Court of Accounts Report: Overpayments Detected in Istanbul Metropolitan Municipality's Dessert Procurement

The latest audit report by the Turkish Court of Accounts regarding the Istanbul Metropolitan Municipality (IBB) has sparked serious controversy over the management of public funds. The report reveals that in a "syrupy dessert procurement" contract worth 94 million 815 thousand 200 Turkish Liras, the estimated cost was not determined realistically, leading to payments far exceeding market rates. It is emphasized that the procurements made through the negotiated procedure contain price differences that could constitute public loss when compared to the same products procured via open tender in subsequent periods.

Background of the Development

At the heart of the issue is the dessert procurement tender conducted by the IBB for the Ramadan period. Court of Accounts auditors state that the provisions of the Public Procurement Law and relevant regulations regarding the determination of "estimated cost" were violated. According to the report, the IBB management determined the estimated cost based on offers from only four companies, without supporting these figures with fundamental data such as previous contract prices. This situation not only prevented a competitive environment but also strengthened criticisms regarding the inefficient use of the public budget.

One of the most striking details in the report is that the contractor company was based in Muş and had only one insured employee during the contract period. This raises significant doubts about whether the company had the technical capacity to carry out a food supply operation of this scale. Indeed, the audits revealed that although the contract contained a clause stating that "no subcontractors may be employed," the work was actually performed by another company.

When viewed in a historical context, the price gap between the IBB's previous tenders and this procurement is quite striking. For instance, it is observed that walnut kadayıf, which was procured for 300 liras in January-February 2025, cost 572 liras in the negotiated procurement, while cold baklava, which cost 370 liras in the same period, was procured at a unit price of 1200 liras. These data once again highlight the importance of transparency and audit mechanisms in public procurement.

Expert and Industry Insights

Food industry representatives and public procurement law experts evaluate this audit report as a "warning regarding the management of public resources." Experts argue that the negotiated procedure should be an exceptional method, but in this instance, it was used to restrict competition.

• Failure to use previous year's data in estimated cost calculations leads to budgeting detached from market realities.
• Eliminating technical qualifications of invited firms in negotiated tenders strengthens the perception of "tailor-made" tenders.
• Transferring the work despite the prohibition of subcontractors is contrary to contract law and competition principles.
• Price differences reaching 400% are too high to be explained by logistics or packaging costs.
• Public institutions are obliged to operate professional audit mechanisms in supply chain management.

Industry experts state that the IBB's defense regarding "packaging and logistics costs" is insufficient to explain such a high increase in unit prices. In the food sector, a fourfold increase in unit price cannot be explained solely by packaging differences.

Economic and Social Implications

This situation carries the risk of creating serious distrust among the public regarding the budget discipline of local governments. A contract value of 94 million liras is a significant item for the municipal budget, and spending this resource far above market rates raises questions about protecting the rights of taxpayers. The IBB's defense, citing the "ordinary flow of commercial life within the supply chain," remains weak against the Court of Accounts' finding of "breach of contract."

From a social perspective, budgets allocated for municipal social aid or hospitality are expected to reach more citizens through more efficient use. However, such cost inflations mean that resources that could have reached disadvantaged segments of society are instead transferred to intermediary firms. This stands out as a factor that negatively affects the transparency record of local governments.

Future Projections and Outlook

Following the Court of Accounts report, how the IBB will manage the administrative process regarding these findings is a matter of curiosity. Considering the sanctions previously applied by the Public Procurement Authority (KİK) in similar cases, it is expected that administrative investigations into the relevant tender process will deepen. It has become a necessity for the municipal management to prefer the "open tender" method more frequently in future procurements and to use more transparent data in estimated cost calculations.

In terms of risk management, the municipality's audit units must more strictly monitor the technical capacities and past performances of contractor companies. Monitoring whether contract provisions regarding the use of "subcontractors" are violated is a critical step in protecting public resources.

In the coming period, whether these findings of the Court of Accounts will be brought to the judiciary and the discussions to be held in the municipal council will determine the legal dimension of the incident. While the public continues to follow such high-value procurements, local governments are expected to act in accordance with the principle of "accountability."