Dem Lawmakers Block Democrat State Auditor from Explaining Damning Report on $2.1 Billion Fraud Risk

“Material weaknesses” and “significant deficiencies” are the worst possible items an auditor can find in any financial organization.

Yet when State Auditor Matt Dunlap, a longtime Democrat appointed by the Democrat-controlled legislature, appeared before the State and Local Government Committee Monday, the Democrat chair of the committee repeatedly blocked him from answering any questions about the material weaknesses and significant deficiencies in how the Mills Administration spent taxpayer dollars in fiscal year 2024.

The purpose of the hearing, Rep. Sue Salisbury (D-Westbrook) said at the outset, was “not for us to go over the findings in the audit report, but to talk about the Office of the Auditor.”

[RELATED: Maine Audit Reveals Systemic $2.1 Billion Financial Mismanagement and Corruption Risk…]

When a Republican representative attempted to ask a question about the issues in the 2024 audit that may have been previously raised in earlier audits but not addressed, Salisbury abruptly cut in to protect the Mills Administration from having the question answered in a public setting.

“Okay, again, we’re not going to go through the audit and ask questions specifically about findings,” she said. “This is about related to the process of the audit report. I know you guys obviously have questions prepared, but we’re not going through that question.”

At that point, Dunlap volunteered to answer the question anyways and noted that he was prepared to speak to the 2024 report.

“I do have a general answer that question, if I may,” said Dunlap, appearing to plead with Salisbury to let him answer questions about the audit.

But Salisbury wasn’t having it.

Democrat Chair of the State and Local Government Committee blocks questions about the audit showing $2.1 billion fraud risk in state spending. pic.twitter.com/ja2dvTz8vK

— The Maine Wire (@TheMaineWire) April 28, 2025

“Okay, but I just want to make sure the committee understands that we’re not going to go through the findings of the report,” Salisbury said.

Dunlap’s appearance marked his first formal appearance before the committee since the Office of State Auditor released the damning audit of FY 2024 spending. Thanks to Salisbury running protection for the Mills Administration, Dunlap was blocked from answering questions about his findings in a public setting, despite signaling his willingness to talk about the report.

[READ THE AUDIT HERE…]

That Democrats would want to avoid drawing attention to the audit is understandable, considering the findings were embarrassing for Gov. Mills and the cabinet appointees who run the agencies that were thoroughly panned in the report.

In the broadest sense, Dunlap’s found that senior figures in the Mills Administration and Maine’s sprawling government bureaucracy routinely disregarded the rules for spending state and federal money on contracts for goods and services, especially in instances where agencies circumvented the competitive bidding process.

The State Auditor’s findings from 2024, as well as other years under Gov. Mills, mark a sharp contrast to the findings under former Republican Gov. Paul LePage.

[RELATED: Maine’s Equity Commission Doled Out Lucrative No-Bid Contracts to Politically Connected Consultants, NGOs…]

Though the 2024 audit, like any audit, only examined a small sample of contracts, the total universe spending that the audit’s findings can be extrapolated to included $2.1 billion for FY2024 — more than half of which was spent via sole-sourced, no-bid, non-competitive processes that circumvented the traditional (and more transparent) competitive bidding process.

The 2024 audit revealed that various government agencies have ignored or flouted the guardrails established around the issuance of no-bid, non-competitive contracts. The findings could provide an opening for litigation from private sector entities who were improperly cut out of the bidding process or prompt a U.S. Justice Department investigation into improprieties with the spending of federal award money.

According to the audit, Dunlap found numerous deficiencies and weaknesses with how the various agencies of the Mills Administration have been procuring goods and services.

The 2024 audit examined 45 active contracts, master agreements, and purchase orders to assess compliance with federal and state regulations. It identified multiple material weaknesses, including failures to conduct required cost analyses, inadequate documentation for sole-source contracts, and violations of policies governing low-cost service contracts (LCSCs).

In the section of the audit entitled “Internal control over Office of State Procurement Services oversight procedures needs improvement,” state auditors highlighted systemic issues in the Office of State Procurement Services (OSPS), a subagency of the Department of Administrative and Financial Services.

One example of an improper process the audit flagged involved the back-dating of forms required when government agencies circumvent the competitive bidding process. The audit found that a high level of Procurement Justification Forms (PJFs) — the forms required for no-bid contracts to be approved — were filled out only after a contract had started.

