The federal government’s financial management has come under intense scrutiny following the release of audit reports for the year 2025-26, which cover the accounts of FY2024-25. These reports reveal extensive budgetary irregularities, weak financial controls, unauthorized expenditures amounting to trillions of rupees, and instances of embezzlement of public funds.
One of the most concerning discoveries is that 92% of supplementary grants, totaling Rs3,177 billion, were disbursed without parliamentary approval, despite the government securing total supplementary grants of Rs3,454 billion during the fiscal year. The audit raises serious questions about the government’s adherence to constitutional and parliamentary mandates regulating public expenditure.
Meanwhile, supplementary grants worth Rs1,833 billion were allocated for loan principal repayments without a proper assessment of actual financial requirements, leading to excessive spending. Additionally, expenditures exceeding the final parliamentary-approved grants reached Rs187 billion. The reports also indicate that federal entities requested Rs3,809 billion in budget allocations without adequate justification, casting doubt on the reliability of the budgeting process.
Ironically, despite these large demands, 115 cost centers failed to utilize Rs87 billion, which subsequently lapsed, while Rs41 billion in supplementary grants remained unspent. The Auditor General highlighted several violations of constitutional and financial management provisions, including the irregular transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account, contravening Article 78 of the Constitution, and the failure to transfer Rs24 billion in unclaimed deposits from dormant accounts to the government treasury.
The audit further exposed significant weaknesses in government accounting and reporting systems. These include the absence of debt and loss reports, lack of fixed asset and liabilities registers, and missing General Provident Fund (GP Fund) subscriptions in individual accounts. The Auditor General noted that most federal entities lack operational internal audit units, and many have not appointed Chief Internal Auditors. This deficiency in internal oversight has contributed to control failures, irregularities, and financial losses.
In a significant development, the reports uncovered two cases involving embezzlement, misappropriation of public funds, and fictitious payments. Additionally, auditors identified 82 cases requiring recoveries and 78 cases highlighting weak internal controls. Expressing grave concern, the Auditor General recommended that cases involving serious embezzlement be forwarded to investigative agencies for appropriate action.
These audit findings are expected to reignite discussions on fiscal discipline, parliamentary oversight, transparency in public spending, and the effectiveness of accountability mechanisms within the federal government.
