Audits Flag $1.2 Billion in Questionable Maryland Spending. Moore Says the Number Is Wrong.

A pattern of failed audits — from Medicaid payments to dead recipients, to billions in undocumented federal draws — is fueling calls for an independent watchdog the governor says Maryland doesn’t need.

By Michael Phillips | MDBayNews

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Maryland state agencies have collectively accumulated more than $1.2 billion in questionable spending, improper payments, and financial irregularities, according to a series of legislative audits that has drawn sustained scrutiny from lawmakers, taxpayer advocates, and the nonpartisan Office of Legislative Audits. The findings span the breadth of state government — unemployment insurance, Medicaid, transportation, emergency management, and procurement — and have reignited a debate over whether Maryland has the structural capacity to do anything more than identify its own failures.

The Moore administration disputes the aggregate figure. In a statement to Spotlight on Maryland, administration officials called it “grossly exaggerated,” arguing it “conflates findings and lacks critical context of corrective actions taken by agencies to resolve identified issues.” Officials said many flagged items involved procedural or documentation problems rather than confirmed fraud, and that internal reviews had already resolved portions of several audit findings.

The problem with that response is the receipts.

Medicaid: Payments to the Dead and Incarcerated

Among the most damaging single findings: the Maryland Department of Health’s Medical Care Programs Administration was flagged for issuing $9.2 million in Medicaid payments for individuals who were deceased or incarcerated at the time services were supposedly rendered. Auditors attributed the errors to breakdowns in eligibility tracking and verification systems, and rated the agency “unsatisfactory” for the second consecutive audit cycle.

The administration’s counter — that an internal review found 95 percent of certain Medicaid payments examined were ultimately proper — does not directly address the $9.2 million in payments that cleared for people who could not have received services. That is not a documentation problem. That is a systems failure with a dollar amount attached to it.

“This state, which I hear is the richest in the United States of America, does not have an inspector general to watch out for the public.”

— Baltimore City Inspector General Isabel Mercedes Cumming, January 2026

Transportation: Billions Drawn Without Documentation

The fiscal year 2025 budget closeout review, conducted by the Office of Legislative Audits across eight major agencies, found that seven of the eight could not provide sufficient documentation to support large federal revenue accruals recorded at year-end. The auditors found $3.42 billion in unsupported revenue entries statewide, with agencies unable to demonstrate that the federal government owed — or later paid — those amounts. As of October 2025, agencies also lacked documentation of receipt for $3.44 billion associated with the questioned accruals.

At the Maryland Transit Administration alone, $755 million in unsupported federal accruals included nearly $688 million tied to expenditures without executed federal grant agreements — meaning the state was booking federal money it had not actually secured the authority to spend. The State Highway Administration recorded $600 million in unsupported accruals, including more than $330 million for project costs not authorized by the federal government.

“This is money the state counted on to balance the budget that may never materialize,” Del. Ryan Nawrocki said in December 2025, when the closeout figures were first published. Political scientist John Dedie offered a blunter warning about the federal funding dynamic: “This is a perfect excuse for them to say ‘we’re gonna send you less money because you don’t have your act together.'”

In the current federal environment — with the Trump administration actively scrutinizing state compliance and Maryland already a target of federal funding reductions — that warning is not theoretical.

No Inspector General, and the Governor Wants It That Way

The audit pattern has renewed calls for a statewide inspector general — an independent, nonpartisan official empowered to investigate waste, fraud, and abuse across government. Maryland does not have one. Moore has argued against creating one, contending that existing internal mechanisms are sufficient.

What he did instead: his administration paid a private consulting firm $5.6 million to identify government waste as part of his Government Modernization Initiative. Baltimore City spends roughly $2.5 million annually to operate its own Inspector General’s Office with 19 employees. The governor’s one-time consulting spend cost more than two years of the city’s independent watchdog — while producing no permanent oversight infrastructure.

The Maryland Republican Party called for a statewide inspector general in response to the audit findings, saying, “No more excuses.” When Moore’s office appointed a deputy legal counsel from his own administration as Inspector General for Education, Senate Republicans issued a symbolic protest vote. The governor’s spokesperson called their objections “deeply unserious.”

The inspector general for education is a narrow office covering school systems. It is not the statewide watchdog that the audit findings are calling for.

Hogan’s Fingerprints, and Moore’s Record

The Moore administration has been careful to note that roughly 90 percent of the unemployment overpayments cited by auditors were incurred under former Gov. Larry Hogan. That is a fair factual point with a limited shelf life. Moore took office in January 2023. The FY 2025 closeout audit covers activity through June 2025 — more than two full fiscal years into his tenure. At some point, the administration that runs the agencies owns the agencies’ performance.

The same audit findings that appeared under Hogan are appearing again under Moore. That is what the auditors themselves are flagging: not one-time errors, but a pattern of the same problems in audit report after audit report. The question lawmakers and taxpayer advocates are pressing is whether the state has the structural will to fix them — or whether documenting them is itself the final step in Maryland’s accountability process.

So far, the answer to that question is the $1.2 billion figure the governor says is wrong.

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Sources

1. FOX45 / Spotlight on Maryland, “Audits reveal $1.2B in questionable Maryland state spending,” June 12, 2026 — foxbaltimore.com
2. The BayNet, “Balance Sheet Bombshell: Maryland Audit Finds Billions in Unverified Federal Funds,” December 24, 2025 — thebaynet.com
3. WJLA / 7News, “Maryland audit finds millions in questionable Medicaid payments” — wjla.com
4. FOX45, “State agencies under scrutiny as auditors uncover billions in unsupported federal funds,” December 2025 — foxbaltimore.com
5. WJLA, “Hundreds of millions of dollars lost — and Maryland has no statewide inspector general,” January 16, 2026 — wjla.com
6. Washington Times, “Wes Moore paid firm millions to find government waste rather than be eyed by inspector general,” March 12, 2026 — washingtontimes.com
7. Maryland Matters, “Moore administration official backed for inspector general job, despite Republican protest vote,” March 9, 2026 — marylandmatters.org
8. Del. Steve Arentz, guest commentary, “Maryland agencies need accountability,” Baltimore Sun, March 2, 2026 — baltimoresun.com
9. Yahoo News / Maryland officials, “Maryland audit finds millions in questionable Medicaid payments” — wjla.com

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