Opinions on public accounts
Financial audit
Performance audit
Revenue audit
Evaluation of information systems
European Union funds audit
Methodology of public audit



Opinions on public accounts

Seeking to promote accountability in the public sector, as well as management oriented towards results and public needs, and progress in finance management and control systems the NAOL submits the following annual opinions to the Parliament:
- opinion on the account of the execution of the State Budget,
- opinion on the report on public debt and loans given from funds borrowed on behalf of the State and given State guarantees;
- opinion on the report on the State-owned property,
- opinion on the draft State Budget.

Financial audit

Financial audits are planned on the basis of materiality and risk, and they are primarily a financial audit of the institutions financial statements. The audit examines whether financial statements are true and fair, and whether appropriations, laws, and other regulations have been complied with. The National Audit Office of Lithuania carries out financial audits of financial statements of about 100 appropriations managers which manage around 85 per cent of the total amount of the State Budget appropriations.

Financial audit evaluates:
- the next year's draft budget of the audited entity in terms of regularity. Results of evaluation of the draft budget are submitted to managers of audited entities before the submission of the draft budget to the Ministry of Finance;
- efficiency of internal control system of the audited entity. Results of evaluation of internal control together with recommendations on ways to increase the efficiency of internal control procedures are submitted to the audited entity;
- interim financial statements (for the first three quarters of the year). Results of such evaluation give an opportunity to managers of audited entities to correct the identified errors and present more accurate data in the annual financial statements;
- the use of property and other resources in terms of compliance with legal acts.

Financial audit in municipalities evaluates the use of the State Budget subsidies as well as other monetary funds of the State and the State property in terms of compliance with legal acts.

Performance audit

The National Audit Office of Lithuania focuses the content of reports towards material issues that will have impact on better delivery of services and good governance. The NAOL focuses on recommendations to a higher degree, which will create a solid base for the improvement of public governance.

Performance audit evaluates:
- performance economy. Economy is understood as minimising the costs of resources maintaining the fixed quality of a product and (or) services provided;
- performance efficiency. Efficiency is understood as the relationship between the output from the product and the resources used to produce it;
- performance effectiveness. Effectiveness is understood as the level of goals achieved, i.e., the relationship between the effects and the resources used to achieve the desired goals.

On an average the National Audit Office of Lithuania carries out about 40 performance audits per year.

Revenue audit

When performing the audit on the execution of the State Budget it is usual to pay a lot of attention to the audit on the budgetary expenditure. State activities are financed from the State revenue, therefore it is very important to pay adequate attention to revenue audit as well. In methodological point of view revenue audit has both financial and performance audit features; it employs their methods and tools. However, the object of examination of revenue audit is specific: it does not examine the expenditure, but evaluates tax administration systems and administration systems of other State revenue and the forecasting of the State revenue.

The main topics of revenue audit are the following: audits of collection of State revenue by tax administrators and other public institutions, financial audit of State revenue accounts prepared by the State Tax Inspectorate, the Customs Department, and the Ministry of Finance, as well as evaluation of tax arrears system and other systems for collection of debts to the State.

Evaluation of information systems

Currently the majority of administrative and financial functions are performed with the help of computerized information systems. They have already become an integral part of every institution and organization, and rather often their performance, financial and economic success depend on these systems. Auditors have to increasingly rely on computerized data and digital information received from information systems.

Existence of information systems does not directly influence objectives of traditional audit; however, it requires specific examinations, results of which may have an impact on planning and performing of the whole audit.

Evaluation of information systems is an audit function, the aim of which is to evaluate whether computerized systems of institutions and organizations protect their information assets, as well as ensure integrity of data and create preconditions for efficient and effective achievement of performance goals. This activity becomes an integral part of traditional financial or performance audit, during which digital information and computerized data are analysed.

European Union funds audit

The EU financial assistance audit unit was established in the NAOL in 2001. The first EU funds audits were performed in cooperation with the European Court of Auditors when we carried out audits of the EU assistance provided prior to the accession.

Competence and experience of the NAOL in this area was acknowledged in 2003 when the Parliament delegated to the NAOL the function of audit of the EU financial assistance granted to Lithuania for the financial period of 2000-2006. Audit results of the NAOL were used not only by Lithuanian public, but also by the European Commission.

According to the European Union regulations and international treaties, the aim of certification and winding-up audits of the EU financial assistance performed by the NAOL is to give an opinion on the following issues: the use of the EU funds in Lithuania, efficiency of the management and control systems of the EU funds, as well as whether reports submitted to the European Commission are true and fair, and economic transactions - regular and lawful.
For the new financial period of 2007-2013 of the EU budget we will focus more on value for money aspects of the EU funds spending including drawing up the EU Trend Report.

Methodology of public audit

Public audit is performed following Public Auditing Requirements, which in all material cases conform to International Auditing Standards. Public auditors may independently choose audit methods aiming for the best audit quality. Methodological basics of audit are laid down in both Financial Audit and Performance Audit Manuals. Taking into consideration changes in the environment, experience collected, and best practice, the Audit Manuals are being constantly developed.

The main objective of quality control arrangements is to ensure that audits are being carried out to the required standard. A robust quality control regime comprises two distinct elements: quality control procedures and quality assurance procedures. Quality control procedures are in-built within the audit process. Guidance on these aspects is contained in the Audit Manuals.