Opinion of the European Central Bank of 29 September 2009 on the public audit of Lietuvos bankas (CON/2009/77)
Date: 2009-09-29
Institutions: European Central Bank
Subjects: Lithuania, audit, central bank, national law, supervisory body

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 29 September 2009 

on the public audit of Lietuvos bankas 

(CON/2009/77) 

Introduction and legal basis 

On 25 August 2009 the European Central Bank (ECB) received a request from the Audit Committee of 

the Seimas (Parliament) of Lithuania for an opinion on a draft law amending Article 14 of the Law on the 
State Audit Office1 (hereinafter the ‘draft law’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European Community and the third indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 

on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative 
provisions2,  as  the  draft  law  relates  to  Lietuvos  bankas.  In  accordance  with  the  first  sentence  of 

Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 

this opinion. 

1. 

Purpose of the draft law 

1.1  The main purpose of the draft law is to amend the Law on the State Audit Office in order to make 

the  legal  provisions  more  detailed  and  certain  and  to  explicitly  enable  the  State  Audit  Office  to 

conduct the public audit of Lietuvos bankas, i.e. to audit the performance of the activities provided 

for  in  the  Law  on  Lietuvos  bankas,  as  far  as  this  does  not  conflict  with  the  legal  acts  of  the 

European  Union  and  the  objectives  and  tasks  of  the  European  System  of  Central  Banks  (ESCB) 

established therein. 

1.2 

In  the  Law  on  the  State  Audit  Office  as  it  currently  stands,  Lietuvos  bankas  is  not  specifically 

mentioned as an institution that is subject to public audit. According to the consulting authority, the 

legal  basis  for  carrying  out  a  public  audit  of  Lietuvos  bankas  is  currently  derived  only  from  a 

systemic  analysis  of  the  legal  norms  governing  the  authority  of  the  State  Audit  Office,  the 

institutions  subject  to  public  audit  and  the  scope  of  public  audits.  In  this  regard,  the  proposed 

amendments to the Law on the State Audit Office will provide an explicit legal basis for the State 

Audit Office to perform such public audits of Lietuvos bankas. 

1  
2 

Valstybės žinios, 1995, No 51-1243. 
OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
                                                 
2. 

General observations 

2.1  The  last  time  the  State  Audit  Office  audited  Lietuvos  bankas  was  in  20043.  This  audit  mostly 

covered  the  period  from  2002  to  2003,  prior  to  Lithuania’s  entry  into  the  EU.  Since  1994  the 

financial  accounts  of  Lietuvos  bankas  have  been  audited  by  an  independent  external  auditor. 

Currently, the independent external auditor of Lietuvos bankas is UAB Ernst & Young Baltic. 

2.2  With regard to the authority to carry out state audits, while the ECB and several national central 

banks  (NCBs)  are  subject  to  other  statutory  audits  and  controls,  in  addition  to  audits  by 

independent external auditors (such as those appointed for Eurosystem NCBs under Article 27.1 of 

the Statute of the European System of Central Banks and of the European Central Bank (hereinafter 

the ‘Statute of the ESCB’)), the scope of such audits is subject to certain limits. In the Convergence 
Report of May 20084 the ECB noted that, where NCB operations are made subject to the control of 

a state audit office or similar body charged with controlling the use of public finances, the scope of 

the control should be clearly defined by the legal framework and should be without prejudice to the 

activities of the NCB’s independent external auditors, as laid down in Article 27.1 of the Statute of 

the ESCB. The state audit should be done on a non-political, independent and purely professional 

basis.  The  activities  of  the  state  auditors  should  in  any  event  not  jeopardise  the  NCBs’ 

independence. 

2.3  Moreover,  the  ECB  has  stressed  on  several  occasions  that,  in  compliance  with  the  principle  of 
financial independence of NCBs5, such statutory audits and controls may in any event not imply ex 

ante third party intervention in an NCB’s expenditure needed for its statutory tasks, including both 

ESCB  and  non-ESCB  related  tasks,  and  that  national  law  should  provide  specific  safeguards  to 

guarantee that state auditors do not interfere with the activities of the independent external auditors 
in respect of the review of ESCB-related accounts and ESCB-related tasks6 conferred by the Treaty 

and  the  Statute  of  the  ESCB.  In  addition,  the  ECB  reminds  the  consulting  authority  that  the 

‘primacy of Community law and rules adopted thereunder also implies that national laws on access 

of  third  parties  to  documents  [of  an  NCB]  may  not  lead  to  infringements  of  the  ESCB’s 
confidentiality regime’7. 

2.4  More  specifically  as  regards  Lithuania,  the  ECB  noted  in  the  Convergence  Report  of  May  2006 

that,  under  the  Law  on  the  State  Audit  Office,  this  Office  is  empowered  to  check  whether  the 

State’s property is being effectively managed. The ECB also stated that it ‘understands that: (i) the 

State Audit Office is also bound by Article 3(2) of the Law [on Lietuvos bankas], which concerns 

3  

4  
5  
6  
7  

Report on the public audit: the assessment of the activities of Lietuvos bankas, 30 December 2004. Available on the State 
Audit Office’s website at http://www.vkontrole.lt/auditas_ataskaita.php?730. 
Convergence Report, May 2008, p. 21. 
Opinion CON/2008/10. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
Opinions CON/2006/4, CON/2006/33 and CON/2006/44.  
Convergence Report, May 2008, p. 22. 

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the general prohibition on giving instructions to the NCB; (ii) the audit of the State Audit Office is 

limited  to  the  management,  usage  and  disposal  of  real  estate,  equipment  and  capital  of  Lietuvos 

bankas;  and  (iii)  the  State  Audit  Office  has  no  power  to  interfere  with  either  the  opinion  of  the 
external auditors or with Lietuvos bankas’s ESCB-related tasks’8. The ECB concluded that, in view 

of  these  safeguards,  the  powers  of  the  State  Audit  Office  are  not  incompatible  with  central  bank 

independence. 

The ECB notes that these remarks remain valid. 

3. 

Specific comments 

3.1 

In  view  of  the  safeguards  required  to  ensure  central  bank  independence  and  outlined  in  the 

Convergence Report of May 2006 (see paragraph 2.4 of this opinion), the current wording of the 

draft law should be clarified in order to ensure that such safeguards are in place. 

3.2 

In  the  same  vein,  the  ECB  understands  the  intention  of  the  consulting  authority  to  make  the 
appropriate legal provisions more detailed and certain9. However, the ECB notes that the wording 

of  the  draft  law  itself  does  not  entirely  fulfil  its  purposes.  For  reasons  of  legal  certainty,  the 

wording  of  the  draft  law  should  therefore  be  adjusted  in  order  to  guarantee  the  safeguards 

mentioned  above,  following,  for  example,  the  concept  of  the  ‘operational  efficiency  of  the 

management’ in describing the mandate of the State Audit Office, as expressed in Article 27.2 of 

the Statute of the ESCB. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 29 September 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

8  
9  

Convergence Report, May 2006, p. 74. 
Explanatory memorandum on the draft law, paragraphs 2 and 4. 

3