Audit Reveals Systemic Mismanagement of Billions in Kostanay Region Budget

A comprehensive state audit of the Kostanay region has uncovered widespread financial irregularities and ineffective management of public funds, amounting to tens of billions of tenge.

The audit revealed a significant 75% increase in the local budget from 2020 to 2024. However, this growth masked underlying problems. The share of the region's own revenues rose only modestly, from 29% to 36.1%. A striking finding was that authorities attracted loans worth 30 billion tenge while simultaneously holding 19 billion tenge in unused budget funds, indicating poor coordination between spending plans and debt management.

Investment projects are stalling. Of eight major projects planned for 2025 with a total value of 188 billion tenge, six have not been commissioned. Furthermore, between 12 and 164 investment initiatives were excluded annually from the regional development program. Systemic flaws in design and cost estimates for construction projects were also identified, preventing their completion or requiring costly mid-construction corrections.

State support for businesses proved largely ineffective. Financial aid totaling 11 billion tenge was provided to 352 enterprises, but the results were dismal: 179 companies ceased operations, and another 168 failed to meet their job creation obligations. The audit also found instances of hidden subsidies being granted to financially stable businesses, distorting competition and undermining the efficiency of state programs.

Critical infrastructure is suffering from neglect. Inspections of a dozen road construction sites uncovered defects like subsidence and asphalt deterioration, including on recently completed sections. The agricultural sector, a cornerstone of the regional economy, is showing instability with declining output since 2022, a shrinking livestock population, and an increasing number of farm closures.

The sphere of public procurement was rife with violations amounting to 12 billion tenge. These included awarding contracts to unqualified bidders, unjustified use of "special order" procurement procedures, and single-source purchases under the pretext of emergencies without proper justification.

In one egregious case involving the construction of medical clinics, the estimated cost for medical equipment was inflated by approximately 200 million tenge. Some items were purchased at prices 18 to 46 times lower than projected in the initial estimates. Shockingly, these prices were based on price lists from a company that had already been declared bankrupt.

In total, the audit established financial violations worth 51 billion tenge and identified inefficient planning and use of budget funds valued at another 50 billion tenge. Materials related to 52 specific cases have been forwarded to initiate administrative proceedings.