• The issue of public management quality. Following the financial audit of the 2025 national accounts, one-fifth of the public sector asset data reported therein cannot be considered reliable. The auditors were unable to confirm the accuracy of more than EUR 19 billion (out of nearly EUR 91 billion) of fixed asset data.
• The largest discrepancies were found in land accounting. The most significant material misstatements were identified in the accounting of forest land and stands, mineral resources, cultural assets, infrastructure assets, land and other state assets.
• Uncertainties regarding debt adjustments. During the audit, insufficient evidence was obtained to substantiate the EUR 1.28 billion reduction in general government debt.
• The budget view is not reliable. The data on the implementation of the consolidated budget are not sufficiently accurate and informative and therefore do not present a reliable view of the state of public finances and the use of public funds.
• The auditors did not identify any significant financial discrepancies in the statement of key results in areas of state activity, which became part of the national set of accounts for the first time in 2025.

The state manages assets worth almost EUR 91 billion, but the auditors were unable to confirm the accuracy of the data for more than EUR 19 billion of these assets. This was revealed by the financial audit of the 2025 National Accounts conducted by the National Audit Office. The audit results show that a significant proportion of public sector asset accounting data is still unreliable. Due to the significant structural errors identified, a qualified opinion was issued on the set of accounts. The errors were caused by misstatements in the financial statements of public sector entities at lower levels of consolidation.
  
“The results of this audit are a clear signal not of lost billions, but of the state of public sector governance. Years of sluggish processes, delayed digitalisation and a lack of basic accounting competence have led us to doubt the data on a fifth of the state’s assets. Such negligence creates an insecure environment where risks arise wherever one might expect – abuse, disappearance of assets or irrational decisions. State assets must be managed on the basis of impeccable data, not guesswork, so managers’ approach to asset accounting and internal control must change fundamentally,” says Auditor General Irena Segalovičienė.
  
Auditors were unable to confirm the accuracy of more than a fifth of the public sector’s asset data
  
Of the EUR 90.87 billion worth of public sector assets reported in the national accounts, auditors were unable to confirm the accuracy of data amounting to more than EUR 19 billion. In state accounts, EUR 2.15 billion worth of asset data cannot be confirmed, while in municipal reports the figure is EUR 16.94 billion.
  
The largest misstatements were identified in the municipal sector regarding the accounting of land. Auditors were unable to confirm the accuracy of EUR 15.8 billion worth of land values, as the values recorded in the accounts of some municipalities differed significantly from the data held by the Centre of Registers. This widespread discrepancy in data does not indicate a physical shortfall in assets, but rather the inability of institutions to synchronise the data in the registers they use.
  
Significant shortcomings were also identified in the accounting of forests and stands, mineral resources, cultural assets, infrastructure structures and other state assets. The audit found that some assets have still not been properly inventoried, that inaccurate or insufficiently substantiated data is used in the accounts, and that in some cases the accounting processes themselves do not ensure the reliability of the financial statements.
  
Recurring problems point to systemic shortcomings
 
The shortcomings identified in the accounting for land, infrastructure and other assets are not isolated cases. Data misstatements recurring over many years across various public sector entities indicate deep-rooted problems in asset accounting and control, which continue to have a negative impact on the reliability of the data in the national accounts.
 
The adjustment to reduce the debt by EUR 1.28 billion cannot be justified
  
The audit also assessed general government debt, which stood at EUR 33.3 billion at the end of 2025. It increased by EUR 3.3 billion over the year, and the debt-to-GDP ratio rose to 39.5 percent. When calculating general government debt, EUR 1.28 billion in intergovernmental liabilities was excluded from the total amount. As the State Data Agency did not provide sufficient evidence to support this financial adjustment, the auditors were unable to confirm that the general government debt had been correctly and justifiably reduced by more than one billion euros.
  
The statement of key results in areas of state activity, which was audited for the first time, needs to be improved
  
The statement of key results in areas of state activity, included for the first time in the national set of annual accounts, presents key information on the results of government activity and the financial resources used for this purpose. Although no significant financial errors were identified in this statement, the auditors consider that its methodology needs to be improved. It was found that some of the data presented does not sufficiently clearly reflect the actual progress made in implementing government measures, and the links between indicators and funds used are not consistent. With a view to enhancing the value of the statement and public sector accountability, the National Audit Office has already submitted proposals to the Government on how to improve the methodology for preparing the statement.
  
