diff --git a/pkg/addon/controllers/addonconfiguration/addon_configuration_reconciler_test.go b/pkg/addon/controllers/addonconfiguration/addon_configuration_reconciler_test.go
index d075e72a3..df0bf474a 100644
--- a/pkg/addon/controllers/addonconfiguration/addon_configuration_reconciler_test.go
+++ b/pkg/addon/controllers/addonconfiguration/addon_configuration_reconciler_test.go
@@ -312,6 +312,45 @@ func TestAddonConfigReconcile(t *testing.T) {
 					},
 				}, nil, nil),
 				addontesting.NewAddon("test", "cluster2"),
+				// cluster3 already has configs synced to status before spec hash is updated
+				newManagedClusterAddon("test", "cluster3", []addonv1alpha1.AddOnConfig{
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test2"},
+					},
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test3"},
+					},
+				}, []addonv1alpha1.ConfigReference{
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Bar"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test1"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test1"},
+							SpecHash:       "",
+						},
+						LastObservedGeneration: 0,
+					},
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test2"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test2"},
+							SpecHash:       "",
+						},
+						LastObservedGeneration: 0,
+					},
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test3"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test3"},
+							SpecHash:       "",
+						},
+						LastObservedGeneration: 0,
+					},
+				}, nil),
 			},
 			placements: []runtime.Object{
 				&clusterv1beta1.Placement{ObjectMeta: metav1.ObjectMeta{Name: "test-placement", Namespace: "default"}},
@@ -327,7 +366,7 @@ func TestAddonConfigReconcile(t *testing.T) {
 						},
 					},
 					Status: clusterv1beta1.PlacementDecisionStatus{
-						Decisions: []clusterv1beta1.ClusterDecision{{ClusterName: "cluster1"}, {ClusterName: "cluster2"}},
+						Decisions: []clusterv1beta1.ClusterDecision{{ClusterName: "cluster1"}, {ClusterName: "cluster2"}, {ClusterName: "cluster3"}},
 					},
 				},
 			},
@@ -343,7 +382,7 @@ func TestAddonConfigReconcile(t *testing.T) {
 				ConfigGroupResource: v1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
 				DesiredConfig: &v1alpha1.ConfigSpecHash{
 					ConfigReferent: v1alpha1.ConfigReferent{Name: "test"},
-					SpecHash:       "hash",
+					SpecHash:       "<core-foo-test-hash>",
 				},
 			}).WithPlacementStrategy(addonv1alpha1.PlacementStrategy{
 				PlacementRef:    addonv1alpha1.PlacementRef{Name: "test-placement", Namespace: "default"},
@@ -355,20 +394,20 @@ func TestAddonConfigReconcile(t *testing.T) {
 						ConfigGroupResource: v1alpha1.ConfigGroupResource{Group: "core", Resource: "Bar"},
 						DesiredConfig: &v1alpha1.ConfigSpecHash{
 							ConfigReferent: v1alpha1.ConfigReferent{Name: "test1"},
-							SpecHash:       "hash1",
+							SpecHash:       "<core-bar-test1-hash>",
 						},
 					},
 					{
 						ConfigGroupResource: v1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
 						DesiredConfig: &v1alpha1.ConfigSpecHash{
 							ConfigReferent: v1alpha1.ConfigReferent{Name: "test1"},
-							SpecHash:       "hash1",
+							SpecHash:       "<core-foo-test1-hash>",
 						},
 					},
 				},
 			}).Build(),
 			validateAddonActions: func(t *testing.T, actions []clienttesting.Action) {
-				addontesting.AssertActions(t, actions, "patch", "patch")
+				addontesting.AssertActions(t, actions, "patch", "patch", "patch")
 				sort.Sort(byPatchName(actions))
 				expectPatchConfigurationAction(t, actions[0], []addonv1alpha1.ConfigReference{
 					{
@@ -376,7 +415,7 @@ func TestAddonConfigReconcile(t *testing.T) {
 						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test1"},
 						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
 							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test1"},
