On Thursday, 12 June 2025, Auditor General Edgars Korčagins addressed the MPs of the Saeima by presenting his annual report on the achievements of the past period and the plans for the future.
12 June 2025
Dear Madam Speaker of the Saeima, Esteemed Members of Parliament,
The year 2024 was not only a year of significant audits, but also a time when significant changes were implemented in the legal framework of the work of the State Audit Office of Latvia and preparations were carried out for the structural changes and growth of the institution. Our drafted annual report for the year 2024 which I have submitted to the Saeima, offers an insight into the achievements and reflects the main highlights that influenced and shaped the work of the State Audit Office of Latvia in the past year as well as allows us to view the work of the state administration in a cross-section.
The current geopolitical, economic and demographic challenges require both strengthening the national defence capabilities by facilitating economic development and creating prerequisites for an increase in the birth rate and urge us to review the activities of state administration in Latvia and its compliance with modern realities. Only a professional, effective and motivated state administration will be able to face the challenges and strengthen the foundations of the future development of our country.
The work of the State Audit Office of Latvia allows us to both assess the possibilities for improving the work of certain institutions or areas, and to see the connections, risks and development opportunities in state administration as a whole. The audits conducted in 2024 reveal several such issues, to which I draw your attention today.
In financial audits, we did not express a single objection to the annual reports prepared by state institutions for the first time ever! This demonstrates the maturity of financial accounting of state administration, readiness to reduce the burden of internal procedures and the opportunity to increase the efficiency of state administration work clearly. Therefore, the centralization of support processes that have been initiated in state administration is certainly a justified step that will allow a number of procedures to be carried out more qualitatively and with fewer resources in the future.
At the same time, our audits show great opportunities for centralising state administration work in other areas as well. For example, by merging state-owned enterprises performing similar tasks or by reviewing the procedure for organising public procurement. Reservations about the unwillingness to make unpopular decisions to implement changes or about the specificity or sensitivity of the relevant areas do not stand up to criticism. Rather, they demonstrate a lack of understanding of the responsibility of a political or administrative leader.
The state administration has begun work on reducing bureaucracy. We have seen opportunities to do so in almost every audit. They exist both in internal processes of state administration, such as in the situation with the enforcement of administrative fines, and in communication with the public, such as in the situation with outdated and citizen-unfriendly procedures for granting technical aids. We expect that the responsible institutions will take measures to improve their work. However, it is crucial for one to realise that it is not the recommendations of the State Audit Office of Latvia or any special campaigns to combat bureaucracy but honest regular daily work aimed at improving the work of state administration that will ensure the revival of a culture of integrity and the elimination of unnecessary bureaucracy in the future.
The need to do things differently in various areas of state administration is also reinforced by the decreasing availability of human resources. It is clearly evidenced by the audits of the State Audit Office of Latvia on the availability of human resources in courts and on the training of teachers needed for schools. Releasing judges from technical and non-judicial work would help address the workload of judges. In its turn, streamlining the school network would free up resources to address the problem of teacher shortages both now and in the long term.
More efficient organisation of state administration work or more effective internal processes and services provided to the public, unfortunately, do not protect completely against dishonest and insufficiently responsible actions of state officials. Moreover, this often goes hand in hand with adverse financial consequences for the state and municipal budgets. It applies both to the spending of funds and to unused opportunities to supplement state revenues and to use already available funding for the common needs of the public in a timely manner. We can cite some vivid examples like the squandering state budget funds in the electric vehicle charging station network project of the Ministry of Agriculture, the use of special flights for the official trips of the Prime Minister, the Rail Baltica project overgrown with financially unrealistic ambitions, millions of lost revenues from uneconomical municipal forest management, and delays in investing the EU Emissions Trading System funding in climate change mitigation.
Any difficulties, challenges, or even crises also open up good opportunities. The maturity of our state administration in many areas creates a solid foundation for a qualitatively new leap in the development of simpler, cheaper and more socially friendly services and processes. To seize these opportunities, responsible officials will need the determination to review the usual and often outdated order of things and to make unpopular and courageous decisions not only from time to time, but every day. It will also be necessary to find an antidote to the dishonest actions of officials, which can destroy all well-intentioned work like a house of cards by creating a shadow of public distrust on the entire state administration.
It is essential for the State Audit Office of Latvia that the recommendations provided are not perceived only as a list of actions to be taken with deadlines and the process of monitoring their implementation only as a formal correspondence between the State Audit Office of Latvia and the audited entity. The goal of each action included in the recommendations is to encourage or ensure specific changes and improvements, thus promoting the well-being of the society. A positive and detectable impact is expected as a result of the implementation of the recommendations.
Therefore, the State Audit Office of Latvia sent a letter to the Saeima last year, in which we provided information on the recommendations provided in the audits and not yet implemented or other findings and insights that could have a positive impact on the state budget in a summarised form. The amount of these benefits ranges from a few tens of thousands to several million euros. We will continue this practice this year, and we will send updated information on the opportunities for savings and additional revenue generation in next year’s state budget already this month.
