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Thursday, 18.04.2024, 01:42
Lithuanian municipalities lack comprehensive approach to systemic issues
Auditors
found that the principles of planning and allocating municipal budget revenues
should be reviewed and the law regulating the methodology should be developed.
Although since 2015 the possibility of increasing municipal budget
revenues due to economic growth has been legalized and amendments were
developed for some part of methodology provisions, however the municipal
economic and financial as well as activity indicators are not evaluated and
have no impact on the increase or reduction of municipal budget revenues.
Municipal debt management was also improved. According to the data of municipal
statistical reports their debt in the end of 2014 amounted to 2 008 million LTL
(581.5 million Euros), but these data do not reflect the correct information,
because the mentioned reports did not show the financial lease obligations of
44.4 million LTL. Additional borrowing limits determined for the municipalities
can limit the implementation of necessary Investment projects, which are
important to local communities.
Municipalities still face difficulties in preparing the consolidated financial
reports, and external users can not use the information that is not correct;
existing data are not used by the municipalities in their decision making
concerning allocation of resources and their use in public services provision.
The public audit in municipalities revealed that the quality control of free
meals for children is insufficient, and that 4.5 million LTL (1.3 million
Euros) of revenues for free meals were used in violation of the Public
Procurement Law.
Municipalities are struggling to implement objectives raised for the civil
protection: in case of emergency situation only 51.5 % residents would be
warned with the measures available. Municipalities are not sufficiently
prepared to manage the imminent or occurring extreme situations, protect the
residents in case of danger.
Municipalities also lack a complex approach to the local road development,
investment planning and project selection, and the part of the funds for
Investments to the local roads are allocated without preparing Investment
projects. Accounting of the funds derived from the sale of the state land are
also handled improperly, therefore it is not always clear whether the
municipalities used the funds in accordance with the priorities established by
legislation.
The National Audit Office had remarks also about domestic transactions.
Municipal decisions to purchase services from the companies they control
without a competition have an impact on competitiveness and the rational use of
the public finances and in some of the municipalities it has become a means to
defer payment to controlled companies for a later date.
The Parliamentary Audit Committee, Rural Affairs Committee, Office of the
Government were informed about the problems found in the municipalities and
recommendations for addressing the systemic problems were submitted to the
Ministries of Finance, Internal Affairs and Transport.