Lithuanian municipalities fail to adopt ‘comprehensive approach to systemic issues’

Auditors found that the principles of planning and allocating municipal budget revenues should be reviewed and the law regulating the methodology should be developed. Although since 2015 the possibility of increasing municipal budget revenues due to economic growth has been legalized and amendments were developed for some part of methodology provisions, the municipal economic and financial as well as activity indicators are not evaluated and have no impact on the increase or reduction of municipal budget revenues.

Municipal debt management was improved. According to the data of municipal statistical reports, their debt in the end of 2014 amounted to EUR 581.5 million, but these data do not reflect the correct information, because the mentioned reports did not show the financial lease obligations of EUR 12.8 million. Additional borrowing limits determined for the municipalities can limit the implementation of necessary Investment projects, which are important to local communities.

Municipalities still face difficulties in preparing the consolidated financial reports; existing data are not used by the municipalities in their decision making concerning allocation of resources and their use in public services provision.

Municipalities are also struggling to implement objectives raised for the civil protection: in case of an emergency situation, only 51.5 percent of residents would be warned with the measures available. Municipalities are not sufficiently prepared to manage the imminent or occurring extreme situations, protect the residents in case of danger.

Municipalities also lack a complex approach to the local road development, investment planning and project selection, the National Audit Office said.