Public Audit

• 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

• 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.

• By 2025, 87% of the National Audit Office’s recommendations had been implemented; however, nearly one in four changes is delayed due to delays in legislative, public procurement, and information system processes.
• Audits revealed that the reliability of some government financial data cannot be confirmed: systemic problems persist in the areas of public finance, national security, state reserves, strategic projects, and public services.
• Following the completion of the 2014–2020 EU investment audit cycle, the highest error rate for the entire period was identified—more than 14%, resulting in Lithuania having to cover more than EUR 216 million from state funds.

Presenting the National Audit Office’s 2025 Activity Report to the Seimas today, Auditor General Irena Segalovičienė warned that some systemic problems in the country have been recurring year after year, while the implementation of critical decisions has been too slow.
  
Today, Lithuania must simultaneously increase defence spending, ensure the sustainability of public finances, strengthen energy security, and adapt to rapid technological changes; however, some decisions are still stalled due to fragmented implementation and a lack of clear accountability.
  
“The country has no shortage of strategies, plans, or recommendations, but some changes get bogged down in bureaucratic labyrinths. When decisions are delayed for years on end, the state loses not only time and money—public trust in the public sector also diminishes. Faster change requires responsible leadership, inter-agency cooperation, smoother lawmaking, more efficient public procurement, and IT solutions,” emphasises Auditor General Irena Segalovičienė.
  
Greater scope of operations and flexible response to current issues
  
In 2025, the National Audit Office conducted 25 audits and assessments, issued 6 fiscal monitoring opinions and 2 reports on the monitoring of the implementation of recommendations. Last year, the institution also received two additional assignments from the Seimas—to conduct audits of the activities of Lithuanian National Radio and Television and the “Curonian Nord” offshore wind farm project. As a result, the scope of planned work had to be adjusted, but the main operational priorities were maintained.
  
At the same time, the institution responded to current issues—it conducted an assessment of the decision to add an additional 10-points to state matriculation examination results and a review of public sector employee salaries. Such independent and timely assessments help decision-makers anticipate potential consequences and ensure greater transparency and soundness in decision-making.
  
Some changes are taking place, but systemic problems persist
  
Monitoring of the implementation of recommendations shows that some changes are taking place in the public sector. By 2025, 87% of the National Audit Office’s recommendations had been implemented, but a growing trend of delays is observed—one in four recommendations is not implemented on time.
  
Some of the solutions have already brought tangible benefits to residents: access to preschool education is increasing for children at social risk; a portion of previously “stalled” one-time SODRA payments has been inventoried and is reaching residents; and conditions have been created to organise the work of courts more efficiently and to provide notary services remotely.
  
Nevertheless, a significant number of changes continue to be stalled. The most common reasons include protracted legislative processes, complex public procurement procedures, slow implementation of information systems, and unclear division of responsibilities among institutions.
  
Fiscal sustainability is also becoming a matter of national security
  
In its assessment of the state of public finances, the National Audit Office notes that fiscal risks will increase in the coming years. Although the 2026 budget still complies with European Union fiscal rules, the general government deficit may exceed the 3% of GDP threshold in the medium term. This means increasing pressure on the state to finance defence needs, social commitments, and the quality of public services.
  
The audits also showed that the reliability of some of the state’s financial data still cannot be confirmed. Material misstatements were identified in the areas of state assets, reserves, biological assets, mineral resources, and other accounting areas.
  
National security: gaps in coordination and preparedness
  
In 2025, significant attention was devoted to audits of national security and national resilience. The audits assessed military staffing, the civil resistance system, the national reserve, the public warning infrastructure, and the development of shelters.
  
The audits show that decisions to strengthen national resilience are still insufficiently coordinated, implemented inconsistently, and responsibilities are not always clearly divided among institutions. It has also been found that the state is not yet adequately prepared to ensure the protection of the entire population in the event of a crisis or war, and some measures are being implemented too slowly.
  
EU investments audits show highest error rate in the entire period
  
revealed the highest error rate for the entire 2014–2020 period—14.15 percent. Due to the identified irregularities, Lithuania had to cover more than EUR 216 million in ineligible expenditures from the state budget. This highlights the need to strengthen project control, accountability, and oversight in the management of public funds in the future.
  
A new strategic phase
  
In 2025, the National Audit Office completed the implementation of its 2021–2025 strategy and launched a new strategic phase running until 2030. It is focused on greater public sector resilience, higher-quality government decisions, more sustainable public finances, and greater value created by the state for the people.
  
“The National Audit Office’s goal is not merely to identify problems. Our goal is to help the government make decisions that are implemented in a timely manner and have a real impact on people,” says Auditor General Segalovičienė.