In other words, state bureaucrats negotiated payments to vendors behind closed doors with no competitive bidding process, started the contracts and paid out on contracts, and then later filled out the paperwork necessary to make the process legal. That means taxpayer money was spent on a no-bid contract before a no-bid process was proposed by an agency or approved by someone from the DAFS Office of State Procurement Services (OSPS).

Among the other key findings, the audit noted that none of the 45 procurement actions tested included documentation of a cost analysis, a requirement under state policy to ensure the best value for taxpayers. Additionally, 16 of 31 sole-source contracts, which bypass competitive bidding, lacked evidence of a “reasonable investigation” by the Director of the Bureau of General Services, as mandated by 5 MRSA 1825-B.

In one instance, a sole-source contract was approved not only after the contract had started, but also after the work was completed, resulting in an invoice issued before the contract’s on-paper start date.

The audit also found that OSPS failed to prevent “stacking” of LCSCs, contracts under $5,000 that do not require competitive bidding. Of seven LCSCs tested, four were awarded to vendors already holding multiple LCSCs with the same department within a 12-month period, a practice prohibited by state policy. One department had seven concurrent LCSCs with a single vendor.

Further issues included delays in contract approvals, with 24 of 45 contracts and 18 of 31 Procurement Justification Forms (PJFs) signed after the contract start date, ranging from three to 187 days late. The audit also flagged two of eight IT-related contracts approved without required review by the Office of Information Technology, and none of the 14 contract amendments tested included documentation of vendor performance reviews.

“In fiscal year 2024, the state expended approximately $2.1 billion in contract-related payments,” the audit stated, emphasizing the scale of the issue.

OSPS disagreed with five of the audit’s eight findings, arguing that contract management responsibilities lie with individual state agencies, not OSPS, the equivalent of bureaucratic buck-passing.

“Federal award compliance is the responsibility of the award recipient,” OSPS stated in its response, adding that PJF dates are for internal use and not indicative of finalized timelines.

OSPS also claimed that cost analyses are conducted but not documented in the manner requested by auditors, and that an updated Policy Manual, set for release in 2025, will clarify practices. It’s unclear why OSPS is only releasing this manual in 2025.

The State Auditor’s Office countered that OSPS, as the state’s centralized procurement authority, cannot delegate its statutory responsibility to ensure best value.

“OSPS did not provide documentation to support that they requested or reviewed any reasonable investigation in relation to all 16 of the sole-source contracts,” the audit concluded, rejecting OSPS’s objections.

According to Dunlap, the material weaknesses and significant deficiencies uncovered in the audit potentially expose taxpayers to legal and financial risks. The lack of oversight “creates a potential liability for the State and exposure to legal proceedings,” the report warned, citing risks such as voided contracts or federal clawbacks for noncompliance with regulations.

Private sector entities that were improperly excluded from bidding on government contracts could potentially sue the state. For example, marketing firms in the state that might have bid on the nearly $400,000 contract awarded to the Bangor Daily News’ marketing agency, but did not get the opportunity because of how the contract was awarded, could challenge the non-competitive, cronyistic nature of the procurement process.

[RELATED: Bangor Newspaper Company Has Received More Than $2.4M from Mills Admin for “Public Affairs”…]

In cases where federal procurement rules were ignored, disregarded, or otherwise violated for contracts funded by federal tax dollars, the U.S. Department of Justice could seek to claw back federal funds that were distributed in violation of federal procurement rules. Whoever President Donald Trump picks to serve as U.S. Attorney for the District of Maine will find the paper trail of backdated procurement finds easy to unravel. If an investigation found that the Mills Administration violated federal procurement rules, the state could be vulnerable to significant clawbacks of federal dollars.

[RELATED: Mills Admin, Press Herald Entered ‘partnership’ for $117k Taxpayer-Funded Marketing Campaign Aimed at Voters, Emails Show…]

Mills Administration figures and their allies in the Democrat-controlled legislature have downplayed the findings of the audit as routine and hardly newsworthy.

Media outlets like the Bangor Daily News and the Portland Press Herald — both of which have benefited from no-bid contracts under the Mills Administration — have also ignored the findings of the audit, with only the taxpayer-funded Maine public offering a tepid story on the scandalous report.

The conduct of Monday’s hearing, however, suggests that Democrats are quietly aware of how damaging the audit’s findings would be for the Mills Administration if they were conveyed to voters by Maine’s corporate news outlets.

