Performance Budgeting and its Impact on Audit of

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• Performance Budgeting and its Impact on Audit of
• State Annual Accounts

• Neringa Cikanaviciute
• Principal Auditor
• National Audit Office of Lithuania
• 3-5 September 2008
• Druskininkai

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Survey

• Performance budgeting in Lithuania
• State Budget formation
• Annual audit of State accounts

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Development of performance budgeting

• Budget reform since 1998
• Programme budget in 1999
• Strategic planning methodology in 2000
• Internal audit in public institutions and
  authority given to external audit in 2000
• Public sector accounting reform in 2005

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Current situation

• Legal framework
• Fiscal policy in the Convergence programme
• Public sector balanced or surplus
• Rules of fiscal discipline
• Programme budget
• Assessment system of institution activity
• Appropriation managers and budgetary programmes

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Assessment system of institution activity
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Appropriation managers and budgetary programmes
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Recommendations for budget system

• NAOL performance audit Programme Budget System
• Development areas

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Plan of budget formation
Government priorities
Draft of the Law on Budget
Macroeconomic fiscal forecasts
Consideration by Government
National Fiscal Plan
Consideration by Seimas
Principal indicators for 3 years (approved by
Government)
Approval of the Law on Budget
Maximum appropriations
Drafts of strategic operating plans State
Budget programmes
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NAOL opinions on account/report

• Opinion on
• Account of the Execution of the State Budget
• Draft of the State Budget
• Report on Public Debt and Loans Given from Funds
  Borrowed on Behalf of the State and Given State
  Guarantees
• Report on the State-owned Property

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Recent developments (1)

• Audit of State Budget execution
• More attention to
• Assessment of internal control
• Measure of budget programmes
• Recommendations
• To approve standards of internal control and
  audit
• To link programme assessment criteria to the used
  appropriations
• Information about execution of programmes and
  their assessment criteria

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Execution of assessment criteria in 2006
Institution Result of assessment criteria () Result of assessment criteria () Result of assessment criteria () Used appropriations to achieve goals ()
Institution Efficiency Result Product Used appropriations to achieve goals ()
Ministries 114.4 132.3 154.2 78.2
Counties 104.9 112.1 143.9 99.2
Total 109.7 122.2 149.1 88.7
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Recent developments (2)

• Audit of the draft State Budget
• Attention to
• Number of appropriation managers and Budget
  programmes
• Assessment criteria of programmes
• Strategic plans of institutions
• Recommendation
• To improve Strategic planning methodology

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Weakness of strategic planning

• Examples in the opinion on the Draft State Budget
  2008

Institution Weakness of strategic planning and creation of programmes
Childrens Rights Ombudsman Institution No assessment criteria (efficiency, result, product) for the programme Protection of Children rights and Their Legal Interests
Ministry of Education and Science Assessed result criteria do not show whether the goal will be achieved in the programme Management of Education Quality
Lithuanian Geological Survey In the programme Geology and Harmonious Development efficiency criterion does not show benefit which must be derived, the result criteria do not allow to assess the result of the programme, in some cases the product criteria are identical with functions.
Vilnius County Governor's Administration Efficiency and product criteria do not allow to assess goals of the programme Preschool and General Education in Eastern Lithuania, products which must be developed, in some cases the result and product criteria for the same goal are identical but achievable rate are different.
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Thank you !?