NATIONAL AUDIT OFFICE OF LITHUANIA BRINGING BENEFITS 2018€¦ · “Rail Baltica” project. Together with Supreme Audit Institutions of Estonia and Latvia, we conduct the monitoring

2018ACTIVITY PLAN

NATIONAL AUDIT OFFICE OF LITHUANIA


BRINGING BENEFITS

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Fiscal Institution

Supreme Audit Institution

European Union InvestmentAudit Institution

Supreme Audit Institution

In our financial and compliance audits, we assess the regularity of the sets of annual consolidated financial and budget execution statements as well as the lawfulness of the management, use and disposal of funds and property of audited entities.

In performance audits, we assess the activities of audited entities related to public and internal administration from the perspective of economy, efficiency and effectiveness (see II. Public Audit Programme).

European Union Investment Audit Institution

Our audits assess the Management and Control System Created for the Implementation of Operational Programmes for European Union Funds Investments for 2014-2020 as well as eligibility of expenditure declared to the European Commission (see III. European Union Funds Investments Audits).

Fiscal Institution

We conduct the monitoring of adherence to the fiscal discipline rules, and fulfilment of the tasks set out in the Constitutional Law on the Implementation of the Fiscal Treaty (see IV. Opinions Issued Implementing Functions of Independent Fiscal Institution).

Activity plan of the National Audit Office is drawn up to ensure the implementation of all functions assigned to it by laws and other legal acts as well as to cover the riskiest public sector activity areas. Public audits are included in the programme taking into account their significance for the achievement of national strategic objectives and indicators, having assessed the scope of risk in the perspective of the managed funds and property, having heard the issues monitored by the Seimas Committees and other public sector authorities, non-governmental organisations, having taken into account the relevance of risk and a possibility to examine it with the help of professional judgement. The plan mostly focuses on issues that are relevant for the large part of the public and are related to the long-standing, systemic public sector problems. Once they have been solved, a positive impact would not be limited to one public sector area; changes would be felt by all inhabitants of the country.

National Audit Office of Lithuania is the supreme audit institution accountable to the Seimas, which carrying out the assigned tasks at the same time exercises the functions of the Supreme Audit Institution, the European Union Investment Audit Institution, and the Fiscal Institution.

ACTIVITY PLAN 2018 OF THE NATIONAL AUDIT OFFICE OF LITHUANIA

INTRODUCTION

II. Public Audit Programme

II.II Performance Audits

III. European Union Funds Investments Audits

IV. Opinions Issued Implementing Functions of Independent Fiscal Institution

V. Other Tasks

II.I Audits (Financial and Compliance)

I. Priority Areas of Activity

Introduction



BRINGING BENEFITS

Having assessed the knowledge and experience on Lithuanian public sector issues gained in the previous year, having analysed the directions for development and achieved indicators as well as recommendations made to Lithuania by international organisations, in 2018-2019 we chose five priority areas of activity which will be one of the focal points of our public audits, of the follow-up of audit recommendations and used in initiating public discussions and conferences. In collaboration with the Competition Council, Office of the Prosecutor General, Special Investigations Service, Financial Crime Investigation Service, Public Procurement Office, other non-governmental and public sector authorities as well as the academic community we monitor risks and aim to make changes in these areas of activity.

Priority areas of activity of the Supreme Audit Institution in 2018-2019

Budgetary Governance � Strategic planning and reporting� Public investments� Financial indicators approved by the Seimas� State budget execution

Education � Pre-school and general education� Vocational training� Higher education

Public Administration � Management of functions implemented by and services delivered by the State� Civil service system� Internal control of the public sector

Management of Public Land � Administration of public land� Construction supervision� Territory planning

Information Society Development � Information society� E-Government� Cyber and electronic security

We conduct our activities in a planned way, however, we understand that the public sector undergoes constant changes, which may result in risks of unlawful and inefficient management, use and disposal of the State property. We are prepared to review the Activity Plan of the National Audit Office and upon the assessment of the significance, scope of the problem as well as its impact on strategic national objectives and international commitments, to supplement or correct the approved tasks to achieve the maximum positive and effective impact on the State financial management and control system and public administration focused on results and public needs.

I. PRIORITY AREAS OF ACTIVITY

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V. Other Tasks



Introduction




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To early respond to the received signals, we would like to draw attention to other areas where significant changes are happening, and mismanagement of which may have negative consequences in the future:

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� “Rail Baltica” project. Together with Supreme Audit Institutions of Estonia and Latvia, we conduct the monitoring of the project implementation, i.e., we monitor the efficiency of the management and use of the State property. We analyse possibilities to carry out a joint international audit of “Rail Baltica” project.

