Independent fiscal institutions (IFIs) represent a major innovation in public financial management. They are an essential pillar of many countries’ fiscal setup.
The Lithuanian IFI is called the Budget Monitoring Department (BMD), and it is overseen by and located within the National Audit Office of Lithuania. It was established in 2015 as part of Lithuania’s commitment to sustainable fiscal policies under EU rules upon joining the European Monetary Union. At the request of the BMD, the OECD undertook a first review of the institution in 2019, providing options and recommendations in light of national developments and international experience. Those recommendations built on the strengths of the existing arrangements for the BMD and observed challenges.
In 2025, the Auditor General and the Head of the BMD requested a second review. The OECD review team conducted stakeholder interviews in June 2025. The review evaluates the BMD’s progress on recommendations from the 2019 OECD Review. It also identifies some of the new challenges the BMD faces and looks at ways it can better deliver its work, which has evolved since the 2019 OECD Review, particularly in the context of the new European Union economic governance framework that entered into force in 2024. This review takes place in a more challenging fiscal context than the first. The Lithuanian Government, as other European economies, faces several ongoing and emerging budgetary pressures, including an ageing population and rising defence spending.
The OECD has been bringing together IFIs through its Working Party of Parliamentary Budget Officials and Independent Fiscal Institutions (PBO Working Party) since 2009. The PBO Working Party seeks to identify and share good practices and to set standards for IFIs across Member countries. It developed the 2014 OECD Recommendation on Principles for Independent Fiscal Institutions, which includes a provision on the need for IFIs to undergo external evaluations. The logic behind this is simple – independence requires accountability. Just as IFIs help hold governments accountable, they have a special duty to be accountable as well. The review presented here is part of a series of IFI external evaluations.