diff --git a/templates/pkg/resource/manager.go.tpl b/templates/pkg/resource/manager.go.tpl
index 181b3c65..f0150312 100644
--- a/templates/pkg/resource/manager.go.tpl
+++ b/templates/pkg/resource/manager.go.tpl
@@ -74,7 +74,7 @@ func (rm *resourceManager) ReadOne(
 	}
 	observed, err := rm.sdkFind(ctx, r)
 	if err != nil {
-		return rm.onError(r, err)
+		return rm.onError(observed, err)
 	}
 	return rm.onSuccess(observed)
 }