Analytics, Financial Services, Legislation, Lithuania

In 2014, the NAO completed 33 financial (regularity) audits, 20 performance audits, and 8 audits of the EU financial assistance funds, audit procedures were performed in all 60 municipalities. In response to public sector risks, five limited scope audits were promptly carried out. A number of these risks were addressed during public audits as additional issues.

More than 800 recommendations for proper management of public property and funds were issued during financial audits. "Although it did happen that we had to provide qualified or adverse opinions, or even a disclaimer of opinion, on the performance of public sector institutions, most of the opinions last year were unqualified. This shows that in many cases no material financial irregularities or violations of the accounting system and law were identified. Compared to the previous year, the number of procurement- related irregularities also went down, though public institutions still have not managed to properly solve the procurement puzzle," said Auditor General Giedre Svediene.

Before the completion of the financial audits, 640 recommendations were issued to the audited entities, of which 275 (43%) were fully or partially implemented during the audits. Following auditors' recommendations, almost all public property (90%) was restored, with a value of LTL 51.5 million (EUR 14.9 million), and the amount of funds returned to the state budget totals over LTL 3 million (EUR 870,000), which is almost half of the recommended amount.

Another area, which showed improved indicators in 2014, was the management of public property. There were less breaches of legislation in leasing public property, although a number of issues related to the rent of residential premises and public property which is leased without public tender still have to be addressed. In some cases, local authorities are still having difficulties in planning their funds and assets, keeping accounts in accordance with the law, decreasing their debt, and implementing investment projects of community importance without any delay.

The results of four public audits and one limited scope audit were forwarded to law enforcement authorities and those of another six limited scope audits – to other public sector institutions.

Most of the recommendations issued in the performance audits last year were related to performance improvements. The rate of the implementation of performance audits recommendations in 2014 totalled 84%. “The factors contributing to achieving this level of implementation include a consistent follow-up system developed at the NAO, continual work with audited entities, the Government, and the Seimas Committee on Audit. We continue seeking to strengthen this area and looking for ways to encourage the implementation of critical recommendations that require legislative changes,” said Auditor General Mrs Svediene.

Last year, the European Court of Auditors and Supreme Audit Institutions of Norway and Finland carried out a peer review of the National Audit Office of Lithuania. The experts confirmed that the NAO’s audit practices are compliant with the ISSAIs, the NAO has effective quality control and reporting processes and a good audit documentation system, and completes audits swiftly and with good quality.