Days after Angela Alsobrooks acknowledged improperly receiving property tax credits for two residences over several years, a new audit of the beleaguered agency that handles those types of credits in Maryland found extensive issues — including with its oversight of the benefits at the center of the Democratic U.S. Senate candidate’s problems.

Thousands of Maryland properties could be improperly benefitting from homestead property tax credits because they are rentals and not primary residences, the audit found.

That was the same reason behind Alsobrooks’ incorrect claiming of the credits, which are intended to alleviate some of the tax burden on a homeowner’s primary residence.

Alsobrooks claimed the credit on two properties she was not living in — a Washington, D.C., property she took over from her grandmother and then rented out, and another rental in Prince George’s County where she previously lived.

For the Washington property, her campaign said she owes $18,000 in credits that she received over 15 years, plus potentially $41,000 in fees and penalties.

The figures are smaller for her Prince George’s County property, where her campaign said the issue actually cost her money because she did not transfer the credit to her new primary residence that was assessed at a higher rate. She received at least $2,600 in deductions on the rental property but would have gotten nearly $4,900 if she had transferred it, the campaign said.

Homestead property tax issues are not new in Maryland. But the latest audit from the Maryland General Assembly’s Office of Legislative Audits found the agency responsible for administering them lacked any kind of process for routinely reviewing independent records of rental properties to identify those that were receiving the tax credits.

The credits were applied, in total, to about 405,000 properties across Maryland, saving owners more than $22 billion in property taxes as of the 2022 tax year, according to the audit.

When the list was cross-referenced with a record of rental properties maintained by the Maryland Department of the Environment, auditors found 2,872 rentals were receiving the homestead credit, costing counties and the state more than $430,000 in revenue. A test of 10 of those properties found none of them were still qualified to receive the credit, according to the audit.

Other records are available to identify additional rental properties but were not reviewed by the Maryland State Department of Assessments and Taxation, or SDAT, to determine proper tax breaks.

State Sen. Clarence Lam, a Howard County Democrat who co-chairs the legislative audit committee, said the issues were “abysmal” and particularly troubling at a time when the state is facing mounting budget deficits that are threatening government programs.

“This is money that’s being left at the table. It’s actually money that we don’t even know is being left on the table,” Lam said.

Improperly applied homestead credits also occurred because the agency did not regularly match property data with driver’s license records, which can identify address changes, the audit found. Meanwhile, there were no formal procedures for informing local governments — who are responsible for collecting property taxes — when a property was deemed ineligible.

Lam said the findings speak to the need for individual taxpayers to closely monitor their filings and correspondence with the state, but also that it’s incumbent upon SDAT to better verify and communicate eligibility to taxpayers.

“It’s a two-way street,” Lam said, adding that he believes “there’s been a level of incompetence and poor management at” the agency.

Other issues disclosed in the audit — which SDAT said it agreed with and accepted the recommendations — included extended periods when the eligibility of homestead credits were pending, a lack of oversight around homeowner’s tax credits and slow refunds. The audit investigated the agency’s actions mostly between March 2019 and August 2022.

It’s not the first time SDAT has come under scrutiny this year.

In the agency’s annual process of reassessing a third of the state’s 2 million properties, it failed to mail 100,000 reassessment notices by a Jan. 30 deadline. The mistake would have cost county governments $152 million and the state $18 million, but that was avoided when lawmakers passed emergency legislation extending the legal deadline.

A report published by the agency in July revealed several internal problems leading to the error, starting with a rushed overhaul of the assessment notice design and a vendor’s inability to work on a rushed timeline. The report identified a “lack of oversight” and claimed SDAT Director Michael Higgs “did not heed the advice of department staff” who warned about the problem.

Gov. Wes Moore replaced Higgs, an appointee of former Gov. Larry Hogan, in April.

SDAT spokesman Myles Handy said Thursday the new director, Dan Phillips, was working to “improve the department’s customer service, as well as employee job satisfaction.”