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08/04/2020   The National Audit Office of Lithuania has published its Annual Report for 2019

The National Audit Office of Lithuania (NAOL) has presented its Annual Report for 2019, which identifies the main tasks performed and key performance results achieved last year to the Seimas Committee on Audit. Lithuania is the only Member State of the European Union (EU) where in one rather than in separate institutions the functions of three independent institutions – supreme audit institution (SAI), EU investment Audit Institution and Fiscal Institution – are concentrated.

In 2019 the NAOL continued to perform systemic-horizontal audits. The audits revealed systemic problems in the State budget governance, education, health, social assistance and other areas. The auditors of the NAOL performed 24 public audits and other assessments, six opinions and reports on budget policy monitoring were issued.

23 per cent of the planned recommendations made by the NAOL were implemented

The Organisation for Economic Co-operation and Development (OECD) has recognised regular reports on the implementation of recommendations made by the NAOL to strengthen parliamentary oversight as best practice and recommends it to its other members. In 2019, 23 per cent of the planned recommendations made by the NAOL were implemented, 13 per cent of them were implemented at a time agreed with the audited entity. In response to the recommendations, 11 legislative amendments were adopted.

Almost a third of the NAOL recommendations speak of the need for strategic, complex changes that require time, however, it is observed that today the priority is still given to the implementation of local changes focused on a single area, delaying systemic changes and critical decisions.

In this context, the NAOL has sought to further enhance the impact of audit recommendations. Openness of the NAOL activities, dissemination of results and public confidence have also increased. The annual conference SIGNALS, initiated by the NAOL, attracted 500 participants last year and gained international authority.

It is necessary to ensure the functional and organisational autonomy of the NAOL

To enable the use of the latest technological data analysis tools in audit processes the NAOL must develop new competencies while its activity programme must be complemented by data economy audits. Unfortunately, from January 2019 the NAOL does not have the possibility to carry out a full-scale personnel policy as it may not apply the centralised civil servants selection procedure.. Such selection is currently organised and carried out by an executive body which is a public audit entity and the auditors cannot audit either themselves or the system of which they are a part. 

The current situation conflicts with the constitutional principle of responsible governance, has a direct negative impact on the development of the NAOL and poses a serious risk to operational stability. It is necessary to ensure the functional and organisational autonomy of the NAOL necessary for the objective fulfilment of the tasks entrusted to it and implementing the recommendations made to Lithuania in 2019 by the OECD and European Court of Auditors (ECA) and, in 2020by the European Commission. This requires a recast of the Law on National Audit Office, which eliminates conflicts of principles with the regulation of the civil service and eliminates legal gaps in the areas of autonomy and neutrality to influence the NAOL activity.

The quality management system of the NAOL is in compliance with the requirements of the ISO 9001 standard

At the end of 2019, 295 employees worked at the NAOL. Since 2015 the number decreased by 23 per cent (in 2015, it was 384). In 2019, EUR 9.2 million were allocated to the NAOL from the State budget. 86 per cent of this amount was allocated to salaries and social insurance, 1.2 per cent to business trips, 1.4 per cent to utilities, 0.2 per cent to transport maintenance, and 1.2 per cent to the development of employees’ competencies. The real estate expenditure last year amounted to EUR 323.8 thousand. Over the past five years, this expenditure decreased by 19 per cent (in 2015, it was EUR 400 thousand). Transport expenditure last year amounted to EUR 18.4 thousand (the year before – EUR 21 thousand). Over the past five years, this expenditure decreased by 72.5 per cent. (in 2015 – EUR 67 thousand).

Public audit process of the NAOL is recognised by foreign experts as meeting the international standards of supreme audit institutions. The OECD and the ECA have internationally recognised the best practices of the NAOL. The quality management system of the NAOL has been approved by external experts to meet the requirements of the ISO 9001. The NAOL was also elected as external audit institution of the global SAI organisation INTOSAI.

The NAOL becomes a centre of competence and a disseminator of good management practices, encouraging the entire public sector to improve, implement positive management changes and create a culture of quality planning and management, while the NAOL audit reports are used to make important decisions for the State.

 

Responsible for the information Communication Division
Last updated on 16 September 2020

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.