The consolidated budget data does not present an accurate view of public finances
  
From 2024, the consolidated budget planned and approved in Lithuania comprises the combined funds of the state, local authorities, SODRA and the Compulsory Health Insurance Fund (PSDF). It was hoped that combining all these funds would allow for a clearer assessment of the state’s finances. However, the audit revealed that these figures are not accurate: institutions categorise expenditure incorrectly, pay out part of the funds in advance and do not spend them by the end of the year; consequently, the final result of the state budget execution is distorted and may hinder the ability to make sound decisions, manage public finances efficiently, save state funds or reallocate them.
  
The biggest problem is that the state uses two completely different calculation methods at the same time, so institutions end up doing double work:

• the first method (cash-based). Only what has entered or left the account specifically today is counted. This does not reflect the real situation, as it does not show debts or money that we will have to pay tomorrow;
• the second method (accrual). This is calculated in the same way the real economy operates – real income and all future liabilities are assessed, regardless of the date on which bank transfers are processed.

Since only the second method reflects the true financial health of the state, institutions are now forced to do the same work twice and prepare two different report.
  
In the National Audit Office’s view, the country should consider changing the model for budget planning and reporting on its implementation. In the auditors’ view, a system based on the accrual principle would allow for a more accurate disclosure of the state’s financial position, fiscal risks and cash flows, whilst reducing the burden of double reporting.
  
“The Ministry of Finance should begin discussions on changing the entire budget model and transitioning to a single system based on the accrual principle. This would eliminate duplication of work, reduce bureaucracy and show the state’s true, rather than supposed, financial health,” says Auditor General Irena Segalovičienė.
   
It is essential to improve the quality of state asset accounting
  
The results of the financial audit of the National Accounts show that some of the public sector’s financial data is still unreliable, and many of the problems identified have been recurring for several years. The National Audit Office therefore emphasises the importance of implementing the recommendations in order to improve the quality of public sector asset accounting, strengthen internal control and ensure that the state’s financial decisions are based on accurate and reliable data.
  
Up-to-date information on the status of implementation of the recommendations, results and changes that have taken place is published in open data on the National Audit Office’s website: https://www.valstybeskontrole.lt/LT/AtviriDuomenys

Auditor General Irena Segalovičienė met with Minister of Finance Kristupas Vaitiekūnas today. The meeting addressed current issues relating to public finance management, fiscal policy and the country’s fiscal sustainability as recorded in the National Progress Report. They also discussed the implementation of the National Audit Office’s recommendations in the field of finance, the need for consolidated reporting, and issues regarding further cooperation between the institutions.
  
The assessment of the fiscal section of the 2026 Annual Progress Report, carried out by the National Audit Office as an independent fiscal institution (IFI), showed that although in 2025 public finances complied with fiscal discipline rules, pressure on public finances will increase in the coming years due to rising government expenditure on defence and the challenges posed by an ageing population.
  
The Auditor General emphasised once again that without sustainable sources of revenue and more efficient management of public sector expenditure, it will be difficult to comply with fiscal discipline rules in the coming years without reducing the availability of public services. If we do not resolve the issue of additional revenue in time, we will have to choose in the future between defence funding or cutting other expenditure.
 
“Public finances are not elastic, and the time for convenient solutions has, in essence, already run out. If we do not find sustainable sources of revenue in the near future and do not dare to tackle inefficient public sector expenditure more actively, we will soon be backed into a corner and will have to choose how to fund the country’s defence while maintaining the availability of public services. The National Audit Office is not merely an observer – we are partners of the Ministry of Finance, identifying risks and ready to support unpopular decisions that are necessary for the state’s financial security,” says Auditor General Irena Segalovičienė.
  
The meeting also addressed the recommendation on state reserves submitted to the Ministry last year. The National Audit Office has recommended that the Ministry of Finance review the legal framework governing reserves and establish common principles for their creation and management, linking them to the state’s borrowing policy.
  
