the subrecipients obtained Single Audits. Additional audit procedures found that
at least 4 of the 11 subrecipients had Federal funding that exceeded the Single Audit requirement
threshold. MEMA did not obtain or review these audits for potential subrecipient noncompliance
with Federal regulations.
The Office of the State Auditor selected a non-statistical random sample.
Context: MEMA provided approximately $19.8 million in Disaster Grants – Public Assistance
funds to subrecipients during fiscal year 2021.
E-147
Cause: Competing priorities related to an increase in aid requests as a result of COVID-19
Effect:
• Noncompliance with Federal regulations
• Subrecipients may not be complying with Federal statutes, regulations, or the terms and
conditions of the subaward.
Recommendation: We recommend that MEMA allocate resources to ensure that each
subrecipient’s audits are received, reviewed, and that corrective action is taken in a timely manner.
Corrective Action Plan: See F-23
Management’s Response: The Department agrees with this finding. We are working to improve
and implement procedures as necessary to ensure MEMA meets the subrecipient audit
requirements.
Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
(State Number: 21-1502-03)
E-148
(2021-061)
Title: Internal control over Schedule of Expenditures of Federal Awards reporting needs
improvement
Prior Year Findings: None
State Department: Administrative and Financial Services
Defense, Veterans and Emergency Management
State Bureau: Office of the State Controller
Maine Emergency Management Agency
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Title: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) (COVID-19)
Assistance Listing Number (CFDA): 97.036
Federal Award Identification Number: 4354DRMEP1SME500, 4367DRMEP1SME500,
4522DRMEP1SME500
Compliance Area: Reporting
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.510; 2 CFR 200, Appendix XI, Assistance Listing Number
97.036
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the
period covered by the State’s financial statements which must include the total Federal awards
expended. At a minimum, the SEFA must provide total Federal awards expended for each
individual Federal program and the Assistance Listing Number (ALN).
Non-Federal entities must record expenditures on the SEFA when: (1) the Federal Emergency
Management Agency has approved the non-Federal entity’s Project Worksheet (PW), and (2) the
non-Federal entity has incurred the eligible expenditures. Federal awards expended in years
subsequent to the fiscal year in which the PW is approved are to be recorded on the non-Federal
entity’s SEFA in those subsequent years.
Condition: Maine Emergency Management Agency (MEMA) must complete and submit exhibits
and related schedules to the Office of the State Controller (OSC) at the close of each fiscal year to
E-149
report Federal award information for inclusion on the State’s SEFA. OSC is responsible for
compiling this information on behalf of the State.
OSC obtained a schedule from the State’s Division of Purchases identifying $29.8 million in
expenditures that were expected to be reimbursed under the Disaster Grants – Public Assistance
program. OSC incorrectly determined the expenditures to be recognizable by the Federal program
in fiscal year 2021 and the expenditures were included on the SEFA.
The Office of the State Auditor’s audit of the $29.8 million of additional expenditures identified
the following:
• An overstatement of $8.3 million due to the same expenditures being included in the SEFA
total twice.
• An overstatement of $21.5 million in expenditures that should not have been included as
fiscal year 2021 expenditures in accordance with Federal regulations.
Additionally, approximately $19.5 million of other program expenditures were incorrectly
reported as amounts provided to subrecipients. As a result of this error, subrecipient expenditures
were overstated and direct expenditures were understated on the SEFA.
Context: MEMA Disaster Grants – Public Assistance program expenditures were incorrectly
reported as approximately $69.7 million rather than $39.9 million in fiscal year 2021. Additionally,
approximately $39.4 million of that amount was reported as subrecipient expenditures, rather than
the correct total of $19.9 million.
Cause:
• Lack of adequate internal control relating to agency SEFA submissions to OSC
• Lack of adequate review procedures
Effect: Incomplete or inaccurate amounts by Federal program and ALN on the SEFA would result
in noncompliance with Federal regulations if undetected. The SEFA is submitted to the Federal
government and may be used for programmatic, policy or statistical purposes.
Recommendation: We recommend that OSC work with MEMA to improve SEFA submission
and subsequent review procedures to ensure Federal program expenditures are reported accurately.
Corrective Action Plan: See F-23
Management’s Response: The Department agrees with this finding. An administrative oversight
resulted in $8.3 million being included in the SEFA twice. The $21.5 million are expenditures that
were originally incurred in a non-federal fund, but not transferred to the federal fund until 2022.
Since the SEFA is a cash basis document the $21.5 million should not be reflected in the SEFA
until 2022 when the transfer was approved and recorded. OSC will work with State agencies to
better understand the process they follow and offer to help them meet the requirements for SEFA
reporting.
Contact: Thomas Randall, Financial Coordinator/Audit Analyst, OSC, 207-626-8492
(State Number: 21-1502-04)
E-150
(2021-062)
Title: Internal control over special reporting needs improvement
Prior Year Findings: None
State Department: Defense, Veterans and Emergency Management
State Bureau: Maine Emergency Management Agency
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Title: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) (COVID-19)
Assistance Listing Number (CFDA): 97.036
Federal Award Identification Number: 4354DRMEP1SME500, 4367DRMEP1SME500,
4522DRMEP1SME500
Compliance Area: Reporting
Type of Finding: Material weakness
Material noncompliance
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 170
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of
$30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency
Act (FFATA) Subaward Reporting System.
Condition: When a subaward exceeding the first-tier threshold is awarded to a subrecipient, Maine
Emergency Management Agency (MEMA) must collect and enter data into the FFATA Subaward
Reporting System. MEMA did not report any subawards in the reporting system in fiscal year
2021.
Context: MEMA provided approximately $19.8 million in Disaster Grants – Public Assistance
funds to subrecipients in fiscal year 2021. Of the 105 subrecipients in fiscal year 2021, 39 received
subawards exceeding the first-tier subaward threshold totaling approximately $19.1 million.
Cause:
• Competing priorities related to an increase in aid requests as a result of COVID-19
• Lack of resources
• Lack of policies and procedures
E-151
Effect: Noncompliance with Federal regulations
Recommendation: We recommend that MEMA implement policies and procedures to ensure that
FFATA reporting is completed for all subawards that meet or exceed the first-tier threshold. We
further recommend that MEMA allocates resources to properly report subrecipient awards as
required by Federal program regulations.
Corrective Action Plan: See F-24
Management’s Response: The Department agrees with this finding. We are working to create
and implement the necessary policies and procedures to ensure MEMA completes FFATA
reporting for all subawards that meet or exceed the first-tier threshold.
Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
(State Number: 21-1502-05)
E-152
(2021-063)
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Prior Year Findings: None
State Department: Defense, Veterans and Emergency Management
State Bureau: Maine Emergency Management Agency
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Title: Disaster Grants – Public Assistance
(Presidentially Declared Disasters) (COVID-19)
Assistance Listing Number (CFDA): 97.036
Federal Award Identification Number: 4354DRMEP1SME500, 4367DRMEP1SME500,
4522DRMEP1SME500
Compliance Area: Subrecipient monitoring
Type of Finding: Significant deficiency
Questioned Costs: None
Criteria: 2 CFR 200.303; 2 CFR 200.332
The Department must establish and maintain effective internal control over Federal awards that
provides reasonable assurance that the Department is managing awards in compliance with Federal
statutes, regulations, and the terms and conditions of awards.
The Department is required to evaluate each subrecipient’s risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of determining the
appropriate subrecipient monitoring described in 2 CFR 200.332.
Condition: When a subrecipient applies for Disaster Grants – Public Assistance funds, Maine
Emergency Management Agency (MEMA) policy requires staff to use a subrecipient risk
assessment form to determine the risk of subrecipient noncompliance and appropriate monitoring
procedures based on the determined risk. MEMA did not evaluate each subrecipient’s risk of
noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward
for purposes of determining the appropriate level of subrecipient monitoring. In the 26
subrecipients selected for testing, 25 did not have completed risk evaluations.
The Office of the State Auditor selected a judgmental and a non-statistical random sample.
Context: MEMA provided approximately $19.8 million in Disaster Grants – Public Assistance
funds to subrecipients in fiscal year 2021.
Cause:
• Competing priorities related to an increase in aid requests as a result of COVID-19
• Lack of resources
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Effect: Subrecipients that are deemed higher risk as a result of prior noncompliance may not be
monitored on a more frequent basis. Conversely, subrecipients that are deemed lower risk may
not be monitored on a less frequent basis, which would free resources and time to dedicate towards
other higher risk subrecipients.
Recommendation: We recommend that MEMA continue implementation of their process that
evaluates each subrecipient’s risk of noncompliance specifically for the purposes of determining
the appropriate subrecipient monitoring to be performed during the subaward. We further
recommend that MEMA allocate resources to evaluate risk in order to properly monitor
subrecipients as required by Federal program regulations.
Corrective Action Plan: See F-24
Management’s Response: The Department agrees with this finding. We are working to improve
the risk assessment procedures and to implement the necessary assessment and monitoring on all
subrecipients.
Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
(State Number: 21-1502-02)
E-154
STATE OF MAINE
CORRECTIVE ACTION PLAN
FOR THE YEAR ENDED JUNE 30, 2021
F-1
F-2
STATE OF MAINE
DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES
OFFICE OF THE STATE CONTROLLER
14 STATE HOUSE STATION AUGUSTA, MAINE 04333-0014
SERVING THE PUBLIC AND DELIVERING ESSENTIAL SERVICES TO STATE GOVERNMENT
KIRSTEN LC FIGUEROA DOUGLAS E. COTNOIR, CPA, CIA
COMMISSIONER STATE CONTROLLER
CORRECTIVE ACTION PLAN
Fiscal Year Ended June 30, 2021
Corrective Action Plan
The Corrective Action Plan (CAP) is compiled by the Office of the State Controller (OSC) on behalf of
the State of Maine. The objective of this report is to document the corrective action steps that will be
completed in response to each Single Audit Report finding, identify the individual(s) responsible for
ensuring that corrective action is completed, and to provide an anticipated date for complete
implementation of corrective action. The CAP complies with 2 CFR 200, Subpart F, § 200.511 Audit
Findings Follow-Up, (c) Corrective Action Plan.
Table of Contents
Finding State Department Corrective Single
Number Action Plan Audit Page
Page Number
Number
2021-001 Administrative and Financial Services F-5 E-11
2021-002 Administrative and Financial Services F-5 E-13
2021-003 Administrative and Financial Services F-6 E-14
Health and Human Services
2021-004 Administrative and Financial Services F-6 E-16
Health and Human Services
2021-005 Education F-7 E-19
2021-006 Education F-7 E-20
2021-007 Judicial Branch F-7 E-21
2021-008 Judicial Branch F-8 E-22
Administrative and Financial Services
2021-009 Labor F-8 E-24
Administrative and Financial Services
2021-010 Transportation F-9 E-27
Administrative and Financial Services
2021-011 Labor F-9 E-28
2021-012 Health and Human Services F-9 E-29
2021-013 Administrative and Financial Services F-9 E-30
2021-014 Administrative and Financial Services F-10 E-31
2021-015 Health and Human Services F-10 E-47
F-3
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Finding State Department Corrective Single
Number Action Plan Audit Page
Page Number
Number
2021-016 Health and Human Services F-10 E-49
2021-017 Health and Human Services F-10 E-51
2021-018 Health and Human Services F-10 E-52
Administrative and Financial Services
2021-019 Health and Human Services F-11 E-55
2021-020 Health and Human Services F-11 E-57
2021-021 Labor F-11 E-59
2021-022 Labor F-12 E-67
Administrative and Financial Services
2021-023 Education F-12 E-69
2021-024 Administrative and Financial Services F-12 E-72
2021-025 Health and Human Services F-13 E-75
2021-026 Administrative and Financial Services F-13 E-78
2021-027 Education F-13 E-79
2021-028 Education F-14 E-80
2021-029 Economic and Community Development F-14 E-81
2021-030 Economic and Community Development F-14 E-83
2021-031 Education F-14 E-85
2021-032 Education F-15 E-87
2021-033 Administrative and Financial Services F-15 E-89
2021-034 Education F-15 E-91
2021-035 Health and Human Services F-16 E-93
2021-036 Health and Human Services F-16 E-95
2021-037 Health and Human Services F-16 E-96
2021-038 Health and Human Services F-16 E-97
2021-039 Health and Human Services F-17 E-99
2021-040 Health and Human Services F-17 E-101
2021-041 Health and Human Services F-17 E-103
2021-042 Health and Human Services F-17 E-105
2021-043 Health and Human Services F-18 E-108
2021-044 Health and Human Services F-18 E-110
2021-045 Health and Human Services F-18 E-111
2021-046 Health and Human Services F-19 E-113
2021-047 Health and Human Services F-19 E-115
2021-048 Health and Human Services F-19 E-117
2021-049 Health and Human Services F-19 E-119
2021-050 Health and Human Services F-19 E-121
2021-051 Health and Human Services F-20 E-125
2021-052 Health and Human Services F-20 E-127
2021-053 Health and Human Services F-21 E-130
F-4
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Finding State Department Corrective Single
Number Action Plan Audit Page
Page Number
Number
Administrative and Financial Services
2021-054 Health and Human Services F-21 E-132
2021-055 Health and Human Services F-21 E-135
2021-056 Health and Human Services F-22 E-138
2021-057 Health and Human Services F-22 E-141
2021-058 Health and Human Services F-22 E-143
2021-059 Defense, Veterans and Emergency Management F-23 E-145
2021-060 Defense, Veterans and Emergency Management F-23 E-147
2021-061 Administrative and Financial Services F-23 E-149
Defense, Veterans and Emergency Management
2021-062 Defense, Veterans and Emergency Management F-24 E-151
2021-063 Defense, Veterans and Emergency Management F-24 E-153
Finding Corrective Action Plan
Number
2021-001 Department: Administrative and Financial Services
Title: Internal control over lottery receivable reconciliations needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department continues its work with a third-party vendor. Due to the
complexity of Lottery operations compounded by an inability to hold regular
meetings in person due to the pandemic, the engagement has been extended. It is
now planned that by March 31, 2022, a streamlined accounting process, an updated
current procedure manual and requisite training will be concluded. Processes will
be in place to provide a monthly reconciliation of Accounts Receivable by retailer.
Completion Date: March 31, 2022
Agency Contact: Janre Mullins, Director, General Government Service Center, DAFS, 207-624-
7399
2021-002 Department: Administrative and Financial Services
Title: ________ over ________ within the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: April 30, 2022
Agency Contact: Kimberly Hall, ERP Business Systems Analyst, OSC, 207-626-8427
F-5
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
2021-003 Department: Administrative and Financial Services
Health and Human Services
Title: Internal control over financial reporting of OFI overpayments needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: Management disagrees with this finding. The receivable balance in question
primarily originates from two Federal programs; Temporary Assistance for Needy
Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP).
