Frequently Asked Questions
What is the National Audit Office?
The National Audit Office is the supreme public audit institution, which supervises the lawfulness of the management and use of public funds and assets as well as the execution of the state budget. It is the only institution in the European Union that performs the functions of the three institutions at the same time: the Supreme Audit Institution (SAI), the Audit Authority (AA) for the European Union Investment and the Budget Policy Monitoring Institution (Independent Fiscal Institution (IFI)).
Who determines the powers of the National Audit Office?
The powers of National Audit Office are determined by the Constitution of the Republic of Lithuania and the Law on National Audit Office of the Republic of Lithuania.
What is the competence of the National Audit Office?
The tasks of the National Audit Office are as follows: supervising the lawfulness and efficiency of the management and use of state assets and the implementation of the State budget; promoting the positive and effective impact of public audit on the public financial management and control system and on public governance oriented towards results and societal needs; monitoring compliance with the rules and fulfilment of tasks laid down in the Constitutional Law for the Implementation of the Fiscal Treaty, ensuring transparency and accountability of public finances. In carrying out these tasks, the National Audit Office performs public audit, budget policy monitoring and other activities.
Each year the National Audit Office submits to the Seimas opinions and public audit reports on: the national set of financial statements; the set of the state consolidated accounts; the set of consolidated accounts of the Compulsory Health Insurance Fund; the set of consolidated accounts of the State Social Insurance Fund; the set of accounts of the Guarantee Fund; the set of accounts of the Reserve/Stabilisation Fund; the set of accounts of the Long-Term Employee Benefits Fund; the set of accounts of the Pension Annuity Fund. It also carries out an annual audit of the compliance of the management, use and disposal of state budget funds allocated by the Office of the Government to the public establishment Foundation for Disposal of Good Will Compensation for the Immovable Property of Jewish Religious Communities.
The National Audit Office also audits the use of state budget funds allocated to municipal budgets; carry out audits of the European Union financial assistance received in the Republic of Lithuania in accordance with the procedure laid down in international agreements and other legal acts of the Republic of Lithuania and provide the relevant institutions with documents relating to these audits; it may also conduct audit of the Bank of Lithuania, with the exception of the fulfilment of the tasks of the European System of Central Banks and the Eurosystem, without violating activities of independent external auditors of the Bank of Lithuania, it carries out an external review of the audits performed by the municipal control and audit services in accordance with the procedure laid down by the Auditor General.
Implementing the functions of the independent fiscal institution, the National Audit Office monitors compliance with the rules of fiscal discipline applicable to members of the Economic and Monetary Union in Lithuania and the fulfilment of the tasks set out in the legislation. The National Audit Office prepares, submits to the Seimas and makes public its opinions on the economic development scenario.
What legislation governs the work of the National Audit Office?
The work of the National Audit Office is governed by the Constitution of the Republic of Lithuania, Law on National Audit Office of the Republic of Lithuania, INTOSAI Professional Pronouncements (INTOSAI Principles, ISSAIs and Guidelines), International Agreements and other legal acts.
What principles guide the work of the National Audit Office?
The work of the National Audit Office is guided by the principles of independence, legality, transparency and professionalism.
Why independence of the National Audit Office is so important?
Independence is one of the most important principles underpinning activity of the National Audit Office. The supreme audit institution may exercise its functions objectively and effectively only if it is independent of the audited entities and protected from outside influence.
The National Audit Office is a supreme audit institution which is accountable only to the Seimas (Parliament). The state authorities are not in a position to indicate how it is to plan its activities, which audits or assessments to carry out. The institution is independent in setting its priorities and organising work, in applying methodology. Each year, the National Audit Office independently determines the planned works in its Annual Activity Plan. This plan is approved by the Auditor General every year after considering the recommendations made by the Seimas Committee on Audit.
Does the National Audit Office have clients?
Unlike the private sector audit, where the tasks of the auditor are laid down in the contract, the relationship between the National Audit Office and the audited entity does not have the status of a customer and a client. The National Audit Office must exercise its statutory obligations and powers freely and impartially. It is not responsible to the management of the audited entity for the scope or type of the audit carried out.
In implementing its functions, the National Audit Office cooperates with a number of institutions: Seimas, Ministry of Finance, Association of Municipal Controllers, Lithuanian Chamber of Auditors, Association of Internal Auditors, Prosecutor General’s Office, Public Procurement Service, Special Investigation Service, Financial Crime Investigation Service under the Ministry of the Interior, other institutions. The National Audit Office regularly cooperates in implementing advanced budget management and internal control methods in the public sector, improving audit and accounting legislation, public sector audit methodologies, sharing experience, drafting legislation, submits conclusions, comments and proposals on draft laws and other legal acts, examines and prepares conclusions on draft resolutions of the Government.
