The Comptroller may direct the units of the State government to use the method that the Comptroller sets for: keeping books and accounts; adopting uniform systems of accounting; or making reports. Except as provided in paragraph (2) of this subsection, the Comptroller shall require a unit of the State government to comply with each recommendation of the Legislative Auditor in an audit report on the unit concerning: its record keeping; its use of a uniform system of accounting; and its submission of reports. The Comptroller may waive compliance with a recommendation of the Legislative Auditor if the unit satisfies the Comptroller that the recommendation should not be carried out. The Comptroller shall report to the Joint Audit and Evaluation Committee on actions under this subsection. The report shall include the reasons for waiving compliance with a recommendation of the Legislative Auditor.

In this section the following words have the meanings indicated. “Social organization” means an association or corporation that is operated for a charitable, cultural, educational, historical, humane, industrial, medical, or military purpose. “State aid” means a contribution, grant, or subsidy of money from the State Treasury. Each social organization that, by statute, is to receive State aid shall make an agreement: with the unit of the State government to which the money for the State aid has been appropriated; or if the money is not appropriated to a unit, with the Comptroller. An agreement under this subsection shall: define the purposes and terms of the State aid; and require the social organization to submit to the unit or Comptroller a report on expenditure of the State aid. Unless the agreement sets another date for submission of the report, a social organization shall submit the report on or before September 1 after the close of the fiscal year in which the social organization received the State aid. The report shall: contain an itemized statement that fully and accurately accounts for how the State aid was spent; and be verified: by an officer of the social organization; or for a military organization, by the commanding officer. After a unit or the Comptroller receives a report under this section, the unit or Comptroller: shall determine whether the social organization has spent and accounted for the State aid in accordance with the agreement; and if the unit or Comptroller finds inconsistencies between the agreement and the expenditures or operations of the social organization, shall give the Department of Budget and Management and, subject to § 2-1257 of the State Government Article, the Department of Legislative Services notice of the inconsistencies. To ensure compliance with this section, the unit or the Comptroller may audit the financial records of a social organization.

In this section the following words have the meanings indicated. “Financial records” means the generally accepted budgets, journals, ledgers, reports of expenses and revenue, or other forms of financial documentation that may be required as a condition for receiving State funds. “Health or social welfare organization” means an organization that is operated for the promotion of the public health or social welfare, whether or not the organization is tax exempt under § 501(c) of the Internal Revenue Code. “Uniform accounting standards” means: accounting standards and procedures that the American Institute of Certified Public Accountants has adopted for voluntary health or social welfare organizations; or uniform standards of an equivalent nature that: are applied consistently; and conform to generally accepted accounting principles. This section does not apply to: a dentist; a hospital that the State Health Services Cost Review Commission regulates; a pharmacist; or a physician. This subsection applies only to a contract for the provision of health or social welfare services between: a unit of the State government; and a health or social welfare organization or an individual. A contract with an individual who is a Maryland resident or with a health or social welfare organization incorporated under the laws of this State shall require the individual or the health or social welfare organization to keep financial records in accordance with uniform accounting standards. A contract with any other individual or private health or social welfare organization may require the individual or private health or social welfare organization to keep financial records in accordance with uniform accounting standards. A unit of the State government that makes a grant to a private health or social welfare organization shall require the private health or social welfare organization to keep financial records in accordance with uniform accounting standards. A unit of the State government may not require an individual or a private health or social welfare organization to keep financial records in a manner that is inconsistent with uniform accounting standards. The chief accountant of a unit of the State government or of the principal department to which the unit is assigned may examine the financial records of an individual or a health or social welfare organization that receives a grant from the unit. The accountant shall give 30 days’ prior notice of an examination under this paragraph. Subject to subparagraphs (ii) and (iii) of this paragraph, the chief accountant of a unit or of the principal department to which the unit is assigned shall examine any financial records required to be kept under subsection (c) of this section. For the financial records required to be kept under subsection (c)(2) of this section, the accountant shall give 30 days’ prior notice of the examination under this paragraph. For any financial records required to be kept under subsection (c)(3) of this section, the accountant shall examine the financial records when an examination is authorized by: the secretary of the principal department to which the unit is assigned; or if the unit is not assigned to a principal department, the head of the unit. A unit of the State government may not: make a grant to an organization that fails to keep financial records in accordance with uniform accounting standards; or make a contract with an organization or individual who fails to keep financial records as required under this section.

