Rokiškis district municipality breached fiscal discipline rules last year

Rokiškis district municipality failed to comply with fiscal discipline rules in 2025 by exceeding the allowed budget deficit, according to a preliminary assessment by the State Audit Office of Lithuania (VK).

The risk was identified during an early evaluation in 2025, VK stated. The municipality attributed the overspending to increased costs for an investment project, which required additional borrowing. Under current regulations, the municipality must compensate for the €1.1 million deviation within two years. Its 2026 budget plan aims to address the shortfall this year.

VK noted that all submitted 2026 municipal budgets currently meet the requirements. However, if initial uncorrected data had been used, four municipalities would have been considered non-compliant, facing a total compensation of around €6.4 million. Without adjustments to 2026 budget plans, two municipalities would still fail to meet fiscal discipline standards.

Jurga Rukšėnaitė, head of the Fiscal Surveillance Centre, was quoted as saying: “The problem of inaccurate data submission is recurring. Errors in financial reporting can affect the assessment of fiscal discipline compliance, so it is crucial for municipalities to ensure the accuracy of the information provided.”

VK also highlighted that while the law requires evaluating the compliance of municipalities’ planned 2027–2028 budget indicators with fiscal discipline rules, there is currently insufficient data for a substantiated assessment.

In 2025, no municipality exceeded the legally established debt and guarantee limits. Economists confirmed that all municipalities adhered to fiscal discipline rules when preparing their 2026 budgets.

From 2026, updated fiscal discipline requirements are in effect in Lithuania, providing municipalities with more flexibility to finance investments and plan budgets. Key changes include a uniform budget balance rule for all municipalities, a broader revenue base for assessing debt and guarantee limits, and new flexibility conditions for projects funded by the national development bank.