BANGOR — The Maine Department of Health and Human Services announced Friday that it has ended its contract with a consultant group that faced plagiarism allegations for its report recommending changes to the state’s Medicaid and welfare programs.

The department determined that “serious problems with citations in the text of two reports warranted both financial penalties and an end to future work to be performed under the contract,” it said in a statement.

The decision means the Alexander Group will lose $450,400, it said. The state has already paid $474,760 to the group, led by the former welfare chief of Pennsylvania and Rhode Island, Gary Alexander. About half of that came from state dollars.

Calls for Republican Gov. Paul LePage’s administration to cancel the controversial contract mounted after newspapers reported that the group copied or improperly cited other organizations’ work in a report it submitted to the state last month.

Alexander said at the time that the group “failed to ensure that intended footnotes were included.”

In a statement Friday, Alexander said the group has made changes to ensure the issue doesn’t happen again. But what he called grammatical errors “do not undermine the substantive analysis and policy recommendations offered by the reports,” he said.

“Our goal was to give Maine practical reforms to help lift the poor out of poverty and support the neediest like the intellectually disabled, poor children and elderly while delivering value to the taxpayers,” Alexander said.

The department is withholding about $145,000 in payments for the most recent report the group submitted to the state. The group has already paid a $27,000 penalty for the first report, which was submitted in January, the department said.

Democrats have criticized the Alexander Group since the state announced the nearly $1 million contract in November. The Democratic-led Legislature attempted to pass a bill to cancel the contract last session.

They said it was a waste of taxpayer dollars and that LePage hired the group to justify his opposition to Medicaid expansion under the federal health care law.

While welfare chief in Pennsylvania, Alexander was blasted by Democrats and advocates for the poor for his cost-cutting efforts toward welfare.

In its first report, the group said that Medicaid expansion would cost Maine more than $800 million over 10 years ”“ an estimate that Democrats said was dramatically overblown because it didn’t take into account any cost savings.

Democratic House Speaker Mark Eves of North Berwick said in a statement Friday that it was a relief that the contract was canceled, but said that the department should have sought a full refund.

“The governor and his administration must be held accountable for using state and federal funds meant for struggling families and hungry children to pay for campaign talking points,” he said.

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