The U.S. Department of Health and Human Services’ Office of Family Assistance
provides guidance on the recovery of overpayments for the TANF program. Program
Instruction TANF-ACF-PI-2006-03 (Collecting and Repaying Overpayments Made
to Families under the Aid to Families with Dependent Children (AFDC) Program
and the Temporary Assistance for Needy Families (TANF) Program) makes it clear
that as of October 1, 1996 the collection of overpayments should be utilized for
program purposes. It is implicit in these same instructions that no liability is created
for the State for uncollected funds. It is for these reasons that recording a general
fund liability for TANF overpayments would be erroneous.
The recovery of overpayments for SNAP households is covered by 7 CFR 273.18
(a)(2). This CFR specifies that claims against households, the action required to be
established for the overpayment of benefits, is specifically identified as a Federal
debt. This proclamation would preclude the State from recording this as a general
fund liability.
In addition to the citations provided above, the Office of the State Controller
requested and received confirmation that supports our position that recording a
liability is not necessary from the Federal Office of Administration for Children
and Families, and the U.S. Department of Agriculture for the TANF and SNAP
programs, respectively.
Completion Date: N/A
Agency Contact: Sandra Royce, Director of Financial Reporting, OSC, 207-626-8451
2021-004 Department: Administrative and Financial Services
Health and Human Services
Title: Internal control over accounting for personal protective equipment inventory needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: Administrative and Financial Services:
The Central Warehouse will provide the FIFO valuation of PPE items with
individual order information to OSC-GGSC for review and approval.
Once approved, item valuations will be input into the FishBowl Inventory System
by the Central Warehouse.
Cycle counts have been and will be completed quartley and all paperwork will be
retained. The last inventory in November has been provided in advance of these
findings.
Inventory documents will be scanned and electronic copies retained for audit and
inquiry purposes, preventing loss or misplacement.
F-6
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
The Office of the State Controller will work with State agencies to better understand
the process they follow and offer to help them meet the requirements for financial
reporting.
Maine Center for Disease Control & Prevention:
An inventory report from the Inventory Management and Tracking System
(IMATS) will be used by each warehouse personnel to cross reference the physical
inventory being conducted. Using the IMATS inventory report, each warehouse
person will write-in the physical count next to the product on the report. Physical
inventory shall be conducted on all new, unopened cases, boxes, or pallets. Partial
boxes or opened boxes will be partially allocated to the extent possible.
The Maine CDC will work with the US CDC IMATS technical team to develop a
"unit cost" data field within the IMATS system to record the fair value of inventory
at the time of receipt. In the event the IMATS system is unable to accommodate a
unit cost field, Maine CDC will utilize an Excel spreadsheet to record the unit cost
for the items. Given the extreme fluctuation in pricing for each PPE item, the fair
value will be recorded as the average cost for each type of PPE item in inventory.
Completion Date: December 10, 2021 (DAFS first item), December 31, 2021 (DAFS second item),
November 30, 2021 (DAFS third and fourth item), June 30, 2022 (DAFS fifth
item) and June 30, 2022 (all MCDC items)
Agency Contact: OSC Contact: Stacey Thomas, Financial Management Coordinator, OSC, 207-626-
8431
BGS Contact: Andrew Giroux, Director of Central Services, BGS, 207-287-2923
GGSC Contact: Janre Mullins, Director, General Government Service Center, 207-
624-7399
CDC Contact: Veronica Robichaud, Chief Operating Officer, Maine CDC, 207-
287-2923
2021-005 Department: Education
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: July 1, 2024
Agency Contact: Joanne Allen, Director of School Finance & Operations, DOE, 207-957-6796
2021-006 Department: Education
Title: ________ over ________ and ________ for the ________ system needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: June 30, 2022 and December 31, 2022 respectively
Agency Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
2021-007 Department: Judicial Branch
Title: ________ over the ________ and ________ system needs improvement
F-7
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: June 30, 2022
Agency Contact: Dennis Corliss, Chief of Finance and Administration, State of Maine Judicial
Branch, 207-822-0709
2021-008 Department: Judicial Branch
Administrative and Financial Services
Title: Internal control over the valuation of the allowance for uncollectible fines and fees
for Judicial Branch receivables needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Administrative Office of the Courts and the Office of the State Controller
(OSC) agree with the process description. Judicial provides the aging report and
OSC calculates the reserve. OSC is responsible for determining the estimates in the
financial statements. The accounting estimates are based on subjective, as well as,
objective factors; therefore, professional judgement is required to estimate an
amount for uncollectible receivables using an aging methodology, which is
considered a common and acceptable method within the industry. Management's
opinion is that this method is conservative, not overly sensitive to variations, is
consistent with historical patterns and is not overly subjective or susceptible to
bias. Applying this methodology, OSC accumulates relevant, sufficient and
reliable data on which to base the estimate. Additionally, we believe that the
estimate is presented in conformity with the applicable accounting principles and
that disclosure is adequate. The OSC will continue to reserve 100% of all fines
over 180 days old, which has been the acceptable method for many years.
Completion Date: N/A
Agency Contact: Sandra Royce, Director of Financial Reporting, OSC, 207-626-8451
2021-009 Department: Labor
Administrative and Financial Services
Title: Internal control over financial reporting of unemployment insurance receivables
needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Office of the State Controller (OSC) will provide guidance to the Department
of Labor (DOL) to develop a reporting mechanism that will provide a more
detailed analysis of the activity of the receivable balances. OSC is responsible for
determining the estimates in the financial statements. The accounting estimates are
based on subjective, as well as, objective factors; therefore, professional judgement
is required to estimate an amount for uncollectible receivables using an aging
methodology, which is considered a common and acceptable method within the
industry. Management's opinion is that this method is not overly sensitive to
variations, is consistent with historical patterns and is not overly subjective or
susceptible to bias. Applying this methodology, OSC and the Department of Labor
(DOL) accumulate relevant, sufficient and reliable data on which to base the
estimate. Additionally, we believe that the estimate is presented in conformity with
the applicable accounting principles and that disclosure is adequate. OSC recently
performed a five-year trend analysis of historical collections with information
provided by DOL. The OSC compared the percentages and the assumptions used
F-8
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
in the past and updated the reserve percentages accordingly. The OSC will
continue to use the rolling year trend analysis with the actual collection data, as
provided by the DOL, to update the reserve percentage. DOL implemented a new
system and OSC will continue to review the reserve process to ensure the
allowance continues to be valued properly.
Completion Date: June 30, 2022
Agency Contact: Stacey Thomas, Financial Management Coordinator, OSC, 207-626-8431
2021-010 Department: Transportation
Administrative and Financial Services
Title: ________ over ________ and ________ for the ________ system needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: June 30, 2022
Agency Contact: Kathleen Malcolm, Financial Processing Director, DOT, 207-624-3292
2021-011 Department: Labor
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: June 30, 2023
Agency Contact: Kimberly Smith, Deputy Commissioner, Department of Labor, 207-621-5096
2021-012 Department: Health and Human Services
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The Department’s explanation and
specific reasons for disagreement have been excluded to protect confidential
information. The complete explanation and specific reasons for disagreement have
been provided to the Office of the State Auditor under separate cover.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-013 Department: Administrative and Financial Services
Title: ________ over the Office of Information Technology’s ________ procedures
needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
F-9
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Completion Date: December 31, 2025
Agency Contact: Nathan Willigar, Chief Information Security Officer, OIT, 207-458-1320
2021-014 Department: Administrative and Financial Services
Title: ________ over ________ needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: December 1, 2022 and December 1, 2023 respectively
Agency Contact: Nathan Willigar, Chief Information Security Officer, OIT, 207-458-1320
2021-015 Department: Health and Human Services
Title: Internal control over the issuance of SNAP benefits needs improvement
Questioned Costs: None
Status: Corrective action complete
Corrective Action: The revised standard operating procedure went into effect on April 26, 2021 which
included increasing the cadence of matching efforts between ACES and Maine’s
CDC Office of Data and Vital Statistics from quarterly to monthly.
Completion Date: April 26, 2021
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-016 Department: Health and Human Services
Title: Internal control over EBT reconciliation procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department has already requested access to the ASAP system from our
Federal partners.
The Department will implement documented procedures once access to the ASAP
system is granted.
Completion Date: June 30, 2022
Agency Contact: Don Ellis, Assistant Director of Business Technology, DHHS, 207-624-4155
2021-017 Department: Health and Human Services
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The Department’s explanation and
specific reasons for disagreement have been excluded to protect confidential
information. The complete explanation and specific reasons for disagreement have
been provided to the Office of the State Auditor under separate cover.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-018 Department: Health and Human Services
Administrative and Financial Services
Title: Internal control over cash balances needs improvement
Questioned Costs: None
Status: Corrective action in progress
F-10
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Corrective Action: The Managing Staff Accountant will modify the current grant cash balance
analysis to include separating the WIC NSA Admin and the WIC Food grants.
The Managing Staff Accountant will finalize grant reconciliations for the WIC
Food grants from 2017 to present.
Completion Date: March 31, 2022 and December 31, 2022 respectively
Agency Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626
2021-019 Department: Health and Human Services
Title: Internal control over subrecipient monitoring needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Senior Health Manager will ensure the completion of the finance component
of the three local agencies.
The Senior Health Manager will implement a process to ensure MERs are
completed timely.
The Senior Health Manager will meet quarterly to check on progress of MERs.
Completion Date: August 31, 2022 (first item) and December 31, 2022 (remaining two items)
Agency Contact: Ginger Roberts-Scott, Senior Health Program Manager, DHHS, 207-287-5342
2021-020 Department: Health and Human Services
Title: Internal control over subrecipient awards needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: DCM is updating the current contracts to ensure information within the contract is
accurate.
DCM will coordinate with programmers for CADB 2.0 and the grants database to
verify the correct information is being transferred between the systems.
DCM will provide additional training to CDC Program staff on data entry of
program codes and program period.
A CDC Program Manager will review contracts to ensure subrecipient awards are
complete, accurate and in accordance with Federal regulations.
Completion Date: March 31, 2022 (first item) and June 30, 2022 (remaining three items)
Agency Contact: Jim Lopatosky, Director - Division of Contract Management, DHHS, 207-287-
5075
2021-021 Department: Labor
Title: Internal control over Unemployment Insurance claim payments needs
improvement
Questioned Costs: Known: $2,032,324 Likely: $29.1 Million
Status: Corrective action in progress
Corrective Action: The Department will review the Maine CDC Vital Statistics Crossmatch to
determine why there is a discrepancy between the records we received and what
was provided to Audit for a crossmatch.
The Department will add functionality for follow-up work items when a claim
filing is detected after a reported date of death (DOD) and enhance blocks to
prevent further filing once a DOD is reported.
F-11
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
The Department will review the process where a transitional benefit year is system
generated and there appears to be unreported (by the claimant) employment during
the time the claimant was filing. Possibility to send wage audits sooner than when
the quarterly intrastate crossmatch would pick up the issue.
The Department will review a claimant's age when filing a claim. Furthermore, the
Department will determine if an upper age range limit needs to be considered to
allow for a review before benefits are paid.
The Department will review the process that generates B-1 Separation and Wage
Request notices to employers when a claim is filed.
Completion Date: June 30, 2023
Agency Contact: Laura Boyett, Director, Bureau of Unemployment Compensation, DOL, 207-621-
5156
2021-022 Department: Labor
Administrative and Financial Services
Title: Internal control over agency Schedule of Expenditures of Federal Awards
submissions needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The existing control of verifying expenditures by Agency will be enhanced with
the additional step of verifying the totals by ALN. This will ensure the accuracy
and completeness of the ALN's reported on the SEFA.
Completion Date: March 31, 2022
Agency Contact: Thomas Randall, Financial Coordinator/Audit Analyst, OSC, 207-626-8492
2021-023 Department: Education
Title: Internal control over education expenditures charged to the Coronavirus Relief
Fund needs improvement
Questioned Costs: Known: $27,169 Likely: Undeterminable
Status: Corrective action in progress
Corrective Action: The Office of Federal Emergency Relief Programs has developed a grant
application reviewing document that will continue to be refined and tailored to the
federal and state statutory requirements.
The team will require strict adherence to the application reviewing document for
all submissions and resubmissions of federal emergency relief funding.
All determinations for allowability, reasonableness, and necessity will be
documented in the application reviewing document.
The Office of Federal Emergency Relief Programs will continue to follow the
standard operating protocol of reviewing reimbursement requests and confirm that
the request and documentation aligns to the approved applications.
Completion Date: July 1, 2022
Agency Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180
2021-024 Department: Administrative and Financial Services
Title: Internal control over payroll transfers to the Coronavirus Relief Fund needs
improvement
Questioned Costs: Known: $4,867 Likely: Undeterminable
Status: Management’s opinion is that corrective action is not required
F-12
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Corrective Action: The Departments disagrees with this finding. Payroll costs are incurred when the
service is provided; however, the cost of leave benefits (including vacation, sick
and compensatory time) is not incurred until claimed by the employee. The cost of
benefits in question were claimed by substantially dedicated public safety
employees during the period of performance in accordance with CRF guidance.
Completion Date: N/A
Agency Contact: Shirley Browne, Deputy State Controller, Office of the State Controller, 207-626-
8423
2021-025 Department: Health and Human Services
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. In the middle of a pandemic the
Department contracted with many new providers in order to prevent the spread of
COVID-19 infections by creating local prevention plans and providing education
to businesses and towns. Many of these contracts were limited period contracts (4
months) and guidance from the Federal government was to promote flexibility in
the disbursement of these funds. The Department, knowing that the timing of
contracting and disbursing these funds was critical and that many of these
providers were new to contracting with the State, recognized these providers as
"high risk". Recognizing these providers as "high risk", the Department utilized 2
of the 3 suggested monitoring tools in the Uniform Guidance based on the
assessment of risk posed by the subrecipients. Those tools, 1) providing
subrecipients with training and technical assistance and 2) arranging for agreed-
upon procedures engagements, which is built into the Department's Maine Uniform
Accounting and Auditing Practices for Community Agencies (MAAP) were
required and performed for all of these subrecipients. The third monitoring tool
identified in the Uniform Guidance related to high risk subrecipients, performing
on-site visits of subrecipient's program operations, was not practical in the middle
of the pandemic.
Completion Date: N/A
Agency Contact: Tony Madden, Deputy Directory – Division of Audit, DHHS, 207-287-2834
2021-026 Department: Administrative and Financial Services
Title: ________ over ________ needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: July 1, 2022
Agency Contact: Soumia Tber, Payroll, Personnel Authorization Supervisor, OSC, 207-626-8420
2021-027 Department: Education
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
F-13
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Completion Date: April 30, 2022 and September 30, 2022 respectively
Agency Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
2021-028 Department: Education
Title: ________ over ________, ________, and ________ needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: May 8, 2022(first item) May 15, 2022(Second item) May30, 2022(third item) and
September 1, 2022 (remaining two items)
Agency Contact: Katherine Warren, Education Data Systems Manager, DOE, 207-592-1793
2021-029 Department: Economic and Community Development
Title: Internal control over special reporting needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will modify existing policies and procedures to ensure that future
engagements made with subrecipients are monitored for inclusion in FFATA
reporting.
Completion Date: March 31, 2022
Agency Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496
2021-030 Department: Economic and Community Development
Title: Internal control over suspension and debarment procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will implement policies and procedures to ensure that future
engagements made with subrecipients through the use of a Memorandum of
Understanding will incorporate the required suspension and debarment language.
