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On 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: State and municipally owned enterprises could bring greater benefits to the public, their functions should be clearer and their activities more transparentWhen participating in the governance of enterprises and public bodies, the state and municipalities do not always ensure that their activities are based on the principles of good governance, are transparent, and oriented towards achievement of objectives. There are still areas for improvement in defining the expediency of their establishment and fulfilling special obligations, setting objectives for enterprises, formation of collegial bodies, and publishing information about enterprises and public bodies, as shown by the audit “Governance of state and municipally owned enterprises and public bodies” carried out by the National Audit Office of Lithuania.

In 2019, 1,007 state and municipally owned enterprises, subsidiaries of all levels of state-owned enterprises and public bodies operated in Lithuania, and 74 institutions represented the state and municipalities in their management. These enterprises and public bodies in major sectors of the economy, contribute to economic growth, employment, and supplement the budget with dividends and contributions.

“The restructuring of state-owned enterprises was aimed at optimising their portfolio, however, this was not achieved as planned. There are still some state-owned enterprises whose legal form does not allow for ensuring smart governance. Moreover, the validity of the functions performed by state-owned enterprises and public bodies not objectively assessed. As a result, conditions for clarifying their competence and determining which public services should be provided only by state institutions are not created,” says Sandra Ragėnaitė, Chief Advisor of the Economy Audit Department of the National Audit Office of Lithuania.

According to the auditors, the formation, requirements and duties of collegial bodies of state and municipal public bodies not regulated by legal acts. The implementation of good governance principles would enable the formation of strong collegial bodies contributing to better results. Furthermore, the authorities representing the state and the municipality are not obliged to prepare performance expectations for public bodies. These expectations would make it possible to clearly identify the needs of the institutions representing the state and municipalities and would encourage achievement of better performance indicators.

The audit detected that 84% of the assessed municipally owned enterprises did not allocate or allocated less dividends or profits to the municipal budgets than they could in accordance with their current return on equity and good practices of state-owned enterprises. This was influenced by the fact that the policy on the allocation and payment of dividends by municipall owned enterprises is not regulated by legal acts, the municipality itself decides on the allocation of dividends. In 2019 alone, 43% of the assessed municipall owned enterprises carried forward EUR 17.5 million of profits available for distribution, whereas 60%–85% of which could have been paid into municipal budgets.

Upon implementation of the recommendations of this audit, only the state-owned enterprises, whose functions are important for the fulfilment of the state tasks, would operate and benefit the public, and the governance of public bodies, in the management of which the state or municipalities participate, would comply with the principles of good governance and be oriented towards more effective and transparent activities.

Picture for National Audit Office: Number of fire fighters on duty and provision of equipment do not meet minimum requirementsThe number of fire fighters on duty in shifts of fire fighting force is smaller than required, the provision of fire fighters with equipment and personal protective equipment does not meet the minimum requirements, the response time to reports does not always meet the standard requirements, and the management of the fire risk lacks focus on the results, as demonstrated by the audit “Performance of fire fighting forces in reducing the number of fires and fire damage” carried out by the National Audit Office of Lithuania (NAOL).

Over the past four years, there have been 41.6 thousand fires, killing 354 people, destroying and damaging more than 200 thousand sq. m of residential and non-residential area. Lithuania ranks 3rd place among 46 countries in the world according to the number of deaths per 100 thousand residents.

Lithuania employs 5.5 thousand fire fighters for fire fighting forces, almost half of which are municipal fire fighters, who are assigned only to carry out primary rescue operations. For this reason, they have lower requirements for preparation, health, provision of equipment and protective equipment. The audit carried out by the NAOL shows that some of these fire fighters actually perform not only primary rescue operations, however they are not properly equipped for the performance of these operations. Without specifying what constitutes the primary rescue operations, the volume of municipal fire fighters’ work is not clear and the proper preparation for the functions assigned to them is not ensured.

“The number and variety of fire brigades to be formed are not assessed at national level in order to ensure proper response and timely arrival at the site with sufficient forces of fire fighters and equipment. Regarding the cases analysed, 41% of the brigades on duty had fewer fire fighters than established by standards. Half of the municipal fire services that first arrived at the fire station had only one fire fighter”, says Rasa Rakauskienė, Chief Advisor of the Governance Audit Department.

Fire fighting forces lack equipment and tools for fire fighting and rescue: State fire fighting forces lack 38%, municipal fire forces lack 29% of the tools, for their provision with tools to meet at least the minimum set requirements. As many as 80% of the state fire fighting forces and 25% of the tankers of the municipal fire fighting forces had incomplete fire fighting and rescue equipment. Most of the tools are old: 42% of the state fire fighting forces’ tools are more than 15 years old, while 69% of the tools of municipalities – more than 20 years old.

The fire fighting forces must be notified of the fire incident within 2 minutes, however, on average, about 35% of the notifications sent by the Emergency Response Centre exceeds the maximum time limit twice. The time for the fire forces to leave must not exceed 1 minute and the time of arrival of the first forces at the site of the incident – 8 minutes in urban residential areas and 18 minutes in rural areas. However, in more than 37% of cases, fire fighting forces left the station by exceeding the maximum time limit. In three (out of 10) counties in urban residential areas and in one county in the rural settlement area, the target was not reached so that at least 80% of the fire fighting forces would arrive within the established maximum time limit. 

The results of the audit show that there is a need to improve fire prevention: enhance the coordinating role and define the functions of bodies involved in fire fighting. According to the auditors, it is necessary to strengthen responsibility for violations of fire safety requirements. Fines imposed (on average EUR 18.00) do not encourage the elimination of violations of fire safety requirements and do not prevent the recurrence of these violations.

The implementation of the recommendations of this audit would help to form fire fighting forces that are properly prepared for fire fighting and rescue operations and that the risk of fire is adequately managed.

Picture for National Audit Office: an emergency in the country only highlights the importance of timely implementation of audit recommendationsNational Audit Office of Lithuania by submitting a report on the implementation of recommendations to the Seimas Committee on Audit stressed the progress in implementing important recommendations. Implementation of more than one-third of the most important recommendations is still awaited, and some of them are postponed to the post-pandemic period.

Due to the emergency, the way in which public sector institutions operate has changed in the country. The audited entities reviewed the previously planned measures and deadlines for implementing the recommendations in the search for new organisational options. The National Audit Office observes that in 2020 the priorities in the field of public procurement were established, targeting them towards the Green Deal and innovations, a EUROMOD component of the model of social support, fiscal and social protection policy analysis for Lithuania was introduced, enabling to make evidence-based decisions and analyse the impact of the measures taken on social welfare, and emission permit rules were improved in order to reduce the negative impact on the environment.

“Monitoring the positive developments in certain areas of the public sector, we encourage other institutions to take actions more operatively and not to wait for the end of the pandemic. It is necessary to look for ways to implement the recommendations of public audits In the new directions of State governance, as the changes initiated by them would contribute to the management of the crisis caused by the coronavirus,” says Auditor General Mindaugas Macijauskas.

According to the auditors, continuity of Government’ actions in the areas of health care, programme budgeting, state investment, education, information resources management, public procurement and social support can contribute significantly to positive changes in the country and help overcome the crisis caused by the coronavirus (COVID-19).

The status of implementation of the recommendations of public audits is constantly monitored and a report on the monitoring of key recommendations is submitted to the Seimas Committee on Audit twice a year. Information about the implementation of all audit recommendations is published on the website of the National Audit Office, which is available and regularly updated at.