diff --git a/controllers/controller_shared.go b/controllers/controller_shared.go
index b8a45a72e..9663b7960 100644
--- a/controllers/controller_shared.go
+++ b/controllers/controller_shared.go
@@ -84,10 +84,14 @@ func GetScopedMatchingInstances(log logr.Logger, ctx context.Context, k8sClient
 
 	var list v1beta1.GrafanaList
 	err := k8sClient.List(ctx, &list, opts...)
-	if err != nil || len(list.Items) == 0 {
+	if err != nil {
 		return []v1beta1.Grafana{}, err
 	}
 
+	if len(list.Items) == 0 {
+		return []v1beta1.Grafana{}, nil
+	}
+
 	selectedList := []v1beta1.Grafana{}
 	var unready_instances []string
 	for _, instance := range list.Items {
@@ -124,10 +128,14 @@ func GetAllMatchingInstances(ctx context.Context, k8sClient client.Client, cr v1
 
 	var list v1beta1.GrafanaList
 	err := k8sClient.List(ctx, &list, client.MatchingLabels(instanceSelector.MatchLabels))
-	if err != nil || len(list.Items) == 0 {
+	if err != nil {
 		return []v1beta1.Grafana{}, err
 	}
 
+	if len(list.Items) == 0 {
+		return []v1beta1.Grafana{}, nil
+	}
+
 	selectedList := []v1beta1.Grafana{}
 	for _, instance := range list.Items {
 		// Matches all instances when MatchExpressions is undefined
diff --git a/controllers/grafanafolder_controller.go b/controllers/grafanafolder_controller.go
index 2272dfe45..643b23e4b 100644
--- a/controllers/grafanafolder_controller.go
+++ b/controllers/grafanafolder_controller.go
@@ -37,6 +37,7 @@ import (
 	"k8s.io/apimachinery/pkg/runtime"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
+	"sigs.k8s.io/controller-runtime/pkg/controller/controllerutil"
 	"sigs.k8s.io/controller-runtime/pkg/log"
 
 	grafanav1beta1 "github.com/grafana/grafana-operator/v5/api/v1beta1"
@@ -58,7 +59,6 @@ type GrafanaFolderReconciler struct {
 //+kubebuilder:rbac:groups=grafana.integreatly.org,resources=grafanafolders/finalizers,verbs=update
 
 func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result, error) {
-	syncLog := log.FromContext(ctx).WithName("GrafanaFolderReconciler")
 	foldersSynced := 0
 
 	// get all grafana instances
@@ -66,9 +66,7 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 	var opts []client.ListOption
 	err := r.Client.List(ctx, grafanas, opts...)
 	if err != nil {
-		return ctrl.Result{
-			Requeue: true,
-		}, err
+		return ctrl.Result{}, err
 	}
 
 	// no instances, no need to sync
@@ -80,9 +78,7 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 	allFolders := &grafanav1beta1.GrafanaFolderList{}
 	err = r.Client.List(ctx, allFolders, opts...)
 	if err != nil {
-		return ctrl.Result{
-			Requeue: true,
-		}, err
+		return ctrl.Result{}, err
 	}
 
 	// sync folders, delete folders from grafana that do no longer have a cr
@@ -100,7 +96,7 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 	for grafana, existingFolders := range foldersToDelete {
 		grafanaClient, err := client2.NewGeneratedGrafanaClient(ctx, r.Client, grafana)
 		if err != nil {
-			return ctrl.Result{Requeue: true}, err
+			return ctrl.Result{}, err
 		}
 
 		for _, folder := range existingFolders {
@@ -119,9 +115,9 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 			if err != nil {
 				var notFound *folders.DeleteFolderNotFound
 				if errors.As(err, &notFound) {
-					syncLog.Info("folder no longer exists", "namespace", namespace, "name", name)
+					r.Log.Info("folder no longer exists", "namespace", namespace, "name", name)
 				} else {
-					return ctrl.Result{Requeue: false}, err
+					return ctrl.Result{}, err
 				}
 			}
 
@@ -133,12 +129,12 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 		// so we should minimize those updates
 		err = r.Client.Status().Update(ctx, grafana)
 		if err != nil {
-			return ctrl.Result{Requeue: false}, err
+			return ctrl.Result{}, err
 		}
 	}
 
 	if foldersSynced > 0 {
-		syncLog.Info("successfully synced folders", "folders", foldersSynced)
+		r.Log.Info("successfully synced folders", "folders", foldersSynced)
 	}
 	return ctrl.Result{Requeue: false}, nil
 }
@@ -153,8 +149,7 @@ func (r *GrafanaFolderReconciler) syncFolders(ctx context.Context) (ctrl.Result,
 // For more details, check Reconcile and its Result here:
 // - https://pkg.go.dev/sigs.k8s.io/controller-runtime@v0.9.2/pkg/reconcile
 func (r *GrafanaFolderReconciler) Reconcile(ctx context.Context, req ctrl.Request) (ctrl.Result, error) {
-	controllerLog := log.FromContext(ctx).WithName("GrafanaFolderReconciler")
-	r.Log = controllerLog
+	r.Log = log.FromContext(ctx).WithName("GrafanaFolderReconciler")
 
