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Public Audit - logo
The National Audit Office carry out public audits in implementing the tasks entrusted to it.

Public audit is an independent and objective assessment carried out by the Supreme Audit Institution in audited entities.

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

  • Financial audit – where the National Audit Office assess the data in the audited entity's annual (consolidated) financial statements and budget execution reports and issues an independent auditor‘s opinion.
  • Performance audit – where the activities of the audited entity are assessed in terms of economy, efficiency and effectiveness.
  • Compliance audit – where it assesses the compliance of the audited entity's activities with legal and/or other requirements and may express an independent auditor's opinion.

In order to improve the performance of the audited entity(ies) and to increase the benefits to society, the results of the public audits are used to formulate proposals - recommendations to address problems identified during the audit. Public audits are an important factor in promoting the efficiency, accountability and effectiveness of public sector institutions and improving the lives of citizens.
   

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 carry out audits in accordance with the INTOSAI Framework of Professional Pronouncements consisting of the INTOSAI Principles (INTOSAI-P), the International Standards of Supreme Audit Institutions (ISSAIs) and Guidelines (GUID). Financial audits are also guided by the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants, which are incorporated into INTOSAI's Standards on Financial Auditing (ISSAIs 2000-2899).

In accordance with the requirements of the ISSAIs, ISAs (in the case of financial audits) and INTOSAI Guidelines, the National Audit Office has developed manuals on Financial, Performance, Compliance and Information Technology audits. The Information Technology Audit Manual also takes into account the Information Systems Audit Standards and Guidelines of the International Information Systems Audit and Control Association (ISACA), as well as other ISACA methodological material. The objective of the audit guidance documents prepared by the National Audit Office is to provide and explain the general and procedural requirements for audits in order to ensure the audit quality.

 
AUDITOR’S RESPONSIBILITY IN PERFORMING FINANCIAL AUDIT

Illustration: Auditor’s responsibility for financial audits

By conducting audits in accordance with International Standards on Auditing and International Standards of Supreme Audit Institutions, we use professional judgement and professional scepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the (consolidated) financial and budget implementation accounts, whether due to fraud or error, design and perform procedures in response to those risks, and obtain sufficient appropriate audit evidence to provide a basis for our opinion. Detection risk of a material misstatement due to fraud is greater than detection risk of a material misstatement due to error, as fraud may include deception, forgery, intentional omission, misinterpretation, or override of internal controls;
  • assess the internal control of the entities/group of entities involved in an audit to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's/group of entities' internal control;
  • assess the appropriateness of accounting policies used and the reasonableness of accounting estimates and related management disclosures;
  • assess the overall presentation, structure and content, including disclosures, of the (consolidated) financial statements and the budget implementation reports and whether they present the underlying transactions and events in a manner that is consistent with the concept of fair presentation.

As part of our group audit, we also obtain sufficient appropriate audit evidence about the financial information or activities of the entities within the group to enable us to express an opinion on the group's consolidated financial statements and budget implementation reports. We are responsible for directing, supervising and performing the group audit. We are solely responsible for expressing our opinion on the audit.

We communicate to those charged with governance, among other things, the scope and timing of the audit and significant audit observations, including significant deficiencies in internal control that we identify in the course of the audit.

Among the matters that we communicate to those charged with governance, we highlight those that were the most significant in the financial audit for the current period and are considered to be key audit matters. We describe such matters in the report if we are not prohibited by law or regulation from disclosing the matter publicly or if, in very limited circumstances, we determine that the matter should not be disclosed because the adverse consequences of disclosure might reasonably be expected to outweigh the benefits to the public.

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.

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News

  • Over almost 10 years, from 2015 to 2024, EUR 100 million has been spent to create a common public sector information technology (IT) infrastructure and ensure the centralised delivery of IT services.
  • In 2024, the State Agency for Digital Solutions, which is supposed to provide centralised IT services to the public sector, did not provide 22% of the assessed IT services included in the service catalogue.
  • The majority of public sector bodies did not make use of the centralised IT assurance and maintenance services offered (42% of the centrally provided IT services assessed were used by less than 15% of the selected bodies).
  • The centralisation of IT services has not been assessed in terms of savings for the state budget, even though the aim of the project was to optimise costs.

Picture for National Audit Office: centralisation of IT services in the public sector fell short of expectationsThe public audit Consolidation of the state's information resources infrastructure showed that the centralised provision of IT services needed by the public sector is inefficient. Not all IT services required by the public sector are provided centrally. The funding model for these services is not working and some institutions do not use centralised services at all. Finally, there is no assessment of whether the system, which over the last ten years has received EUR 100 million in investment from the state budget and EU funding, is saving the public money.

