Cookies information
Close

YOUR PERSONAL DATA MANAGEMENT

In order to provide you the best experience on our website, we use cookies. Your consent can be revoked by changing browswer settings or deleting cookies.


About the area of activity

Public Audit - logo
In performing the tasks assigned to it the National Audit Office carries out public audit. Public audit is an independent and objective assessment carried out in the audited entities by the supreme audit institution.

The National Audit Office carries out three types of public audit:  

  • Financial audit – where the sets of data of annual (consolidated) financial statements and reports on the execution of the budget of the audited entity are assessed and an independent auditor’s opinion is issued.
  • Performance audit – where the activities of the audited entity are assessed in terms of economy, efficiency and effectiveness. 
  • Compliance audit – where compliance of the audited entity’s activities with legal acts and/or other requirements is assessed, and an independent auditor’s opinion may be issued.

In order to improve the performance of the audited entity(s) and increase the public benefit, proposals - recommendations are formulated on the basis of the results of public audits to resolve the problems identified during the audit. Public audit is an important factor in promoting the efficiency, accountability and effectiveness of public sector institutions and improving citizens’ lives.
   

DOCUMENTS PROVIDING GUIDANCE TO PUBLIC AUDITING

Professional standards and guidelines are essential to ensure the reliability, quality and professionalism of public sector audit. The National Audit Office Supreme Audit Institution carry out audits based on The INTOSAI Framework of Professional Pronouncements consisting of the INTOSAI Principles (INTOSAI-P), the International Standards of Supreme Audit Institutions (ISSAIs) and Guidelines (GUID).

 
AUDITOR’S RESPONSIBILITY IN PERFORMING FINANCIAL AUDIT

Illustration: Auditor’s responsibility for financial audits

While performing audit in accordance with International Standards on Auditing and International Standards of Supreme Audit Institutions, during the entire audit we make professional decisions and observe the principle of professional scepticism. In addition:

  • We identify and assess the risk of material misstatement in (consolidated) financial and budget execution reports due to fraud or error, design and conduct procedures as a response to such risks and collect sufficient appropriate audit evidence to support our opinion. The risk of material misstatement resulting from fraud is greater than the risk of material misstatement as a result of errors, as fraud may include deceit, counterfeiting, deliberate omission, misinterpretation or disregard of internal controls;
  • We assess the internal control of audited entities (group of entities) so that we can plan audit procedures that are appropriate in the circumstances and not so that we can express an opinion on the effectiveness of the internal control of the entity (group of entities);
  • We assess the adequacy of the accounting methods used and the validity of the accounting assessments and related management disclosures;
  • We assess the overall presentation, structure and content of (consolidated) financial and budget execution reports, including disclosures, and whether those reports contain underlying transactions and events in a manner consistent with the concept of fair presentation.

When conducting group audit, we also collect sufficient appropriate audit evidence of entities’ financial information or activities within the group to give an opinion on the group consolidated financial and budget execution reports. We are responsible for managing, supervising and implementing the group audit. Only we are responsible for our opinion on the audit.

We also inform those in charge of management about the scope and timing of the audit and significant audit findings, including important internal control deficiencies that we detect during the audit.

Among the matters about which we inform those in charge of management, we distinguish those that have been the most important in performing the current financial audit and which are considered to be the main elements of auditing. We describe such matters in the audit report if the law or legal act does not prevent such disclosure from the public, or if, in very rare circumstances, we find that the subject matter should not be presented, because it can reasonably be expected that the negative consequences of such presentation will outweigh the benefits to society.

PLANNING OF PUBLIC AUDIT

Illustration: Planning of public audit

In order to implement the tasks assigned to it, the National Audit Office determine each year the scope of activities in the Annual Activity Plan.

The Institution is independent in deciding which audits or assessments are carried out, and only the Seimas, by its resolution, may assign the National Audit Office to carry out public audit within the scope of its competence.

The institution’s Annual Activity Plan is drawn up in such a way to cover the most important areas of public sector activities and to carryout all public audits and assessments assigned to the National Audit Office by laws and other legal acts. The Annual Activity Plan is approved by the Auditor General after it has been presented to the Seimas Committee on Audit.

 
PUBLIC AUDIT RECOMMENDATIONS

Illustration: Public audit recommendations

In order to maximise the impact of public audits and positive developments in the public sector, public audit recommendations are provided during each audit. Taking into account the extent of changes for the implementation of goals of state policy, public governance and society, they are marked as high, medium and low importance. Recommendations are the possibility of the National Audit Office as the supreme audit institution to initiate processes of improvement of the activities of public sector institutions, increase the value of the public sector to society and benefit to the State.