The Department will update the Memorandum of Understanding with the
subrecipient administering the Emergency Rental Assistance program to obtain
assurance that the subrecipient is not suspended or debarred.
Completion Date: March 31, 2022 and May 2, 2022 respectively
Agency Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496
2021-031 Department: Education
Title: Internal control over Title I, Part A award allocations needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Title I Specialists updated the reviewer's checklist.
The Title I Specialists will use the allocation spreadsheet to run the Title I
calculations.
The ESEA Federal Programs Director and Title I Specialists will meet to review
the checklist and allocations.
F-14
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
If discrepancies exist, the ESEA Federal Programs Director and Title I Specialists
will resolve the issues by reaching out to the Federal Programs Director or the US
DOE with any further questions.
The ESEA Federal Programs Director will sign off on the verification of accuracy
section of the reviewer's checklist.
Completion Date: March 11, 2022, May 13, 2022, May 20, 2022, June 10, 2022, and June 30, 2022
respectively
Agency Contact: Cheryl L. Lang, ESEA Federal Programs Director, DOE, 207-441-8059
2021-032 Department: Education
Title: Internal control over special reporting needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department’s Financial Analyst will update and maintain a listing of
applicable DUNS numbers (and UEI moving forward).
The Department will compare each new month's FFATA report to the prior
month’s report to avoid any potential duplicative entries.
FFATA reports will be reviewed by a second party for completeness and accuracy,
to ensure awards for state agencies are not included, and that the project
description is correctly stated prior to submission.
The reviewer will sign off on the review in a FFATA tracking file which includes
the review date, submission date, and any errors discovered and corrected prior to
submission.
Completion Date: April 30, 2022
Agency Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161
2021-033 Department: Administrative and Financial Services
Title: Internal control over cash management needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will implement additional policies and procedures to ensure the
timely return of excess grant funds as well as providing supervisory oversight of
these transactions.
Completion Date: March 31, 2022
Agency Contact: Laurie Andre, GGSC Deputy Director, Accounting, DAFS, 207-592-0725
2021-034 Department: Education
Title: Internal control over agency Schedule of Expenditures of Federal Awards
submissions needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: Upon completion of the SEFA, the GGSC will forward the preliminary report to
the Department for review prior to submission.
The Department will review expenditures for the appropriate categorization, and
the Department will notify GGSC of any recategorizations needed.
Once the GGSC has made any needed revisions and received Department
approval, the SEFA will be submitted.
F-15
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Completion Date: September 1, 2022
Agency Contact: Nicole Denis, Director of Finance, DOE, 207-530-2161
2021-035 Department: Health and Human Services
Title: Internal control over provider monitoring needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Health Program Manager will update the standard operating procedures to
reflect quarterly provider monitoring. The procedures will be documented and
records will be maintained.
The Health Program Manager will update the standard operating procedures
compliance spreadsheet to include a supervisory sign-off of the activities
completed. The supervisory oversight will be documented and records will be
maintained.
Completion Date: June 30, 2022
Agency Contact: Jessica Shiminski, Health Program Manager, Maine Center for Disease Control &
Prevention, DHHS, 207-287-7087
2021-036 Department: Health and Human Services
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: April 30, 2023
Agency Contact: Tonya Philbrick, Senior Health Program Manager, Maine Center for Disease
Control & Prevention, DHHS, 207-287-2541
2021-037 Department: Health and Human Services
Title: ________ over ________, ________, and ________ needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: May31, 2022 (first item) July 31, 2022 (second item) September 30, 2022 (third
item) and October 31, 2022 (remaining three items)
Agency Contact: Danielle Sherwood, ImmPact Manager, DHHS, 207-287-2586
2021-038 Department: Health and Human Services
Title: Internal control over reporting needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Senior Program Manager will create an internal review process to ensure that
quarterly progress reports, annual progress reports, and special reports are accurate,
complete, reviewed, and are recorded when filed.
Completion Date: February 1, 2023
Agency Contact: Sara Robinson, Senior Program Manager, DHHS, 207-287-4610
F-16
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
2021-039 Department: Health and Human Services
Title: Internal control over subrecipient awards needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will update the current contracts to ensure that information within
the contracts are accurate.
DCM will coordinate with programmers for CADB 2.0 and the grants database to
verify that the correct information is being transferred between the systems.
DCM will provide additional training to the MeCDC Program staff on the data
entry of program codes and program period.
A MeCDC Program Manager will review contracts to ensure subrecipient awards
are complete and accurate in accordance with Federal regulations.
Completion Date: March 31, 2022 (first item) and June 30, 2022 (remaining three items)
Agency Contact: Jim Lopatosky, Director - Division of Contract Management, DHHS, 207-287-
5075
2021-040 Department: Health and Human Services
Title: Internal control over payments made to and on behalf of TANF clients needs
improvement
Questioned Costs: Known: $8,377 Likely: $667,074
Status: Corrective action in progress
Corrective Action: The Department (The Work Support Team Supervisor, ASPIRE Program Manager,
and Sr. Program Manager for TANF) will review protocols and training material
regarding frequency of monitoring and notification of certain client changes to the
Work Support Team.
The Department (The Work Support Team Supervisor, ASPIRE Program Manager,
and Sr. Program Manager for TANF) will review, and revise if necessary, the
policies and protocols regarding our vendor payment processing system to include
monitoring of activity.
Completion Date: June 30, 2022
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-041 Department: Health and Human Services
Title: Internal control over special reporting needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Director will revisit and adjust the process as necessary.
The Director will make technology improvements to ensure data accuracy.
The Director will add a layer of review to the process to ensure accuracy and
documentation is retained.
Completion Date: June 30, 2022 (first item) and October 31, 2022 (remaining two items)
Agency Contact: Jim Lopatosky, Director - Division of Contract Management, DHHS, 207-287-
5075
2021-042 Department: Health and Human Services
Title: Internal control over subrecipient cash management needs improvement
Questioned Costs: None
F-17
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The Department reviews budgeted
expenses to determine their timing and nature (one time, recurring, allowability);
reviews quarterly expense reports and alters payments to meet immediate cash
needs, and finally, monitors subrecipient single audits to ensure there are no cash
management findings. Additionally, our subrecipient's programs are tested more
frequently and at a lower threshold than the threshold for single audits in
accordance with the Maine Uniform Accounting and Auditing Practices for
Community Agencies (MAAP). The Department's approach is administratively
reasonable and does minimize the time elapsing between the payment of Federal
funds to the subrecipient and the subrecipient’s actual disbursement for program
purposes given administrative and operational needs. We believe we have
procedures in place that can be corroborated by the fact that our subrecipients do
not receive single audit findings related to cash management.
Completion Date: N/A
Agency Contact: Jim Lopatosky, Director - Division of Contract Management, DHHS, 207-287-
5075
2021-043 Department: Health and Human Services
Title: Internal control over Income Eligibility and Verification System procedures needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will review the standard operating procedures governing IEVS
reporting and make changes as appropriate.
The Department will consider opportunities for automation of existing manual
processes.
Completion Date: June 30, 2022 and June 30, 2023 respectively
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-044 Department: Health and Human Services
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department agrees with this finding. The Department’s corrective action plan
has been excluded to protect confidential information. The complete corrective
action plan has been provided to the Office of the State Auditor under separate
cover.
Completion Date: June 30, 2022
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-045 Department: Health and Human Services
Title: Internal control over cash benefits paid to TANF clients needs improvement
Questioned Costs: Known: $224; Likely: $112,657
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The Office of the State Auditor
correctly identified an error; however, the Department has controls in place and
identified the error timely. The case was referred for overpayment during the fiscal
year.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
F-18
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
2021-046 Department: Health and Human Services
Title: Internal control over TANF client child support sanction procedures needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: Inform DSER staff on the correct utilization of the INT37 form generated by the
application CSME for all DSER generated non-cooperation sanction requests.
Maintain, and update as necessary, the SOP and related regular training governing
this business process.
Create a unique email in-box to track receipt of all DSER generated non-
cooperation sanction requests.
Completion Date: March 1, 2021, June 30, 2022 and June 30, 2022 respectively
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-047 Department: Health and Human Services
Title: Internal control over TANF performance reporting and work participation
procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will investigate and identify issues leading to erroneous month
counts.
The Department will enhance the Quality Review Tool.
The Department will review and modify, if necessary, the procedures governing
the ACF 199 and 209 reporting.
Completion Date: June 30, 2022
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-048 Department: Health and Human Services
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Deputy Director will create a policy regarding the evaluation of risk to
determine the appropriate subrecipient monitoring.
Completion Date: December 31, 2022
Agency Contact: Tony Madden, Deputy Director – Division of Audit, DHHS, 207-287-2834
2021-049 Department: Health and Human Services
Title: Internal control over subrecipient audit procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Deputy Director will implement new procedures to ensure single audits are
received timely.
Completion Date: June 30, 2022
Agency Contact: Tony Madden, Deputy Director – Division of Audit, DHHS, 207-287-2834
2021-050 Department: Health and Human Services
Title: Internal control over Hospital and Long Term Care Facility audits needs
improvement
F-19
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Questioned Costs: None
Status: Nursing Facilities: Corrective action in progress
Hospitals and LTCF – ICF/IIDs: Management’s opinion is that corrective action is
not required
Corrective Action: LTCF - Nursing Facilities and Hospitals:
The Department has hired additional staff to assist with the completion of the
Nursing Facility audits.
The new staff will be trained on the Nursing Facility audit process.
The Audit Program Manager will assign nursing facility audits to staff, prioritizing
cases within the one year timeline.
The Director and Audit Program Manager will meet bi-weekly to monitor the
completion of audits within the identified timeline.
Hospitals and LTCF – ICF/IIDs:
The Department disagrees with this finding in regard to LTCF - ICF/IID's. The
ICF/IID audits do not have a specific time requirement in MBM for completion. The
federal regulations only require that periodic audits of financial records occur. All
ICF/IID cost reports submitted to the Department are recorded in a database and
tracked for audit purposes. All cost reports are audited as resources are available.
We have worked with our Federal partners who have agreed with our interpretation
of the regulation and the timing of our audits for the ICF/IIDs.
Completion Date: March 31, 2022, March 31, 2023, June30, 2023 and June 30, 2023 respectively
Agency Contact: Herb Downs, Director, Division of Audit, DHHS, 207-287-2778
2021-051 Department: Health and Human Services
Title: Internal control over cases opened due to potential fraud, abuse or questionable
practices needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Program Manager, with approval from the Director of Compliance, will close
cases as appropriate or reassign any cases that are not able to be closed timely.
The Program Manager will run a quarterly report to identify any cases assigned to
former staff and will evaluate the cases for closure or reassignment.
Completion Date: April 30, 2022
Agency Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS, 207-287-2093
2021-052 Department: Health and Human Services
Title: Internal control over compliance with eligibility determination requirements needs
improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The Office of the State Auditor has
misinterpreted MaineCare policy by excluding the eligibility system (ACES) as
part of the electronic case record. Electronic data sources are required per federal
regulations and documentation of citizenship and identity verifications are stored
within ACES. The requirement to verify identity is part of the Medicaid citizenship
verification requirements. Maine verifies citizenship and identity through
electronic data matches in accordance with 42 CFR §435.949; the results of this
match are stored in ACES. The state cannot request paper documentation from
applicants after successful electronic verification for the purpose of storing it in
F-20
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
another system, nor can we establish more restrictive verification requirements
than those allowed by federal regulations. This was a prior year finding (2020-052)
that the Department disagreed with and the federal cognizant agency, CMS, agreed
with the Department's position and closed the finding.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-053 Department: Health and Human Services
Administrative and Financial Services
Title: Internal control over Medicare Part B premium payments needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will finalize standard operating procedures governing the
reconciliation process to specifically include:
1. procedures to ensure the production, review and follow up to Monthly
Reconciliation Reports;
2. procedures for the documentation and retention of the reports;
3. procedures to include all CMS coding requiring state action.
Implement technology improvements in support of reducing manual data entry and
increased regulatory compliance.
Completion Date: June 30, 2022 and June 30, 2023 respectively
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-054 Department: Health and Human Services
Title: Internal control over the eligibility determination process needs improvement
Questioned Costs: None
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department disagrees with this finding. The systems we have in place are
both necessary and sufficient in meeting programmatic requirements to ensure
accurate eligibility determinations are being made. There has been no citation of
federal regulation provided by OSA during this review that contradicts this. The
Department would like to note: 1. Supervisors do a minimum of 1 case reading per
month and a minimum of 1 call monitoring per week for staff on phones. It is
commonplace for them to do more, especially for a new employee, or known
coaching issues. 2. Prior to 2021, these case readings were tracked by supervisors
and units, and were tracked centrally on our Streamline Management Y-Drive. 3.
Phone calls can be referenced by Supervisors in real time OR afterwards, via
recording. 4. Prior to 2021 specifics of case reading and call monitoring were
formalized, with specific expectations in multiple categories, which were followed
up on by coaching staff if not all of the expectations were met. However, with a
goal of continuous improvement, we were already working on an enhanced system
to track Case Reading and Call Monitoring performance statewide which will
supersede and further improve upon current practice. A new program and
procedure have already been written and are in the process of being vetted and
approved by Regional personnel for implementation. This example of continuous
quality improvement will lead to a more holistic understanding of trends and
training needs.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-055 Department: Health and Human Services
Title: Internal control over cost of care assessments needs improvement
Questioned Costs: Undeterminable
F-21
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Status: Management’s opinion is that corrective action is not required
Corrective Action: The Department agrees with this finding and has a quality assurance process for
monitoring manually adjusted cost of care assessments as reflected in the standard
operating procedures which underwent a major revision, effective June 30, 2020.
This new business process was in effect for the entire audited year. From the
sample that was tested, the Department achieved a 95% compliance rate and will
commit to continuing to achieve at least 95%. No corrective action is necessary.
Completion Date: N/A
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
2021-056 Department: Health and Human Services
Title: Internal control over deceased client cases and claims analysis needs improvement
Questioned Costs: None
Status: OFI: Corrective action complete
OMS: Corrective action in progress
Corrective Action: OFI: Zero exceptions occurred upon implementation of a revised standard
operating procedure in April of 2021, which increased the cadence of death data
matches with Maine's CDC from quarterly to monthly. Therefore, a corrective
action plan is not necessary.
OMS: The Department will continue to explore options to further improve
processes and will evaluate whether those options are feasible and reasonable
given the extremely low error rate described in this finding.
Completion Date: April 26, 2021 (OFI) and June 30, 2022 (OMS)
Agency Contact: OFI Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS,
207-624-4104
OMS Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS,
207-287-2093
2021-057 Department: Health and Human Services
Title: Internal control over the outsourced medical claims coding process needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department and its vendor will deploy Change Request (CR) 106786 into
production and begin using the RISSNET files.
