According to the Ministry of Regional Development, the renovation of local roads is a local issue; yet, it has provided municipalities with nearly five billion in subsidies
PRESS RELEASE ON AUDIT NO 25/04 – 23 March 2026
According to its own statement*, the Ministry of Regional Development (MoRD) considers the renovation of local roads to be a local issue. Nevertheless, from 2019 through February 2025, it provided municipalities with subsidies totalling CZK 4.7 billion from the state budget for this renovation, supporting a total of 2,150 projects. An audit by the Supreme Audit Office (SAO) of a sample of projects showed that in more than half of the cases, the financial support had minimal benefits for addressing the traffic situation, improving residents’ quality of life, or developing the municipalities. For example, state budget support was used to renovate dead-end streets, roads in outlying parts of municipalities with restricted access, and similar projects. In some cases, the deficiencies that the roads suffered from prior to renovation were not even addressed.
Although local roads are the property of municipalities, which are required to maintain them properly and finance this maintenance primarily from their own budgets, some projects also addressed the consequences of neglected maintenance. The MoRD provided financial support even in cases where municipalities did not necessarily need it and would have carried out the projects even without a state subsidy. Seven of the 14 audited beneficiaries stated that the main benefit of the support was the ability to save their own funds for addressing more important municipal needs. “Based on the audit results, the SAO considers the MoRD’s provision of financial support to municipalities for the renovation of local roads to be an inefficient use of state funds and recommends that it not be continued,” stated Jan Kinšt, Member of the SAO Board who led the audit.
The MoRD failed to ensure that the financial support was sufficiently aligned with the municipalities’ actual development needs. It did not assess whether the renovation of specific roads was among the municipality’s priority development areas. The Ministry did not specify what results the support was intended to achieve. The SAO reviewed 20 projects in a total of 14 municipalities that received support. In 12 cases, it found that roads of no significance to traffic had been renovated, such as dead-end streets or roads with limited traffic or in outlying parts of municipalities. State support thus helped only a small group of residents on the given street but had almost no or only negligible significance for improving the traffic situation in the municipality. For example, a project received a subsidy of CZK 1.7 million where the application emphasised the road’s transport significance for the entire municipality and passing drivers. The SAO found that this “transport-significant road” was in fact a dead-end street that blocked vehicle passage at its end with a retractable bollard. Furthermore, the repairs did not address the described shortcomings—the road was not widened, and neither reinforced shoulders nor pavements were constructed. Only the road surface was improved.
The audit found that the MoRD had not established clear rules for the use of the financial support. As a result, beneficiaries took different approaches in many cases, particularly when reporting eligible costs that could be co-financed by the state. While some beneficiaries used the support to cover, for example, the costs of driveways and access roads to family homes, drainage, traffic signage, utility networks, etc., other beneficiaries did not consider these parts of the projects eligible for support and covered them entirely from their own funds.
The MoRD does not systematically monitor or evaluate how funds were spent or whether the expected benefits were achieved. Although it supported over two thousand projects between 2019 and 2025, it conducted public administration inspections on only four. The Ministry does not have complete information on completed projects because it conducts final evaluations with a delay of several years. “Given the number of programmes it administers, the Ministry is unable to verify the effectiveness of the funds spent on these projects. This raises the question of why it announces such a subsidy programme at all and spends money on it from an already deeply deficit-ridden state budget,” added Jan Kinšt.
In six out of twenty projects, the audit identified facts indicating a breach of budgetary discipline. “In this context, the SAO considers it a serious matter that it found the improper use of funds provided from the state budget in nearly one in three of the projects audited. In at least five cases, the MoRD could have identified these issues itself from the documents attached to the subsidy reimbursement requests—yet it failed to do so. This confirms the SAO’s conclusion that the MoRD’s control system is ineffective,” concluded Jan Kinšt.
Communication Department
Supreme Audit Office
* This statement is included in the action plans accompanying the Czech Republic’s regional development strategies.