Less than half of care homes keep records of HbA1c and kidney function tests from the patient's GP, the England-wide Care Home Diabetes Audit found.
It called for every care home in the country to screen residents for diabetes, after research showed one in 10 had the condition yet many remained undiagnosed.
The report was led by the Institute of Diabetes for Older People (IDOP) and the Association of British Clinical Diabetologists.
An estimated 37,625 people living in care homes have diabetes.
The audit found that documented evidence of latest HbA1c levels was kept by only 44% of 2,043 care homes that responded to questions from researchers. Lack of awareness of glycaemic control risks patients becoming hypo- of hyperglycaemic, increasing the chance of infections or hospital admission.
Similarly, only 40% retained records of kidney function test, meaning many would have no evidence of the onset or worsening of renal failure. While 97% of care home residents with diabetes had an annual review with their GP, only 36% of care homes had copies of these reviews.
Better dialogue needed
The report called for better dialogue between care homes and local practices so that records are more commonly shared to improve disease management and homes have information available in an emergency.
It added: 'Care homes should establish good communication with primary care, liaising with GPs and community teams to ensure annual reviews and other scheduled checks take place and inform care practice.'
Two-thirds of care homes (65%) had no policy for screening for diabetes, leaving many with undiagnosed disease.
Professor Alan Sinclair, audit lead and director of IDOP, which is based at the University of Bedfordshire, said there were 'masses' of people with undiagnosed diabetes in care homes.
'The longer it takes them to become diagnosed, the more their health will suffer, leading to the potential of the development of unseen complications. Screening for diabetes should be a fundamental policy for every care home.'
Barbara Young, chief executive of Diabetes UK, said the report's findings were 'deeply worrying'. 'They show that far too many older and vulnerable people are being denied basic standards of diabetes care and this is something that needs to be addressed urgently,' she said.