2013-11-05
National Audit Office: not everything has been done to ensure efficient use of funds allocated for roads of local significance
Roads of local significance are municipal property; however, their development and maintenance is largely financed by public funds. The state allocated more than LTL 2 billion for this purpose over the period 2008-2012, hence the objective of the audit was to assess whether conditions have been ensured for the effective use of state budget funds allocated for the maintenance and upgrading of local roads and streets.
Auditor General Giedrė Švedienė summed up the audit results as follows: “Auditors found that there is no comprehensive and reliable information on the condition, and changes in the condition, of streets and roads of local significance, inventory and legal registration of these roads have not been completed, there is no road condition monitoring system. This makes it difficult to develop well-founded local roads policy, evaluate the condition of local roads, plan their maintenance, and properly manage funds allocated for this purpose.”
There is no agreement of municipal strategies and plans between different municipalities and with authorities responsible for the overall policy on the development of the infrastructure and funding of roads of national and local significance. Failure to coordinate actions often results in a lack of funds for the completion of projects and achievement of the intended objectives, i.e. investments do not produce any return. There are cases when local authorities apply to the Government, Ministry of Transport and Communications, and Road Administration for additional funding for projects in the selection of which these institutions did not take part, did not agree the projects, and did not assess the demand of funds.
The audit also found that the system of funding streets and roads of local significance from the Road Development and Maintenance Programme (RDMP) does not allow for the efficient use of funds, because the existing procedure for the selection of eligible projects does not guarantee that funding will be granted for the most effective projects and that different municipalities compete for at least part of the earmarked funds. Also, the procedure for the allocation of funds under the RDMP does not encourage the beneficiaries to use the funds for the implementation of investment projects thus extending the lifetime of the roads.
According to the National Audit Office, possibilities to reduce the demand for public funds allocated for roads of local significance have not been fully used. This could be done by ensuring continuous and uninterrupted funding, because, due to the RDMP funds allocation procedure, there are cases when the beneficiaries are short of time to develop quality projects and to carry out procurement procedures. It is also important to reduce the amount of long-standing investment projects which increase the costs of works, decrease the quality, and actually freeze the investments. In addition, the existing procedure for the allocation of funds under the RDMP for the maintenance of local roads discourages municipalities from spending more of their own money, because the national legislation does not regulate what part of funds should be allocated by municipalities in order to receive funding from the RDMP. It should be noted that the achievement of the objectives of investment projects financed by the RDMP funds has not been assessed, so it is not clear whether the right projects had been selected and whether the funds had been used effectively.
The National Audit Office made recommendations to the Government and the Ministry of Transport to help ensure efficient use and management of public funds allocated for streets and roads of local significance.