National Audit Office of the Republic of Lithuania

Press Release


12/09/2019

Joint audit of municipal real estate to be performed by the National Audit Office together with municipalities

National Audit Office – supreme audit institution – and Lithuanian municipal control and audit services begin to conduct joint audit of municipal real estate (RE). This is the first such project to be carried out in the country. Control and audit services of 58 municipalities are planning to be part of the joint audit. Today, the Agreement was signed with 48 municipalities, the others are going to sign it electronically. 

The aim of the joint audit is to establish whether RE in Lithuanian municipalities is managed in a targeted and complex way, whether it is used efficiently and in the best interests of the public. This audit will help to identify whether conditions are created in the municipalities for resolving the problems in RE management.

Municipal real estate accounts for the largest share of national RE - at around 63 %. The real estate is one of the means to perform municipal functions and, as such, should be managed rationally, to benefit the society and serve the public interest. Unfortunately, there is no precise information on all real estate owned by the municipalities. 

The previous audits performed by the National Audit Office have identified problems relating to municipal real estate. The audit “The Management of State Real Estate“, performed in 2018 showed that after the transfer of ownership of the State real estate to municipalities, part of this real estate is not used to perform municipal functions, but is sold, thus depriving the State budget of some potential revenue. In some cases, the real estate is transferred to beneficiaries who are not entitled to obtain the estate on the basis of the lending right.

“We are organising such a joint project for the first time, and the greater part of the control and audit services of the Lithuanian municipalities agreed to participate in it. The plans drawn up by them should be supported by their municipal councils and their control committees in each municipality. I therefore invite those who have not yet done so to approve, on the basis of the proposals of the controllers’ services, and to include this audit into the plans so that we can establish together a more detailed picture of the real estate currently present in municipalities,” says the Auditor General Arūnas Dulkys.

“In complying with the obligation set out in law, municipal controllers express their views on the real estate of municipalities and make recommendations for its more effective use. We believe that the joint systemic municipal RE audit performed jointly by the two independent external audit institutions will not only further reveal problems in the RE management, but, building on each other’s experience, will provide the basis for recommendations for more effective management of RE in municipalities,” says Gintaras Radavičius, President of the Association of controllers for local authorities.

The project for the audit of municipal real estate initiated by the supreme audit institution is planned to be completed in November 2020.

 

National Audit Office of the Republic of Lithuania
Pamėnkalnio str. 27, LT-01113 Vilnius
www.vkontrole.lt