Does the National Audit Office audit the use of European Union funds in Lithuania?
Resolution No IX-1667 of the Seimas of 1 July 2003 entrusted the National Audit Office with the task of carrying out audits of the European Union assistance received in the Republic of Lithuania in accordance with the procedure laid down in the legal acts of the European Union. They are carried out by the European Union Investments Audit Department of the National Audit Office, which has been designated as an audit authority for the management and control system of European Union funds. In accordance with the audit strategy for the 2014-2020 Operational Programme for investments from the European Union funds, the audit authority carries out audits to assess the entirety of the procedures carried out by the European Union Investment Management and Control System, the adequacy of the functioning, the correctness of the data provided in the accounts (summary information for the financial year) and the eligibility of the expenditure declared to the European Commission during the reporting period.
What is internal audit?
Internal audit is part of the institution’s internal control system. Internal auditors carry out independent, objective verification, evaluation and advisory activities to ensure improvements in the performance of the institution. The internal audit function is to systematically and comprehensively assess and promote the effectiveness of the organisation’s risk management, control and oversight processes and to support the achievement of the organisation’s objectives.
Who works at the National Audit Office?
National Audit Office employs state officials (the Auditor General and his deputies), public auditors, other specialists and employees with whom employment contracts are concluded.
Who can apply to work at the National Audit Office?
Persons with a university degree (minimum bachelor’s degree) or an equivalent higher education qualification and at least one year’s work experience in the fields of finance, economics, law, information technology, audit or control may apply to the position of a public auditor. A person must have a citizenship of the Republic of Lithuania and be proficient in Lithuanian at advanced level.
When selecting public auditors, we also assess the applicant’s knowledge of international standards of supreme audit institutions.
Which legal acts are applicable in carrying out a public audit? Does public audit rely on internal control of public institutions?
Public audit (financial, performance and compliance) is carried out in accordance with international standards of supreme audit institutions (ISSAIs).
Internal control is assessed by the auditor in two stages: familiarising with the internal control environment and control procedures and determining whether the control procedures are effective throughout the audited period. When assessing internal control in a financial audit, the auditor assesses the effectiveness of internal control in accounting areas and decides on its reliability. Performance audit examines and evaluates internal control in terms of helping the entity to operate in an economic, efficient and effective manner.
The auditor may also use the results of the work of internal auditor. They may be used when it is considered that they can be useful for the achievement of the audit objectives and after having ascertained that the working methods used by internal auditor are adequate and that conclusions drawn are based on sufficient appropriate evidence.
What is the municipal control and audit service?
The municipal control and audit service is a legal entity established by a municipal council to carry out the control and audit functions of the municipality: to supervise if municipal property and state property managed by the right of trust is managed and used in a legal, effective, economical and efficient manner as well as the implementation of the municipal budget and the use of other monetary resources. The municipal control and audit service carries out external financial and performance audit in the municipal administration, municipal administration entities and enterprises managed by it.
The municipal control and audit service is guided by Law on Local Self-Government and other laws, international standards of supreme audit institutions, methodologies approved by the National Audit Office and other legal acts.
The municipal control and audit service is headed and operated under the responsibility of the municipal controller. The service is not subordinate to the National Audit Office, it is an independent audit institution at municipal level and is accountable to the municipal council.
The National Audit Office carries out an external review of the audits performed by the municipal control and audit services in accordance with the procedure laid down by the Auditor General.
Are those responsible for the irrational use of the budget being held accountable? What action is the National Audit Office taking against guilty persons in case of violations of the law? Are irrationally used state funds being recovered from guilty persons?
In the event of a possible breach of the legislation during the audit, the management of the audited entity is informed in the first place. It is particularly important to report promptly if, in the opinion of the auditor, breaches of legislation are likely to be intentional and significant. If the auditor suspects that members of the management are involved in established breaches of legislation, this must be notified in writing to the top-level management of the entity and, if necessary, to law enforcement authorities. If the audit finds facts, circumstances and/or violations that must be examined by the relevant law enforcement authorities and decides to transfer public audit documents to the relevant law enforcement authority within the scope of their competence, this is carried out in accordance with the procedure laid down by the Auditor General.
