State of Maine Directs Agencies To Revise Financial Policies

By Baker Newman Noyes June 29, 2012

The State of Maine recently enacted legislation to require quasi-independent state agencies to adopt certain financial policies and procedures with the goal of ensuring that activities and costs are necessary and reasonable for the agency’s mission. This follows recent recommendations from the Office of Program Evaluation and Government Accountability (OPEGA).

The new policies and procedures are summarized below. The full text of the law is here. The policies and procedures need to be adopted by December 31, 2012 and implemented by July 1, 2013.

The policies and procedures should cover:

Competitive bidding

• Establish competitive procurement as the standard procurement method.
• Specify conditions under which the competitive procurement may be waived.
• For procurements over $10,000 that were not competitively bid, maintain written justification and approval for five years.

Contributions

• Ensure contributions are directly related to the agency’s mission.
• Budgeted and accounted for separately from other expenditures.
• Maintain documentation for each contribution.
• Ensure amounts are approved in the annual budget by the governing board.
• Ensure periodic reports are made to the governing board on contributions made.

Travel, meals and entertainment

• Limit costs to those reasonable and necessary for meeting the agency’s mission.
• Describe which employees are eligible to be covered by such costs, under what circumstances and how they will be paid.
• Establish requirements for supporting documentation and approval.
• Budgeted and accounted for separately from other expenditures.
• Ensure amounts are approved in the annual budget by the governing board.
• Ensure periodic reports are made to the governing board on such costs.

Lobbyists

• Not retain any person who is not an employee of the agency as a registered lobbyist.

Reporting

By February 1, 2013, the agency’s governing body must report on the adoption and implementation of these policies to the Legislature. Each year thereafter, the agency must report on procurements that were not competitively bid, contributions over $1,000, and changes in the agency’s policies and procedures related to the above areas.

The Legislature may review whether other agencies should be covered by the legislation and will review legislation that creates new quasi-independent agencies to ensure that enabling legislation for those new agencies meet certain criteria.

If you would like to discuss these matters further, please contact your BNN advisor at 1.800.244.7444.