BAKU, Azerbaijan, October 23. Azerbaijan’s Chamber of Accounts has identified, in total, about 1.08 million ($635,000) in excess payments in road repairs across 14 local executive authorities.
This was reflected in a report by the Chamber of Accounts following the analysis of the use of funds allocated from the state budget for the major repair of roads in 14 local executive authority bodies from 2024 through 2025.
The analysis found that work volumes and costs had been overstated, resulting in excess payments to contractors totaling the above-mentioned amount. The full amount was subsequently reimbursed to the state budget during the analysis period.
According to the information, the analytical activities were conducted in accordance with the Chamber of Accounts' 2026 Work Plan, covering 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.
Within the scope of this analysis, expenditures incurred for the major repair of roads were examined based on documentation; no on-site verification measurements were performed. The assessment of evidence took into account the primary documents and data submitted to the Chamber of Accounts by the local executive authorities.
The chamber determined that, in several instances, the technical condition, used to justify the need for road repairs, wasn’t sufficiently substantiated. Specifically, instrumental assessments, measurements, laboratory tests, and relevant technical documentation were not used to the necessary extent; instead, defect reports were prepared primarily based on visual inspections.
This situation has hindered the objective determination of repair needs, the assessment of whether completed works align with the actual condition of the roads, and the economical, efficient, and results-oriented management of budgetary funds.
The analysis highlighted that, despite the design and cost estimate documentation undergoing state expert review and approval, the projects focused primarily on specifying the thickness of the asphalt-concrete pavement. Factors such as the longitudinal and transverse profiles of the roads, gradient specifications, and technical solutions for surface water drainage were overlooked during both the design and execution phases.
Consequently, roads that underwent major repairs failed to meet standard geometric parameters or ensure natural water runoff, leading to risks such as water pooling on the surface, the formation of localized depressions, and the creation of reverse slopes. This not only shortens the service life of the road pavement but also means that budgetary funds have failed to yield the expected outcomes, while simultaneously creating the need for additional repair costs in the future.
Instances were also identified where procurement procedures were merely formalistic in nature. According to the chamber, the fact that the defect statements, which serve as the basis for preparing design and cost estimate documentation, were drawn up after the procurement procedure indicates that the scope of work and the estimated cost were determined without proper justification.
Acceptance certificates for repair works totaling 6.29 million manat ($3.7 million) carried out by six local executive authorities were issued just 1–2 days after procurement contracts were signed, and in some cases within four days.
The chamber interpreted this as an indication that the works had commenced prior to the procurement procedure.
The report notes that these instances demonstrate a failure to adhere to the principles of competitiveness, transparency, and the economical use of funds in public procurement.
The analysis further revealed that construction materials recovered during demolition were neither valued nor recorded in the inventory, nor were they accounted for in settlements with contractors. Additionally, transportation costs for milled and demolished materials were included in the cost estimates, despite the absence of the necessary permits authorizing such transport.
Instances were recorded where the scope of work put up for procurement was altered without justification; the volume of certain tasks was increased within the contracts; and work that had already been physically completed was subsequently incorporated into the project-cost documentation (which had undergone state expert review), the procurement terms, and the acceptance certificates.
In the case of four local executive authorities, cost-estimate standards lacking any legal basis were applied within the project-cost documentation. In two local executive authority bodies, tasks such as road signage, line marking, and painting, which fall outside their official mandate, were included in the cost estimates for major road repairs and formalized as such.
The chamber also identified several irregularities, including instances where "defect reports" (documents detailing required repairs) for roads with existing asphalt-concrete surfaces, which were already in satisfactory condition, didn’t reflect the actual state of the infrastructure. Furthermore, technical standards regarding demolition and restoration work were not followed. These issues facilitated the inclusion of inflated work volumes in project cost estimates and procurement documentation.
Violations of legal requirements were also uncovered during the execution of procurement contracts. Specifically, suppliers submitted performance securities with delays, and contractual obligations weren’t fulfilled on time. In some cases, there was no performance security in place during the period of delay, resulting in state funds remaining at the disposal of private entities for extended periods. The failure to impose penalties, in accordance with contractual terms, on contractors who didn't fulfill their obligations on time, as well as the omission of penalty rates from the special conditions of the contracts, has contributed to delays and limited the assessment of penalties.
Deficiencies were also noted regarding the recording of state property. Technical certification and the maintenance of records for intra-city roads, covering their actual condition, length, type of surfacing, structural elements, ownership/balance-sheet status, and other parameters, weren’t carried out in compliance with legislative requirements. Furthermore, there were shortcomings in reconciling this data with the Unified State Register of Roads, the State Register of Immovable Property, and cadastral records.
As a result, road assets created or overhauled using public funds in 2024–2025, with a total value of over 23.97 million manat ($14.1 million), weren’t recorded in accounting records, and capital expenditures were not capitalized at the facilities covered by the analysis.
The chamber said that these shortcomings led to the distortion of financial and property reports by local executive authorities, and negatively impacted the transparency and reliability of the accounting for state property.
To address the identified shortcomings, the Chamber of Accounts has proposed the implementation of several measures. These include establishing a unified pricing mechanism for major road repairs; conducting mandatory technical assessments prior to project development; preventing the preparation of defect reports based solely on visual inspection (except in necessary cases); and defining standardized requirements for geometric parameters and water-drainage solutions in road projects.
Furthermore, it has been proposed that major road repair works, organized by local executive authorities, be incorporated into the State Investment Program as part of a unified project framework and financed through state capital investments. To ensure uniformity in the recording of state property, it has been recommended to conduct an inventory of roads within cities, settlements, and villages—specifically those created or majorly repaired using state funds, and to register them in an electronic registry. This process includes assigning a unique registry number to each road asset, as well as systematizing data regarding its location (address), length, surface area, type of pavement, structural elements, and value.
Furthermore, the proposals include the formal recording of majorly repaired road assets on the balance sheet based on handover-acceptance acts, the regular reconciliation of accounting records, the determination of which entity holds the roads on its balance sheet, the preparation of technical passports, and the entry of this data into the Unified State Registry of Highways.
According to the information, the Board of the Chamber of Accounts reviewed the results of its analytical work and decided to forward the necessary documents and data to the relevant authorities. This is intended to facilitate the implementation of recommendations for addressing identified shortcomings and deficiencies, as well as to enable the taking of appropriate measures, within the scope of legally defined powers, regarding the issues uncovered.
