The federal government’s financial management has come under intense scrutiny after audit reports for the audit year 2025-26, covering accounts for FY2024-25, revealed widespread budgetary irregularities, weak internal controls, unapproved spending worth trillions of rupees, and cases of embezzlement of public funds.
The findings, highlighted in recent audit reports, raise serious questions about fiscal discipline, transparency, and compliance with constitutional requirements governing public expenditure.
Rs3.1 Trillion in Supplementary Grants Remained Unapproved
One of the most significant findings concerns supplementary grants obtained by the federal government during the fiscal year.
According to the audit report, the government secured supplementary grants totaling Rs3.454 trillion. However, 92 percent of these grants, amounting to Rs3.177 trillion, were not approved by parliament.
The Auditor General questioned whether the government complied with constitutional and parliamentary requirements that mandate legislative oversight of public spending. The report noted that such large-scale expenditure without parliamentary approval undermines accountability and weakens financial governance.
Excess Spending on Loan Repayments
The audit report also highlighted concerns regarding debt management and budget planning.
According to the findings, supplementary grants worth Rs1.833 trillion were obtained for the repayment of loan principal without a proper assessment of actual requirements. This resulted in excess expenditure and raised concerns about the accuracy of financial forecasting.
In addition, government spending exceeded the final grant authorized by parliament by Rs187 billion, further highlighting weaknesses in expenditure controls and budget management.
Questions Raised Over Budget Planning Process
Auditors also pointed to serious flaws in the budgeting process.
Federal entities requested budget allocations totaling Rs3.809 trillion without conducting proper assessments of their actual financial requirements. The report stated that such practices cast doubt on the credibility and effectiveness of the government’s budget preparation process.
Despite seeking massive financial allocations, 115 cost centers failed to utilize Rs87 billion that had been allocated to them. As a result, the funds lapsed at the end of the fiscal year.
Furthermore, supplementary grants worth Rs41 billion also remained unused, raising additional concerns about planning inefficiencies and resource management.
Constitutional Violations Identified
The audit findings also highlighted several instances of non-compliance with constitutional provisions.
According to the report, Rs7 billion was transferred from the Federal Consolidated Fund to the Public Account in violation of Article 78 of the Constitution.
The Auditor General also noted that Rs24 billion in unclaimed deposits from dormant or dead accounts was not transferred to the government account as required.
These irregularities have raised concerns about adherence to constitutional safeguards designed to ensure transparency and proper management of public finances.
Weak Accounting and Financial Reporting Systems
The report identified major shortcomings in accounting and financial reporting practices across federal institutions.
Auditors found that debt and losses reports were not prepared in several cases. They also observed the absence of fixed asset registers and liabilities records in various government entities.
In addition, missing General Provident Fund (GP Fund) subscriptions in individual GP Fund accounts were highlighted as another serious administrative deficiency.
The Auditor General warned that incomplete financial records weaken transparency and make it difficult to accurately assess the government’s financial position.
Lack of Internal Audit Mechanisms
A major concern raised in the report relates to the absence of effective internal oversight mechanisms.
According to the audit findings, most federal entities either do not have functioning internal audit units or have failed to appoint Chief Internal Auditors.
The Auditor General concluded that the lack of internal audits contributed significantly to internal control failures, financial irregularities, and losses of public funds.
Experts have long argued that strong internal audit systems serve as a first line of defense against fraud, waste, and financial mismanagement in public institutions.
Cases of Embezzlement and Misappropriation Detected
The audit report also uncovered cases involving alleged embezzlement and misuse of public money.
Auditors identified two cases involving embezzlement, misappropriation of funds, and fictitious payments.
In addition, the report highlighted 82 cases where recoveries were recommended due to financial irregularities. Another 78 cases reflected weak internal controls and deficiencies in governance practices.
The findings suggest that financial oversight mechanisms remain inadequate in several government departments and agencies.
Auditor General Calls for Investigations
Expressing concern over the seriousness of the findings, the Auditor General recommended that cases involving significant embezzlement and financial misconduct be referred to relevant investigation agencies.
The recommendation aims to ensure accountability and determine whether criminal action is warranted in cases involving misuse of public resources.
Government officials have yet to publicly respond in detail to the latest audit observations.
Debate Over Fiscal Discipline Expected
The audit findings are expected to spark renewed debate in parliament and among policy experts regarding fiscal discipline, public sector accountability, and transparency in government spending.
Financial experts argue that parliamentary oversight plays a critical role in ensuring that taxpayer funds are spent efficiently and according to approved budgets.
The revelations are also likely to intensify calls for reforms in budget planning, internal auditing, financial reporting, and public sector governance to prevent similar irregularities in future fiscal years.
As lawmakers review the findings, attention will focus on whether corrective measures are implemented and whether accountability actions are taken against those responsible for financial mismanagement.