- 115 cost centers fail to utilize allocation of Rs 87 billion.
- The Auditor General points out two cases of embezzlement and embezzlement.
- Most federal entities do not have functioning internal audit units.
The federal government’s financial management has come under scrutiny after audit reports for the audit year 2025-26, covering the federal government’s accounts for the financial year 2024-25, revealed widespread budgetary irregularities, weak financial controls, unapproved expenditure worth billions of rupees and cases of misappropriation of public funds. News reported.
One of the most alarming results is that 92% of the additional subsidies, amounting to Rs 3,177 billion, were not approved by Parliament, although the government obtained total additional subsidies of Rs 3,454 billion during the year. The audit report calls into question the government’s compliance with constitutional and parliamentary requirements governing public spending.
Latest reports, shared with News by a parliamentary source, also pointed out that additional grants worth Rs 1.833 billion were obtained for repayment of loan principal without proper assessment of actual needs, resulting in excessive expenditure. In another case, expenditure beyond the final grant authorized by Parliament amounted to Rs 187 billion.
The reports further revealed that federal entities were seeking Rs 3,809 billion in budget allocations without proper needs assessment, raising concerns over the credibility of the budget process. Ironically, despite huge allocations, 115 cost centers failed to utilize the Rs 87 billion, which was ultimately wasted, while additional grants worth Rs 41 billion also remained unspent.
The auditor general also highlighted constitutional and financial management violations. These include the irregular transfer of 7 billion rupees from the Federal Consolidated Fund to the public account, in violation of Article 78 of the Constitution, as well as the failure to transfer 24 billion rupees of unclaimed deposits from the dead accounts to the government account.
The audit reports identify serious weaknesses in the government’s accounting and reporting systems, including failure to prepare debt and loss reports, failure to maintain records of fixed assets and liabilities, and absence of General Provident Fund (GP Fund) subscriptions in individual GP Fund accounts.
The Auditor General observed that most federal entities do not have functional internal audit units, while many organizations have not appointed heads of internal audit. The lack of effective internal control, the audit found, contributed to internal control failures, irregularities and losses of public funds.
The reports also revealed two cases of embezzlement, misappropriation of public funds and fictitious payments, in addition to 82 cases in which recoveries were flagged by auditors and 78 cases reflecting weak internal controls.
Expressing concern over the findings, the Auditor General recommended that cases involving serious misappropriation of public funds be referred to investigating agencies for appropriate action.
The audit’s findings are likely to spark a new debate on budgetary discipline, parliamentary oversight, transparency of public spending and the effectiveness of accountability mechanisms within the federal government.
