The State of Maine is facing a crisis of competence and accountability. The 2024 audit laid bare the chronic dysfunction within state agencies — from contract abuse and sloppy procurement to improper payments and widespread noncompliance with federal requirements. This moment demands serious legislative action. Lawmakers can no longer afford to kick the can down the road.

The audit wasn’t just an embarrassment — it was a warning shot. If legislators fail to respond, Maine risks further losing federal funding, facing stiff penalties, expensive litigation, and suffering reputational harm that could deter both private-sector investment and federal cooperation. The question is no longer what happened, it’s “what are we going to do about it?”

The Scope of the Problem

The findings in the audit and related reports were staggering, some of the most prominent findings being:

  • Contract stacking to avoid procurement thresholds.
  • No public centralized tracking of contracts or documentation of waivers.
  • Millions in federal funds mismanaged or at risk due to repeated noncompliance.
  • Quality of service reviews and outcomes tracking are nearly nonexistent.
  • Payments to deceased individuals — a shocking but not unfamiliar sign of dysfunction.

This is not a partisan problem — it is a failure of stewardship over taxpayer resources. The Legislature now has a moral and fiscal responsibility to fix it.

Policy Solutions: From Transparency to Accountability

Maine lawmakers should act immediately to strengthen transparency, accountability, and performance within state government to restore trust and avoid punitive federal action. Maine Policy Institute recommends the following reforms:

1. Tie Agency Funding and Leadership to Audit Performance

It is unacceptable for agencies to repeatedly ignore audit findings. Moving forward, a portion of agency funding—and even commissioner and senior staff retention—should be tied to meaningful progress on correcting deficiencies. Maine’s governor currently appoints the heads of the various executive departments, so any department failing to meet transparency and accountability standards due to poor leadership falls on Governor Mills to replace. 

2. Establish Penalties for Contract Stacking

Contract stacking to avoid competitive bidding is deceptive and corrosive to good governance. LD 857, which requires the Department of Administrative and Financial Services (DAFS) to preserve and publish all notices of intent to waive competitive bidding, would be a critical first step. However, lawmakers should also penalize agencies or staff who repeatedly engage in this practice.

3. Mandate Cross-Agency Data Integration for Eligibility Verification

Errors like payments to deceased individuals or ineligible recipients arise from siloed, outdated data systems. Lawmakers must mandate inter-agency data integration for welfare and benefit eligibility determinations. As shown in earlier posts, other states have effective models to avoid this, but Maine has failed to keep up with the 21st century.

4. Enforce Corrective Action Plans for Repeat Offenders

Too many agencies have seen the same audit findings year after year. The Legislature must require formal corrective action plans for any agency with repeat findings — and hold public hearings if agencies fail to comply.

Legislative Fixes Lawmakers Should Enact Immediately

The 132nd Legislature has tools already on the table to address the audit’s root causes. Lawmakers should move quickly to pass the following bills:

  • LD 594: Directing the State Auditor To Audit All State Agencies
    • Summary: LD 594 would direct the State Auditor to conduct a comprehensive audit of all state agencies, rather than relying solely on selective or sporadic reviews. This bill ensures that no agency is above scrutiny and promotes a culture of continuous accountability. Regular audits would expose inefficiencies, waste, or misuse of public funds across government operations, allowing legislators and the public to assess the effectiveness of agency performance better.
    • Transparency and Accountability Impact: By mandating routine and thorough audits, LD 594 increases visibility into how tax dollars are spent and ensures that all state agencies are subject to the same level of fiscal scrutiny. This reinforces public trust and deters mismanagement by making government operations more transparent and measurable over time.
  • LD 671: An Act To Establish Zero-based Budgeting for State Government
    • Summary: LD 671 would require Maine state agencies to use zero-based budgeting (ZBB), a method where each expense must be justified for every new budget period. Instead of relying on incremental increases to prior budgets, agencies must build their budgets from the ground up each budget cycle. This approach demands a critical evaluation of all programs and expenditures, exposing outdated, redundant, or inefficient uses of public resources.
    • Transparency and Accountability Impact: ZBB shifts the budgeting process from automatic funding increases to active justification, making agencies more transparent about their needs and priorities. It gives legislators and the public a more transparent view of agency operations and spending, enhancing accountability and ensuring that the government only funds programs that it truly needs and produce results.
  • LD 857: Transparency in Procurement  
    • Expanded Summary: LD 857 would likely do the most out of any of these bills to directly fix problems identified in Maine’s latest audit. It seeks to ensure that the process of awarding state contracts is open and transparent by requiring state agencies to publish more detailed procurement records. This includes clarifying why particular vendors are chosen and under what conditions. It aims to prevent favoritism, cronyism, or manipulation in state procurement.
    • Transparency and Accountability Impact: By exposing the state’s procurement processes, LD 857 deters abuse and encourages fair competition. It ensures public contracts are awarded based on merit and value for taxpayers, not behind-the-scenes deals. This bill is a critical step toward restoring faith in how public dollars are spent on services and infrastructure.

If Lawmakers Fail to Act

Failure to respond to this audit invites severe consequences:

  • Loss of federal funding: Several findings involved mismanagement of federal grants, which could trigger funding freezes.
  • Increased costs to taxpayers: Without accountability, inefficiencies fester and program costs balloon.
  • Reputational harm: Maine cannot afford to be viewed by the federal government — or potential business partners — as a state where financial controls are optional.
  • Erosion of public trust: Citizens lose faith in government when fiscal mismanagement is met with silence or excuses.
  • Litigation: The federal government or private actors can sue the state of Maine for unfairly selecting contracts or inappropriately managing/spending federal money.
Conclusion

This is a turning point for the Maine state government. Lawmakers have a choice: accept mediocrity and corruption as the norm, or take bold, responsible action to restore trust in our institutions. Maine taxpayers — and the future health of our public programs — deserve nothing less than reform with teeth. Hopefully, Maine legislators will act to ensure that the next state audit is better than the last.