Purpose: To notify State agencies that the Board of Public Works has delegated them authority to pay out of agency funds — without Board approval — settlements, judgments and counsel fees that do not exceed $10,000 in a particular case. This Advisory sets forth the conditions under which agencies may exercise that authority. This Advisory also sets forth procedures for presenting to the Board of Public Works proposed settlements, judgments, and counsel-fee payments that exceed $10,000 or that are to be paid from the State Insurance Trust Fund.

Background: The General Assembly amended section 12-501 of the State Government Article, Maryland Code, to provide that:  "The Board of Public Works may delegate to affected units, in consultation with the Attorney General, authority to pay, from the funds of that unit available for the purpose, settlement, judgments, and counsel fees that do not exceed $10,000 in a particular case." (Chapter 184, 2001 Laws.)  The Board has exercised its discretion and increased to $10,000 the authority of agencies to pay settlement, judgments, and counsel fees in a particular case without Board approval. (Secretary's Agenda Item 6, BPW Meeting 10/03/01.)

Conditions For Exercising Delegated Authority:

1. An agency must consult with the Office of the Attorney General before settling legal claims or paying judgments or attorney fees.
2. An Assistant Attorney General for the agency must prepare a request and recommendation and submit that request to the Civil Division of the Office of the Attorney General for approval.
3. With the approval of the Office of the Attorney General, an agency may, using agency funds, settle legal claims or pay judgments or attorney fees in the amount of $10,000 or less without Board of Public Works approval.
4. If the federal Medicare and Medicaid SCHIP Extension Act of 2007 requires a report to the Centers for Medicare and Medicaid Services concerning the payment, the agency must ensure the report is filed.
5. For all payments approved under this delegation, the Office of the Attorney General shall on a fiscal year basis annually report to the Board: the case name, payee, amount, type of case, whether the payee’s Medicare enrollment status was ascertained, and whether a report was filed under the Medicare and Medicaid SCHIP Extension Act of 2007.

Procedures for Settlements, Judgments, and Counsel Fees That Exceed $10,000 or That Are to Be Paid from the State Insurance Trust Fund.

1. When a State agency seeks to pay a settlement, judgment, or counsel fees:
   • exceeding $10,000 in a particular case; or
   • in any amount when the State Insurance Trust Fund is to be the funding source, an Assistant Attorney General must prepare a request and recommendation. The request must indicate that the Civil Division of the Office of the Attorney General has reviewed it.
2. If the request is to pay a settlement or judgment against State personnel, the request must include a statement that:
   • it is the Assistant Attorney General's opinion that the applicant was performing a duty within the scope of the applicant's employment and that the applicant's act or omission was not malicious or grossly negligent; and
   • that the request otherwise accords with section 12-405, State Government Article, Maryland Code.
3. The request must be addressed to the Secretary of Budget and Management and copies sent to the Governor, the Comptroller, the Treasurer, and the Board's Executive Secretary. The request must be made to the Secretary of Budget and Management regardless of the requesting agency or the funds which are proposed for payment.
4. If the agency proposes to use the State Insurance Trust Fund for payment, the request must note: the exact amount, the payee's name, the payee's federal identification number, and the name and address of the Assistant Attorney General to whom the check is to be sent.
5. The Department of Budget and Management will present requests to pay settlements, judgments, and counsel fees to the Board on the Secretary's Agenda.
6. The Department of Budget and Management will notify the Assistant Attorney General who made the request of the Board's action.
7. Upon Board approval of an item proposing payment from agency funds, the agency may process payment.
8. When the Board approves an item proposing payment from the State Insurance Trust Fund:
   • The Board's Executive Secretary will forward the official action to the Treasurer’s Office.
   • The Treasurer's Office will then prepare and deliver to the Comptroller’s Office a transmittal with remittance instructions.
   • The Comptroller’s Office will remit the check.
   • The Assistant Attorney General will deliver the check to the appropriate recipient and obtain the necessary releases.
9. If the federal Medicare and Medicaid SCHIP Extension Act of 2007 requires a report to the Centers for Medicare and Medicaid Services concerning the payment, the agency must ensure the report is filed.