2026-06-05
- 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