Audit Flags $8.5 Billion in Maryland Spending With Weak Oversight, Raises Transparency Concerns

By Michael Phillips | MDBayNews

A new state audit is raising serious questions about transparency and accountability in Maryland government, after finding that $8.5 billion in taxpayer-funded spending flowed through dozens of state entities with inconsistent or inadequate oversight safeguards.

The findings come from a November 20, 2025 special review by Maryland’s Office of Legislative Audits (OLA), which examined procurement practices at 42 state agencies and authorities that are fully or partially exempt from Maryland’s standard procurement laws. Those laws typically require competitive bidding, public disclosure, and oversight by the Board of Public Works.

While the exemptions themselves are legal and long-standing, auditors warned that the system lacks uniform safeguards—leaving taxpayers with limited visibility into how billions of dollars are being spent.

“This is a problem where you have almost $9 billion going to these entities and we just don’t know where the money is going,” one lawmaker said in response to the audit.

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What the Audit Found

According to the OLA review:

• The 42 exempt entities reported approximately $8.5 billion in non-payroll operating expenditures in FY 2024.
• State law requires exempt entities to adopt their own written procurement policies to ensure competition, transparency, and accountability.
• 38 of the 42 agencies had written procurement policies, but the quality and rigor of those policies varied widely.
• Four agencies had no written procurement policies at all as of the review period:
  • Maryland State Lottery and Gaming Control Agency
  • Maryland Corps Program
  • Maryland State Archives
  • Maryland Energy Administration

Auditors noted that even among agencies with policies, many failed to clearly address key areas such as competitive bidding requirements, sole-source justifications, public posting of contract awards, and vendor fairness protections.

“This is supposed to be a system of checks and balances,” one auditor noted. “We know the checks are going out, but there are no balances to make sure the money is being spent wisely.”

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What This Is — and What It Isn’t

It is important to be precise about what the audit does—and does not—say.

The OLA review did not allege fraud, criminal misconduct, or proven waste. It was not a full compliance audit and did not test individual transactions. Instead, it highlighted structural risks created by fragmented oversight and inconsistent internal controls.

Still, critics argue that when nearly $9 billion is spent under uneven rules—especially during a period of projected multi-billion-dollar budget deficits—the lack of transparency alone is a problem.

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How Maryland Got Here

The procurement exemptions examined in the audit date back as far as 1983 and were enacted piecemeal over decades under both Democratic and Republican administrations. They were intended to give flexibility to specialized entities such as universities, authorities, and quasi-independent agencies.

Examples of exempt or partially exempt entities include:

• University System of Maryland
• Maryland Stadium Authority
• Maryland Health Benefit Exchange
• Maryland Environmental Service
• Departments of Commerce and Natural Resources (partial exemptions)

Critics say that while flexibility may be justified, the absence of centralized oversight has allowed accountability standards to erode over time—particularly in a state dominated by one-party legislative control.

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Political and Fiscal Context

The audit arrives amid a broader wave of 2025 OLA reports identifying repeated oversight failures across Maryland agencies, including:

• Improper health benefit payments
• Payroll inaccuracies
• Hundreds of millions in unauthorized transportation spending
• Child welfare system failures

Notably, OLA reported that 34% of audit findings this year were repeat issues, the highest rate in more than a decade.

Governor Wes Moore (D) has acknowledged the scope of the problem, stating earlier this month:

“These problems have been year on year… I don’t care when they started. Fix them.”

However, critics argue that acknowledgment alone is not enough—particularly since the Procurement Reform Act of 2025, which took effect in October, did not address these longstanding exemptions.

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What Auditors Recommended

Rather than issuing binding findings, OLA offered several “considerations for improvement” to lawmakers:

• Consolidating procurement exemptions into a single statute for clarity
• Designating a central oversight or reporting body
• Requiring greater public disclosure of exempt contracts
• Narrowing exemptions where appropriate

As of mid-December 2025, no specific legislative reforms have been announced, though the issue is expected to surface in the upcoming General Assembly session.

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Why It Matters

Marylanders may reasonably disagree about the size and role of government—but basic transparency should not be partisan.

When billions in taxpayer dollars move outside standard safeguards, confidence in public institutions erodes. Even absent proven wrongdoing, weak oversight creates risk—and risk ultimately falls on taxpayers.

As budget pressures mount and families across the state tighten their belts, many are asking a simple question: If regular Marylanders must account for every dollar, why shouldn’t state government do the same?