A system under strain—why the audit matters
Maine State Auditor Matt Dunlap released his office’s 2024 report auditing the state of Maine, and it is a sobering wake-up call to anyone who believed (for some reason) that state government was operating with any form of fiscal discipline and transparency. With $2.1 billion in contracted spending riddled with oversight failures and millions in federal funds now under scrutiny, this is not just an accounting problem but a profound failure of governance. The audit reveals not isolated errors, but a disturbing pattern of systemic negligence that should alarm every taxpayer and policymaker.
If Mainers want to understand why their government’s fiscal health continues to erode, they need look no further than this audit. The audit itself is over 500 pages, and since 500 pages is quite a lot to read, the purpose of this post is to summarize some of Dunlap’s most notable findings.
Where the money went wrong: Top-line failures
$2.1 billion in procurement under loose oversight. That’s the headline figure. That is how much money went through Maine’s contract procurement system, which is a system that the state auditor found lacks proper supervisory oversight. While this does not necessarily mean that every one of these contracts are invalid, or that the auditor suspects every one is a product of mismanagement, it does raise massive red flags to the lack of transparency and review in Maine’s spending processes. Furthermore, the auditor found that the Office of State Procurement Services (OSPS) failed to enforce oversight policies and procedures upon agencies ensuring agreements conformed with federal and state legal requirements.
Low-Cost Service Contracts (LCSC) overuse. Small one-time services less than $5,000 are considered LCSCs and are not subject to the normal bidding process. However, the report alleges that these types of contracts were overused by Maine state agencies. This kind of “contract stacking” is a breeding ground for cronyism and backdoor deals—an affront to good governance and fiscal prudence.
More than half of the seven LCSCs audited were awarded to vendors already providing a different LCSC in the last 12 months, which the audit notes is in direct violation of Maine state requirements. This is almost certainly a sign of either accidental or intentional circumvention of the bidding requirements for contracts above the $5,000 threshold. The OSPS guidelines specifically require a bidding process for projects of $5,000 or more.
Further Bidding Process Bypassing. The audit reviewed 31 separate non-bidding purchase justifications, which are reports by agencies justifying why a purchase above $5,000 did not go through a competitive bidding process. These projects deserve a lot of oversight since they don’t allow separate bidders to drive the project price down through the normal bidding process. Of the 31 reviewed purchases, 16 had no documentation at all that a reasonable investigation occurred despite Maine state law explicitly requiring that review in many cases. In at least one case, a contract’s approval occurred after the project was completed. Even worse, for every procurement tested, there was zero documentation regarding cost/price analysis, meaning there was zero review as to whether quoted prices were fair and reasonable for the state to pay.
$3.7 million in mismanaged child care funds. The federal government gives millions of dollars of child care funds to the state, but it stipulates that 70% of those funds must directly go to subsidizing care for low-income families. However, the Maine DHHS failed to meet these requirements, meaning the federal government could potentially ask for that money back or even investigate the Maine DHHS for mismanagement of federal funds.
Specifically, the Maine DHHS failed to properly earmark funds they were supposed to send to low-income families, spending $3.7 million of federal funds on things they aren’t supposed to under federal law. These funds were rerouted to administrative and other purposes, violating federal rules and potentially forcing Maine to repay the money.
Around $615,000 in fraudulent school meal reimbursements. While free school meals are possibly one of the most pure-intentioned government programs Maine has, the audit even found severe mismanagement there. In particular, the Department of Education (DOE) approved ineligible and duplicate meal claims, improperly authorized summer feeding sites, and generally operated with a blatant disregard for federal guidelines.
The DOE completely failed to create oversight policies for a large array of school meal reimbursement programs, which makes all of those funds have questionable reliability. Some might argue that this doesn’t matter, since the greater goal of feeding children was still served. However, improper management does not only unfairly cost the taxpayers of Maine, but it also denies resources to hungry children who may truly need this assistance.
Payments to the deceased. While not a massive cost compared to some other issues outlined in the report, it should be noted that this audit did not review the entire government, merely a sample size of programs. Among the sample size, DHHS issued food stamp (SNAP) benefits to individuals who had already died—more than $11,000 in improper payments were identified, with more likely missed. This happened because Maine lacked a basic system to cross-check death records with benefit rolls. This finding is outright offensive, since many before have dismissed conservative claims that dead people are receiving any form of government benefits.
Unsafe foster placements and improper payments. In many cases, children were placed in homes without required background checks. In one case, $10,000 was paid to a foster home where several adults had not passed abuse and neglect screenings. The audit also found cases of foster care benefits being paid after children were adopted, payments to unlicensed or unregistered caretakers, or overpayment of state funds when inappropriate. This isn’t just mismanagement—it’s a direct threat to child safety. Furthermore, this brings a whole new light to recent DOJ lawsuits against Maine for failing to provide quality services, in that case behavioral health services, for Maine children.
Patterns: Systemic negligence, not isolated mistakes
The audit paints a clear picture: these aren’t one-offs or flukes—they’re recurring failures. The same programs, including TANF, foster care, and SNAP, appear year after year with similar findings. DHHS and DOE have shown a troubling inability or unwillingness to implement basic internal controls.
This is a bureaucracy asleep at the wheel—or worse, unwilling to be held accountable. In the case of Child Care Development Fund, the department wasn’t even tracking whether it was meeting federal earmark requirements, which is itself an institutional failure. Furthermore, OSPS has the duty to provide and manage effective contracting and spending guidelines, yet they failed to provide proper oversight to the various agencies of Maine.
Why this isn’t just about accounting—it’s about trust
Public finance is not just about dollars and cents; it’s about the values of stewardship and responsibility. When agencies like DHHS and DOE misuse federal dollars, they risk clawbacks, legal liability, and the credibility of Maine as a responsible steward of taxpayer money. The Trump administration is already investigating Maine and threatening to claw back funding; we shouldn’t be giving them more reasons to do so, especially as the state faces a budget shortfall.
Worse yet, this audit shows that essential guardrails—like verifying eligibility or enforcing procurement laws—are being ignored. If a private business ran its books this way, its executives would be fired—or prosecuted.
Conclusion
This is likely the most damning audit in recent Maine history, as it reveals major mismanagement of state and federal funds, as well as complete failure from the OSPS to review and oversee the procedures of individual state agencies effectively. The oversight crisis revealed by this audit is not a fluke either, it is a direct result of Maine policies, as we will dissect in the second part of this analysis linked below.