 	// periodic sync reconcile
 	if req.Namespace == "" && req.Name == "" {
@@ -166,26 +161,45 @@ func (r *GrafanaFolderReconciler) Reconcile(ctx context.Context, req ctrl.Reques
 	}
 
 	folder := &grafanav1beta1.GrafanaFolder{}
-
 	err := r.Client.Get(ctx, client.ObjectKey{
 		Namespace: req.Namespace,
 		Name:      req.Name,
 	}, folder)
 	if err != nil {
 		if kuberr.IsNotFound(err) {
-			if err := r.onFolderDeleted(ctx, req.Namespace, req.Name); err != nil {
-				return ctrl.Result{RequeueAfter: RequeueDelay}, err
-			}
 			return ctrl.Result{}, nil
 		}
 		return ctrl.Result{}, fmt.Errorf("error getting grafana folder cr: %w", err)
 	}
+
+	if folder.GetDeletionTimestamp() != nil {
+		// Check if resource needs clean up
+		if controllerutil.ContainsFinalizer(folder, grafanaFinalizer) {
+			if err := r.finalize(ctx, folder); err != nil {
+				return ctrl.Result{}, fmt.Errorf("failed to finalize GrafanaFolder: %w", err)
+			}
+			if err := removeFinalizer(ctx, r.Client, folder); err != nil {
+				return ctrl.Result{}, fmt.Errorf("failed to remove finalizer: %w", err)
+			}
+		}
+		return ctrl.Result{}, nil
+	}
+
 	defer func() {
 		folder.Status.Hash = folder.Hash()
 		folder.Status.LastResync = metav1.Time{Time: time.Now()}
 		if err := r.Status().Update(ctx, folder); err != nil {
 			r.Log.Error(err, "updating status")
 		}
+		if meta.IsStatusConditionTrue(folder.Status.Conditions, conditionNoMatchingInstance) {
+			if err := removeFinalizer(ctx, r.Client, folder); err != nil {
+				r.Log.Error(err, "failed to remove finalizer")
+			}
+		} else {
+			if err := addFinalizer(ctx, r.Client, folder); err != nil {
+				r.Log.Error(err, "failed to set finalizer")
+			}
+		}
 	}()
 
 	if folder.Spec.ParentFolderUID == folder.CustomUIDOrUID() {
@@ -195,18 +209,24 @@ func (r *GrafanaFolderReconciler) Reconcile(ctx context.Context, req ctrl.Reques
 	}
 	removeInvalidSpec(&folder.Status.Conditions)
 
-	instances, err := GetScopedMatchingInstances(controllerLog, ctx, r.Client, folder)
-	if err != nil || len(instances) == 0 {
+	instances, err := GetScopedMatchingInstances(r.Log, ctx, r.Client, folder)
+	if err != nil {
 		setNoMatchingInstancesCondition(&folder.Status.Conditions, folder.Generation, err)
+		meta.RemoveStatusCondition(&folder.Status.Conditions, conditionFolderSynchronized)
 		folder.Status.NoMatchingInstances = true
+		return ctrl.Result{}, fmt.Errorf("failed fetching instances: %w", err)
+	}
+
+	if len(instances) == 0 {
+		setNoMatchingInstancesCondition(&folder.Status.Conditions, folder.Generation, err)
 		meta.RemoveStatusCondition(&folder.Status.Conditions, conditionFolderSynchronized)
-		controllerLog.Error(err, "could not find matching instances", "name", folder.Name, "namespace", folder.Namespace)
+		folder.Status.NoMatchingInstances = true
 		return ctrl.Result{RequeueAfter: RequeueDelay}, nil
 	}
 
 	removeNoMatchingInstance(&folder.Status.Conditions)
 	folder.Status.NoMatchingInstances = false
-	controllerLog.Info("found matching Grafana instances for folder", "count", len(instances))
+	r.Log.Info("found matching Grafana instances for folder", "count", len(instances))
 
 	applyErrors := make(map[string]string)
 	for _, grafana := range instances {
@@ -266,7 +286,7 @@ func (r *GrafanaFolderReconciler) SetupWithManager(mgr ctrl.Manager, ctx context
 	return err
 }
 
-func (r *GrafanaFolderReconciler) onFolderDeleted(ctx context.Context, namespace string, name string) error {
+func (r *GrafanaFolderReconciler) finalize(ctx context.Context, folder *grafanav1beta1.GrafanaFolder) error {
 	list := grafanav1beta1.GrafanaList{}
 	var opts []client.ListOption
 	err := r.Client.List(ctx, &list, opts...)
@@ -276,7 +296,7 @@ func (r *GrafanaFolderReconciler) onFolderDeleted(ctx context.Context, namespace
 
 	for _, grafana := range list.Items {
 		grafana := grafana
-		if found, uid := grafana.Status.Folders.Find(namespace, name); found {
+		if found, uid := grafana.Status.Folders.Find(folder.Namespace, folder.Name); found {
 			grafanaClient, err := client2.NewGeneratedGrafanaClient(ctx, r.Client, &grafana)
 			if err != nil {
 				return err
@@ -291,7 +311,7 @@ func (r *GrafanaFolderReconciler) onFolderDeleted(ctx context.Context, namespace
 				}
 			}
 
-			grafana.Status.Folders = grafana.Status.Folders.Remove(namespace, name)
+			grafana.Status.Folders = grafana.Status.Folders.Remove(folder.Namespace, folder.Name)
 			err = r.Client.Status().Update(ctx, &grafana)
 			if err != nil {
 				return err