Baltimore is failing to collect millions owed to the city, audit reveals

For years, potentially decades, Baltimore has been failing to fully collect on payments for leases, loans and agreements with some of the city’s most prominent nonprofit institutions, an audit released Wednesday found.

By failing to pursue delinquent payers, Baltimore lost an untold sum, city Auditor Josh Pasch told members of the city spending board. Pasch’s audit included just a snapshot of accounts, but found $2 million in outstanding balances owed by vendors for fiscal year 2024. The previous year, roughly $2.4 million was outstanding.

The news was greeted with deep concern from members of the Board of Estimates, which includes Mayor Brandon Scott, who oversees the city’s finance team. During a news conference following a nearly two-hour discussion about the audit, Scott said Finance Director Michael Mocksten was waiting outside Scott’s office to continue the discussion.

“There is no way in hell we should have that amount of money just standing out there,” Scott said during the board meeting.

The audit, which city finance officials said they requested, examined a sample of payment records for fiscal years 2023 and 2024. Auditors looked at invoices for loans, leases and permits as well as payments in lieu of taxes, better known as PILOTs, which the city sometimes signs with tax-exempt nonprofit institutions to assist with the expenses they generate for the city.

Baltimore recently reached an agreement with the city’s 14 largest nonprofits to pay up to $12 million annually by 2030.

Auditors also examined rental payments for space in the city’s conduit, a 700-mile underground network of pipes that carries various utility cables. Companies including Baltimore Gas & Electric Co. and Comcast pay for space in the system.

When payments become delinquent, certain types — those that are lienable — are automatically forwarded to the city’s law department, which can pursue legal action. Other payment types, however, such as those for the conduit, are not presented to attorneys, city finance officials said.

“If I’m in this category and I choose either willfully or unintentionally to not pay my bill to the city of Baltimore, what happens?” questioned Council President Zeke Cohen.

“Nothing,” Pasch said. “There is no investigation analysis by the city, and basically we would just be waiting for the vendor to pay.”

Board member Ebony Thompson, the city’s solicitor, looked on while shaking her head in disbelief.

Scott pointed out that the city is quick to escalate costs for average people who leave traffic tickets unpaid.

“We do that every single time someone doesn’t pay a traffic camera, and somebody in the Department of Finance is going to explain to me in a way that satisfies me today, why in the hell we weren’t doing that for people who owe us hundreds of thousands of dollars or tens of thousands of dollars.”

In some instances, city finance officials did refer delinquent account holders to the law department but they were so slow that the statute of limitations, generally three years, had expired, the audit found. As of June 2024, $6 million worth of bills had been outstanding for more than three years. That figure rose to $8.5 million by December. Pasch cautioned that those figures included just the categories audited.

The audit also found that the city has been incorrectly billing some customers. Of 30 PILOT agreements tested, one group was billed twice, two were billed the incorrect amount and seven didn’t receive a bill for more than a month. In one instance, one PILOT holder was not billed from 2011 to 2025, the audit found.

City finance officials insisted that they had been making progress on the issue. Additional staff were hired and a Corporate and Revenue Compliance unit was launched. The unit pursues payments for a variety of delinquent accounts, including hotel taxes, parking taxes, parking licenses and licensing fees.

Figures presented by the auditor showed that balances have been significantly reduced. In fiscal 2024, a balance of $25 million was initially reported for loans. By October 2025, that figure was reduced to $41,555. A $9.7 million balance for PILOTs was reduced to $227,000.

City officials were unable to provide a total figure for how much they believed to be owed to the city over the audit period. Mocksten agreed to provide the figure to the board within 48 hours.

“This is not a huge proportion of the city’s overall revenue, but any dollar is a dollar too much,” Mocksten said.

Baltimore has historically had difficulty tracking delinquent revenue and pursuing customers who are long in arrears. A 2022 audit found the city had no process to collect from customers with delinquent water bills. In 2019, it was revealed the city had not billed the Ritz-Carlton Residences along the Inner Harbor for $2.3 million in water used since 2007.

The city factors “bad debt,” debt they consider uncollectible, in their budget. As of June 2025, uncollectible accounts for property taxes amounted to more than $20 million.

Cohen pressed city officials to get fixes implemented within the next 60 days and then report back to the Board of Estimates.

“We cannot be in a situation where bills are not being collected for the city of Baltimore,“ Cohen said. ”When we’re not collecting on bills, that means someone else is paying for it."

Thompson said she would like officials to explore automatic notifications to the law department when bills are well overdue. If that’s not possible, Thompson said she would like to use blockchain, a shared permanent, anonymous ledger, to build an automatic system.

“I would be more than happy to come up with a way to satisfy this,” she said.