Ms Segalovičienė emphasised that the accumulation and use of reserves is one of the most important instruments for increasing the state’s financial resilience during periods of economic or geopolitical crisis. The Ministry of Finance is currently preparing a strategic framework for reserve management, which would help to ensure the state’s long-term financial security.
  
The leaders devoted considerable attention to the issue of improving the efficiency of public sector spending, so that institutions can create greater value for society with the same resources. National Audit Office audits have identified a number of areas where efficiency needs to be improved – ranging from ministry administrative costs, state asset management and the consolidation of IT services to childcare benefits for foreign nationals and transport services.
  
The meeting also discussed opportunities to improve the state budget formulation and reporting system by applying the accrual principle. Such a practice would enable a more unified, comprehensive and analysis-friendly public sector accountability system, better revealing the financial position of the public sector, fiscal risks and cash flows, while reducing the administrative burden and improving the soundness of decision-making.
  
Finally, the heads of the institutions reviewed planned and ongoing financial audits, the risks associated with the management of reforms and strategic projects, and issues relating to sustainable funding that strengthens the independence of the National Audit Office.

• Benefits for foreigners are rising rapidly. Over two years, the number of foreign nationals receiving childcare benefits in Lithuania has increased by 56.2%, while the amount paid out to them has jumped by 78.6%, reaching EUR 7.94 million.
• Benefits for children not registered in Lithuania. The number of third-country nationals receiving benefits for children who are not even included in the Lithuanian population register has increased by as much as 14.2 times.
• Controls exist only “on paper”. SODRA lacks effective mechanisms to verify whether similar benefits for the same child are being paid both in Lithuania and abroad, or whether benefit recipients are receiving additional income from employment abroad. Due to these control gaps, the auditors were unable to confirm the accuracy of EUR 454.9 million in expenditure on maternity, paternity and childcare benefits.

The financial audit of the 2025 set of accounts of the state social funds carried out by the National Audit Office showed that the country’s social support system is becoming increasingly open to foreign nationals, yet state institutions have failed to put safeguards in place to protect public finances from potential abuse or the duplication of benefits in another country.
  
The figures reveal new trends: demographic decline vs. a boom in foreign nationals
  
The audit data reveal a paradoxical situation: while the total number of childcare benefit recipients in the country is declining, the segment of foreign nationals is growing exponentially. Possibly due to the declining birth rate, the total number of benefit recipients in Lithuania has fallen consistently over three years by as much as 18.3% – from 58,017 (2023) to 47,416 people (2025).
  
A completely opposite trend is observed among non-EU citizens. Here, the number of recipients shot up by 64% (from 1,113 to 1,824 people). While in 2023 foreigners accounted for around 2% of all recipients, by 2025 this share had doubled to 4%. Although the total amount of SODRA benefits declined in 2025, the amount paid to foreign nationals almost doubled: it rose by 78.6% – from EUR 4.4 million to nearly EUR 8 million (EUR 7.94 million).
  
The most significant increases were seen among citizens of Central Asian countries and Ukraine
  
The audit report highlights several countries whose citizens’ benefits increased not by percentage points, but by multiples. The most striking surge was recorded among citizens of the Republic of Tajikistan, where the number of recipients increased 17-fold over two years – from just 15 people in 2023 to 257 recipients in 2025. A similar trend is observed when analysing data for citizens of the Republic of Uzbekistan, where a 6.6-fold increase was recorded, with the number of recipients jumping from 22 to 146 people. In the group of citizens of the Republic of India, the auditors highlight a completely new phenomenon, as not a single benefit recipient was recorded in 2023, whereas by 2025 their number had already reached 21. Meanwhile, the number of Ukrainian citizens receiving childcare benefits doubled during this period, rising from 272 to 556 people, while the amount paid to them almost tripled, reaching EUR 2.3 million.
  
The opposite trend is observed only among EU citizens. The number of EU, EEA and Swiss citizens receiving benefits in Lithuania remains minimal and has even decreased slightly (from 143 to 138 people). Labour migration affecting the Lithuanian social system occurs exclusively from third countries.
  