� Ignalina Nuclear Power Plan Decommissioning process. We monitor the changes in the management of the power plant decommissioning process as well as the implementation of recommendations made in the audit performed by the European Court of Auditors in 2016 on decommissioning of nuclear plants in Europe.

� Personal data protection field. On 25 May 2018, EU General Data Protection Regulation comes into force, and it introduces further data protection obligations, therefore, to ensure personal data protection, preparedness for the EU data protection reform is necessary.

� Consolidation of State information resources infrastructure. The consolidation of this infrastructure had to be completed by 2017 in order to ensure better data security, the economy of public funds and to establish an activity model of cloud services delivery. We monitor the consolidation process because the works are put off until 2019, and the implementation of other information society development measures are dependent on them to avoid duplication of resources.

� Fight against corruption. Planning every audit following international auditing standards we assess the risk of fraud while evaluating the regularity of the management, use and disposal of the State funds and property we also assess the corruption prevention in this area. Indicators of the fight against corruption are not improving, which shows that the existing corruption prevention measures are not sufficient. Auditors do not have an obligation to identify cases of fraud and corruption, however, it is very important to ensure the management of fraud and corruption risk in the public sector, therefore, having identified the risk of fraud and corruption, we cooperate with authorities responsible for its prevention.

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V. Other Tasks



Introduction




BRINGING BENEFITS

Every year, we assess if annual sets of (consolidated) financial and budget execution statements are free from material misstatements and if funds and property are managed, used and disposed of lawfully. We conduct financial and compliance audits in entities on which annual sets of (consolidated) statements we must submit audit report and opinion following the legislation. Public audits assigned to us by the legislation are conducted every year.

Activity Plan of the National Audit Office sets outs two cycles of these public audits:� A cycle of audits started in 2017 and to be completed in 2018 – during which we evaluate the reporting period 2017;� A cycle of audits to be started in 2018 and to be completed in 2019 – during which we will evaluate the reporting period 2018.

II.I. AUDITS (FINANCIAL AND COMPLIANCE AUDITS)

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Subject matter

1. The national set of financial statements and public debt.

2. Sets of consolidated financial and budget execution statements of the State, and management, use and disposal of public funds and property.

3. Sets of consolidated financial and budget execution statements of the State Social Insurance Fund, and management, use and disposal of funds and property.

4. Sets of consolidated financial and budget execution statements of the Compulsory Health Insurance Fund, and management, use and disposal of funds and property.

5. Sets of financial and budget execution statements of the Guarantee Fund, and management, use and disposal of funds and property.

6. Sets of financial and budget execution statements of the Ignalina Nuclear Power Plan Decommissioning Fund, and management, use and disposal of funds and property.

7. Sets of financial and budget execution statements of the Reserve (Stabilisation) Fund, and management, use and disposal of funds and property.

8. Sets of financial and budget execution statements of the Long-Term Employee Benefits Fund, and management, use and disposal of funds and property.

9. The regularity of the disposal of State budget funds of the Public Establishment Foundation for Disposal of Goodwill Compensation for the Real Estate of Jewish Religious Communities.

II. PUBLIC AUDIT PROGRAMME





V. Other Tasks



Introduction




BRINGING BENEFITS

We conduct independent public sector activity analysis and assess if principles of economy, efficiency and effectiveness are upheld; we also aim to identify the performance improvement potential. Such audits may assess activities of one or several authorities, parts of activities of certain authority(ies) or implemented programmes. These audits allow to identify both the existing and probable issues, therefore, they are a very important prevention measure.

Public audits are planned to promote a positive and effective impact on public administration focused on results and public needs:

2. PERFORMANCE AUDITS

Audits planned to be started in 2018

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Subject matter Area

1. Granting of Construction Permits and Compliance of Construction Process with the Set Requirements Environment Protection

2. Smart Tax Administration System Information Resources

3. Cyber Crime

4. Social Support System Social Security and Labour

5. Prevention and Control of the Shadow in the Labour Market

6. Protection of Consumer Rights Justice





V. Other Tasks



Introduction




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Subject matter Area

1. Handling of Hazardous Waste Environment Protection

2. Territory Planning

3. Achievement of Objectives in Energy Consumption Efficiency Energy

4. Management of National Critical Information Resources Information Resources

5. Theatres and Concert Establishments Culture

6. Quality Assurance System of Personal Health Care Services Health Care

7. Preschool Education Education and Science

8. Legislative Process Justice

9. Management of Public Railway Infrastructure Transport and Communications

10. Management of State-Owned Real Estate State Property and Finance Management

11. Public Revenues and Their Management

12. Functioning of Public Procurement System National Economy and Market Control

13. Business Oversight Authorities Internal Affairs

14. Development of Public Sector Institutional Framework

15. Autonomous and Public (Delegated by the State to Municipalities) Functions Exercised by Municipalities Local Governance

Audits planned to be completed in 2018





V. Other Tasks



Introduction




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III. EUROPEAN UNION FUNDS INVESTMENTS AUDITSEvery year, we conduct audits carrying out functions of Audit Authority for European Union Funds (Cohesion Fund, European Regional Development Fund and European Social Fund) Investments for 2014-2020.

