While the report has acknowledged the Council budget may not meet the requirements of the road network, it nevertheless recognises the roads asset management strategy which is in place to improve conditions over the coming years.
The council increased the roads reconstruction budget in the capital plan in February to £21m for 2012-15.
The Audit Scotland report comes following an audit on all 32 Scottish councils in 2004, a follow up in 2011 and a further audit earlier this year.
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Lead Councillor for Development and Infrastructure, John Semple, said: "This [roads asset management] strategy will help to reduce the need for reactive maintenance on council roads. It will prioritise routes based on the how road condition affects the local economy and the quality of life for local people and will maximise the impact of works on the road condition whilst making the best use of available resources.
He added: "A three year roads recovery programme of works which largely focuses on surface treatments will be progressed and a ten year improvement programme developed."
Mr Semple said the figures speak for themselves. He pointed out that the roads reconstruction programme for 2012/13 was already 85% complete as of October 1.
The Council is estimating that by 2015 more than half of the A class roads in the area will be upgraded, as will 30% of B class roads.
A policy for bringing private roads up to standard in has also been adopted by Argyll and Bute Council. There are 87.5 kilometres of unadopted roads and the Council says it will consider adopting a road if it is in the public interest.
(IT)
