The Chamber of Accounts revealed deficiencies in AZAL
The Chamber of Accounts Azerbaijan Weather issued a statement regarding the inspections conducted in the Roads Company (AZAL-Closed Joint Stock Company). During the inspection covering the years 2019-2021, it is reported that many deficiencies were revealed in the institution.
It is clear from the Chamber’s statement that the conducted inspections confirm the shortcomings that have been voiced at various levels so far regarding the high cost of the company’s services and the limitation of the competitive environment.
It is emphasized in the report that the audit determined that the formation of prices in a more competitive environment was not given priority. The potential for increasing profitability as a whole has not been adequately evaluated. At the same time, it was also revealed that higher rates than similar standards were applied in relation to some commission fees.
According to the inspections, successful examples of public-private partnership in the international practice of AZAL were also studied, and their application opportunities were not used.
The additional income potential that could be obtained as a result of this cooperation remained unrealized.
In the statement of the Chamber of Accounts, the indicator of the use of AZAL’s services is also noteworthy.
Occupancy levels on long-haul routes with higher cost capacity are significantly lower than average, the statement said.
Factors hindering the optimization of ticket prices have also been determined. The length of flight intervals, the fixed cost burden during the use of airports have a negative effect on increasing revenues from passenger transportation activities. According to the audit of the Chamber of Accounts, one factor that has a negative effect on the price of tickets is the increase in fuel prices.
Purchase of AZAL’s used volumes of jet engine fuel prices Formed in international sales exchanges since February 2021 prices is determined based on However, there is domestic production of jet fuel and it is not regulated by the state.
In this regard, the Chamber Azerbaijan Managed by Investment Holding national separately emphasizes that mutual commercial relations between residents are not regulated in the context of the public sector.
The audit of the Chamber of Accounts revealed that the work and services were mainly ordered to external legal entities. According to the Chamber, as a whole, the actual and scheduled number of the contingent of hired workers is not optimized for the long term.
According to the information of the Accounting Chamber at the beginning of this year, the debt of AZAL is 2 billion 10It is close to 0 million manats. The chamber believes that such a large amount of debt poses serious risks to the financial liquidity of the company. So, in the long term, current assets may lag behind current liabilities.
Moreover, AZAL’s debts create additional costs for state finances. It is clear from the opinion of the Chamber of Accounts on the implementation of last year’s state budget that approximately 35 million manats were spent on the payment of AZAl’s debts at the expense of the “Provision Fund”.
With this indicator, the company was the fourth state-owned enterprise whose debt was paid from the fund account. It is also reported that AZAL in several cases did not follow the criteria of correctness in the context of the public sector in terms of economical use of assets and prevention of excess expenses.
There were a number of significant inconsistencies in the allocation of state property and state funds compared to audit criteria. The Chamber made proposals to eliminate all deficiencies and deficiencies