May a physical person provide a proposal to initiate a public audit of a certain public entity?
Each year, the National Audit Office approves its annual activity plan. The plan sets out what kind of public audit, where and when will be carried out. The National Audit Office is independent in deciding on the scope of the activities set out in the annual activity plan. You can read the annual activity plan here. The National Audit Office does not carry out public audits, assessments or other examinations based on the requests of persons that are not provided for in the plan. Only the Seimas of the Republic of Lithuania has the exclusive right to entrust the National Audit Office to conduct a public audit in the course of the year by adopting a resolution.
The institution’s annual activity plan is drawn up in such a way as to implement all the functions assigned to the National Audit Office by laws and other legal acts and to cover the most risky areas of public sector activities. Public audits are included in the public audit plan (programme) taking into account their importance for the achievement of the state’s strategic objectives, indicators, after assessing the extent of the risk to the size of the funds and assets managed, after hearing the problems observed by the Seimas Committees and other public sector institutions, non-governmental organisations, taking into account the relevance of the risk and the possibility to examine it by means of a professional assessment. The focus is on issues that affect a large part of society and relate to long-standing, systemic problems in the public sector. If resolved, the positive effects would be felt in a number of areas of the public sector, with changes affecting the entire population of the country.
Each year, the National Audit Office conducts a survey of institutions, companies and organisations, asking to provide proposals (raise problems) regarding the institution’s activity plan for the coming year.
You may submit proposals for a public audit programme and ask a question in the website section “Questions”.
How many Auditors General are there in Lithuania?
There is one Auditor General in Lithuania. The Auditor General is the head of the National Audit Office. He is appointed by the Seimas on the proposal of the President of the Republic of Lithuania for a term of five years. Mindaugas Macijauskas holds the position of Auditor General since 7 May 2020.
How much time does it take to perform an audit?
Public audits are carried out in accordance with the approved annual activity plan and last from 3 months to 1.5 years. The duration of each audit depends on the scope and complexity of issues examined, number of auditors and other aspects.
What is the cost of an audit?
The cost of each audit varies depending on the number of staff involved in the audit, their remuneration, the duration of the audit, missions, the need for external expertise and other factors.
What is the impact of audit reports? Are actions taken if there is no change as a result of the audit?
As a supreme audit institution, we are constantly striving for the greatest possible benefits for society and for the necessary changes implemented in a timely manner in the country. These are the main elements that guide us not only in selecting priority audit areas, planning public audits, but also in the monitoring the implementation of the recommendations of public audits.
The impact of public audit includes the direct and indirect benefits generated by public audits and the activities of the supreme audit institution. The direct impact is the result of changes in the area of public administration triggered by specific public audit recommendations. Indirect effects stem from audits as a whole and from the overall activities of the supreme audit institution. Public audits and other activities of the supreme audit institution contribute to building trust in the state and its institutions, ensuring the rule of law, preventing and reducing corruption, improving the quality of the management of public finances and public administration, improving knowledge and understanding. Changes in the audited area can also be stimulated by the public audit process, when audited entities start to solve long-standing problems in the field of public administration on their own initiative following the publication of a planned audit by the National Audit Office.
In order to solve the problems identified during the audit, to correct the weaknesses or improve the activities of the auditee (audited entity), to achieve changes in the audited area, we make recommendations to the auditee (proposals formulated on the basis of the results of the public audit, indicating what should be changed) and monitor the implementation of the recommendations. The aim of the monitoring is to strengthen the audit impact so that the implementation of the recommendations contributes to improving the public financial management and control system and public administration and other changes in the areas audited.
A recommendation is deemed to be implemented when the implementation of its measures by audited entity eliminates the problems identified during the audit and achieves the change planned in the recommendation implementation plan for the audited area. In order to encourage timely implementation of the recommendations, we do not extend or postpone the deadlines for the implementation of the recommendations and their measures agreed with the National Audit Office.
In order to inform the audited entities, other public sector entities and the public about the state of implementation of the recommendations and the changes that occurred after the implementation of the recommendations, the information on the monitoring of the recommendations is published in open data (in Lithuanian) on the website of the National Audit Office.
The National Audit Office reports twice a year on the implementation of the recommendations to the Seimas. In order to inform the public about the implementation of the recommendations, these reports are also published on the website of the National Audit Office.
Have a question? Ask it here.
Requests and complaints should be made in written form by email [email protected], or signed with secure electronic signature. They are examined in accordance with the procedure established in the Rules for the Service of Persons by National Audit Office of Lithuania.