Vulnerable Dem's own audit admits Medicaid oversight failure amid massive statewide fraud scandal

Maine's Democratic state auditor, Matt Dunlap, who is now pursuing a bid to represent Maine's 2nd Congressional District, released a report earlier this year sounding the alarm that the state's internal watchdog for its MaineCare program had a serious gap in utilization control.

"[The Program Integrity Unit] could not provide documentation of the methodology used to identify projects and post-payment reviews performed in relation to surveillance of all Medicaid services provided under the State plan," the report reads, referring to the "PIU," the program's watchdog.

The report’s release, which comes after revelations of healthcare fraud in Maine from federal investigators and a local whistleblower, puts renewed focus on Dunlap’s tenure as auditor and raises questions about Maine's past systems to detect fraud amid one of the country's most competitive congressional races.

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In order to ensure that state programs are complying with federal requirements, the PIU, the watchdog, selects a set number of cases for review, picking those cases based on "data analytics." The report didn't expand on those analytics — but noted a key weakness. In addition to being unable to provide documentation of why those cases had been chosen for review, the process also didn't take into account possible misuse — by patients or by the companies that bill MaineCare.

In the report's words, the PIU, the watchdog group, "does not document consideration of misutilization practices of beneficiaries or providers ... [and] may not provide adequate monitoring of all Medicaid services, resulting in potential noncompliance with Federal regulations."

Dunlap's 2026 report also acknowledged that this particular reporting issue hadn't been caught before, noting that it had a "prior year findings: none" designation.

When asked about the weakness and whether this was really the first time it had surfaced in an audit, Dunlap's campaign stressed that the report only narrowly applied to that particular weakness and that Dunlap had received praise — even from local Republicans — on his work identifying other liabilities.

"As Auditor, Matt Dunlap has flagged many issues that date back to the LePage administration. He has been praised by local press and Republican leaders alike for his work to recommend ways to safeguard taxpayer dollars. Paul LePage should answer why his team didn't implement the recommendations of his own Auditors from when he was governor," Harry Burke, a spokesperson for the Dunlap campaign said in a comment to Fox News Digital, referring to the Republican nominee in the race, a former governor of Maine who served from 2011 to 2019.

The campaign also observed that Dunlap himself, as an auditor, has little power to implement changes he flags as problematic. Decisions to remedy issues within Maine's programs lie within the departments themselves, although auditors can recommend specific changes.

"The auditor's job is to be a fire alarm: identify the problems so that state agencies can act. For example, last year, his recommendations led to the arrest and prosecution of a procurement fraudster saving taxpayer dollars," Burke added.

Despite his campaign's pushback, Dunlap has received backlash from Republicans for failing to stop fraud schemes that have caught national attention.

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Dunlap first came into the role in 2021 despite lacking the credentials to become an auditor. After being installed, he had to resign after twice failing the needed tests to become a certified auditor. Even so, Dunlap returned to the role in November 2022 after passing the requisite exams.

That track record has become a focal point for Republicans in the congressional race after the U.S. Health and Human Services Office of Inspector General revealed in January that the state had paid out at least $45.6 million in improper Medicaid payments for autism services.

The findings only furthered concerns raised by a whistleblower in December.

Christopher Bernardini, a former employee of Gateway Community Services, said his company had been defrauding Maine’s Medicaid program. According to Bernardini, the health services contractor had routinely filed false records about client visits, billing the state for services that Gateway had never provided.

The compounding stories of fraud have captured the attention of figures like Vice President JD Vance, who highlighted them in a visit to the state on Monday.

"How did Maine become one of the main capitals of defrauding the American taxpayer?’" Vance asked at a campaign event.

"One of the answers is somehow you guys hired an auditor who is not actually an auditor and failed the auditor exam. Well, call it old-fashioned common sense, but if you want somebody managing your money, maybe they ought to actually meet the constitutional requirements to do the job," Vance said.

Vance argued Dunlap’s track record should be disqualifying.

"And for Matt Dunlap, if you’ve got a guy who cannot protect your tax dollars from fraudsters, who has turned your state into one of the fraud capitals of the United States of America, maybe you should be saying to Matt Dunlap, ‘You’re fired, not promoted to the United States Congress,’" Vance said.

Previous years of reporting before Dunlap’s time as auditor also cast doubt on the office’s aggressiveness in uncovering fraud, hinting that the office’s zeal has declined under his watch.

Notably, in the six years before Dunlap took over the reins in 2022, the state had identified that it had almost too many active fraud investigations.

"Cases opened because of potential fraud, abuse, or questionable practices need improved supervisory review," several reports state.

Audits going back to 2016 noted that the office had routinely taken on more cases than its resources and its staffing would allow for, leading to a lack of monitoring of individual cases.

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Since Dunlap returned to the role in 2022, the auditor’s office has not resurfaced that concern.

Having secured his party’s nomination in the state’s primaries earlier this year, Dunlap heads to the general election on Nov. 3, where he faces off against the Republican nominee, former Gov. Paul LePage.