ANNAPOLIS, Md. — A new review by the Maryland Office of Legislative Audits found the state’s community colleges and their independent auditors substantially complied with state requirements, but also flagged deficit balances at three colleges and an issue with one audit report.
The review, dated July 20, 2026, examined audit reports filed with the Maryland Higher Education Commission by 15 of Maryland’s community colleges for the fiscal year ending June 30, 2025.
According to the Office of Legislative Audits, all opinions issued by the colleges’ independent auditors stated that the applicable financial statements were presented fairly, in all material respects, under generally accepted accounting principles.
The report also noted that Maryland granted approximately $494.3 million in state aid to 15 of the state’s 16 community colleges during fiscal year 2025. That aid primarily consisted of funding based on cost and student enrollment data, retirement benefits and various grants.
Baltimore City Community College was not included in the same review because it is a state budgetary unit and receives an annual state appropriation. The report states BCCC is subject to separate financial statement audits and fiscal compliance audits by the Office of Legislative Audits.
The review found one audit report was not presented in accordance with American Institute of Certified Public Accountants guidance. Auditors reported that the Community College of Baltimore County’s audit report did not express an opinion on the college’s Fiduciary Funds, which are included in the college’s basic financial statements. A similar issue was noted in the prior review report dated Aug. 12, 2025.
The Office of Legislative Audits also found three colleges had deficit balances in the unrestricted portion of their net position as of June 30, 2025. The report described those deficits as long-standing conditions.
| College | Deficit | Condition Repeated Since |
|---|---|---|
| Anne Arundel Community College | $29,152,384 | Fiscal Year 2011 |
| Community College of Baltimore County | $99,047,251 | Fiscal Year 2016 |
| Carroll Community College | $14,150,271 | Fiscal Year 2009 |
The report states an unrestricted net position deficit represents expenses for current or past services that will need to be financed with funds related to future periods and “could indicate a potential financial problem.”
A separate issue involved Garrett College. The review found the college’s financial statements disclosed cash deposits totaling $35,318 that were not adequately collateralized or otherwise insured, as required by state law.
The report states Maryland law requires deposits with financial institutions by local governmental units to be fully collateralized to minimize the risk of loss if a financial institution defaults.
A draft copy of the report was provided to the Maryland Higher Education Commission for review and comment. Because the report included no recommendations, a written response was not required.
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