Centralisation of IT services in the public sector is an ambitious project, one of the objectives of which is to reduce the cost of acquiring and maintaining public sector IT services by their centralisation according to the needs of the institutions. However, the audit results show that there is no evidence to support the benefits of the centralisation of IT services.

"While we monitor the number of institutions using centralised IT services, this is not enough. There is a fundamental problem: there is no assessment of whether millions of euro of investment have created a system that will bring savings. Given that EU funding will end in 2026 and it is likely that the project will have to continue to be financed exclusively by the state budget, it is important for the responsible authorities to clearly assess now the current benefits, the real need for centralised IT services and the potential long-term impact of the investment. Reforms are not made just for the sake of reforms - we need to know the current and future benefits", says Auditor General Irena Segalovičienė.

The audit shows that the planned funding model for centralised IT services has not been implemented. The necessary appropriations should have been calculated on the basis of the planned volumes of services and the established fees, agreed with the service recipients and reallocated from their budgets to the IT service provider. However, this model was never implemented. Funding was planned without taking into account the actual volumes and prices of the services and the actual need for IT services remained uncalculated.

In 2024, the State Agency for Digital Solutions did not provide 4 of the 18 assessed IT services included in the service catalogue. These include maintenance of database management systems, printing services, maintenance of local area networks. The main reason for the non-provision of services is the lack of IT specialists in the Agency, which means that public sector bodies must continue to take care of IT services themselves, as they did before the consolidation process.

We assessed the extent to which the selected 52 institutions made use of centrally provided IT services. At the end of last year, less than 15% of these institutions were using 5 out of 12 centrally provided IT services. Service users often purchased IT services through public procurement, hired their own IT specialists or had existing contracts with other suppliers. The State Agency for Digital Solutions was not able to provide computer maintenance, software and workstation hardware services to all institutions, so the technical capacity created during the consolidation process was not fully exploited.

For the consolidation of the State's information resources infrastructure to deliver its intended benefits, the National Audit Office recommends that the Ministry of Economy and Innovation develop an efficient IT service model from planning and benefit assessment to financing. It should ensure that all the services included in the catalogue and needed by the public sector are provided. It is also important to ensure that institutions not only use these services, but also derive real benefits from them without incurring additional administrative burden.

Picture for Auditor General: accountability to citizens must be increasedFor two years now, the National Progress Report submitted to Seimas alongside the sets of financial accounts has not been prepared on time. This prevents the public auditors, the public and Members of Seimas from confirming the accuracy of the information contained in the report in a timely manner.

"Citizens pay taxes and therefore have the right to see, every year, how much progress is being made in the country with the public money spent on it. Every euro spent must bring benefits, which is why we believe it is necessary to monitor the country's progress every year. We would not be in favour of any possible considerations to reduce accountability. Transparency and accountability is a fundamental principle of the public sector," said Auditor General Irena Segalovičienė when presenting the findings of the audits of the 2024 State accounts to the Seimas Committee for the Future.

The National Progress Report prepared by the Government was due to be submitted to the National Audit Office for assessment by 20 April 2025, in accordance with the Law on Public Sector Accountability. However, on 25 April 2025, the institution only received the draft data.

Providing final data on progress in a timely manner would allow auditors to do their job. This means that Seimas and the public would receive more reliable data.

"It is particularly important that the National Progress Report is prepared at exactly the same time with the reports on state budget and the financial accounts. For the second year, the principle has been implemented in budget planning, following which, along with planned expenses, performance indicators are determined to be achieved with the allocated state funds. Therefore, the relationship between expenses and results should be maintained when accounting to the public,” assures the Auditor General.

To avoid recurrent delays in submission of the National Progress Report and to meet the statutory obligation to report to the public on the use of public funds and the results achieved in a timely manner, it is appropriate to streamline the processes of preparing and submitting reports.

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Picture for Following recommendations by the National Audit Office SODRA corrects its errorsThe National Audit Office found that the State Social Insurance Fund Board SODRA has not yet identified the full range of social benefits (periodic and partly lump-sum) allocated to persons but not paid to them for various reasons. The Fund's liabilities for such benefits are not reflected in the financial statements. This is one of the main reasons why the auditors issued a qualified opinion on the accounts of the Fund.

Implementing the recommendation of the National Audit Office, SODRA inventoried and recorded in its accounts a part of lump-sum benefits (EUR 1.1 million) allocated in the last four years and, after additionally informing the beneficiaries about the unpaid benefits, in 2024 paid them EUR 162.2 thousand (sickness, paternity, unemployment, occupational accident and occupational disease benefits).