Completion Date: September 30, 2022
Agency Contact: Michelle Probert, Director, Office of MaineCare Services, DHHS, 207-287-2093
2021-058 Department: Health and Human Services
Title: ________ over the ________ system needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department partially agrees with this finding. The Department’s corrective
action plan as well as the explanation and specific reasons for disagreement have
been excluded to protect confidential information. The complete corrective action
plan as well as the explanation and specific reasons for disagreement have been
provided to the Office of the State Auditor under separate cover.
Completion Date: June 30, 2023
Agency Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104
F-22
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
2021-059 Department: Defense, Veterans and Emergency Management
Title: Internal control over cash management needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department has improved determining immediate cash needs by creating and
implementing a check list to ensure and verify the necessary data on invoices for
processing.
The Department has improved draw procedures so that cash is drawn after invoices
have been fully reviewed and sent for processing by the Service Center.
The Department will hire and train the open business director position with
responsibility to improve procedures and process flows.
The Department will develop and implement an improved procedure for account
reconciliations on cash management.
Completion Date: February 1, 2022 (first two items), May 1, 2022 (third item), and July 1, 2022
(fourth item)
Agency Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
2021-060 Department: Defense, Veterans and Emergency Management
Title: Internal control over subrecipient audit procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: Subrecipient single audit needs and requirements will be reviewed with the MEMA
business office and PA program manager.
The Department will incorporate a single audit review as part of the updated risk
assessment procedure. The Department will review a subrecipient’s previous single
audit to evaluate their compliance with requirements.
The Department will incorporate a single audit request and review as part of the
updated subrecipient monitoring procedure to ensure on going compliance with the
requirement.
The Department will develop and implement procedures for single audit review
and agency responses as needed for all new PA contracts.
The Department will review single audits when received and provide agency
responses as applicable for all existing PA contracts.
Completion Date: March 31, 2022 (first item), May 15, 2022 (second and third items), June 1, 2022
(fourth item), and September 1, 2022 (fifth item)
Agency Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
2021-061 Department: Administrative and Financial Services
Defense, Veterans and Emergency Management
Title: Internal control over Schedule of Expenditures of Federal Awards reporting needs
improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: The Department will work with State agencies to better understand the process
they follow and offer to help them meet the requirements for SEFA reporting.
F-23
State of Maine – Office of the State Controller Corrective Action Plan
For the Fiscal Year Ended June 30, 2021
Completion Date: September 1, 2022
Agency Contact: Thomas Randall, Financial Coordinator/Audit Analyst, OSC, 207-626-8492
2021-062 Department: Defense, Veterans and Emergency Management
Title: Internal control over the financial reporting process needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: FFATA needs will be reviewed with the MEMA business office and PA program
manager.
The Department will create a FFATA form for use with MEMA subrecipients.
The Department will create FFATA procedures.
The Department will implement the new FFATA procedure on all new PA
contracts.
The Department will review existing contracts and complete FFATA reports as
applicable.
Completion Date: March 15, 2022, April 15, 2022, May 15, 2022, June 1, 2022 and September 1,
2022 respectively
Agency Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
2021-063 Department: Defense, Veterans and Emergency Management
Title: Internal control over subrecipient risk evaluation procedures needs improvement
Questioned Costs: None
Status: Corrective action in progress
Corrective Action: Risk assessment needs will be reviewed with the agency business office and PA
program manager.
The Department will update the risk assessment form.
The Department will improve the risk assessment procedure.
The Department will implement the improved risk assessment procedure on all
new PA contracts.
The Department will review existing contracts and provide risk assessments as
applicable.
Completion Date: March 15, 2022, April 15, 2022, May 15, 2022, June 1, 2022 and September 1,
2022 respectively
Agency Contact: Joe Legee, Deputy Director, MEMA, 207-215-0442
F-24
STATE OF MAINE
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2021
G-1
G-2
STATE OF MAINE
DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES
OFFICE OF THE STATE CONTROLLER
14 STATE HOUSE STATION AUGUSTA, MAINE 04333-0014
SERVING THE PUBLIC AND DELIVERING ESSENTIAL SERVICES TO STATE GOVERNMENT
KIRSTEN LC FIGUEROA DOUGLAS E. COTNOIR, CPA, CIA
COMMISSIONER STATE CONTROLLER
Summary Schedule of Prior Audit Findings
For Years Prior to Fiscal Year 2021
Summary Schedule of Prior Audit Findings
The Summary Schedule of Prior Audit Findings (SSPAF) is compiled by the Office of the State
Controller (OSC) on behalf of the State of Maine. The objective of the SSPAF is to report on the
status of audit findings reported in the prior: (1) audit’s schedule of findings and questioned
costs, and (2) audit’s summary schedule of prior audit findings.
For each prior year audit finding, the SSPAF reports the current status of corrective action; for
findings in which corrective action has either not been taken, or not completed, explanations are
generally provided that describe the reason(s) for the finding’s recurrence, the planned corrective
action, and any partial corrective action taken. In the event that corrective action differs
significantly from previously reported corrective action, an additional explanation has been
provided. The SSPAF complies with 2 CFR 200, Subpart F, § 200.511 Audit Findings Follow-
Up.
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Controls over Cost of Care assessments need improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2017
Questioned Costs: Undeterminable
2017-017 FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-055
Finding Title: Cases opened because of potential fraud, abuse, or questionable practices
need improved supervisory review
State Department: Health and Human Services
2017-027 ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2016
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
G-3
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-051
Finding Title: Procedures over subrecipient monitoring need improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
2018-001
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over State matching requirements needs improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
2018-002
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over the donated food inventory needs improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
2018-005
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
G-4
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Control over WIC’s infant food and formula rebate process needs
improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2018
2018-007
Questioned Costs: Questioned
Total Federal State
Costs
Known $280,580 $280,580
Likely
FY21 Status: Corrective action was taken during FY 2021
Finding Title: The Department has no assurance that ________ are adequate (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining.)
State Department: Health and Human Services
2018-009 ALN: 10.557
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Subrecipient monitoring needs improvement
State Department: Administrative and Financial Services
Agriculture, Conservation and Forestry
ALN: 10.565, 10.568, 10.569
Initial Finding FY: 2018
Questioned Costs: None
2018-011 FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over suspension and debarment needs improvement
State Department: Agriculture, Conservation and Forestry
ALN: 10.565, 10.568, 10.569
Initial Finding FY: 2018
Questioned Costs: None
2018-013
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
G-5
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over Federal cash management needs improvement
State Department: Administrative and Financial Services
Agriculture, Conservation and Forestry
ALN: 10.565, 10.568, 10.569
Initial Finding FY: 2018
Questioned Costs: None
2018-014 FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Documentation that supports payroll costs needs improvement
State Department: Defense, Veterans and Emergency Management
ALN: 12.401
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
2018-016 Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Subrecipient contract specifications are not consistent with program
regulations
State Department: Health and Human Services
ALN: 16.575
Initial Finding FY: 2018
Questioned Costs: None
2018-021 FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with the recommendation regarding contract
language “Illegal aliens ineligible for State and local public benefits” as
this language is specific to state and local benefits and not Federal
benefits.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
G-6
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: ________ over ________ needs improvement (The title of this finding has
been redacted to protect confidential information. These redactions appear
as blank underlining)
State Department: Labor
ALN: 16.575
Initial Finding FY: 2011
Questioned Costs: Questioned
Total Federal* State Trust Fund
Costs
Known Redacted Redacted
2018-023 Likely Redacted Redacted
*No federally funded benefit payments appeared in the randomly selected
sample
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-021
Finding Title: The Department has no ________ that ________ over the ________ are
adequate (The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining.)
State Department: Education
ALN: 10.555, 10.559; 84.010
Initial Finding FY: 2018
2018-025 Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-005
Finding Title: Monitoring over subrecipient cash management needs improvement
State Department: Health and Human Services
ALN: 93.558; 93.667; 10.557; 16.575; 93.044, 93.045, 93.053; 93.569; 93.917
Initial Finding FY: 2017
Questioned Costs: None
2018-026 FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required.
Explanation: The Department disagrees with this finding. The Department reviews
budgeted expenses to determine their timing and nature (one time,
recurring, allowability); reviews quarterly expense reports and alters
payments to meet immediate cash needs, and finally, monitors
subrecipient single audits to ensure there are no cash management
findings. Additionally, our subrecipient's programs are tested more
G-7
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
frequently and at a lower threshold than the threshold for single audits in
accordance with the Maine Uniform Accounting and Auditing Practices
for Community Agencies (MAAP). The Department's approach is
administratively reasonable and does minimize the time elapsing between
the payment of Federal funds to the subrecipient and the subrecipient’s
actual disbursement for program purposes given administrative and
operational needs. We believe we have procedures in place that can be
corroborated by the fact that our subrecipients do not receive single audit
findings related to cash management.
FY 2021 Finding: 2021-042
Finding Title: Procedures related to TANF performance reporting and work participation
need improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021 for the secondary review
portion of this finding.
2018-028
Management believes this audit finding does not warrant further action for
the work participation and countable month portion of this finding.
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-047
Finding Title: Internal control over pass-through awards needs improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2018
Questioned Costs: None
2018-030 FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-048
Finding Title: Control over payments to and on behalf of TANF clients needs
improvement
State Department: Health and Human Services
2018-031
ALN: 93.558
Initial Finding FY: 2018
G-8
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Questioned Costs: Questioned
Total Federal State
Costs
Known $381 $381
Likely $139,925 $139,925
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-040
Finding Title: Evaluation of each subrecipient’s risk of noncompliance needs
improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2017
Questioned Costs: None
2018-032
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-048
Finding Title: The Department has no assurance that ________ is adequate (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining.)
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2018
2018-033 Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-044
Finding Title: Indirect costs charged by subrecipients are not consistent with the
Uniform Guidance
State Department: Health and Human Services
2018-037
ALN: 93.667; 16.575
Initial Finding FY: 2018
Questioned Costs: Undeterminable
G-9
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department has procedures in place to ensure each subrecipient is
utilizing an appropriate indirect cost rate.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Evaluation of each subrecipient’s risk of noncompliance needs
improvement
State Department: Health and Human Services
ALN: 93.667; 16.575
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: There are multiple ways the Department evaluates risk on its
2018-040 subrecipients, the Division of Audit's risk evaluation is one of them. The
Division of Audit uses the risk assessment to determine how much testing
of invoices to perform. There is also an assessment of risk built into the
Maine Uniform Accounting and Auditing Practices for Community
Agencies (MAAP) in which all of our subrecipients have reporting
requirements based on their level of expenditures. These thresholds are
lower than the audit requirements of 2 CFR 200 so those that fall below
the single audit threshold will have agreement expenditures tested much
more frequently.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control to ensure program expenditures are accounted for and
reported in accordance with the Federally-approved State Plan needs
improvement
State Department: Administrative and Financial Services
Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2018
2018-042 Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees there is a material control weakness as the
Department takes a pragmatic approach to effectively and efficiently
administer the Medicaid program, which often requires working with
CMS on reporting reclasses and exceptions, for a variety of reasons.
FY 2021 Finding: No finding was issued for FY 2021 and this program was audited as a
major program.
Finding Title: Eligibility re-determination needs improvement
State Department: Health and Human Services
2018-043
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2017
G-10
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Questioned Costs: Undeterminable
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. OSA has misinterpreted
MaineCare policy by excluding the eligibility system (ACES) as part of
the electronic case record. Electronic data sources are required per federal
regulations and documentation of citizenship and identity verifications are
stored within ACES. The requirement to verify identity is part of
Medicaid citizenship verification requirements. Maine verifies citizenship
and identity through electronic data matches in accordance with 42 CFR
§435.949; the results of this match are stored in ACES. The state cannot
request paper documentation from applicants after successful electronic
verification for the purpose of storing it in another system, nor can we
establish more restrictive verification requirements than those allowed by
federal regulations. This was a prior year finding (2020-052) that the
Department disagreed with and the cognizant agency, CMS, agreed with
the Department's position and closed the finding.
FY 2021 Finding: 2021-052
Finding Title: ________ and ________ over ________ need improvement (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining)
State Department: Administrative and Financial Services
2018-045 ALN: 93.775, 93.777, 93.778; 93.767; 10.551, 10.561
Initial Finding FY: 2014
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Contractor-provided ________ over ________ processing needs
improvement (The title of this finding has been redacted to protect
confidential information. These redactions appear as blank underlining)
State Department: Health and Human Services
2018-046 ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2016
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Procedures related to Long Term Care Facility Audits need improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2010
Questioned Costs: None
2018-049
FY21 Status: Management believes this audit finding does not warrant further action
with the LTCF – Nursing Facilities and Hospitals portion of the finding
Management disagrees with the LTCF – ICF/IID’s portion of this finding
and does not believe corrective action is required
G-11
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
The Department disagrees with this finding in regard to LTCF - ICF/IID's.
The ICF/IID audits do not have a specific time requirement in MBM for
completion. The federal regulations only require that periodic audits of
financial records occur. All ICF/IID cost reports submitted to the
Department are recorded in a database and tracked for audit purposes. All
cost reports are audited as resources are available. We have worked with
our Federal partners who have agreed with our interpretation of the
regulation and the timing of our audits for the ICF/IIDs
FY 2021 Finding: 2021-050
Finding Title: ________ assigned to ________ need improvement (The title of this
finding has been redacted to protect confidential information. These
redactions appear as blank underlining)
State Department: Administrative and Financial Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2017
2018-051 Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-014
Finding Title: Cases opened because of potential fraud, abuse, or questionable practices
need improved supervisory review
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2016
Questioned Costs: None
2018-052
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-051
Finding Title: Procedures to ensure that individual client Cost of Care assessments are
accurate need improvement
2018-053
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
G-12
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management believes this audit finding does not warrant further action
Explanation: 1. Two years have passed since the audit report in which this finding
occurred was submitted to the FAC;
2. The Federal agency or pass-through entity is not currently following up
with the auditee on this audit finding; and
3. A management decision was not issued on this finding
FY 2021 Finding: 2021-055
Finding Title: ________ does not have a ________ in place (The title of this finding has
been redacted to protect confidential information. These redactions appear
as blank underlining)
State Department: Administrative and Financial Services
ALN: N/A - Financial Statement Finding
2019-001 Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: This audit finding does not warrant further action
Explanation: This finding is no longer applicable to the Maine Revenue Services and
has been directed towards the Office of Information Technology
FY 2021 Finding: 2021-013
Finding Title: Internal control over the valuation of allowances for uncollectible
accounts needs improvement
State Department: Labor
Administrative and Financial Services
ALN: N/A - Financial Statement Finding
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Departments agree that detailed receivables reports should be
generated and retained during the fiscal year. OSC will provide guidance
to DOL to develop a reporting mechanism that will provide a more
detailed analysis of the activity of the receivable balances. OSC is
2019-004 responsible for determining the estimates in the financial statements. The
accounting estimates are based on subjective, as well as, objective factors;
therefore, professional judgement is required to estimate an amount for
uncollectible receivables using an aging methodology, which is
considered a common and acceptable method within the industry.
