BAKU, Azerbaijan, October 23. Azerbaijan’s
Chamber of Accounts has identified approximately 1.08 million manat
($635,000) in overpayments for road repairs across 14 local
executive authorities.
The findings were outlined in a report following an analysis of
the use of state budget funds allocated for major road repairs by
14 local executive authorities in 2024–2025.
The analysis found that work volumes and costs had been
overstated, resulting in overpayments to contractors totaling the
above-mentioned amount. The full amount was subsequently reimbursed
to the state budget during the analysis period.
According to the report, the analysis was conducted under the
Chamber of Accounts’ 2026 Work Plan and covered the district
executive authorities of Guba, Tartar, Imishli, Gusar, Aghjabadi,
Zagatala, Lerik, Shabran, Gadabay, Ujar, and Jalilabad, as well as
the city executive authorities of Mingachevir, Lankaran, and
Shaki.
The analysis examined expenditures on major road repairs based
on documentation, without on-site verification measurements. The
assessment took into account primary documents and data submitted
to the Chamber of Accounts by the local executive authorities.
The Chamber found that, in several cases, the technical
condition of roads used to justify the need for repairs had not
been sufficiently substantiated. Instrumental assessments,
measurements, laboratory tests, and relevant technical
documentation were not used to the necessary extent. Instead,
defect reports were prepared primarily on the basis of visual
inspections.
This hindered the objective assessment of repair needs, the
verification of whether completed works matched the actual
condition of the roads, and the economical, efficient, and
results-oriented use of budget funds.
The analysis found that, although design and cost-estimate
documentation had undergone state expert review and approval, the
projects focused primarily on specifying the thickness of the
asphalt-concrete pavement. Factors such as longitudinal and
transverse road profiles, gradient specifications, and technical
solutions for surface water drainage were overlooked during both
the design and construction phases.
As a result, roads that had undergone major repairs failed to
meet standard geometric parameters or ensure natural water runoff.
This created risks of water pooling on road surfaces, localized
depressions, and reverse slopes. These issues not only shorten
pavement service life but also prevent budget funds from delivering
the expected results and may lead to additional repair costs in the
future.
The analysis also identified cases in which procurement
procedures were largely formalistic. According to the Chamber,
defect reports used as the basis for preparing design and
cost-estimate documentation were drawn up after procurement
procedures had taken place. This indicated that the scope of work
and estimated costs had been determined without proper
justification.
Acceptance certificates for repair works worth a total of 6.29
million manat ($3.7 million), carried out by six local executive
authorities, were issued just one or two days after procurement
contracts were signed, and in some cases within four days. The
Chamber interpreted this as an indication that the works may have
begun before the procurement procedures were completed.
The report stated that these cases demonstrated a failure to
comply with the principles of competition, transparency, and the
economical use of public funds in procurement.
The analysis also found that construction materials recovered
during demolition were neither valued nor entered into inventory
records or accounted for in settlements with contractors. In
addition, transportation costs for milled and demolished materials
were included in cost estimates despite the absence of the
necessary permits for their transportation.
Other irregularities included unjustified changes to the scope
of work put out to tender, increases in the volume of certain tasks
under contracts, and the subsequent inclusion of work that had
already been physically completed in project cost estimates,
procurement documentation, and acceptance certificates. The project
cost estimates had undergone state expert review.
In four local executive authorities, cost-estimate standards
without a legal basis were applied in project documentation. In two
local executive authorities, tasks such as road signage, line
marking, and painting — which fell outside their official mandates
— were included in cost estimates for major road repairs and
formalized accordingly.
The Chamber also found cases in which defect reports for roads
with existing asphalt-concrete surfaces that were already in
satisfactory condition did not reflect the actual state of the
infrastructure. Technical standards for demolition and restoration
work were also not followed. These shortcomings enabled inflated
work volumes to be included in project cost estimates and
procurement documentation.
Violations of legal requirements were also identified during the
implementation of procurement contracts. Suppliers submitted
performance securities late, and contractual obligations were not
fulfilled on time. In some cases, no performance security was in
place during the period of delay, leaving public funds at the
disposal of private entities for extended periods.
The failure to impose penalties on contractors that did not meet
their contractual obligations on time, as well as the omission of
penalty rates from the special conditions of contracts, contributed
to delays and limited the assessment of penalties.
The analysis also identified deficiencies in state property
records. Technical certification and records covering the actual
condition, length, surface type, structural elements, ownership and
balance-sheet status, and other characteristics of intra-city roads
were not maintained in accordance with legislative requirements.
There were also shortcomings in reconciling these records with the
Unified State Register of Roads, the State Register of Immovable
Property, and cadastral records.
As a result, road assets constructed or overhauled using public
funds in 2024–2025, with a total value exceeding 23.97 million
manat ($14.1 million), were not recorded in accounting records, and
capital expenditures were not capitalized for the facilities
covered by the analysis.
The Chamber said these shortcomings distorted the financial and
property reports of local executive authorities and undermined the
transparency and reliability of state property accounting.
To address the identified shortcomings, the Chamber of Accounts
proposed several measures, including establishing a unified pricing
mechanism for major road repairs, conducting mandatory technical
assessments before project development, preventing defect reports
from being prepared solely on the basis of visual inspections
except where necessary, and setting standardized requirements for
road geometry and drainage solutions.
It also proposed incorporating major road repairs organized by
local executive authorities into the State Investment Program under
a unified project framework and financing them through state
capital investments.
To ensure consistent accounting for state property, the Chamber
recommended taking an inventory of roads in cities, settlements,
and villages that had been constructed or substantially repaired
using state funds and registering them in an electronic database.
The process would include assigning a unique registration number to
each road asset and systematizing information on its location,
length, surface area, pavement type, structural elements, and
value.
The proposals also included formally recording majorly repaired
road assets on balance sheets based on handover and acceptance
certificates, regularly reconciling accounting records, determining
which entities were responsible for the roads on their balance
sheets, preparing technical passports, and entering the relevant
data into the Unified State Register of Highways.
According to the report, the Board of the Chamber of Accounts
reviewed the findings of the analytical work and decided to forward
the relevant documents and data to the appropriate authorities.
This was intended to support the implementation of recommendations
to address the identified shortcomings and enable the authorities
to take appropriate action within their legally defined powers.