In this section the following words have the meanings indicated. “Department” means a principal department of the Executive Branch of the State government. “Independent unit” means a unit of the State government that is not in a department. This section does not apply to: a private provider who provides care for 4 or fewer individuals; a provider from another state; a provider of family child care for 6 or fewer children; or a foster parent with whom a child is placed by the Social Services Administration. After consultation with the Legislative Auditor, the head of each department or independent unit that contracts with a private provider for care of an individual in a nongovernmental facility shall specify the intervals and manner of examination of the accounts of the private provider. The examination shall determine whether costs of care for which the private provider has received reimbursement are in accordance with the guidelines of the department or unit for allowable costs. The department or independent unit shall pay for the examination from the appropriation to the department or independent unit in the State budget. If an independent certified public accountant is to examine the accounts of a private provider, the head of the department or independent unit shall choose the accountant in accordance with a procedure that the Legislative Auditor has reviewed. Whenever an examination under this section shows that the reimbursement that a provider has received during the period covered by the examination exceeds the total allowable costs, the department or independent unit shall collect: the full amount of the excess; or a lesser amount if the department or independent unit finds that the collection of the full amount would impair seriously the financial condition of the provider. Whenever an examination under this section shows that the allowable costs exceed the reimbursement that the provider has received, the department or independent unit shall pay to the provider the difference between the reimbursement and the lesser of the allowable costs or the maximum rate of payment as provided in the State budget. The head of a department or independent unit shall send to the Secretary of Budget and Management and, subject to § 2–1257 of the State Government Article, the Legislative Auditor: a copy of a report of each examination under this section; and a written statement that contains the basis for any finding made under subsection (f)(1)(ii) of this section. A provision of this section has effect only to the extent that the provision does not conflict with federal law.

In this section the following words have the meanings indicated. “Developmentally disabled individual” means a severe chronic disability of an individual that: is attributable to a physical or mental impairment, other than the sole diagnosis of mental illness, or to a combination of mental and physical impairments; is manifested before the individual attains the age of 22; is likely to continue indefinitely; results in an inability to live independently without external support or continuing and regular assistance; and reflects the need for a combination and sequence of special, interdisciplinary, or generic care, treatment, or other services that are individually planned and coordinated for the individual. “Elderly individual” means an individual who is 60 years old or older. In addition to any other requirement of this subtitle, each corporation that administers services to elderly or developmentally disabled individuals and receives funds from the State shall be subject to audit of its financial records by: the State Comptroller; or the State Legislative Auditor. This section does not apply to services administered by a nonprofit hospital corporation.

In this section the following words have the meanings indicated. “Department” means the Department of Budget and Management. “Grantee” means a for profit or nonprofit entity or association that receives State aid during a fiscal year. “Grantee” does not include a unit of State or local government. “Grantor” means a unit of State government or other State entity that provides State aid to a grantee. “State aid” means a contribution, grant, or subsidy of $50,000 or more provided through the State operating or capital budget or by the action of a unit of State government from State funds appropriated to that unit. “State aid” does not include reimbursements to providers participating in a State program. A grantor shall submit a report as provided in this subsection to the Department on or before September 1 after the close of each fiscal year in which the grantor provided State aid to a grantee. The report shall contain: the name, address, and zip code of each grantee that received State aid from the grantor during the previous fiscal year; the amount of any State aid provided to the grantee; and a description of the State aid provided to the grantee. The reports required under this subsection shall be in the form and format, including electronic format, that the Department, after consultation with the Department of Information Technology, requires. The Department of Information Technology, in consultation with the Department of Budget and Management, shall develop and operate a searchable website, accessible to the public at no cost through the Internet. The searchable website shall contain: the name of the grantor that provided the State aid; the name of the grantee that received the State aid; the amount of the State aid that was provided to the grantee; the zip code of the grantee that received the State aid; and a description of the State aid that was provided to the grantee. The searchable website shall allow a user to search by the following data fields: the grantee that received the State aid; the grantor that provided the State aid; and the zip code of any grantee that received State aid. The Office of Legislative Audits may conduct an audit or review of a grantee in accordance with §§ 2–1221 through 2–1227 of the State Government Article.