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.