Management's opinion is that this method is not overly sensitive to
variations, is consistent with historical patterns and is not overly
subjective or susceptible to bias. Applying this methodology, OSC and the
Department of Labor (DOL) accumulate relevant, sufficient, and reliable
data on which to base the estimate. Additionally, we believe that the
estimate is presented in conformity with the applicable accounting
principles and that disclosure is adequate. OSC recently performed a five-
year trend analysis of historical collections with information provided by
DOL. The OSC compared the percentages and the assumptions used in the
past and updated the reserve percentages accordingly. The OSC will
G-13
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
continue to use the rolling year trend analysis with the actual collection
data, as provided by the DOL, to update the reserve percentage. DOL
implemented a new system and OSC will continue to review the reserve
process to ensure the allowance continues to be valued properly.
FY 2021 Finding: 2021-009
Finding Title: The Department has not completed a ________ that complies with State
________ (The title of this finding has been redacted to protect
confidential information. These redactions appear as blank underlining.)
State Department: Transportation
ALN: N/A - Financial Statement Finding
2019-005 Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-010
Finding Title: The Department has no ________ that ________ over the ________ is
adequate (The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining.)
State Department: Education
ALN: N/A - Financial Statement Finding
2019-006 Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-005
Finding Title: ________ over the ________ or ________ needs improvement (The title
of this finding has been redacted to protect confidential information.
These redactions appear as blank underlining.)
State Department: Transportation
Administrative and Financial Services
ALN: N/A - Financial Statement Finding
2019-007
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-010
Finding Title: ________ and ________ over ________ need improvement (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining)
State Department: Administrative and Financial Services
2019-008 ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2014
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
G-14
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: The Department ________ that ________ over the ________ is adequate
(The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining)
State Department: Health and Human Services
2019-010 ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2016
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over compliance with eligibility determination
requirements, and the related automated data processing system
requirements, needs improvement
State Department: Health and Human Services
ALN: 10.551, 10.561
Initial Finding FY: 2019
Questioned Costs: Questioned
Total Federal State
Costs
Known $261 $261 $0
Likely $5,144,620 $5,144,620 $0
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with the assertion that there are not procedures
2019-012
in place to ensure that the information entered into ACES is accurate and
complete. We do agree that there was one TFA client with an
overpayment; however, this does not represent a structural or
programmatic deficiency. Our federally funded Quality Control unit
follows federal standards and requirements which further represent an
additional internal control for both SNAP and TFA.
A total of 60 cases were reviewed for audit, 2 of them were TFA cases
and 58 were SNAP. TFA is included in the Payment Error Rate
determined by FNS and should be for the purpose of this audit. A sample
size of only 2 TFA cases reviewed does not provide statistical evidence of
noncompliance (or compliance).
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program
Finding Title: Internal control over the issuance of SNAP benefits needs improvement
State Department: Health and Human Services
ALN: 10.551, 10.561
Initial Finding FY: 2019
2019-013 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Although we agree with this finding, it should be noted that all of the
exceptions found were prior to the implementation of a revised standard
operating procedure governing the Date of Death processing which was
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
implemented near the end of the audit period, on April 26, 2021. This
repeat finding has been fully addressed.
FY 2021 Finding: 2021-015
Finding Title: Internal control over ________ needs improvement (The title of this
finding has been redacted to protect confidential information. These
redactions appear as blank underlining.)
State Department: Health and Human Services
ALN: 10.551, 10.561, 93.558
Initial Finding FY: 2019
2019-014
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding and will not be taking steps to
address and remediate this condition
FY 2021 Finding: 2021-012 and 2021-017
Finding Title: Internal control over State matching requirements needs improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2019-015
Explanation: The Department modified the NEO system to ensure that the match
attributable to State owned schools is funded from the General Fund.
Additionally, going forward the Department will perform reconciliations
to ensure compliance with the grant’s matching requirements.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over subrecipient monitoring procedures needs
improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2019-017 Explanation: Child Nutrition continues to follow the improved procedures of using a
cloud-based service for data storage. Child Nutrition has also discussed
the withholding procedure with staff. The discussion included: when to
withhold, the documentation to withhold, granting documented extensions
and recording extension information. Additionally, at the monthly staff
meetings, prior and upcoming reviews are discussed, and cross checked
with the tracking spreadsheet.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
G-16
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Internal control over the donated food inventory needs improvement
State Department: Education
ALN: 10.555, 10.559
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2019-018 Explanation: Child Nutrition has worked with USDA to develop procedures for
inventory control and periodic reconciliations. Child Nutrition will
review existing procedures and make changes as needed. Steps are already
being taken to address the inventory procedures for the food shipments
that occur after the end of the school year. Specifically, A new inventory
system was implemented in February 2021.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over subrecipient monitoring needs improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2019
Questioned Costs: None
2019-019 FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department will implement a process to complete the MERs as time
allows and prioritize current year MERs to ensure compliance with the
regulation. The Department has hired additional staff to assist with the
completion of the MERs. The Department will meet at least quarterly to
check on the progress of the MERs.
FY 2021 Finding: 2021-019
Finding Title: Internal control over subrecipient contracts needs improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2019
2019-020 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Division of Contract Management will collaborate with MeCDC to
implement controls to ensure subrecipient awards are complete, accurate
and in accordance with Federal regulations.
FY 2021 Finding: 2021-020
Finding Title: Internal control over Federal cash management needs improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2019
2019-021
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Service Center will modify the current grant cash balance analysis to
include separating the WIC NSA Admin and the WIC Food grants. This
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
will be completed by March of 2022. They will also finalize grant
reconciliations for the WIC Food grants from 2017 to present. This will be
completed by December of 2022.
FY 2021 Finding: 2021-018
Finding Title: The Department has no assurance that ________ is adequate (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining.)
State Department: Health and Human Services
2019-022 ALN: 10.557
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over payroll costs needs improvement
State Department: Defense, Veterans and Emergency Management
ALN: 12.401
Initial Finding FY: 2017
2019-023 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Procedures have been revised, improved and are being further refined to
address these situations.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over cash management for travel advances and the related
reporting to the Federal government on the SF-270 report needs
improvement
State Department: Defense, Veterans and Emergency Management
ALN: 12.401
Initial Finding FY: 2019
2019-024 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Procedures are being reviewed and updated as necessary to ensure that
travel advances are reported accurately on the SF-270 report and drawn in
accordance with cash management requirements. Additionally, procedures
covering the issuance of travel advances will be reviewed and updated as
necessary.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over subrecipient monitoring procedures needs
improvement
State Department: Health and Human Services
2019-025
ALN: 14.267
Initial Finding FY: 2019
Questioned Costs: None
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department has policies and procedures in place to ensure
subrecipients use Continuum of Care funds in accordance with all award
requirements and program regulations. We perform comprehensive annual
on-site reviews to verify subrecipient compliance with all program rules
and regulations and have the documentation to support it.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over continuing eligibility needs improvement
State Department: Labor
ALN: 17.225
Initial Finding FY: 2011
Questioned Costs: Questioned
Total Federal State
Costs
Known $10,375 $0 $10,375
Likely $5,272,833 $0 $5,272,833
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department partially agrees with this finding.
The finding states that the Department’s system does not ensure that
benefit payments to ineligible claimants are prevented or detected prior to
the issuance of payments. The Department collects the necessary
information to determine initial and ongoing eligibility. It is important to
note that both federal and state law prohibit the withholding of payment
from someone who is already receiving benefits when a potential
eligibility issue is identified. The Department must gather additional
information and issue a written determination, which also includes
2019-027
notification of the right to appeal the determination. In the meantime,
payments must be made. If the Department issues a determination that the
individual was ineligible, an overpayment is created, and repayment is
required.
The finding further states that the Department has insufficient controls in
place to detect possible unreported employment or wages when a
transitional (back-to-back) benefit year is filed. The Department will
research the availability of any additional tools or programming needed to
detect wages reported by employers that have not been reported by
claimants when a transitional benefit year is filed. Given the time
difference that occurs between when a claim is filed and when an
employer is statutorily required to report wages or employment,
overpayments that occur when the claimant willfully misrepresents facts
cannot be completely avoided. In those circumstances, the repayment of
benefits also includes interest and penalties.
The finding also states that working part-time should not have been
considered as a work search activity after the Department’s return to more
traditional work search activities in May 2021. Maine was one of the first
states to restore a work search requirement under the Pandemic – many
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
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continued a work search waiver through all of 2021. The Department
began partially lifting a work search in 2020, and then moved closer to
pre-Pandemic allowed work search activities in May 2021. Though
working part-time was not considered a qualified work search activity
prior to the pandemic, continued concerns regarding COVID-19 infection,
lack of childcare, remote schooling, and businesses opening but not
immediately returning to full employment, informed the Department’s
decision to continue our earlier decision to allow acceptance of part-time
work to satisfy the work search requirement beyond May 2021. This
encouraged those who had been unemployed for an extended period to
maintain a connection to the workforce by accepting part time work.
Neither Maine law nor rules fully define what constitutes a work search,
this is set by the Department. People were notified of the change in the
activities that would be accepted as satisfying the work search by email,
website, and the press.
The finding furthermore states that the Department erred in paying
benefits to individuals collecting on the Pandemic Unemployment
Assistance (PUA) program pending receipt of required proof of
employment documentation (POE). When the guidance around PUA POE
was released in UIPL 16-20, change 4, the Department reached out via e-
mail to USDOL through their dedicated COVID-19 inbox to ask whether
claimants should be paid pending receipt of PUA POE. The response from
USDOL clearly stated the Department should not hold up benefits
pending receipt of PUA POE. States are required to follow federal
guidance on these federal programs.
The finding states the Department needs additional controls for claims
filed after a claimant’s date of death, as well around the claimants age
when filing a claim for benefits. The Department agrees that the current
crossmatch with the state’s Vital Records office that identifies deceased
claimants should be enhanced. As with reporting of quarterly wages, there
are timing differences that cannot be avoided, and overpayments cannot
be completely ruled out. Overpayments, penalties, and prosecutions are all
considered when it is determined someone falsely filed for benefits using
a deceased person’s information. Regarding the age of the individual
filing for benefits, controls will be reviewed and enhanced where
appropriate. Of the three claimants identified as being over 100 years old,
two were eligible for the benefits they received. The third required a
correction to the person’s date of birth.
FY 2021 Finding: 2021-021
Finding Title: The Department has no assurance that ________ over the ________ is
adequate (The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining.)
State Department: Labor
2019-028 ALN: 17.225
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-011
Finding Title: Internal control over program income needs improvement
State Department: Labor
ALN: 84.126
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Since February of 2020, the Bureau of Rehabilitation Services (BRS)
Quality Assurance (QA) Division, with assistance from Maine IT, is
working closely with the AWARE case management system vendor to
resolve issues with the Social Security Administration (SSA) cost
reimbursement module. The QA Division does have a number of internal
controls in place regarding the processing of SSA cost reimbursement
2019-030 claims, including the review of each payment received to confirm which
client and claim it is associated with and assessing any difference between
the claim and payment amount. In addition, bureau management reviews a
quarterly report indicating claims submitted, potential reimbursement,
number of denials and approvals and total reimbursement amount. Going
forward, BRS will enhance its claims review process. On a quarterly
basis the Bureau will analyze the report and identify any patterns or
discrepancies to determine which need further investigation. Keeping in
mind that BRS does not have access to some of the data SSA uses in
determining the final claim amount, such as beneficiary eligibility periods
and anticipated savings to the SSA trust fund, it is likely that differences
in the claim amount requested and received will continue for a significant
percentage of claims.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over the timeliness of eligibility determinations needs
improvement
State Department: Labor
ALN: 84.126
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: In the Fall of 2020, the Division of Vocational Rehabilitation (DVR)
2019-031 issued an updated procedural directive on the eligibility process that set a
maximum timeframe from date of application to date of intake. It also
provides guidelines on how to streamline the eligibility process. All
DVR/DBVI VR staff were trained on the streamlined process in
November and December of 2020. That training is now included in the
training for all new VR counselors and is posted on the bureau's intranet
for future reference. BRS (DVR and DBVI) has several internal control
procedures in place to monitor the requirement for a 60-day eligibility or a
signed eligibility extension. There are also reports available in the
AWARE case management system to assist VR counselors, supervisors
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
and managers with monitoring eligibility due dates and organizing their
work. BRS will provide a refresher staff training on how to generate and
use these reports. The BRS QA unit will also provide regional reports to
the Division Directors and Regional Managers on a monthly basis to assist
with monitoring. It should be noted that even with effective internal
controls in place, BRS often faces difficulties contacting applicants to
arrange for an intake to establish eligibility or to get a signature to approve
an eligibility extension. The impact of the COVID pandemic has added
challenges to the eligibility determination process as well. Despite the
aforementioned issues, DVR and DBVI placed a higher priority on
keeping cases open during this unprecedented time.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not
audited as a major program
Finding Title: Internal control over provider site visits and corrective action follow up
needs improvement
State Department: Health and Human Services
ALN: 93.268
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2019-032
Explanation: This finding is directly related to an alternative plan developed by the
State of Maine during FY2021 when on-site VFC Compliance Visits were
temporarily suspended. The Department will update procedures to ensure
provider monitoring is documented and records are maintained. The
Department will update procedures to ensure supervisory oversight is
completed, documented, and maintained.
FY 2021 Finding: 2021-035
Finding Title: Internal control over Federal cash management needs improvement
State Department: Administrative and Financial Services
ALN: 93.268
2019-033
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: The Department has no assurance that ________ over the ________ is
adequate (The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining.)
State Department: Health and Human Services
2019-034 ALN: 93.268
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-036
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Monitoring over subrecipient cash management needs improvement
State Department: Health and Human Services
ALN: 93.558; 10.557; 16.575; 93.044, 93.045, 93.053; 93.667; 93.569; 93.917
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. The Department reviews
budgeted expenses to determine their timing and nature (one time,
recurring, allowability); reviews quarterly expense reports and alters
2019-035 payments to meet immediate cash needs, and finally, monitors
subrecipient single audits to ensure there are no cash management
findings. Additionally, our subrecipient's programs are tested more
frequently and at a lower threshold than the threshold for single audits in
accordance with the Maine Uniform Accounting and Auditing Practices
for Community Agencies (MAAP). The Department's approach is
administratively reasonable and does minimize the time elapsing between
the payment of Federal funds to the subrecipient and the subrecipient’s
actual disbursement for program purposes given administrative and
operational needs. We believe we have procedures in place that can be
corroborated by the fact that our subrecipients do not receive single audit
findings related to cash management.
FY 2021 Finding: 2021-042
Finding Title: Internal control over Income Eligibility and Verification System
procedures needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2019-037
Explanation: With only three disagreements regarding the discrepancies cited in the
Condition statement above, the Department agrees with this finding. Four
standard operating procedures governing IEVS reporting were modified in
fiscal year 2021. However, largely due to the pandemic, combined with
manual processing, we did witness an uptick in errors. The Department
has created a Technology Roadmap workgroup and IEVS automation is a
component of this project.
FY 2021 Finding: 2021-043
Finding Title: Risk evaluation procedures to determine the extent of appropriate
subrecipient monitoring need improvement
State Department: Health and Human Services
2019-038 ALN: 93.558
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: Although there are several layers of risk evaluation built into the
subrecipient monitoring process, the Department agrees that there should
be a policy regarding the evaluation of risk to determine the appropriate
subrecipient monitoring.
