Extract from the Strategic Activity Plan for 2007-2009 of the National Audit Office of Lithuania

STRATEGIC GOAL OF THE INSTITUTION

To promote accountability in the public sector as well as management oriented towards results and public needs, and progress in financial management and control systems.

IMPLEMENTATION OF THE STRATEGIC GOAL

Due to various tasks raised for public audit, different public audit product, and the expected effect, strategic goal of the National Audit Office of Lithuania (NAOL) is divided into five smaller objectives:

1. To strengthen parliamentary control exercised by the Seimas in the area of public accounts and revenue;

2. To promote transparent and efficient management and use of the European Union financial assistance, and to protect financial interests of the European Union;

3. To promote introduction of the advanced financial management and control systems in the public sector;

4. To promote results-oriented management in public administration entities;

5. To promote advanced practice of the management and control of information technologies and information systems in the public sector.

1. To promote accountability in the public sector and parliamentary control exercised by the Seimas by presenting opinion on the State accounts and performing audit in the area of the State Budget and revenue

The National Audit Office of Lithuania has to provide an independent and reliable information on the management of the public sector finances to the Seimas.

The following opinions submitted by the NAOL to the Seimas are a tool of the efficient parliamentary control:

° 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.

In order to strengthen function of parliamentary control over Budget execution, the National Audit Office of Lithuania has performed a new audit function since 2003: State Budget revenue audit. Hereby we seek to facilitate the work of the Seimas: preparation of the draft State Budget, execution of the general continuous Budget execution control, as well as approving the State Budget execution account and other consolidated State accounts.

2. To promote transparent and efficient management of the use of the European Union financial assistance and to protect financial interest of the European Union

Particular public attention is given to the transparent allocation and efficient use of the European Union financial assistance. European Union's assistance improves the quality of life of the public, strengthens the development of various economic sectors and enhances institutional capacity.

Implementing the Seimas resolution the NAOL performs mandatory audits of the EU financial assistance of the financial period of 2000-2006 envisaged in the EU Regulations. The utmost attention is given to supervision, evaluation, development, and proper use of funds of the management and control system of the assistance. Our current audits conform to international auditing standards; the NAOL keeps on taking over the best practice of the European Union Member States, as well as follows special requirements raised to the European Union funds audit. High quality audit results promote economic and social development of Lithuania, reduce economic differences between Lithuania and other European Union Member States, as well as help to assimilate the allocated funds, supervise the use of assistance, and avoid sanctions on the improper use of the assistance.

3. To promote introduction of the advanced financial management and control systems in the public sector

Having evaluated peculiarities of drafting the State Budget for 2005, changes in Public Auditing Requirements, and financial audit results due to come in May this year, a decision was made on strategic areas of financial audit, i.e.:

° Evaluation of internal control, including financial management;

° Lawfulness of the use of the European Union assistance funds and their reflection in financial accounts;

° Evaluation of the planning of the Budget appropriations for 2007 in terms of regularity.

One of the ways to improve accounting, transparency, and accountability is to strengthen internal control. Our financial audit evaluates internal control procedures of audited entities in terms of sufficiency and effectiveness. Lawfulness and efficiency of the use of the State Budget appropriations allocated to public institution or body depends on internal control procedures: whether they allow tracing of errors and their timely correction.

Progress in the public sector is evidenced with introduction of the advanced financial management and control systems (it will be evaluated in a research in 2007 by comparing the situation in 2003 and 2006).

4. To promote results-oriented management in public administration entities

Programme budget has been executed in Lithuania since 2000; appropriations managers are encouraged to perform results-oriented activities. Strategic planning methodology as well as other legal acts related to results-oriented management were developed. Promotion of results-oriented management in the public sector is closely related to strengthening of internal control systems and more effective use of funds in the public sector.

Currently it is still difficult to implement results-oriented management in the public sector of Lithuania. Not all the institutions set programmes' aims which should reflect the intended impact on the public and goals which would show services provided by the institutions properly. Both system of evaluation criteria and the supporting management information system which enable to thoroughly evaluate activities of the public administration entities are not sufficiently developed. Responsibility of appropriations managers for the performance results is often insufficient or unreliable.

In 2001 the National Audit Office of Lithuania started to conduct performance audit the aim of which is to give recommendations to audited entities enabling the use of the State property to become economic, efficient, and effective. Therefore in the near future a lot of attention will be given to the development of results-oriented management in the public administration entities.

Seeking to achieve this strategic objective the NAOL will perform not only programme implementation audits, but also programming audits and will give special attention to logic structure of programmes operation as well as evaluation criteria system and organization of the monitoring system. Performance audit of the NAOL will focus on the following areas: monitoring of the Budget programme implementation, reporting to the public on the programme implementation results, as well as reliability of performance information on the achieved results provided in activity reports.

Other fundamental long-term performance audit priorities are the following:

° Evaluation of efficiency and effectiveness of the reforms underway;

° Systematic evaluation of the national economy's main development problems which cover several ministries or institutions and influence economic, social, cultural, and political system of the whole country;

° Evaluation of problems characteristic to one ministry or institution and influencing political, economic, social, and cultural decisions of the State;

° Evaluation of performance of individual institutions, bodies or organizations, and their functions;

° Economic, efficient, and effective use of the State Budget appropriations and investments.

5. To promote advanced practice of management and control of information technologies and information systems in the public sector

Information systems are increasingly applied in activities of public institutions and entities. They have already become an integral part of every institution and organization, and rather often their financial and economic success depends on these systems. Development of the reliable information system becomes one of strategic goals and parts of the strategic plan of every institution or organization.

In order to strengthen the efficient use of information systems of public institutions the NAOL enhanced substantially a new audit function - information systems audit in 2006.

In order to avoid problems of information systems management and security protection, general control methods of information systems were developed. Generally information systems audit is aimed at evaluating such control. Information systems audit is comprised of three following components:

° information systems general control audit;

° applications software audit;

° audit of information systems under development.

Since the National Audit Office of Lithuania became a certifying institution, the function of certification audit of the annual accounts of expenditure - including information systems audit - of the Special Accession Programme for Agriculture and Rural Development and Guarantee Section of the European Agricultural Guidance and Guarantee Fund became mandatory.

Recommendations of information systems audit aim to improve activities of public institutions in the area of information systems, to strengthen internal control - to ensure security of information assets, data integrity, as well as to seek organizational goals more efficiently and to use the resources more rationally.

Full text of the Strategic Activity Plan for 2007-2009 of the National Audit Office of Lithuania can be found in Lithuanian language. Press here