"Following the implementation of the National Audit Office's recommendations, some people have already received their due lump sums which were on hold. After our observations, SODRA took action, contacted the recipients and asked for additional data to be able to pay out the allotted benefits," says Auditor General Irena Segalovičienė.

These audit results were highlighted by the representatives of the National Audit Office, when presenting the results of the audits on the 2024 set of accounts of the State Social Funds to the Seimas Committee on Audit.

The National Audit Office aims to make audits faster and more efficient, therefore it addressed SODRA to provide auditors with more convenient access to its information systems. These systems contain data on the activities of the State Social Insurance, Guarantee, Long-Term Employment Benefits and Pension Annuity Funds. Better access to information would not only help to speed up audits, but also to detect risks in good time and to assess the effectiveness of the management of the State's social liabilities. It would also reduce the bureaucratic burden and save time for SODRA staff responsible for data submission.

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Picture for Auditor General: civil resistance is a duty for all of us. Are we ready for it?

Preparing citizens for unarmed civil resistance lacks a leader to mobilise institutions at the national level. Knowledge of national defence needs to be strengthened among schoolchildren, and civil resistance training for adults should cover a wider area of the country and be adapted for people with disabilities. These are the results of the audit "Preparation of citizens of the Republic of Lithuania for civil resistance" conducted by the National Audit Office.

"Unarmed resistance is the responsibility of each of us. Certainly, we have a strong army, which is our pride. But there is another force that often goes unnoticed, which is just as important. The audit shows that we are still in the process of planning how citizens should resist. Everyone should receive the necessary training and skills in civil resistance. People with disabilities, the elderly and other vulnerable groups must also be given the opportunity to prepare themselves. In this regard, it is important to strengthen cooperation with non-governmental organisations," says Auditor General Irena Segalovičienė.

Currently, the Government, the National Security Commission and the Council for Civil Resistance are charged with leading and coordinating the training of citizens for civil resistance. Measures to this end are being implemented by 15 institutions in the fields of national defence, education, culture, social security and labour, and the interior. It has been found that there is no single coordinating entity to ensure the coherence of the activities of all the institutions and the integration of civil resistance into the overall defence at national level. An empowered leader could help to define common strategic objectives and directions for the institutions and mobilise all the resources at their disposal.

The audit identified that there are currently no plans in place to organise and implement unarmed resistance in the event of a crisis, mobilisation or war. The Ministry of National Defence has prepared a draft concept for unarmed civil resistance, which is still being coordinated. Once the concept is approved, the Lithuanian Rifle Union will have until the end of 2025 to develop an action plan. This plan would enable citizens to contribute to the defence of the state by non-military and non-violent means, facilitate the implementation of tasks entrusted to the armed forces, and contribute to the activities of the state and self-government institutions.

According to the auditors, it is necessary to strengthen the development of civic competence in the education system. From 2024, a course on civic and defence skills organised by the Lithuanian Riflemen's Union will be compulsory for all ninth graders. A renewed optional National Security and National Defence programme for pupils in grades 11-12 has been launched for the school year 2023-2024. However, according to audit data, less than 1% of pupils choose this programme.

"Higher education institutions have the autonomy to develop and run their own study programmes, but it is very worrying that civic education is not even included in the programmes. The aim of higher education is to develop a well-educated personality. Civic education would increase students' sense of patriotism and encourage them to participate in global defence. This is especially important for students of pedagogical studies, as they will be the ones to pass on the knowledge of civic education to their future students," emphasises the Auditor General.

The Department of Mobilisation and Civil Resistance has provided opportunities for adults to voluntarily improve their knowledge and skills in civil resistance. However, the auditors note that training is only provided in about half of the country's municipalities, which deprives some citizens of the opportunity to prepare themselves for civil resistance. There is also a need for better access to training for people with disabilities, the elderly and people with other special needs. At present, training is not adapted to them.

One of the priorities of the preparation for civil resistance is to strengthen cooperation with non-governmental organisations (NGOs). The potential of these organisations can be used in practice in times of crisis, mobilisation or war. Expanding the involvement of NGOs would require coordination at national level, with a clear definition of objectives, priorities and ways of participation.

Following the implementation of the recommendations made by the National Audit Office, proposals will be submitted to the Government by 2026 for a coordinating leader to bring together the functions of the institutions active in the field of civil resistance and to make the training more accessible to a wider range of groups of people and cover a larger area of the country. The mobilisation of volunteers and NGOs for meeting the basic needs of the population during crises, emergencies, mobilisation and war will be planned until 2027.

Photo credit: Lithuanian Riflemen's Union