FY 2021 Finding: 2021-048
Finding Title: Internal control over TANF performance reporting and work participation
procedures needs improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was taken in FY 2021 for the secondary review portion
of this finding.
2019-039
Corrective action was not completed in FY 2021 for the work
participation and countable month portion of this finding.
Explanation: The Department agrees with this finding and recommendations regarding
the 28 cases containing errors. The Department will investigate and
identify the source or cause of errors found which led to incorrect month
counts. The Department will modify the existing Quality Review Tool.
Additionally, we will review, and edit if necessary, the existing
procedures governing this process.
FY 2021 Finding: 2021-047
Finding Title: Internal control over payments to and on behalf of TANF clients needs
improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2018
Questioned Costs: Questioned
Total Federal State
Costs
Known $1,120 $1,120 $0
Likely $1,295,496 $1,295,496 $0
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees with the condition statement and
2019-040 recommendations.
Regarding client payments: During SFY 2021, the Department
formalized and implemented additional supervisory case readings (two per
worker per week) and call monitoring (two calls a week, randomly
selected). In addition, the Work Support Team Supervisor conducts
partial reviews of approximately 25 percent of the cases worked on a daily
basis. The Department will provide additional guidance to eligibility and
other related workers regarding notification to the Work Support Team
when the Department receives information that may affect payments.
Regarding provider payments: The Department will examine the existing
internal controls over payments, billing, invoice structures and
mechanisms, including monitoring, to determine if the errors discovered
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
were related to human error and/or lack of training or clarity in existing
vendor payment controls.
FY 2021 Finding: 2021-040
Finding Title: The Department has no assurance that ________ is adequate (The title of
this finding has been redacted to protect confidential information. These
redactions appear as blank underlining.)
State Department: Health and Human Services
ALN: 93.558
2019-042 Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-044
Finding Title: Internal control over special reporting needs improvement
State Department: Health and Human Services
ALN: 93.558
2019-043
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over monthly reconciliation procedures needs
improvement
State Department: Administrative and Financial Services
Health and Human Services
2019-044 ALN: 93.563
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over individual client Cost of Care assessments needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2017
Questioned Costs: Undeterminable
FY21 Status: Corrective action was not completed in FY 2021
2019-045 Explanation: The Department agrees with this finding and has a quality assurance
process for monitoring manually adjusted cost of care assessments as
reflected in the standard operating procedures which underwent a major
revision, effective June 30, 2020. This new business process was in effect
for the entire audited year. From the sample that was tested, the
Department achieved a 95% compliance rate and will commit to
continuing to achieve at least 95%. No corrective action is necessary.
FY 2021 Finding: 2021-055
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Internal control over compliance with eligibility determination
requirements needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. OSA has misinterpreted
MaineCare policy by excluding the eligibility system (ACES) as part of
2019-046 the electronic case record. Electronic data sources are required per federal
regulations and documentation of citizenship and identity verifications are
stored within ACES. The requirement to verify identity is part of
Medicaid citizenship verification requirements. Maine verifies citizenship
and identity through electronic data matches in accordance with 42 CFR
§435.949; the results of this match are stored in ACES. The state cannot
request paper documentation from applicants after successful electronic
verification for the purpose of storing it in another system, nor can we
establish more restrictive verification requirements than those allowed by
federal regulations. This was a prior year finding (2020-052) that the
Department disagreed with and the cognizant agency, CMS, agreed with
the Department's position and closed the finding.
FY 2021 Finding: 2021-052
Finding Title: Internal control over Long Term Care Facility Audits needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2010
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021 for the LTCF – Nursing
Facilities and Hospitals portion of the finding
Management disagrees with the LTCF – ICF/IID’s portion of this finding
and does not believe that corrective action is required
Explanation: The Department agrees with this finding in regard to LTCF - Nursing
Facilities and Hospitals. The delay in completing the Nursing Facilities
2019-047
audits is the result of staff shortages and competing priorities due to
COVID-19 funds which required audit resources to reconcile interim
payments. While hospitals were not completed within the one-year
timeline identified in policy, one audit being 12 days late should not be
considered material. The hospital audits are tracked on a weekly basis and
staff are dedicated to completing the audits. We are currently on pace to
complete them all within the one-year timeline; therefore, no corrective
action is necessary.
The Department disagrees with this finding in regard to LTCF - ICF/IID's.
The ICF/IID audits do not have a specific time requirement in MBM for
completion. The federal regulations only require that periodic audits of
financial records occur. All ICF/IID cost reports submitted to the
Department are recorded in a database and tracked for audit purposes. All
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
cost reports are audited as resources are available. We have worked with
our Federal partners who have agreed with our interpretation of the
regulation and the timing of our audits for the ICF/IIDs.
FY 2021 Finding: 2021-050
Finding Title: Internal control over cases opened due to potential fraud, abuse or
questionable practices needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2016
Questioned Costs: None
2019-048 FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees that the cases identified lacked documentation to
support the reason for an extended period of non-activity. Three of the
five cases identified have been subsequently closed and require no
additional action. The remaining two cases are being addressed by the
Program Manager. Procedures will be established to run a quarterly report
and evaluate outstanding cases for closure or reassignment.
FY 2021 Finding: 2021-051
Finding Title: Internal control over provider enrollment packages needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The system upgrade was a process enhancement and not the result of a
control or compliance deficiency. The Department's longstanding
licensure verification process is to term a provider's contract with
MaineCare concurrent to the period of licensure for that provider as
supplied during enrollment. In other words, the licensed provider's ability
to bill and be reimbursed by MaineCare would end with the last effective
2019-049 date of the provider's license as supplied by the provider, unless the
provider subsequently updates that licensure information. If a provider
updates licensure information via an enrollment case, the Department
would then review that information under its normal enrollment processes,
verify/confirm the licensure, and update the provider's contract
accordingly. If a provider fails to update the license information, the
licensed provider's contract would expire, and any claims associated with
that provider would deny and not be paid. The Department notes that this
audit did not find any instances in which a provider was reimbursed
during the audit year during a period of non-licensure. The Department
maintains that its processes were adequate to meet its obligations under
the applicable federal regulations. While the Department did implement
an automated licensure verification process during the audit year, that
system upgrade does not mean that, before the implementation of the
upgrade, the Department lacked a process to ensure a provider was
licensed.
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program.
Finding Title: Internal control over Medicare Part B premium payments needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2019
Questioned Costs: Questioned
Total Federal State
Costs
Known $134 $86 $48
Likely $2,163,872 $1,395,265 $768,607
FY21 Status: Corrective action was not completed in FY 2021
2019-050
Explanation: We continue to address this repeat finding as evidenced by two substantial
edits to the standard operating procedures governing Medicare Part B
Buy-in reconciliation during the fiscal year. Additional work on this front
includes consolidation of legacy tasks previously conducted by the IEVS
team migrating to the ACES Helpdesk. Related, we have also conducted
a transaction code review to ensure all CMS codes requiring state action
are appropriately captured on these reports.
The Department is reviewing Information Technology processes in order
to determine where system changes may enhance and further automate
reconciliation for individuals with SSI and Medicare premium changes.
FY 2021 Finding: 2021-053
Finding Title: Internal control over Acute Care Critical Access Hospital supplemental
pool payments needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The MaineCare Benefits Manual Section 45, chapter III, 45.04C identifies
the data used to determine the relative share will relate to the latest state
fiscal year for which there exists an As-Filed Medicare Cost Report or a
2019-051 Final Cost Settlement Report for all critical access hospitals at the time the
pool allocation is done. However, the Medicare as filed cost report does
not include any MaineCare payment information, so it cannot be used to
allocate the pool. The rule then identifies that allocation will be based on
the last year when all Finals Cost Settlement reports have been issued. The
last year for Maine would be 2011 since we still have outstanding reports
from the Fiscal Intermediary for 2012. The Department utilized the 2014
interim audit report data since it would allocate the pool utilizing the same
data as the tax is calculated on. The Department is amending the language
on the allocation of the pool to better identify the Medicaid payments to
be utilized for this calculation.
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Internal control over the eligibility determination process needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The systems we have in place are both necessary and sufficient in meeting
programmatic requirements to ensure accurate eligibility determinations
are being made. There has been no citation of federal regulation provided
by OSA during this review that contradicts this. The Department would
like to note: 1. Supervisors do a minimum of 1 case reading per month
and a minimum of 1 call monitoring per week for staff on phones. It is
2019-052 commonplace for them to do more, especially for a new employee, or
known coaching issues. 2. Prior to 2021, these case readings were tracked
by supervisors and units, and were tracked centrally on our Streamline
Management Y-Drive. 3. Phone calls can be referenced by Supervisors in
real time OR afterwards, via recording. 4. Prior to 2021 specifics of case
reading and call monitoring were formalized, with specific expectations in
multiple categories, which were followed up on by coaching staff if not all
of the expectations were met. However, with a goal of continuous
improvement, we were already working on an enhanced system to track
Case Reading and Call Monitoring performance statewide which will
supersede and further improve upon current practice. A new program and
procedure have already been written and are in the process of being vetted
and approved by Regional personnel for implementation. This example of
continuous quality improvement will lead to a more holistic understanding
of trends and training needs.
FY 2021 Finding: 2021-054
Finding Title: Internal control over ________ assigned to ________ needs improvement
(The title of this finding has been redacted to protect confidential
information. These redactions appear as blank underlining.)
State Department: Administrative and Financial Services
ALN: 93.775, 93.777, 93.778
2019-057 Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-014
Finding Title: Internal control over cash management needs improvement
State Department: Defense, Veterans and Emergency Management
ALN: 97.036
2019-061
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: The Department is working to improve the cash management procedures
and to implement the necessary reconciliation and draw processes.
FY 2021 Finding: 2021-059
Finding Title: Internal control over the evaluation of each subrecipient’s risk of
noncompliance needs improvement
State Department: Defense, Veterans and Emergency Management
ALN: 97.036
Initial Finding FY: 2019
2019-062 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is working to improve the risk assessment procedures and
to implement the necessary assessment and monitoring on all
subrecipients.
FY 2021 Finding: 2021-063
Finding Title: Internal control over monitoring subrecipient Single Audits needs to be
established
State Department: Defense, Veterans and Emergency Management
ALN: 97.036
Initial Finding FY: 2019
2019-063
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is working to improve and implement procedures as
necessary to ensure MEMA meets the subrecipient audit requirements.
FY 2021 Finding: 2021-060
Finding Title: Internal control over the valuation of the allowance for uncollectible taxes
receivable needs improvement
State Department: Administrative and Financial Services
2020-001 ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over receivable reconciliations needs improvement
State Department: Administrative and Financial Services
ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
2020-002 FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees with this finding; however, we are unable, at this
point, to confirm or refute the accumulated discrepancy until the
conclusion of the ongoing engagement with our contractor. Due to the
complexity of Lottery operations compounded by an inability to hold
regular meetings in person due to the pandemic, the engagement has been
extended. It is now planned that by March 31, 2022, a streamlined
accounting process, an updated current procedure manual and requisite
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
training will be concluded. Processes will be in place to provide a monthly
reconciliation of Accounts Receivable by retailer.
FY 2021 Finding: 2021-001
Finding Title: The Department of Administrative and Financial Services’ ________ over
the ________ and ________ of ________ needs improvement (The title of
this finding has been redacted to protect confidential information. This
appears as blank underlining.)
State Department: Administrative and Financial Services
2020-003 ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: ML-21-0903-02
Finding Title: ________ over the Maine Revenue Services ________ needs
improvement (The title of this finding has been redacted to protect
confidential information. This appears as blank underlining.)
State Department: Administrative and Financial Services
ALN: N/A - Financial Statement Finding
2020-004 Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: This audit finding does not warrant further action
Explanation: This finding is no longer applicable to the Maine Revenue Services and
has been directed towards the Office of Information Technology
FY 2021 Finding: 2021-013
Finding Title: Internal control over the recording of OFI overpayments needs
improvement
State Department: Administrative and Financial Services
Health and Human Services
ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
2020-005 Explanation: The receivable balance in question primarily originates from two Federal
programs: Temporary Assistance for Needy Families (TANF) and the
Supplemental Nutrition Assistance Program (SNAP).
The U.S. Department of Health and Human Services’ Office of Family
Assistance provides guidance on the recovery of overpayments for the
TANF program. Program Instruction TANF-ACF-PI-2006-03 (Collecting
and Repaying Overpayments Made to Families under the Aid to Families
with Dependent Children (AFDC) Program and the Temporary Assistance
for Needy Families (TANF) Program) makes it clear that as of October 1,
1996 the collection of overpayments should be utilized for program
purposes. It is implicit in these same instructions that no liability is
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
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created for the State for uncollected funds. It is for these reasons that
recording a general fund liability for TANF overpayments would be
erroneous.
The recovery of overpayments for SNAP households is covered by 7 CFR
273.18 (a)(2). This CFR specifies that claims against households, the
action required to be established for the overpayment of benefits, is
specifically identified as a Federal debt. This proclamation would
preclude the State from recording this as a general fund liability.
In addition to the citations provided above, the Office of the State
Controller requested and received confirmation that supports our position
that recording a liability is not necessary from the Federal Office of
Administration for Children and Families, and, the U.S. Department of
Agriculture for the TANF and SNAP programs, respectively.
FY 2021 Finding: 2021-003
Finding Title: The State has ________ that ________ over the ________ is adequate
(The title of this finding has been redacted to protect confidential
information. This appears as blank underlining.)
State Department: Judicial Branch
ALN: N/A - Financial Statement Finding
2020-006 Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-007
Finding Title: Internal control over the valuation of the allowance for uncollectible fines
and fees receivable needs improvement
State Department: Judicial Branch
Administrative and Financial Services
ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Administrative Office of the Courts and OSC agree with the process
description. Judicial provides the aging report and OSC calculates the
2020-007 reserve. OSC is responsible for determining the estimates in the financial
statements. The accounting estimates are based on subjective, as well as,
objective factors; therefore, professional judgement is required to estimate
an amount for uncollectible receivables using an aging methodology,
which is considered a common and acceptable method within the industry.
Management's opinion is that this method is conservative, not overly
sensitive to variations, is consistent with historical patterns and is not
overly subjective or susceptible to bias. Applying this methodology, OSC
accumulates relevant, sufficient, and reliable data on which to base the
estimate. Additionally, we believe that the estimate is presented in
conformity with the applicable accounting principles and that disclosure is
adequate. The OSC will continue to reserve 100% of all fines over 180
days old, which has been the acceptable method for many years.
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY 2021 Finding: 2021-008
Finding Title: Internal control over unemployment insurance financial reporting needs
improvement
State Department: Labor
Administrative and Financial Services
2020-008 ALN: N/A - Financial Statement Finding
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over the valuations of the allowances for uncollectible
unemployment insurance-related receivables needs improvement
State Department: Labor
Administrative and Financial Services
ALN: N/A - Financial Statement Finding
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Departments agree that detailed receivables reports should be
generated and retained during the fiscal year. OSC will provide guidance
to DOL to develop a reporting mechanism that will provide a more
detailed analysis of the activity of the receivable balances. OSC is
responsible for determining the estimates in the financial statements. The
accounting estimates are based on subjective, as well as, objective factors;
therefore, professional judgement is required to estimate an amount for
2020-009 uncollectible receivables using an aging methodology, which is
considered a common and acceptable method within the industry.
