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About the area of activity

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.


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).


Illustration: Auditor’s responsibility for financial audits

While performing audit in accordance with 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 statements 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 statements, including disclosures, and whether (consolidated) financial statements 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 statements. 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 the audit of the current financial statements 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.


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.


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 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.

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Picture for National Audit Office: Employment Service needs to achieve more effective labour market inclusionThe Employment Service would contribute more to employment growth if its lines of action were reviewed and updated, the planning and evaluation of activities were more coherent, and the consultants’ orientation towards results was higher. All this would make it possible to achieve better results in the provision of services to jobseekers and employers, as published in the National Audit Office audit report “Employment Service activities to increase employment”. 

“The audit showed that the Employment Service, despite its efforts to achieve its objectives, needs more change to justify the fundamental expectation of increasing employment. Currently, the Service is often linked to the registration of unemployed people for the payment of benefits and not to their employment. In both 2019 and 2020, the Service achieved less than half of the planned results", — says Eivida Šlamė, Principal Auditor-Audit Team Leader of the Performance Audit Department 4 of the National Audit Office. 

One of the factors that can help people find self-employment is the appropriate consultancy from the Employment Service. The audit shows that during the pandemic, 39.6 % of consultants did not devote enough time to such consultancy, while 59.3 % of unemployed people were not assessed for self-employment.

The share of persons receiving vocational counselling and career planning services is low and decreased by 4 times during the pandemic, reaching 0.4 % in the first half of 2021. When consulting on the acquisition or retraining of a profession, one in five career and recruitment consultants do not use the results of labour market monitoring. In the 1st half of 2021, 12.3 % of jobseekers were sent to acquire professions that are not on the list of professions in demand. The Service should better target individuals in acquiring professions and competences that are in demand on the labour market. 

Half of the employers say that the candidates proposed by the Service lack motivation to work. The auditors estimate that 6.9 % of the candidates proposed by the Service were recruited for vacant posts in the first half of 2021, thus filling 9.2 % of the vacancies. The results of activities of the Service would be beneficial to employers if the Service were able to identify and propose suitably qualified and motivated candidates to job vacancies.

The introduction of new working methods in the Employment Service was more intensive in 2021, however training, methodological support and information systems should be more responsive to the needs of consultants in the Service.

Better results could be achieved by providing consultants with relevant training and by making more use of the information system to explain customers’ needs and reduce the workload of consultants.

The implementation of the audit recommendations will contribute to the Service’s performance in reducing long-term unemployment: the share of re-registered unemployed will decrease, the satisfaction of jobseekers and employers with the services provided by the Employment Service will increase, more vacancies will be filled.

Picture for National Audit Office: The Centre of Registers should pay more attention to data security and availability when managing public information resourcesThe National Audit Office carried out an audit of the management of state information resources in the Centre of Registers, which revealed the opportunities for improvement of processes for development, supervision, service and maintenance of these resources. During the audit, it was analysed whether the processes for the management of state information resources comply with the requirements of legislation and international good practice recommendations. 

The audit found that the Centre of Registers does not always ensure the availability of managed state information resources. In 6 (out of 8) of critical public information resources the time of inactivity in some months in 2020 exceeded the limit of 8 hours allowed. 

The smooth use of state information resources may also be hampered by the unintended replacement of more than half (55 %) of staff performing important IT functions. If these employees were to leave the Centre of Registers or take long-term leave, urgent measures would have to be taken to avoid disrupting the operation of the systems. 

“The audit also found that the Centre of Registers did not follow some of the mandatory security requirements for information resources: for three years, almost half of all (11 out of 21) state information resources have not been subject to safety conformity assessments. Improvement of the management of state information resources managed by the Centre in accordance with the recommendations of IT good practice would ensure the availability of critical state information resources, sufficient high-speed and data security", — says Deputy Auditor General Živilė Kindurytė. 

The National Audit Office notes that the Centre of Registers takes measures to implement the State’s strategic expectations in the areas assigned to the entity. The Centre actually applies IT good practice recommendations in its management of IT processes and achieves its objectives to a large extent. In addition, it takes steps to bring IT processes to a higher level of capacity: improves IT processes and provides for measures for the implementation of recommendations. 

The Centre of Registers is the main manager of 25 critical state information resources. Among the information resources managed by the Centre are also such vital ones for the performance of state functions as the Electronic Information System for Health Services and Cooperation Infrastructure (E-Health), Real estate and legal entities registers, etc. These data are used by state institutions, municipalities, notaries, bailiffs, other legal and natural persons. Therefore, failures in these systems lead to disruptions in the provision of health services, the validation of transactions and the provision of other services. The Centre of Registers has to ensure that state information resources are managed in such a way that the data contained therein are reliable, secure and conveniently accessible to state and municipal institutions and bodies, businesses and the public. 

Following the audit, the National Audit Office issued recommendations on how to improve the management processes of state information resources. Proper implementation of the recommendations will contribute to the implementation of good practices in IT management, thus ensuring high availability of critical state information resources and data security.

Picture for Financial audit reports presented to the Seimas: the cash-based reporting on the implementation of the budgets is correct, but the data in the financial statements are not reliableThe National Audit Office presented in the Seimas auditor‘s reports on the national set of financial statements and financial and budget implementation reports of the state and five resource funds — Compulsory Health Insurance, State Social Insurance, Guarantee, Long-term Work Benefits and Reserve (Stabilisation) Funds for 2020. These auditor’s reports are produced annually by the National Audit Office as part of its constitutional obligation. As stated in the auditor‘s reports, the implementation of the budgets is reported properly, but data on the financial positions are not reliable.
Unqualified opinions were expressed on all sets of budget implementation reports. According to the auditors, the cash-based reporting for the implementation of the budgets has no significant weaknesses, which means that the use of the funds is correctly accounted for. A qualified and adverse auditor’s opinion is issued when material misstatements are identified, and they were identified in all sets of financial statements: the adverse opinions were issued on the sets of the national and the state consolidated financial statements, and qualified opinions were issued on the sets of financial statements of all resource funds. As reported by the auditors, data misstatements are due not only to ongoing errors, but also to the volume of atypical activities in the public sector related to the management of the consequences of the pandemic. 

“Better quality data on public finances and their opening make public sector work more efficient, increase government transparency and encourage citizens’ involvement in decision-making. Unfortunately, for the nine consecutive years, we have found material misstatements in the sets of the national and the state consolidated financial statements, and in 2020 we observed a worsening situation: the data does not present the true value of our state-owned assets, liabilities and income. For this reason, the data of the reports are not a reliable source of information when making governance decisions", - says the Auditor General Mindaugas Macijauskas.

The auditor’s reports on the above-mentioned financial and budget implementation reports are presented in the autumn, although the government has already reported on its performance in the spring. As part of the implementation of the recommendations issued by the National Audit Office, a new version of the Law on Public Sector Accountability was adopted in 2020, the provisions of which will oblige financial data linked to performance to be prepared and submitted to the Seimas much earlier — during the spring session. The new arrangement was due to enter into force from 2022, but preparations have taken time and its entry into force is proposed to be postponed by one year. 

In order to reduce the extent of misstatements detected in the accounts of public sector entities, we make recommendations to public sector entities each year after carrying out our audits and, having identified the most common causes of errors, we recommend that the Ministry of Finance take measures to eliminate them.