-							SpecHash:       "hash1",
+							SpecHash:       "<core-bar-test1-hash>",
 						},
 						LastObservedGeneration: 0,
 					},
@@ -405,7 +444,7 @@ func TestAddonConfigReconcile(t *testing.T) {
 						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test1"},
 						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
 							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test1"},
-							SpecHash:       "hash1",
+							SpecHash:       "<core-bar-test1-hash>",
 						},
 						LastObservedGeneration: 0,
 					},
@@ -414,10 +453,39 @@ func TestAddonConfigReconcile(t *testing.T) {
 						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test1"},
 						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
 							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test1"},
-							SpecHash:       "hash1",
+							SpecHash:       "<core-foo-test1-hash>",
 						},
 						LastObservedGeneration: 0,
 					}})
+				expectPatchConfigurationAction(t, actions[2], []addonv1alpha1.ConfigReference{
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Bar"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test1"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test1"},
+							SpecHash:       "<core-bar-test1-hash>",
+						},
+						LastObservedGeneration: 0,
+					},
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test2"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test2"},
+							SpecHash:       "",
+						},
+						LastObservedGeneration: 0,
+					},
+					{
+						ConfigGroupResource: addonv1alpha1.ConfigGroupResource{Group: "core", Resource: "Foo"},
+						ConfigReferent:      addonv1alpha1.ConfigReferent{Name: "test3"},
+						DesiredConfig: &addonv1alpha1.ConfigSpecHash{
+							ConfigReferent: addonv1alpha1.ConfigReferent{Name: "test3"},
+							SpecHash:       "",
+						},
+						LastObservedGeneration: 0,
+					},
+				})
 				expectPatchConditionAction(t, actions[0], metav1.ConditionTrue)
 				expectPatchConditionAction(t, actions[1], metav1.ConditionTrue)
 			},
diff --git a/pkg/addon/controllers/addonconfiguration/graph.go b/pkg/addon/controllers/addonconfiguration/graph.go
index 4344bc32b..c11dd4b54 100644
--- a/pkg/addon/controllers/addonconfiguration/graph.go
+++ b/pkg/addon/controllers/addonconfiguration/graph.go
@@ -369,12 +369,21 @@ func (n *installStrategyNode) addNode(addon *addonv1alpha1.ManagedClusterAddOn)
 		// TODO we should also filter out the configs which are not supported configs.
 		overrideConfigMapByAddOnConfigs(n.children[addon.Namespace].desiredConfigs, addon.Spec.Configs)
 
-		// copy the spechash from mca status
-		for _, configRef := range addon.Status.ConfigReferences {
-			if configRef.DesiredConfig == nil {
-				continue
-			}
-			if nodeDesiredConfigArray, ok := n.children[addon.Namespace].desiredConfigs[configRef.ConfigGroupResource]; ok {
+		//	go through mca spec configs and copy the specHash from status if they match
+		for _, config := range addon.Spec.Configs {
+			for _, configRef := range addon.Status.ConfigReferences {
+				if configRef.DesiredConfig == nil {
+					continue
+				}
+				// compare the ConfigGroupResource and ConfigReferent
+				if configRef.ConfigGroupResource != config.ConfigGroupResource || configRef.DesiredConfig.ConfigReferent != config.ConfigReferent {
+					continue
+				}
+				// copy the spec hash to desired configs
+				nodeDesiredConfigArray, ok := n.children[addon.Namespace].desiredConfigs[configRef.ConfigGroupResource]
+				if !ok {
+					continue
+				}
 				for i, nodeDesiredConfig := range nodeDesiredConfigArray {
 					if nodeDesiredConfig.DesiredConfig.ConfigReferent == configRef.DesiredConfig.ConfigReferent {
 						n.children[addon.Namespace].desiredConfigs[configRef.ConfigGroupResource][i].DesiredConfig.SpecHash = configRef.DesiredConfig.SpecHash