Management's opinion is that this method is not overly sensitive to
variations, is consistent with historical patterns and is not overly
subjective or susceptible to bias. Applying this methodology, OSC and the
Department of Labor (DOL) accumulate relevant, sufficient, and reliable
data on which to base the estimate. Additionally, we believe that the
estimate is presented in conformity with the applicable accounting
principles and that disclosure is adequate. OSC recently performed a five-
year trend analysis of historical collections with information provided by
DOL. The OSC compared the percentages and the assumptions used in the
past and updated the reserve percentages accordingly. The OSC will
continue to use the rolling year trend analysis with the actual collection
data, as provided by the DOL, to update the reserve percentage. DOL
implemented a new system and OSC will continue to review the reserve
process to ensure the allowance continues to be valued properly.
FY 2021 Finding: 2021-009
Finding Title: ________ and ________ over ________ need improvement (The title of
this finding has been redacted to protect confidential information. This
appears as blank underlining.)
2020-010 State Department: Administrative and Financial Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2014
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Finding Prior Audit Finding Status
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Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: The Department has no ________ that ________ over the ________ is
adequate (The title of this finding has been redacted to protect confidential
information. This appears as blank underlining.)
State Department: Education
ALN: 84.027, 84.173
2020-011 Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-005
Finding Title: The Department of Health and Human Services has no ________ that
________ over the ________ is adequate (The title of this finding has
been redacted to protect confidential information. This appears as blank
underlining.)
State Department: Health and Human Services
2020-012
ALN: 93.775, 93.777, 93.778, 93.767
Initial Finding FY: 2016
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: The Department of Labor has no ________ that ________ over the
________ is adequate (The title of this finding has been redacted to
protect confidential information. This appears as blank underlining.)
State Department: Labor
ALN: 17.225
2020-013 Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-011
Finding Title: ________ over the Department of Transportation ________ needs
improvement (The title of this finding has been redacted to protect
confidential information. This appears as blank underlining.)
State Department: Transportation
Administrative and Financial Services
2020-014 ALN: 20.205, 20.219, 20.509
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-010
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: The Department of Transportation has not completed a ________ that
complies with State policy or industry best practice (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Transportation
Administrative and Financial Services
2020-015 ALN: 20.205, 20.219; 20.509
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-010
Finding Title: ________ over the ________ needs improvement (The title of this finding
has been redacted to protect confidential information. This appears as blank
underlining.)
State Department: Transportation
Administrative and Financial Services
ALN: 20.205, 20.219; 20.509
2020-016
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-010
Finding Title: Internal control over agency Schedule of Expenditures of Federal Awards
submissions needs improvement
State Department: Administrative and Financial Services
2020-017 ALN: 10.551, 10.561; 93.558
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over SNAP benefit calculations within the automated data
processing system needs improvement
State Department: Health and Human Services
ALN: 10.551, 10.561
Initial Finding FY: 2019
Questioned Costs: Questioned
Total Federal State
Costs
2020-018
Known $74 $74 $0
Likely $111,273 $111,273 $0
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. We do not agree that this
finding rises to the level of a significant deficiency; additionally, we
disagree with the assertion that there are not procedures in place to ensure
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
that the information entered into ACES is accurate and complete. We do
agree that there was one TFA client with an overpayment; however, this
does not represent a structural or programmatic deficiency. Our federally
funded Quality Control unit follows federal standards and requirements
which further represent an additional internal control for both SNAP and
TFA.
A total of 60 cases were reviewed for audit, 2 of them were TFA cases and
58 were SNAP. TFA is included in the Payment Error Rate determined by
FNS and should be for the purpose of this audit. A sample size of only 2
TFA cases reviewed does not provide statistical evidence of
noncompliance (or compliance).
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program.
Finding Title: Internal control over the issuance of SNAP benefits needs improvement
State Department: Health and Human Services
ALN: 10.551, 10.561
Initial Finding FY: 2019
Questioned Costs: None
2020-019 FY21 Status: Corrective action was not completed in FY 2021
Explanation: Although we agree with this finding, it should be noted that all of the
exceptions found were prior to the implementation of a revised standard
operating procedure governing the Date of Death processing which was
implemented near the end of the audit period, on April 26, 2021. This
repeat finding has been fully addressed.
FY 2021 Finding: 2021-015
Finding Title: ________ over the ________ system needs improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Health and Human Services
ALN: 10.551, 10.561; 93.558
Initial Finding FY: 2019
2020-020
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding and will not be taking steps to
address and remediate this condition
FY 2021 Finding: 2021-012 and 2021-017
Finding Title: Internal control over cash balances needs improvement
State Department: Health and Human Services
Administrative and Financial Services
2020-021 ALN: 10.557
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
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Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
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Explanation: The Service Center will modify the current grant cash balance analysis to
include separating the WIC NSA Admin and the WIC Food grants. This
will be completed by March of 2022. They will also finalize grant
reconciliations for the WIC Food grants from 2017 to present. This will be
completed by December of 2022.
FY 2021 Finding: 2021-018
Finding Title: Internal control over subrecipient monitoring needs improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2019
Questioned Costs: None
2020-022 FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department will implement a process to complete the MERs as time
allows and prioritize current year MERs to ensure compliance with the
regulation. The Department has hired additional staff to assist with the
completion of the MERs. The Department will meet at least quarterly to
check on the progress of the MERs.
FY 2021 Finding: 2021-019
Finding Title: Internal control over the WIC infant formula rebate process needs
improvement
State Department: Health and Human Services
Administrative and Financial Services
2020-023 ALN: 10.557
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over subrecipient awards needs improvement
State Department: Health and Human Services
ALN: 10.557
Initial Finding FY: 2019
2020-024 Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Division of Contract Management will collaborate with MeCDC to
implement controls to ensure subrecipient awards are complete, accurate
and in accordance with Federal regulations.
FY 2021 Finding: 2021-020
Finding Title: ________ over the ________ system needs improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Health and Human Services
2020-025 ALN: 10.557
Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Internal control over Unemployment Insurance claim payments needs
improvement
State Department: Labor
ALN: 17.225
Initial Finding FY: 2011
Questioned Costs: Questioned
Total Federal State
Cost
Known $63,371,162 $37,047,183 $26,323,979
Likely Undeterminable Undeterminable Undeterminable
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department partially agrees with this finding.
The finding states that the Department’s system does not ensure that
benefit payments to ineligible claimants are prevented or detected prior to
the issuance of payments. The Department collects the necessary
information to determine initial and ongoing eligibility. It is important to
note that both federal and state law prohibit the withholding of payment
from someone who is already receiving benefits when a potential eligibility
issue is identified. The Department must gather additional information and
issue a written determination, which also includes notification of the right
to appeal the determination. In the meantime, payments must be made. If
the Department issues a determination that the individual was ineligible, an
overpayment is created, and repayment is required.
2020-026 The finding further states that the Department has insufficient controls in
place to detect possible unreported employment or wages when a
transitional (back-to-back) benefit year is filed. The Department will
research the availability of any additional tools or programming needed to
detect wages reported by employers that have not been reported by
claimants when a transitional benefit year is filed. Given the time
difference that occurs between when a claim is filed and when an employer
is statutorily required to report wages or employment, overpayments that
occur when the claimant willfully misrepresents facts cannot be completely
avoided. In those circumstances, the repayment of benefits also includes
interest and penalties.
The finding also states that working part-time should not have been
considered as a work search activity after the Department’s return to more
traditional work search activities in May 2021. Maine was one of the first
states to restore a work search requirement under the Pandemic – many
continued a work search waiver through all of 2021. The Department
began partially lifting a work search in 2020, and then moved closer to pre-
Pandemic allowed work search activities in May 2021. Though working
part-time was not considered a qualified work search activity prior to the
pandemic, continued concerns regarding COVID-19 infection, lack of
childcare, remote schooling, and businesses opening but not immediately
returning to full employment, informed the Department’s decision to
continue our earlier decision to allow acceptance of part-time work to
satisfy the work search requirement beyond May 2021. This encouraged
those who had been unemployed for an extended period to maintain a
connection to the workforce by accepting part time work. Neither Maine
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
law nor rules fully define what constitutes a work search, this is set by the
Department. People were notified of the change in the activities that would
be accepted as satisfying the work search by email, website, and the press.
The finding furthermore states that the Department erred in paying benefits
to individuals collecting on the Pandemic Unemployment Assistance
(PUA) program pending receipt of required proof of employment
documentation (POE). When the guidance around PUA POE was released
in UIPL 16-20, change 4, the Department reached out via e-mail to
USDOL through their dedicated COVID-19 inbox to ask whether claimants
should be paid pending receipt of PUA POE. The response from USDOL
clearly stated the Department should not hold up benefits pending receipt
of PUA POE. States are required to follow federal guidance on these
federal programs.
The finding states the Department needs additional controls for claims filed
after a claimant’s date of death, as well around the claimants age when
filing a claim for benefits. The Department agrees that the current
crossmatch with the state’s Vital Records office that identifies deceased
claimants should be enhanced. As with reporting of quarterly wages, there
are timing differences that cannot be avoided, and overpayments cannot be
completely ruled out. Overpayments, penalties, and prosecutions are all
considered when it is determined someone falsely filed for benefits using a
deceased person’s information. Regarding the age of the individual filing
for benefits, controls will be reviewed and enhanced where appropriate. Of
the three claimants identified as being over 100 years old, two were eligible
for the benefits they received. The third required a correction to the
person’s date of birth.
FY 2021 Finding: 2021-021
Finding Title: ________ for the ________ system need improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Labor
2020-027 ALN: 17.225
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over subrecipient monitoring procedures needs
improvement
State Department: Transportation
2020-028 ALN: 20.509
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over cash management needs improvement
State Department: Administrative and Financial Services
2020-029
ALN: 84.027, 84.173
Initial Finding FY: 2020
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: ________ and ________ for the ________ system need improvement (The
title of this finding has been redacted to protect confidential information.
This appears as blank underlining.)
State Department: Education
ALN: 84.173, 84.027
2020-030 Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-006
Finding Title: Internal control over claim reimbursements needs improvement
State Department: Labor
ALN: 84.126
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Since February of 2020, the Bureau of Rehabilitation Services (BRS)
Quality Assurance (QA) Division, with assistance from Maine IT, is
working closely with the AWARE case management system vendor to
resolve issues with the Social Security Administration (SSA) cost
reimbursement module. The QA Division does have a number of internal
controls in place regarding the processing of SSA cost reimbursement
2020-031 claims, including the review of each payment received to confirm which
client and claim it is associated with and assessing any difference between
the claim and payment amount. In addition, bureau management reviews a
quarterly report indicating claims submitted, potential reimbursement,
number of denials and approvals and total reimbursement amount. Going
forward, BRS will enhance its claims review process. On a quarterly basis
the Bureau will analyze the report and identify any patterns or
discrepancies to determine which need further investigation. Keeping in
mind that BRS does not have access to some of the data SSA uses in
determining the final claim amount, such as beneficiary eligibility periods
and anticipated savings to the SSA trust fund, it is likely that differences in
the claim amount requested and received will continue for a significant
percentage of claims.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not audited
as a major program
Finding Title: Internal control over the timeliness of eligibility determinations needs
improvement
State Department: Labor
2020-032 ALN: 84.126
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: In the Fall of 2020, the Division of Vocational Rehabilitation (DVR) issued
an updated procedural directive on the eligibility process that set a
maximum timeframe from date of application to date of intake. It also
provides guidelines on how to streamline the eligibility process. All
DVR/DBVI VR staff were trained on the streamlined process in November
and December of 2020. That training is now included in the training for
all new VR counselors and is posted on the bureau's intranet for future
reference. BRS (DVR and DBVI) has several internal control procedures
in place to monitor the requirement for a 60-day eligibility or a signed
eligibility extension. There are also reports available in the AWARE case
management system to assist VR counselors, supervisors and managers
with monitoring eligibility due dates and organizing their work. BRS will
provide a refresher staff training on how to generate and use these reports.
The BRS QA unit will also provide regional reports to the Division
Directors and Regional Managers on a monthly basis to assist with
monitoring. It should be noted that even with effective internal controls in
place, BRS often faces difficulties contacting applicants to arrange for an
intake to establish eligibility or to get a signature to approve an eligibility
extension. The impact of the COVID pandemic has added challenges to the
eligibility determination process as well. Despite the aforementioned
issues, DVR and DBVI placed a higher priority on keeping cases open
during this unprecedented time.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not audited
as a major program
Finding Title: Internal control over Federal cash management needs improvement
State Department: Administrative and Financial Services
Labor
ALN: 84.126
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Cash on hand exceeded the administratively feasible time of seven business
days. In seven business days, 77% of the cash drawn was expended. The
cash drawn was fully expended in 17 business days. As stated in the
2020-033 Context section, 149 draws were processed in compliance with the cash
management requirements. This one anomaly occurred at the end of the
state fiscal year when the focus was on processing as many documents as
possible within the applicable fiscal year. In addition, staff were still
adjusting to working remotely in the pandemic environment. The internal
controls in place identified the error. Because the process to return funds is
administratively burdensome and the Department anticipated expending
within a reasonable amount of time, the decision was made to not return
the funds. The Department recognizes the need to accurately calculate the
amount of cash being requested, especially considering that funds cannot
be returned in the same manner that they are drawn.
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not audited
as a major program
Finding Title: Internal control over provider site visits needs improvement
2020-034
State Department: Health and Human Services
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
ALN: 93.268
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: This finding is directly related to an alternative plan developed by the State
of Maine during FY2021 when on-site VFC Compliance Visits were
temporarily suspended. The Department will update procedures to ensure
provider monitoring is documented and records are maintained. The
Department will update procedures to ensure supervisory oversight is
completed, documented, and maintained.
FY 2021 Finding: 2021-035
Finding Title: Internal control over agency Schedule of Expenditures of Federal Awards
submissions needs improvement
State Department: Health and Human Services
2020-035 ALN: 93.268
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over Federal cash management needs improvement
State Department: Administrative and Financial Services
ALN: 93.268
2020-036
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: ________ over the ________ system needs improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Health and Human Services
ALN: 93.268
2020-037 Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-036
Finding Title: ________ and ________ for the __________ system need improvement
(The title of this finding has been redacted to protect confidential
information. This appears as blank underlining.)
State Department: Health and Human Services
2020-038 ALN: 93.268
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
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State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY 2021 Finding: 2021-037
Finding Title: Internal control over payments made on behalf of TANF clients needs
improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2018
Questioned Costs: Questioned
Total Federal State
Costs
Known $18,606 $18,606 $0
Likely $608,524 $608,524 $0
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees with the condition statement and recommendations.