For the implementation of the recommendations and for monitoring their implementation, each time a plan of implementation of recommendations is being prepared and coordinated with the audited entity, which is part of the public audit report. The plan specifies the changes sought by the implementation of the recommendations, their evaluation indicators and values, the deadlines for the implementation of the recommendations and the measures proposed by the audited entity implementing the recommendations, and other important information. The audited entity informs the National Audit Office of the results of the implementation of the recommendations within the deadlines agreed in the plan of implementation of recommendations.

In order to strengthen the impact of the audit on public finance management and control systems and on the improvement of public administration in audited areas, the National Audit Office carries out regular monitoring of the implementation of recommendations. The results of this monitoring: the status of implementation of the recommendations, the responsible entities and the changes that have taken place following the implementation of the recommendations can be followed in Lithuanian in continuously updated open data on the institution’s website. Twice a year, before the spring and autumn sessions of the Seimas of the Republic of Lithuania, the National Audit Office submits reports on the monitoring of the implementation of the recommendations to the Seimas Committee on Audit. The reports review the status of implementation of the audit recommendations of high importance for the past half-year, draw attention to the problems observed when implementing the recommendations, identify a list of laws necessary to implement the recommendations and achieve the impact of the audit. These reports are available on the website of the National Audit Office.

 
COOPERATION

Cooperation icon

When implementing its functions, the National Audit Office cooperates with many institutions, including the Office of the President, Seimas, Government, the Association of Municipal Controllers as well as directly with public sector institutions as present or former audited entities. Cooperation of the National Audit Office with the Seimas is very important in making a positive and effective impact of public audit on public finance and asset management and control system. When exercising parliamentary scrutiny of the executive, the Seimas uses the results of the public audit as one of the parts of the system of parliamentary scrutiny and seek that the entities in which the National Audit Office has carried out public audit implement public audit recommendations. The National Audit Office cooperates most intensively with the Seimas Committee on Audit, which regularly considers public audit reports. Depending on the area audited, audit reports (as well as other products produced in implementing other functions of the institution) are submitted for consideration to other committees and commissions of the Seimas.

To implement advanced methods of budgetary governance and internal control in the public sector close cooperation is maintained with the Ministry of Finance, the Association of Internal Auditors, the Association of Municipal Controllers, municipal control and audit services, the Lithuanian Chamber of Auditors in improving the audit and accounting legislation, public sector audit methodologies, and sharing experience.

The National Audit Office has concluded cooperation agreements with the Bank of Lithuania, the Chief Official Ethics Commission, the Prosecutor General’s Office, the Public Procurement Office, the Special Investigation Service, the Financial Crime Investigation Service, the State Tax Inspectorate, the Competition Council, the Ministry of Finance, the Ministry of Social Security and Labour, the Faculty of Economics and Business Administration of Vilnius University, Vytautas Magnus University, Mykolas Romeris University, Lithuanian Chamber of Auditors, the Association of Municipal Controllers, the Association of Internal Auditors.

The National Audit Office also co-operates with various institutions when submitting conclusions, comments and proposals concerning drafts of laws and other legal acts, considers and prepares conclusions regarding draft decisions of the Government.

The National Audit Office maintains collegiate relations with the academic community: representatives of the institution are regularly invited to give lectures to students of higher education institutions, students of general education schools come to get acquainted with the activities of the institution.

The Institution also invites the general public to cooperate; when annually drawing up a public audit programme and deciding which audit topics to choose, the National Audit Office addresses the public by proposing to contribute to the development of the public audit programme in a specially designed tool for this purpose on the website where it is possible to indicate noticeable public sector failures that the National Audit Office could assess during the audit. Proposals of citizens are evaluated and taken into account when choosing directions and topics of public audit.

The National Audit Office also liaise with its peers in foreign countries – other supreme audit institutions. One of the most important expressions of this cooperation is the cooperative international audit. National Audit Office is an active member of the International Organisation of Supreme Audit Institutions INTOSAI and the European Organisation of Supreme Audit Institutions EUROSAI, participates in the work of committees and working groups of these international organisations. Read more about this cooperation in the section Internationality.

Read more

News

  • The Ministry of Agriculture should analyse the reasons for not reaching one-fifth of the target values for the continuous performance indicators between 2020 and 2022, to eliminate them in the future.
  • The need and measures for reducing administrative burden are not precisely identified, as the Ministry does not collect and analyse the proposals made by agricultural associations and municipalities on this burden.
  • Agricultural sector actors should be more actively involved as social partners in the activities of the working groups set up to address policy making issues.

