A new state audit found the Maryland Secretary of State’s Office failed to maintain adequate controls over millions of dollars in collections and did not sufficiently verify payments made through a charity program for state employees, with some financial control problems dating back more than a decade
The July report from Maryland’s Office of Legislative Audits examined the Secretary of State’s Office from November 2021 through November 2025. Auditors identified three publicly disclosed findings involving the state’s charity database, oversight of the Maryland Charity Campaign and controls over money collected by the office. The audit also identified a cybersecurity-related finding, but details were redacted as required by state law.
The Secretary of State’s Office agreed with the audit’s recommendations and said it has already begun making changes.
The most persistent concerns involve money collected by the Secretary of State’s Office, OSOS. According to the audit, the office deposited approximately $15.5 million between November 2021 and November 2025. That included about $9.9 million in electronic payments and $5.6 million in checks and money orders. The payments largely came from charitable registration and enforcement fees, document certifications and notary commissions.
ALSO READ | Lawsuit filed seeking to block Maryland redistricting amendment from ballot
Auditors said the office did not reconcile electronic payments processed by its credit-card vendor against state bank accounts to ensure the money had actually been received.
In a test of 21 days of credit-card transactions totaling approximately $510,000, auditors said OSOS could not provide certain bank statements supporting that $374,000 had been credited to one of the state’s bank accounts.
The audit did not conclude that the $374,000 was missing.
“OSOS obtained bank statements to verify that all of the $374,000 in collections identified in this finding were properly credited to the State’s bank accounts and is fully accounted for at this time,” the agency wrote.
But auditors identified other weaknesses in how the office handled money.
They observed several instances in which checks received by mail had not yet been recorded or restrictively endorsed and were sitting in an unsecured bin accessible to office personnel. Auditors also said OSOS could not readily provide a list of checks received through the mail.
ALSO READ | Dan Cox pitches affordability, tax cuts in bid to unseat Gov. Wes Moore
In another test, auditors examined $174,000 in collections received over 21 selected days. They found approximately $39,000 received on five of those days was not deposited until eight to 15 days later, despite a general requirement that collections be deposited by the next business day.
Although the audit did not find money was missing, David Williams, president of the Taxpayers Protection Alliance, said weak accounting controls made it harder for the state to know whether the money is being handled properly.
“When you have a weak foundation of accounting, then everything else has a problem,” Williams said. “Whether it’s the money that’s coming in, whether it’s checks that weren’t verified or deposited or money that’s going out.”
Auditors said weaknesses involving independent verification of deposits and review of voided transactions had been cited in four preceding audit reports dating back to 2011. The failure to verify that credit-card receipts reached state bank accounts had been raised in three previous reports dating to 2015.
The agency previously indicated it would implement proper procedures and controls by June 2022, according to auditors. The latest audit found those problems were still not sufficiently corrected.
“This happens across multiple administrations,” Williams said. “And when you have a system that is broken, you need to fix it, whether you’re a Republican or a Democrat.”
The Secretary of State’s Office said its Administration and Finance Division did not have adequate staffing or systems during the audit period but said the division will now have two employees capable of independently monitoring and verifying collections.
ALSO READ | GOP plans court challenge after Maryland lawmakers approve redistricting amendment
The agency agreed to implement new procedures for handling checks, documenting voided transactions and ensuring receipts are deposited on time, with an estimated completion date of Aug. 31, 2026. It also said unprocessed checks are now being kept in a safe until they can be processed.
Auditors also raised concerns about the Maryland Charity Campaign, which is a workplace giving program that allows state employees and eligible retirees to donate to approved charities.
According to records from the campaign’s vendor, approximately $1.7 million was donated between April 2024 and March 2025.
Auditors said OSOS did not maintain an independent record of employee contributions and the amount each charity was supposed to receive. The office also did not attempt to independently confirm with charities that the amounts the vendor reported distributing had actually been received.
Auditors were able to confirm that certain amounts reached charities, but said that because records were not readily available, they could not verify that all amounts contributed were properly disbursed.
The audit, however, did not identify any donation proven to have been lost or sent to the wrong charity; OSOS pushed back on the implication that donations were not properly reaching their intended charities.
The agency said the Maryland Comptroller’s Office collects and aggregates employee pledges, maintains records showing how much is due to each charity and transfers the money to the campaign vendor for distribution. OSOS said individual contribution information is kept confidential and is not available to the Secretary of State’s Office.
“Neither the Office of the Comptroller nor participating charities have expressed any discrepancy that would indicate any improper payments were made by the vendor,” OSOS said in its response.
OSOS said it will begin obtaining records directly from the Comptroller so it can independently compare those records against documentation supplied to the vendor and verify distributions. The agency expects that process to be fully implemented and audited by June 2027 because the charity campaign operates on an 18-month cycle.
According to the audit, the vendor retained approximately $242,000 in 2022, $229,000 in 2023 and $304,000 in 2024.
ALSO READ | Baltimore IG battles City Hall over records access in court: ‘Job has become impossible’
The contract allowed the vendor to retain up to 20% of prior-year pledges to cover actual expenses. Auditors said OSOS did not obtain adequate documentation supporting the expenses to determine whether the fees were proper. They also found $59,760 in expenses reported for the 2024 campaign were estimates rather than actual expenses, which auditors said was inconsistent with the contract.
Auditors recommended that OSOS verify the administrative fees and recover any amounts that cannot be supported.
Williams questioned the state’s oversight of the vendor and its fees.
“You have a vendor that is being paid hundreds of thousands of dollars, and there’s really no accounting for exactly what they’re being paid for other than the state is paying these invoices,” Williams said.
The agency said the vendor’s administrative fees have averaged between 12% and 15% of pledged amounts and have never exceeded the contract’s 20% cap. The agency said supporting records and independent audits have consistently supported the fees and that it has “no indication” they were unsupported or excessive.
However, OSOS agreed to strengthen its process by using records obtained independently from the Comptroller to verify future administrative fees.
The audit also identified a cybersecurity-related finding, and a portion of the Maryland Charity Campaign finding was determined to involve cybersecurity.
The specifics are not included in the public report. Maryland law requires the Office of Legislative Audits to redact cybersecurity findings before reports are publicly released.
For Williams, the audit findings raise a larger issue about state government oversight.
“Taxpayers are paying millions of dollars for these agencies to be working,” Williams said. “Taxpayers deserve a certain level of competence.”
Follow Political Reporter Mikenzie Frost on X and Facebook. Send tips to mbfrost@sbgtv.com.
