The State Fund for Transport Infrastructure distributed 7.4 billion crowns on road repairs. However, it did not evaluate how their state improved.
Press release on Audit No. 17/09 – 12. 3. 2018
In the years 2014 to 2016, the Supreme Audit Office (SAO) focused on reconstruction, modernization and development of B and C class roads (called the second and third class roads in the Czech Republic). The auditors examined both state subsidies distributed by the State Fund for Transport Infrastructure (SFTI) and the European subsidies distributed by the Regional Council of the Southwest Cohesion Region. The auditors scrutinized 39 projects of seven beneficiaries, i.e. selected regions and contributory organizations established by local governments, in total of nearly CZK 750 million. Due to the scope of its competence, the SAO could not verify the funds that were distributed by regions from their budgets. The audit did not reveal that the finances were used ineffectively. However, the SFTI did not evaluate the benefit coming from these funds, although it earmarked CZK 7.4 billion for road repairs in the years 2015 and 2016.
Financing of reconstructions of B and C roads from SFTI’s reserves, while the state was investing its funds into assets of the regions, was not a systemic solution but originally a one-off solution that was intended to last for one year. This funding method was later extended for the period from 2015 to 2017.
Although the total of funds distributed in 2015 and 2016 amounted to CZK 7.4 billion, the SFTI did not determine what specific and measurable targets were supposed to be achieved through these subsidies. The SFTI had set only one purpose - that the B and C roads had to be reconstructed and modernized from those funds. But it did not assess the benefits brought by those finances - for example, to what extent the condition of the roads improved, how their quality changed, or what percentage of the B and C class roads was repaired. This is, in fact, the basis for assessing whether funds have been used efficiently.
The auditors also found that with help of funds, individual regions achieved different results. For instance, in the years 2012 to 2016, the Plzeň Region with its approximately 4,600 km of B and C roads received more than CZK 3.7 billion from European and national subsidies. The number of roads in serious disrepair and in unsatisfactory condition in the Plzeň Region decreased by 1,177 kilometres. Over the same period, the Liberec Region with nearly 2,100 kilometres of B and C roads received almost two billion crowns. The number of roads in serious disrepair was reduced from about 780 kilometres to 631 kilometres. On the contrary, the length of roads in unsatisfactory condition grew by about 50 kilometres.
Audited regions did not have a reliable instrument or procedure to correctly determine the expected value of public procurement of reconstruction and modernisation of B and C roads. The estimation of the expected values was entrusted to external suppliers but the regions did not review in any way how this value had been determined.
From the data obtained from the audits of four regions and selected activities, it implies that the repair of one kilometre of B and C roads ranged from CZK 1.5 million to CZK 14 million on average. The Slovak SAI carried out a similar audit in 2014 which showed that the costs of repairing roads in individual regions in Slovakia ranged from approximately CZK 1.8 million to CZK 5.8 million per kilometre.
Supreme Audit Office