Picture for The National Audit Office makes recommendations to the Ministry of Agriculture for improvement

The National Audit Office carried out an audit on the "Management and Responsibilities System of the Ministry of Agriculture" to assess whether the Ministry's management and responsibilities system is capable of ensuring efficient operations and results. The results of the audit indicate that there are areas for improvement in the system that need to be addressed to ensure smooth and effective policy making.

The Ministry of Agriculture's management and responsibilities system needs to be improved - between 2020 and 2022, one-fifth of the planned indicators of the continuous performance have not been achieved, including: modernisation of the land drainage system, increase in certified organic farming, and the growth of agricultural co-operatives. The National Audit Office stresses that the Ministry should analyse the reasons for the non-achievement of the indicators and undertake improvements to the system.

"More active cooperation between the Ministry and the social partners, and their fuller involvement in the policy making working groups, would help to make decisions that are more in line with stakeholders' expectations. Such decisions would ensure that the administrative burden is reduced and that legislation would not have to be adjusted several times, introducing confusion and uncertainty, as is the case today," said Mindaugas Macijauskas, Auditor General.

Agricultural associations make proposals for possible reductions in administrative burden, but without systematising this information, it is difficult for the Ministry to select appropriate measures to address the problems. Moreover, the number of farmers self-declaring their agricultural land and crops is increasing by only 0.1-0.2 percentage points each year. Improving the declaration system could also reduce the administrative burden.

Agricultural natural risk management currently focuses on compensation mechanisms for damages and insurance premiums, but discourages independent preventive measures. Only a small proportion of crops and plants are insured against natural drought, one of the most serious risks: in 2022, only 0.74% of the area insured was covered by this type of insurance. In the absence of an effective insurance system, farmers are compensated by the State from the State budget or EU funds. In order to avoid potential losses for farmers and costs for the State budget, and in the context of the increasing frequency of extreme weather events, it is important to provide farmers with insurance advice.

The Ministry of Agriculture's strategic management changes and the achievement of the objectives of continuous performance through more targeted measures to reduce administrative burden, encourage farmers to manage their own risks due to weather events, create a more modern and user-friendly system for declaring agricultural land and crops, and involve social partners more closely in policy making, would result in a more efficient and effective Ministry.

  • There are 148.8 thousand registered agricultural holdings in Lithuania, covering almost 2.9 million hectares.
  • Together with forestry and fisheries, the agricultural sector accounted for 4% of gross domestic product in 2022.
  • The competitiveness of Lithuania's agriculture, food and fisheries sectors is below the EU average.

  • The priority areas for the National Audit Office's work this year are a safe environment and a healthy society, strategic management and return on public investment, innovation and technological progress.
  • The Institution plans to carry out 49 public audits and assessments in 2024, 34 of which will be completed this year.
  • The National Audit Office has the independence to decide which audits to carry out. The choice of audit areas is based on risk assessment in the public sector and suggestions from individuals and institutions. Only the Seimas have the exclusive right to assign the institution to carry out audits.

Picture for The National Audit Office's Activity Plan focuses on a healthy society, innovation and the country's preparedness to face external threatsThe National Audit Office presents its 2024 Activity Plan. The plan includes audits and assessments that will provide independent and evidence-based information on solutions for a safe environment and a healthy society, innovation and technological progress. It will also assess the country's readiness to cope with external threats and structural public sector reforms.
  
The plan envisages that the National Audit Office will carry out 49 public audits and assessments in 2024, 34 of which will be completed and presented to the public this year.
  
"We are independent in deciding which public audits and assessments to carry out in order to ensure that all the functions entrusted to the National Audit Office by the legislation are fulfilled and that the most risky areas of public sector activity are covered. Only the Seimas have the exclusive right to assign the National Audit Office to carry out audits. When choosing the audit areas, we analyse the indicators and risks in the public sector in Lithuania, and assess the proposals made by individuals and institutions. In drawing up this year's Activity Plan, we have focused on the priority areas of activity - a safe environment and a healthy society, strategic management and return on public investment, innovation and technological progress," says Auditor General Mindaugas Macijauskas.
  
Audits on strengthening state border security, data re-use, the regulatory impact assessment framework, the use of education appropriations, risk management for the achievement of the indicators of Lithuania‘s National Recovery and Resilience Plan and changes in strategic management and budgeting will be completed in 2024.
  