2020-039 Regarding client payments: During SFY 2021, the Department formalized
and implemented additional supervisory case readings (two per worker per
week) and call monitoring (two calls a week, randomly selected). In
addition, the Work Support Team Supervisor conducts partial reviews of
approximately 25 percent of the cases worked on a daily basis. The
Department will provide additional guidance to eligibility and other related
workers regarding notification to the Work Support Team when the
Department receives information that may affect payments.
Regarding provider payments: The Department will examine the existing
internal controls over payments, billing, invoice structures and
mechanisms, including monitoring, to determine if the errors discovered
were related to human error and/or lack of training or clarity in existing
vendor payment controls.
FY 2021 Finding: 2021-040
Finding Title: Internal control over TANF client child support sanction procedures needs
improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2020-040
Explanation: The Department agrees with the condition statement noted in the audit
finding for the audit period ending June 30, 2021.
The Department implemented a solution to this issue during the audited
year, in March of 2021, as represented by a direct communication to staff
as well as subsequent communications including an SOP governing this
process
FY 2021 Finding: 2021-046
Finding Title: Internal control over TANF performance reporting and work participation
procedures needs improvement
2020-041
State Department: Health and Human Services
ALN: 93.558
G-43
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was taken in FY 2021 for the secondary review portion
of this finding
Corrective action was not completed in FY 2021 for the work participation
and countable month portion of this finding
Explanation: The Department agrees with this finding and recommendations regarding
the 28 cases containing errors. The Department will investigate and
identify the source or cause of errors found which led to incorrect month
counts. The Department will modify the existing Quality Review Tool.
Additionally, we will review, and edit if necessary, the existing procedures
governing this process.
FY 2021 Finding: 2021-047
Finding Title: Internal control over subrecipient cash management needs improvement
State Department: Health and Human Services
ALN: 93.558; 10.557; 93.044, 93.045, 93.053; 93.667; 93.569; 93.917
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. The Department reviews
budgeted expenses to determine their timing and nature (one time,
recurring, allowability); reviews quarterly expense reports and alters
2020-042 payments to meet immediate cash needs, and finally, monitors subrecipient
single audits to ensure there are no cash management findings.
Additionally, our subrecipient's programs are tested more frequently and at
a lower threshold than the threshold for single audits in accordance with
the Maine Uniform Accounting and Auditing Practices for Community
Agencies (MAAP). The Department's approach is administratively
reasonable and does minimize the time elapsing between the payment of
Federal funds to the subrecipient and the subrecipient’s actual
disbursement for program purposes given administrative and operational
needs. We believe we have procedures in place that can be corroborated by
the fact that our subrecipients do not receive single audit findings related to
cash management.
FY 2021 Finding: 2021-042
Finding Title: Internal control over Income Eligibility and Verification System
procedures needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Initial Finding FY: 2019
2020-043
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: With only three disagreements regarding the discrepancies cited in the
Condition statement above, the Department agrees with this finding. Four
standard operating procedures governing IEVS reporting were modified in
G-44
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
fiscal year 2021. However, largely due to the pandemic, combined with
manual processing, we did witness an uptick in errors. The Department
has created a Technology Roadmap workgroup and IEVS automation is a
component of this project.
FY 2021 Finding: 2021-043
Finding Title: Internal control over risk evaluation procedures needs improvement
State Department: Health and Human Services
ALN: 93.558
Initial Finding FY: 2017
Questioned Costs: None
2020-044
FY21 Status: Corrective action was not completed in FY 2021
Explanation: Although there are several layers of risk evaluation built into the
subrecipient monitoring process, the Department agrees that there should
be a policy regarding the evaluation of risk to determine the appropriate
subrecipient monitoring.
FY 2021 Finding: 2021-048
Finding Title: Internal control over special reporting needs improvement
State Department: Health and Human Services
ALN: 93.558
2020-045
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: ________ over the ________ system needs improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Health and Human Services
ALN: 93.558
2020-046 Initial Finding FY: 2018
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-044
Finding Title: ________ and ________ for the ________ system need improvement (The
title of this finding has been redacted to protect confidential information.
This appears as blank underlining.)
State Department: Health and Human Services
ALN: 93.659, 93.658, 93.596, 93.575
2020-047 Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: No finding was issued for FY 2021; however, this program was not audited
as a major program
G-45
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Finding Title: Internal control over Hospital and Long Term Care Facility audits needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2010
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021 for the LTCF – Nursing
Facilities and Hospitals portion of the finding
Management disagrees with the LTCF – ICF/IID’s portion of this finding
and does not believe that corrective action is required
Explanation: The Department agrees with this finding in regard to LTCF - Nursing
Facilities and Hospitals. The delay in completing the Nursing Facilities
audits is the result of staff shortages and competing priorities due to
COVID-19 funds which required audit resources to reconcile interim
2020-048 payments. While hospitals were not completed within the one-year
timeline identified in policy, one audit being 12 days late should not be
considered material. The hospital audits are tracked on a weekly basis and
staff are dedicated to completing the audits. We are currently on pace to
complete them all within the one-year timeline; therefore, no corrective
action is necessary.
The Department disagrees with this finding in regard to LTCF - ICF/IID's.
The ICF/IID audits do not have a specific time requirement in MBM for
completion. The federal regulations only require that periodic audits of
financial records occur. All ICF/IID cost reports submitted to the
Department are recorded in a database and tracked for audit purposes. All
cost reports are audited as resources are available. We have worked with
our Federal partners who have agreed with our interpretation of the
regulation and the timing of our audits for the ICF/IIDs.
FY 2021 Finding: 2021-050
Finding Title: Internal control over Medicaid Cost of Care assessments and deductions
needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
2020-049
Explanation: The Department agrees with this finding and has a quality assurance
process for monitoring manually adjusted cost of care assessments as
reflected in the standard operating procedures which underwent a major
revision, effective June 30, 2020. This new business process was in effect
for the entire audited year. From the sample that was tested, the
Department achieved a 95% compliance rate and will commit to continuing
to achieve at least 95%. No corrective action is necessary.
FY 2021 Finding: 2021-055
Finding Title: Internal control over Automated Data Processing Risk Analysis and
2020-050 System Security Reviews needs improvement
State Department: Health and Human Services
G-46
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Administrative and Financial Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over cases opened due to potential fraud, abuse or
questionable practices needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2016
Questioned Costs: None
2020-051 FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees that the cases identified lacked documentation to
support the reason for an extended period of non-activity. Three of the five
cases identified have been subsequently closed and require no additional
action. The remaining two cases are being addressed by the Program
Manager. Procedures will be established to run a quarterly report and
evaluate outstanding cases for closure or reassignment.
FY 2021 Finding: 2021-051
Finding Title: Internal control over compliance with eligibility determination
requirements needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The Department disagrees with this finding. OSA has misinterpreted
MaineCare policy by excluding the eligibility system (ACES) as part of the
2020-052 electronic case record. Electronic data sources are required per federal
regulations and documentation of citizenship and identity verifications are
stored within ACES. The requirement to verify identity is part of Medicaid
citizenship verification requirements. Maine verifies citizenship and
identity through electronic data matches in accordance with 42 CFR
§435.949; the results of this match are stored in ACES. The state cannot
request paper documentation from applicants after successful electronic
verification for the purpose of storing it in another system, nor can we
establish more restrictive verification requirements than those allowed by
federal regulations. This was a prior year finding (2020-052) that the
Department disagreed with and the cognizant agency, CMS, agreed with
the Department's position and closed the finding.
FY 2021 Finding: 2021-052
Finding Title: Internal control over Medicare Part B premium payments needs
improvement
2020-053
State Department: Health and Human Services
Administrative and Financial Services
G-47
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2019
Questioned Costs: Questioned
Total Federal State
Costs
Known $279 $187 $92
Likely $4,675,373 $3,136,240 $1,539,133
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department agrees with this finding. We continue to address this
repeat finding as evidenced by two substantial edits to the standard
operating procedures governing Medicare Part B Buy-in reconciliation
during the fiscal year. Additional work on this front includes consolidation
of legacy tasks previously conducted by the IEVS team migrating to the
ACES Helpdesk. Related, we have also conducted a transaction code
review to ensure all CMS codes requiring state action are appropriately
captured on these reports.
The Department is reviewing Information Technology processes in order to
determine where system changes may enhance and further automate
reconciliation for individuals with SSI and Medicare premium changes
FY 2021 Finding: 2021-053
Finding Title: Internal control over the eligibility determination process needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767; 10.551, 10.561; 93.558
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The systems we have in place are both necessary and sufficient in meeting
programmatic requirements to ensure accurate eligibility determinations
are being made. There has been no citation of federal regulation provided
by OSA during this review that contradicts this. The Department would
like to note: 1. Supervisors do a minimum of 1 case reading per month and
2020-054 a minimum of 1 call monitoring per week for staff on phones. It is
commonplace for them to do more, especially for a new employee, or
known coaching issues. 2. Prior to 2021, these case readings were tracked
by supervisors and units, and were tracked centrally on our Streamline
Management Y-Drive. 3. Phone calls can be referenced by Supervisors in
real time OR afterwards, via recording. 4. Prior to 2021 specifics of case
reading and call monitoring were formalized, with specific expectations in
multiple categories, which were followed up on by coaching staff if not all
of the expectations were met. However, with a goal of continuous
improvement, we were already working on an enhanced system to track
Case Reading and Call Monitoring performance statewide which will
supersede and further improve upon current practice. A new program and
procedure have already been written and are in the process of being vetted
and approved by Regional personnel for implementation. This example of
continuous quality improvement will lead to a more holistic understanding
of trends and training needs.
G-48
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
FY 2021 Finding: 2021-054
Finding Title: Internal control over the Medicaid and CHIP payment files needs
improvement
State Department: Health and Human Services
Administrative and Financial Services
ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2020
2020-055 Questioned Costs: Questioned
Total Federal State
Costs
$448,211 $289,186 $159,025
Known Medicaid Medicaid Medicaid
($448,211) CHIP ($439,964) CHIP ($8,247) CHIP
Likely None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over payment of claims needs improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: OFI Response: While The Department acknowledges 13 exceptions were
found during the audit period ending June 30, 2021, it should be noted that
all of these occurred prior to our updated standard operating procedure
governing Date of Death processing which was implemented on April 26,
2020-056 2021.
OMS Response: The Department has procedures in place among multiple
units to identify and recover claims paid with dates of service after the date
of death. Starting in February 2019, the Adjustment Unit receives updates
from the Change Management Unit when there is a change to a member’s
date of death and then adjusts/reverses any affected claims. The Program
Integrity Unit runs an annual DOD report (implemented in November
2020) to identify and recover any overpayments. For context regarding the
efficacy of the Department’s current procedures, there was an error rate of
.000003 for claims with dates of service after the date of death.
FY 2021 Finding: 2021-056
Finding Title: Internal control over Prospective Interim Payments to hospitals needs
improvement
State Department: Health and Human Services
2020-057 ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over Patient Service Revenue needs improvement
2020-058 State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
G-49
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required
Explanation: The condition incorrectly states that the DHHS Division of Audit is
responsible for calculating each hospital's annual PSR tax. The Division of
Audit has no authority to determine the amount of tax, collect the tax or
enforce the tax.
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program.
Finding Title: Internal control over the outsourced medical claims coding process needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: A Change Request has been made with the vendor to process claims using
the MII RISSNET files. OMS is currently evaluating the Change Request
2020-059 development schedule and estimates that this will be completed and
deployed by September of 2022.
Currently the MIHMS NCCI reference tables are updated by publicly
available files found on the Medicaid website. CMS requires States to
update the MIHMS NCCI reference tables with NCCI edit files that are
available on the Medicaid Integrity Institute (MII) secure portal
(RISSNET). The Change Request was also created to set up a process to
update the MIHMS NCCI reference tables with the RISSNET NCCI edit
files.
FY 2021 Finding: 2021-057
Finding Title: Internal control over the financial reporting process needs improvement
State Department: Health and Human Services
Administrative and Financial Services
2020-060 ALN: 93.775, 93.777, 93.778; 93.767
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was taken during FY 2021
Finding Title: Internal control over provider license verification procedures needs
improvement
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767
2020-061
Initial Finding FY: 2019
Questioned Costs: None
FY21 Status: Management disagrees with this finding and does not believe that
corrective action is required.
G-50
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
Explanation: The system upgrade was a process enhancement and not the result of a
control or compliance deficiency. The Department's longstanding licensure
verification process is to term a provider's contract with MaineCare
concurrent to the period of licensure for that provider as supplied during
enrollment. In other words, the licensed provider's ability to bill and be
reimbursed by MaineCare would end with the last effective date of the
provider's license as supplied by the provider, unless the provider
subsequently updates that licensure information. If a provider updates
licensure information via an enrollment case, the Department would then
review that information under its normal enrollment processes,
verify/confirm the licensure, and update the provider's contract
accordingly. If a provider fails to update the license information, the
licensed provider's contract would expire, and any claims associated with
that provider would deny and not be paid. The Department notes that this
audit did not find any instances in which a provider was reimbursed during
the audit year during a period of non-licensure. The Department maintains
that its processes were adequate to meet its obligations under the applicable
federal regulations. While the Department did implement an automated
licensure verification process during the audit year, that system upgrade
does not mean that, before the implementation of the upgrade, the
Department lacked a process to ensure a provider was licensed.
FY 2021 Finding: No finding was issued for 2021 and this program was audited as a major
program.
Finding Title: ________ over the Office of Information Technology’s ________
procedures needs improvement (The title of this finding has been redacted
to protect confidential information. This appears as blank underlining.)
State Department: Administrative and Financial Services
ALN: 93.775, 93.777, 93.778
2020-062 Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-013
Finding Title: ________ and ________ needs improvement (The title of this finding has
been redacted to protect confidential information. This appears as blank
underlining.)
State Department: Administrative and Financial Services
ALN: 93.775, 93.777, 93.778
2020-063 Initial Finding FY: 2017
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-014
Finding Title: ________ over the Office for Family Independence ________ and
________ needs improvement (The title of this finding has been redacted
2020-064 to protect confidential information. This appears as blank underlining.)
State Department: Health and Human Services
G-51
State of Maine – Office of the State Controller Summary Schedule of Prior Audit Findings
For the Fiscal Year Ended June 30, 2021
Summary Schedule of Prior Audit Findings
Finding Prior Audit Finding Status
Number
ALN: 93.775, 93.777, 93.778, 93.767, 10.551, 10.561, 93.558
Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: This audit finding does not warrant further action
Explanation: This finding is no longer applicable to the Office for Family Independence
and has been directed towards the Office of Information Technology
FY 2021 Finding: 2021-013
Finding Title: ________ for the ________ system need improvement (The title of this
finding has been redacted to protect confidential information. This appears
as blank underlining.)
State Department: Health and Human Services
ALN: 93.775, 93.777, 93.778; 93.767; 93.558; 10.551, 10.561
2020-065 Initial Finding FY: 2020
Questioned Costs: None
FY21 Status: Corrective action was not completed in FY 2021
Explanation: The Department is taking steps to address and remediate this condition
FY 2021 Finding: 2021-058
Printed under appropriation 014-27A-0067-04
G-52