Changes to Structure of Board of Directors, Oversight Rules to Promote Accountability, Reduce Conflicts of Interest
Additional Spending Audits and Officer Term Limits to Ensure Responsible Stewardship of Taxpayer Funds
ANNAPOLIS, MD—Governor Larry Hogan today announced legislation that proposes systemic reforms to the way the Maryland Environmental Service (MES) operates, including new ethics rules, accountability measures, and changes to the structure of the Board of Directors.
“Since taking office, our administration has pushed to restore integrity and accountability to our state government and to ensure that the best interests of Maryland’s citizens are being represented fairly and honestly,” said Governor Hogan. “These reforms will help ensure proper oversight, transparency, and accountability at the Maryland Environmental Service.”
Topline Summary of MES Reform Legislation
Board of Directors. When enacted, this legislation will require the director, secretary, treasurer, members of the Board of Directors, and the chairman of the board of MES to be appointed by the governor, subject to Senate approval.
The Board of Directors will increase to a total of 12 members. The Secretary of the Department of Budget and Management (DBM) and the State Treasurer will be added to provide additional fiscal oversight, as well as an ethics expert, and a member of the private sector with experience in water or wastewater management, specifically with financial management expertise.
The MES director will remain a member of the board, but will not have voting powers. The deputy director will be removed as an officer of MES.
Term Limits. Currently, there are no term limits imposed for board members. This bill establishes staggered terms and term limits that allow for a member of the board to serve a maximum of two four-year terms. The governor’s recent appointments, such as Judge Frederic N. Smalkin, would be permitted to be reappointed to the board.
Accountability, Transparency, and Ethics. The bill makes several provisions to strengthen and enhance accountability, transparency, and ethics for MES leadership. The director will be subject to an annual performance review and evaluation conducted by the Board of Directors—the criteria of which will be provided publicly. An independent assessment of the board’s functions will be required once every three years. It will be submitted to the governor and the General Assembly, and will be posted on the MES website.
MES will be required to submit a detailed budget to DBM, which must include all sources of revenue.
Board members will also be subject to a new conflict of interest policy that mirrors that of the University of Maryland Medical System—a policy that was established through legislation in 2019.
MES will also be subject to an audit that will specifically target any misallocated funds or unauthorized spending. A copy of the audit will be submitted to the governor, the General Assembly, and DBM, and will be posted on the MES website. MES will be required to provide a report by December 31, 2021, recommending and adopting policies related to expense reimbursements, severance and bonuses, and travel. Read the bill.
Ongoing Reforms
This is the latest in a series of reforms the governor has initiated since it came to light earlier this year that MES has longstanding practices of paying large bonuses, expense reimbursements, and severance packages to top executives:
Additional Spending Audits and Officer Term Limits to Ensure Responsible Stewardship of Taxpayer Funds
ANNAPOLIS, MD—Governor Larry Hogan today announced legislation that proposes systemic reforms to the way the Maryland Environmental Service (MES) operates, including new ethics rules, accountability measures, and changes to the structure of the Board of Directors.
“Since taking office, our administration has pushed to restore integrity and accountability to our state government and to ensure that the best interests of Maryland’s citizens are being represented fairly and honestly,” said Governor Hogan. “These reforms will help ensure proper oversight, transparency, and accountability at the Maryland Environmental Service.”
Topline Summary of MES Reform Legislation
Board of Directors. When enacted, this legislation will require the director, secretary, treasurer, members of the Board of Directors, and the chairman of the board of MES to be appointed by the governor, subject to Senate approval.
The Board of Directors will increase to a total of 12 members. The Secretary of the Department of Budget and Management (DBM) and the State Treasurer will be added to provide additional fiscal oversight, as well as an ethics expert, and a member of the private sector with experience in water or wastewater management, specifically with financial management expertise.
The MES director will remain a member of the board, but will not have voting powers. The deputy director will be removed as an officer of MES.
Term Limits. Currently, there are no term limits imposed for board members. This bill establishes staggered terms and term limits that allow for a member of the board to serve a maximum of two four-year terms. The governor’s recent appointments, such as Judge Frederic N. Smalkin, would be permitted to be reappointed to the board.
Accountability, Transparency, and Ethics. The bill makes several provisions to strengthen and enhance accountability, transparency, and ethics for MES leadership. The director will be subject to an annual performance review and evaluation conducted by the Board of Directors—the criteria of which will be provided publicly. An independent assessment of the board’s functions will be required once every three years. It will be submitted to the governor and the General Assembly, and will be posted on the MES website.
MES will be required to submit a detailed budget to DBM, which must include all sources of revenue.
Board members will also be subject to a new conflict of interest policy that mirrors that of the University of Maryland Medical System—a policy that was established through legislation in 2019.
MES will also be subject to an audit that will specifically target any misallocated funds or unauthorized spending. A copy of the audit will be submitted to the governor, the General Assembly, and DBM, and will be posted on the MES website. MES will be required to provide a report by December 31, 2021, recommending and adopting policies related to expense reimbursements, severance and bonuses, and travel. Read the bill.
Ongoing Reforms
This is the latest in a series of reforms the governor has initiated since it came to light earlier this year that MES has longstanding practices of paying large bonuses, expense reimbursements, and severance packages to top executives:
- The acting director, Charles Glass, conducted a top-to-bottom review that led to the removal of executives and board members.
- Retired Federal Judge Frederic N. Smalkin was named to the MES board as board secretary. Judge Smalkin served as Chief Judge of the U.S. District Court for the District of Maryland.
- The governor directed state budget officials to launch a comprehensive audit, which is currently ongoing. MES conducted its own audit and has made changes to its expense reimbursement practices.
- In a letter to General Assembly leaders, the governor called for bipartisan systemic reforms to the governance structure, oversight, and management of this quasi-governmental agency.
- Last month, the governor issued an executive order establishing a State Transparency and Accountability Reform Commission, chaired by former Sen. Andrew Serafini.
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