The phenomenon of “unregistered” children: are benefits paid to families living abroad?
  
The greatest control anomaly, increasing the risk of abuse and weakening the protection of public finances, is the payment of benefits for children who are not included in the Lithuanian population register. The number of such recipients in the country has increased by as much as 14.2 times over two years (from 46 to 651 people), while the amount paid to them has risen 10.4 times (to EUR 1.22 million).
  
The scale of this phenomenon is particularly evident among groups of Central Asian nationals. Of the 257 citizens of the Republic of Tajikistan receiving child care benefits, as many as 95% (244 recipients) receive them for children who are not registered in Lithuania. A similar situation is observed among citizens of the Republic of Uzbekistan.
  
The audit results show that foreigners working legally in Lithuania and covered by social insurance are exercising their right to receive benefits, even if their children and families do not physically reside in Lithuania. As the information systems of these countries are not integrated into EU data exchange networks, and SODRA has not developed any tools to check whether benefits are being paid for the same children in their country of origin, the state has limited means of ensuring that benefits are not being duplicated.
  
Dynamics of geopolitical neighbours: Belarus and Russia
  
Different, yet no less significant from a financial perspective, trends are observed when analysing data on citizens of Belarus and Russia. Looking at the group of citizens of the Republic of Belarus, although the total number of recipients fell by 22% – from 428 to 333 people – the amounts paid to them remain higher than in 2023. This indicates a rise in the average wage for this group, on which child care benefits are directly calculated. Meanwhile, the number of Russian citizens in the country remains stable, fluctuating between 124 and 130 people, but the amount paid to them has risen by as much as 53.3% over two years, increasing from EUR 534,000 to EUR 819,000.
  
The auditors emphasise that this rapidly changing structure of the system increases the risk that individuals may receive similar benefits for the same child simultaneously in both Lithuania and their country of origin, which is directly prohibited by European Union regulations and national legislation.
  
Blind reliance on the assessment of income abroad
  
Under the current rules, the amount of both maternity and paternity or childcare benefits must be reduced or their payment suspended if the person has other income from employment during the benefit period. However, SODRA only monitors income earned in Lithuania. If a person works and earns income abroad, this information does not reach the state authorities.
  
At present, the system essentially operates exclusively on the principle of trust. During the audit, the Ministry of Social Security and Labour acknowledged that to date there has not been a single case where a foreign national or a person working abroad has, on their own initiative, declared income from employment received abroad to SODRA. Cross-border information exchange is fragmented and slow, and legislation does not even impose a clear obligation on SODRA to carry out active checks or to require applicants to provide certificates from competent foreign authorities.
  
“The tenfold increase in the number of recipients signals that the state benefits system can no longer operate on a system of blind trust. When control mechanisms are not in place, public finances remain unprotected from the risks of double payments. I call on the Government and decision-makers to undertake a systematic review of these and other benefits – we must create effective and efficient safeguards that would guarantee transparency and prevent any opportunities for abuse,” says Auditor General Irena Segalovičienė.
  
National Audit Office recommendations – urgent legislative changes are needed
  
In order to prevent potential misuse of public funds, the National Audit Office has issued strict recommendations to the Ministry of Social Security and Labour and SODRA. It is required that legislation be amended urgently and that two fundamental changes be introduced:

• Legislation will clearly delegate to SODRA’s regional offices the function and strict obligation not only to await data from abroad, but also to actively verify information regarding applicants’ income and benefits received abroad.
• To tighten the accountability of benefit claimants by requiring them to submit official documents from foreign countries proving that they are not receiving a similar benefit abroad, and to declare any income from employment received abroad.

The legal changes will also affect SODRA’s internal procedures: in order to create automated control measures, the provisions governing information systems will need to be reviewed. If an application is submitted by a third-country national and the child’s details are not in the Lithuanian Population Register, the system should automatically suspend the payment of the benefit until reliable evidence is received from the foreign state or the person submits documents substantiating the legality of their status.
  
The responsible authorities have already planned measures to implement these recommendations and have undertaken to submit draft legislation to specific deadlines, which will close gaps in the legal framework and protect the country’s social budget.