Amendments to the Law on Public Sector Accountability will allow earlier reporting on the financial performance of the public sector in the previous year, linking it to the country's progress and the Government's performance. For this reason, the National Audit Office will carry out audits and present its opinions in May this year on the State's consolidated set of financial statements and budget execution reports and on the financial statements and budget execution reports of the six funds (Compulsory Health Insurance, State Social Insurance, Reserve (Stabilisation), Pension Annuities, Guarantee, and Long-Term Employment Benefits Funds). The opinions on the national set of financial statements will be presented as before in October.
  
The Institution's Activity Plan includes audits assessing the management and control system created for the implementation of the Operational Programme for the European Union Funds Investments, the expenditure declared to the European Commission during the reporting period, and the annual accounts declared to the European Commission (summary information for the financial year).
  
In implementing the function of the budget policy control authority as set out in the Constitutional Law on the Implementation of the Fiscal Treaty, the National Audit Office implementing the fuction of the fiscal institution also draws up opinions and monitors compliance with the rules and the fulfilment of the tasks set out in this Law on an annual basis.
  
To ensure that the changes initiated by the audits take place on time, the National Audit Office will, as it does every year, assess whether the audit recommendations have been implemented on time and have had the intended impact, by publishing follow-up reports on the implementation of the recommendations of the public audits in the spring and autumn.

Picture for National Audit Office: it is necessary to enable patients to obtain the medicines they need in time    •  92% of decisions on the entry of medicines in the List
       of Reimbursable Medicinal Products were delayed.

  
    •  The administration of the Price List of Reimbursable
       Medicinal Products should be improved.
  
    •  There is a lack of more effective measures to promote the
       rational use of medicines and to improve the physical
       accessibility of medicines.

The reimbursement system of medicines and the conditions for patients to obtain the medicines they need in time should be improved, as well as measures to ensure the rational use of medicines. These results are shown by the audit "Availability of medicines to the population" conducted by the National Audit Office.

The reimbursement system of medicines and the conditions for patients to obtain the medicines they need in time should be improved, as well as measures to ensure the rational use of medicines. These results are shown by the audit "Availability of medicines to the population" conducted by the National Audit Office.

According to the auditors of the National Audit Office, 92% of decisions on the entry of a medicinal product in the List of Reimbursable Medicinal Products were delayed (the waiting time for a medicine varied from half to 2 years). The availability of medicines is also hampered by the fact that the reimbursement needs for 2020-2023 did not match the funding possibilities, with 76% less funding (lower than the estimated need) allocated for medicines on the Reserve List. The Compulsory Health Insurance Fund (CHIF) expenditure on medicines and medical devices has been increasing (EUR 450.3 million in 2021 and EUR 554.1 million in 2022), however, the lack of funds in 2022 led to 43% of the total decisions not to allocate funds for the treatment of 28 patients for very rare diseases.

The audit results show that more convenient information to the public on supply disruptions of medicinal products is planned from 2024 onwards and that the administration of the Price List of Reimbursable Medicinal Products needs to be improved. Between 2020 and 2023, the price lists contained around 30% of the groups of medicines with one supplier, other than the original supplier. When the supply of such a group is disrupted, it takes more time to find another medicine for patients. In 2023, changes in the requirements for the preparation of the price list have led to factors warning that the number of medicinal products in the price list may decrease in the future.

Information to the public on the rational use of medicines is provided in a fragmented way, which prevents people from easily finding the information they need on the use of medicines. No new pharmaceutical care service contributing to the rational use of medicines has been regulated between 2020 and 2022. The only pharmaceutical care service regulated in 2016 for patients taking inhaled medicines was provided by only 6 out of 1 322 pharmacies.

"Rational use of medicines would be facilitated by the repeat dispensing of medicines in pharmacies, the preparation of individual doses, the monitoring of the use of newly prescribed medicines, a chronic disease management service, and a comprehensive review of the use of medicines, medical devices and nutritional supplements," says the audit team leader Kristina Česaitienė.

Physical access to medicines is difficult for people living in areas of the country that are far from major cities, although measures are being taken to improve physical accessibility (over-the-counter medicines are available at petrol stations or supermarkets, medicines are distributed at the units of medical institutions, and social workers provide support). Remote selling accounts for 0.07% of prescription medicines and there is no availability to obtain prescription medicines with e-prescription in other EU countries.

The implementation of the recommendations made by the National Audit Office will increase the number of decisions whether to enter a medicinal product in the List of Reimbursable Medicinal Products taken without delay from 8% to 100% by 2026. Recommendations to the Ministry to establish monitoring indicators would lead to informed annual decisions on whether to change the pricing of reimbursable medicines.