The Auditor General of Pakistan’s 2025–26 audit of federal civil accounts has exposed extensive financial mismanagement, highlighting billions of rupees in irregular expenditures, weak oversight, unrecovered receivables, and governance failures across numerous ministries, divisions, and autonomous organizations. The comprehensive 399-page report details significant issues within key federal bodies.
The Higher Education Commission tops the list with 31 audit paras, followed by the Trade Development Authority of Pakistan (18), Ministry of Food Security (17), Ministry of Science and Technology (16), National Heritage and Culture Division (12), Pakistan Agricultural Research Council (12), Pakistan Atomic Energy Commission (12), Ministry of National Health (11), and Education Division (10). Additional scrutiny was directed at the Cabinet Division (2 paras), Communications Division (5), Defence Division (5), Economic Affairs Division (2), Information Division (2), Inter-Provincial Coordination (8), Maritime Affairs (6), NAB (2), National School of Public Policy (1), Planning Ministry (1), and Religious Affairs (3).
In a significant development, the Cabinet Division was questioned over the utilization of Rs75 billion allocated for federal and provincial development projects under the Sustainable Development Goal Achievement Programme (SAP), commonly referred to as MPs’ schemes. Auditors noted the division’s failure to secure mandatory monthly progress reports and completion certificates from implementing agencies. Due to the absence of scheme-wise and region-wise data, auditors were unable to verify if fund allocations aligned with balanced regional development objectives. Despite repeated inquiries, the Cabinet Division did not provide any response. The report recommends creating a centralized digital tracking system for SAP fund allocations and expenditures.
The report also highlights that although the Toshakhana Act was enacted in 2024, the necessary rules and regulations for its enforcement remain unformulated. The Economic Affairs Division (EAD) faces one of the largest financial observations, with Rs1.927 trillion in principal, interest, and exchange-risk liabilities on foreign relent loans remaining outstanding and unrecovered from various state-owned entities as of June 30, 2025. No response was provided by management to these audit findings.
In the education sector, auditors revealed that 298 acres of the 1,709 acres allotted to Quaid-e-Azam University (QAU) by the Capital Development Authority have been illegally occupied by private settlers for nearly five decades. The report urges university officials to actively pursue eviction of the encroached land. Additionally, QAU failed to deposit Rs177 million in deducted income tax to the government treasury, explaining financial difficulties but later depositing Rs83 million. The audit also pointed out Rs356 million in scholarship funds retained and invested without utilization, despite the university’s claim that donor conditions governed their use. Another concern is Rs281 million invested by various QAU centers without an approved policy, with no response from the university. Separately, the Centre of Excellence in Molecular Biology, Lahore, invested Rs500 million instead of returning unspent funds to the government at fiscal year-end, with no explanation provided.
The Information Division was scrutinized over non-recovery of Rs87 million in outstanding fees and fines by Pemra. The Karachi Dock Labour Board (KDLB), under the Ministry of Maritime Affairs, faces major issues including non-recovery of Rs433 million in cess, recurring losses of Rs1.9 billion due to expenditures exceeding income, irregular payment of Rs343 million in bonuses, irregular selection of hospitals and laboratories, and questionable payments totaling Rs620 million.
The audit report also records Rs324 million in observations against the National Accountability Bureau (NAB), including Rs277 million spent from the regular budget on law officers and experts rather than the Recovery and Reward Fund, and non-deposit of Rs46 million in recoveries into the government treasury. NAB denied any wrongdoing.
The Ministry of National Food Security faces significant findings such as non-recovery of Rs1.9 billion in cotton standardization fees, wasteful spending of Rs193 million on aircraft spare parts, Rs355 million on non-transparent contractual recruitments, and unreconciled receipts amounting to Rs4.4 billion. The report notes that an aircraft of the Plant Protection Department crashed in 2020, but the inquiry remains incomplete after five years. Additionally, 15 deregistered aircraft have remained idle for years without auction, causing losses exceeding Rs42 million.
The Ministry of National Health Services was found to have procured vaccines worth Rs1.1 billion at inflated prices, violating a federal cabinet decision, along with irregular medicine procurement worth Rs508 million by the Federal Government Polyclinic Hospital and fraudulent payment of Rs28 million to consultants at Sheikh Zayed Medical Complex Lahore.
Several significant irregularities were observed in the National Heritage and Culture Division, including Rs681 million irregularly invested in treasury bills by the Quaid-i-Azam Mazar Management Board; Rs865 million invested by the National Academy of Performing Arts without Finance Ministry approval; non-recovery of Rs27 million from CDA for the Pakistan National Council of Arts building construction; and Rs145 million in unrecovered utility charges from Iqbal Academy Pakistan.
Within the Pakistan Atomic Energy Commission (PAEC), auditors pointed to unutilized funds of Rs2.8 billion from the Water Disposal Fund at the Chashma Nuclear Power Plant, spot purchases worth Rs61 million, and non-adjustment of Rs936 million paid in advance for undelivered items.
The Planning and Development Division received a single audit observation related to the Pakistan Bureau of Statistics’ failure to obtain audited statements and adjustment accounts involving Rs3.1 billion from district administrations. Meanwhile, the Ministry of Religious Affairs did not secure audited statements and adjustment accounts involving Rs45 billion, raising serious accountability concerns.
One of the largest audit findings involves the Ministry of Science and Technology, where the Pakistan Standards and Quality Control Authority (PSQCA) incurred a Rs59 billion loss due to failure to impose late-payment charges. Additionally, Rs1.7 billion surplus funds were not deposited into the Federal Consolidated Fund, Rs7.3 billion investments were not withdrawn from the National Bank of Pakistan despite maturity, and 45 unauthorized bank accounts holding around Rs3 billion outside the Federal Consolidated Fund were maintained.
The Trade Development Authority of Pakistan (TDAP) faces 18 audit observations, including irregular retention of Rs513 million income from Karachi Expo Centre in commercial banks, outstanding liabilities of Rs1.56 billion payable by the Export Development Fund, excess spending of Rs1.2 billion on international exhibitions, wasteful expenditure of 31,320 euros on Intertex Portugal 2025 despite lack of participation, and failure to recover possession of prime Expo Centre land allegedly encroached upon by PIA and Sindh Police.
The audit report presents a troubling picture of weak financial controls, poor record-keeping, delayed recoveries, unauthorized investments, procurement irregularities, and oversight failures across multiple federal entities. Several departments either failed to respond to audit queries or defended questionable practices, leaving major accountability issues unresolved.
