Baltimore’s 2025 Single Audit points to a broader problem than any one accounting error or compliance issue. Across the city’s finances, auditors repeatedly found the same underlying weaknesses: late reviews of account balances, fragmented responsibilities across departments, weak monitoring, and internal controls that failed to catch problems before year-end. Those breakdowns affected everything from cash and grant reporting to utility billing and cybersecurity.
The clearest warning sign was the city’s year-end financial reporting process. Auditors found problems involving cash, investments, receivables, capital assets, debt, and fund activity were serious enough to require major corrections after the books had effectively been closed. That matters because city leaders, taxpayers, bondholders, and other stakeholders were relying on financial statements during the year that later turned out to contain errors and misstatements.
Auditors also found weaknesses in how Baltimore monitored and reconciled its cash accounts. Large differences between bank records and city accounting records were not consistently investigated, and multiple cash accounts were often reconciled together instead of individually. When cash controls are weak, it becomes easier for errors or misstatements to go undetected and harder for decision-makers to rely on the city’s financial information.
Grant accounting was another problem area. Auditors found that Baltimore had to make major corrections to its grant records after year-end, showing that the city’s grant-related financial information was not accurate during the year. Because grant data is spread across many departments without strong central oversight, Baltimore continues to face challenges in keeping those records accurate and meeting federal requirements.
Baltimore’s operational systems also contributed to financial risk. Auditors found ongoing problems in the city’s water and wastewater billing system, including accounts that remained unbilled and others that were billed inconsistently. As a result, the city had to rely on manual adjustments to estimate revenue and amounts owed, increasing the risk of error.
The audit also identified cybersecurity concerns. Auditors found that Baltimore was still operating older technology systems with high-risk vulnerabilities and had not completed a citywide cybersecurity risk assessment. Those weaknesses increase the risk of security breaches, system disruptions, and other technology problems going undetected.
Auditors also found that Baltimore’s Wastewater Utility Fund did not generate enough revenue to meet a required financial benchmark tied to its debt, and the city did not catch the problem until after year-end. That raises concerns about how closely the city was monitoring the financial health of one of its major utility funds.
Federal grant administration showed the same pattern. Auditors identified multiple findings involving missing support for financial reports, incomplete grant agreements, late reporting, unsupported payroll costs, and weak monitoring of organizations receiving federal funds. Those failures make it harder for Baltimore to demonstrate that federal grant money was handled properly and increase the risk of repayment demands, funding issues, and less reliable public reporting.
Baltimore’s 2025 audit findings suggest the city’s biggest challenge is not one isolated problem but a pattern of weak controls across multiple systems and departments. Until the city strengthens reconciliations, clarifies accountability, improves monitoring, and fixes long-standing control gaps, it will remain more vulnerable to financial reporting errors, compliance failures, and reduced public trust.