Md. Code, State Finance and Procurement § 7-404

(a) (1) In this section the following words have the meanings indicated.

(2) “Department” means a principal department of the Executive Branch of the State government.

(3) “Independent unit” means a unit of the State government that is not in a department.

(b) This section does not apply to:

(1) a private provider who provides care for 4 or fewer individuals;

(2) a provider from another state;

(3) a provider of family child care for 6 or fewer children; or

(4) a foster parent with whom a child is placed by the Social Services Administration.

(c) (1) 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.

(2) 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.

(d) The department or independent unit shall pay for the examination from the appropriation to the department or independent unit in the State budget.

(e) 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.

(f) (1) 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:

(i) the full amount of the excess; or

(ii) 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.

(2) 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.

(g) 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:

(1) a copy of a report of each examination under this section; and

(2) a written statement that contains the basis for any finding made under subsection (f)(1)(ii) of this section.

(h) A provision of this section has effect only to the extent that the provision does not conflict with federal law.