The Activity Plan sets out three audits that assess the Management and Control System Created for the Implementation of Operational Programme for European Union Funds Investments for 2014-2020; expenditure declared to the European Commission during the reporting period as well as annual accounts declared to the European Commission. Following the Operational Programme for 2014-2020 European Union Funds Investments, audit subject covers the following audited areas:� Promotion of research, experimental development and

innovation;

� Promotion of information society;

� Promotion of competitiveness of small and medium-sized enterprises;

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� Promotion of energy efficiency as well as production and use of renewable energy;

� Environment, sustainable use of natural resources and adaptation to climate change;

� Promotion of sustainable transport, backbone infrastructure;

� Promotion of quality employment and participation in the labour market;

� Promotion of social inclusion and combating poverty;

� Promotion of public education and human capacity;

� Smart public administration responding to society's needs;

� Technical assistance for the management of operational programme;

� Technical assistance for information about the operational programme and its evaluation.

Subject matter Assessed reporting period Conducted

1. Management and Control System Created for the Implementation of Operational Programme for European Union Funds Investments for 2014-2020, Expenditure Declared in the Accounts as well as Expenditure Declared to the European Commission During the Reporting Period and Annual Accounts Declared to the European Commission

July 2016 – June 2017 2016–2018

July 2017 – June 2018 2017–2019

July 2018 – June 2019 2018–2020





V. Other Tasks



Introduction




BRINGING BENEFITS

IV. OPINIONS ISSUED IMPLEMENTING FUNCTIONS OF INDEPENDENT FISCAL INSTITUTION Conducting functions of Budget Policy Monitoring Institution set out in the Constitutional Law on the Implementation of the Fiscal Treaty, every year we issue opinions and perform the monitoring of adherence to the rules and fulfilment of the tasks set in the above-mentioned law.

Opinion / Report

1. Uncertainty Assessment of Key Tax Projections

We will assess the uncertainty of the key tax (personal income tax, profit tax, value-added tax, and excise tax) projections in 2012-2017.

2. Endorsement of the Economic Development Scenario for 2018–2021

We will assess the Economic Development Scenario drawn up and published by the Ministry of Finance and will issue an opinion on its endorsement.

3. Assessment of the 2018 Stability Programme

We will assess the 2018 Stability Programme developed by the Government and will issue an assessment if forecasts of the medium-term fiscal and debt indicators follow the fiscal discipline rules set out in the Constitutional Law on the Implementation of the Fiscal Treaty.

4. Retrospective Assessment of Adherence to Fiscal Discipline Rules

We will assess the report on the structural general government sector balance indicator submitted by the Government as well as if in 2017 fiscal discipline rules set out in the Constitutional Law on the Implementation of the Fiscal Treaty were followed.

5. Endorsement of the Revised Economic Development Scenario

We will assess the economic development scenario drawn up/ revised and published by the Ministry of Finance as well as will issue an opinion on its endorsement.

6. Assessment of the Draft State Budget 2019

We will assess the compliance of the general government sector draft budgets with the requirements of fiscal discipline rules set out in the Constitutional Law on the Implementation of the Fiscal Treaty and will issue an opinion on it.

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V. Other Tasks



Introduction




BRINGING BENEFITS

V. OTHER TASKS

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Tasks

1. Maturity Assessment of Budgetary Governance

In accordance with maturity levels of performance management systems identified in international practice, we will assess their impact on the budgetary governance.

2. Monitoring of the Implementation of Public Audit Recommendations

To achieve a bigger audit impact, we monitor the implementation of audit recommendations in a timely manner and to the extent agreed with audited entities; we open the monitoring data to the public, and every year, in spring and autumn we submit reports to the Committee on Audit of the Seimas.

3. External auditor of the International Organisation of Supreme Audit Institutions (INTOSAI)

At the XXII Congress of INTOSAI, we were elected as external auditor of this organisation for the three-year budgetary term. We will assess the regularity of INTOSAI financial statements.

4. External Review of Audit Performed by Municipal Controllers (Municipal Control and Audit Services)

Every year, we conduct an external review of audits performed by municipal control and audit services to assess the audit quality control systems developed by the services, the quality of their audits as well as to improve their performance quality.





V. Other Tasks



Introduction




BRINGING BENEFITS

Documents

NATIONAL AUDIT OFFICE OF LITHUANIA BRINGING BENEFITS 2018€¦ · “Rail Baltica” project. Together with Supreme Audit Institutions of Estonia and Latvia, we conduct the monitoring