[RELATED: Mills’ Millions: Maine Taxpayers Foot Bill for Absurd No-Bid Contracts…]

Committee Chair Suzanne Salisbury (D-Westbrook) shutdown all attempts to ask about the 2024 audit’s findings and insisted that questions to Dunlap be general in nature and broadly applicable to the auditor’s office.

Salisbury even blocked Dunlap himself from responding to questions about the 2024 audit’s findings despite him signaling his willingness to speak to his office’s most recent report.

Following the release of the audit, the Maine Wire obtained roughly 4,500 PJF documents related to no-bid contracts by scraping publicly available government records using a Python script.

An ongoing review of those records has confirmed many of the findings of Dunlap’s audit, including mismatched and post-dated PJF approval dates, as well as several instances of no-bid contracts being used to award money to politically connected businesses and nonprofits.

Maine's 2024 audit is DEVASTATING for the Mills administration.

Remarkably, no other media outlets in Maine seem capable of covering this story.

So where did your money go over the last year?

We provide some answers: pic.twitter.com/wblb3CDCxC

— The Maine Wire (@TheMaineWire) April 2, 2025

Read more on Mills Admin spending here:

• Mills’ Millions: Maine Taxpayers Foot Bill for Absurd No-Bid Contracts
• Maine Department of Corrections to Pilot Prison Rehab Program Tailored to Muslim Inmates
• Mills Gives $130,000 No-Bid Contract to Spread False Info About COVID-19 Vaccine
• Mills Admin Supports ‘chestfeeding’ with $50k Purchase of Larger Size Nursing Bras for ‘birthing parents’
• Mills Admin to Spend $500,000 on Extending Marketing Campaign to ‘Decrease Hesitancy’ About COVID-19 Shots, Flu Vaccines
• Maine CDC Awards $90,000 Grant to Combat Diabetes in Portland’s Immigrant Population
• Mills Admin Proceeds with $15,000 Study into ‘Safe Consumption Sites’
• Maine State Library Pays $12,000 for ‘toolkit’ to Teach Children About ‘climate change and climate action’
• Mills Administration Hires California-Based Nonprofit to Guide Public Schools Toward Zero Carbon Goals
• Mills Admin Partners with Woke Brunswick Nonprofit to Train Maine Students to be Climate Change Activists
• Maine Department of Education Wants to Spend $23,500 on ‘Happiness Expert’ Motivational Speaker
• Mills Admin Discloses Payments to Press Herald for Publishing Positive Articles on Maine Public Schools, DOE Spending
• Race-Based Tourism: Maine Taxpayers Fund $165k Grant to Black Travel Influencers for Attracting ‘diverse visitors’ to State
• Maine Racial Equity Board Sponsors Educational Walking Tours to Dispel Myth that State is ‘too old and too white’
• Mills Admin Seeks to Spend $2.7 Million to Boost Recruitment of ‘racial, ethnic, and linguistic minorities’ into Workforce
• Mills Admin Hires ‘best professional cheat’ in Casino History to Advise Maine Casino Inspectors
• State DEI Commission’s Finance Committee Prohibits Public Comment After Question About Conflict of Interest
• Maine Speaker’s Racial Equity Board Gave Her Sister’s Nonprofit $12,000 for Black History Month…
• Maine DEI Board Says No Conflict of Interest with $12,000 Grant to Co-Chair’s Sister
• Gov Mills “Jobs and Recovery Plan” Diverted $1,000,000 to Maine DEI Commission…
• Corruption: Equity Panel Chief Dodges Questions Over $12k Grant to Maine House Speaker’s Sister
• After Maine House Speaker Gave Sister’s Nonprofit $12,000 in Taxpayer Money, DEI Panel Will Consider Anti-Corruption Policy
• Consulting Firm Scores $300k Contract to Advise Maine on Offshore Wind After Hiring Ex-Mills Staffer
• Mills Admin Boosts Maine Defense Contractor Recruitment Effort with $260,000 Grant
• Mills Admin Offers $300,000 ‘Social Equity Program’ Pushing Affirmative Action for Business Development
• Mills Admin Directs $462,000 Grant to Lewiston-Based Nonprofit for Services to Immigrant Victims of Domestic, Sexual Violence
• Mills Admin Seeks Immigration Law Consultants to Assist Public Defenders in Noncitizens’ Criminal, Juvenile Cases
• Mills Admin, Press Herald Entered ‘partnership’ for $117k Taxpayer-Funded Marketing Campaign Aimed at Voters, Emails Show