The recommendations provided by the State Audit Office of Latvia provide measurable monetary benefits. The financial return achieved as a result of the implementation of the recommendations provided proves that which we calculated and coordinated with the audited institutions. Last year, it was 1:4.75. Namely, for every euro spent to ensure the work of the State Audit Office of Latvia, our performance has generated a return of 4.75 euros. At the same time, many of the successfully implemented recommendations of the State Audit Office of Latvia benefit the population that are not measurable in money. For example, the opportunity to receive equal social support in certain life situations regardless of which local or regional government a person lives in.
Development and continuous improvement of work are the everyday life of the State Audit Office of Latvia, both in public sector auditing and in the daily operations of the institution. In 2024, we implemented several development initiatives successfully that will have a positive impact on the future work of the State Audit Office of Latvia.
First of all, this concerns the streamlining of financial audits. On 4 December 2024, the Saeima adopted a law on amendments to the State Audit Office Law. From 1 May 2025, the State Audit Office of Latvia will prepare a single audit report on the accuracy of an annual consolidated financial statement of the state instead of 27 separate opinions on the accuracy of the annual financial statements of ministries and central government institutions. It will allow us to further strengthen our performance audit capacity. For several years now, conducting performance audits has been a strategic development line of action of the State Audit Office of Latvia, and 80% of the completed performance and compliance audits were performance audits in 2024.
Last year, we developed a new approach to monitoring the implementation of recommendations, which involved assessing the results achieved by a recommendation rather than the process and activities. We introduced this approach to both MPs sitting on the Saeima Public Expenditure and Audit Committee, as well as representatives of state and municipal institutions and non-governmental organisations by receiving positive and encouraging feedback. I expect that the approach will both facilitate mutual cooperation between the State Audit Office of Latvia and audited entities and allow for more effective improvement of state administration.
We have also intensified cooperation with the Saeima and the non-governmental sector. We provided information and opinions on audit results and other crucial issues at 69 meetings of Saeima Committees and Subcommittees and cooperated with 27 socially active public organizations. Cooperation with the Saeima is important to provide you with up-to-date information on audit results for the supervision of state administration work, and cooperation with active public organisations provides the State Audit Office of Latvia with valuable information about the public needs. Moreover, the overall goal of supreme audit institutions is to make a difference to the lives of citizens.
We implemented artificial intelligence solutions successfully to improve our work and continued to invest significant resources in educating the public sector and partner organizations by ensuring the transfer of knowledge gained from audits, as well as continuing our participation in the school programme “Ready for Life” run by Foundation “Iespējamā misija” (Mission Possible). We visited 15 schools across Latvia by meeting more than 370 children and young people. In the autumn, game “Do You Know What State Money Is?” prepared by the State Audit Office of Latvia became available in digital format on the platform dziveigatavs.lv.
We are pleased that audited entities appreciate our work very much. In a survey of audited entities conducted at the end of last year, 94% of respondents rated the work of the State Audit Office of Latvia as “good” or “very good” overall.
The State Audit Office of Latvia continues to be an essential member of the international public sector auditing community and a support provider in the field of public sector audits, as well as promoting Latvia’s visibility at the international level. We continue to implement cooperation projects successfully in the EU Eastern Partnership countries such as Moldova, Ukraine, and Uzbekistan and as far away as The Gambia and Dominica. Since last year, we have also taken responsibility for auditing the annual reports of the NATO Multinational Division Headquarters North for the next three years and for the development of municipality auditing in Europe.
To assess and improve our work in sustainability constantly, we participate actively in the “Sustainability Index”. For the second year in a row, experts have assessed the performance of the State Audit Office of Latvia as compliant with the Gold category of the Sustainability Index.
The State Audit Office of Latvia continues to provide the public with a comprehensive assessment of the regularity and efficiency of the work of state administration through its work. The State Audit Office of Latvia supports state administration in its development and growth efforts and also holds high the obligation set out in international auditing standards for us, that is, to serve as a role model for other state institutions.
In concluding this speech, I would like to express my gratitude to the team of the State Audit Office of Latvia for their dedication and professional attitude. I would like to thank the Public Council of the State Audit Office of Latvia and non-governmental organizations, whose involvement strengthens public oversight and adds additional value to our work. I also highly appreciate the contribution of the audited entities and cooperation partners including the Saeima Public Expenditure and Audit Committee, state and municipal institutions, and law enforcement agencies, to the joint advancement towards more effective and responsible state governance.
About the State Audit Office of Latvia
The State Audit Office of the Republic of Latvia is an independent, collegial supreme audit institution. The purpose of its activity is to find out whether the actions with the financial means and property of a public entity are legal, correct, useful and in line with public interests, as well as to provide recommendations for the elimination of discovered irregularities. The State Audit Office conducts audits in accordance with International Standards of Supreme Audit Institutions of the International Organization of Supreme Audit Institutions INTOSAI (ISSAI), whose recognition in Latvia is determined by the Auditor General. Upon discovering deficiencies, the State Audit Office of Latvia provides recommendations for their elimination, but it informs law enforcement authorities about potential infringements of the law.
Additional information
Ms Gunta Krevica
Head of Communication Division
Ph. 23282332 | E-mail: Gunta.Krevica@lrvk.gov.lv