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The federal government’s financial management has come under scrutiny after audit reports for the audit year 2025-26, covering federal government accounts for FY2024-25, identified widespread budgetary irregularities, weak financial controls, unapproved spending and cases involving alleged embezzlement of public funds, The News reported.
According to the reports, one of the major findings was that 92 percent of supplementary grants, amounting to Rs3,177 billion, remained unapproved by parliament. The government had obtained total supplementary grants of Rs3,454 billion during the year, raising questions over compliance with constitutional and parliamentary requirements for public expenditure.
The reports, shared with The News by a parliamentary source, also stated that supplementary grants worth Rs1,833 billion were obtained for repayment of loan principal without proper assessment of actual requirements, resulting in excess expenditure. In another case, spending exceeded the final grant authorised by parliament by Rs187 billion.
The audit reports further found that federal entities sought Rs3,809 billion in budgetary allocations without proper need assessment, raising concerns about the credibility of the budgeting process. Despite seeking large allocations, 115 cost centres failed to utilise Rs87 billion, which eventually lapsed, while supplementary grants worth Rs41 billion also remained unspent.
The Auditor General also pointed out alleged constitutional and financial management violations. These included the irregular transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account, reportedly in violation of Article 78 of the Constitution, and the failure to transfer Rs24 billion in unclaimed deposits from dead accounts to the government account.
The reports identified weaknesses in government accounting and reporting systems, including the non-preparation of debt and losses reports, failure to maintain fixed asset and liabilities registers and missing General Provident Fund subscriptions in individual GP Fund accounts.
According to the audit findings, most federal entities do not have functional internal audit units, while Chief Internal Auditors have not been appointed in several organisations. The Auditor General observed that the absence of effective internal oversight contributed to control failures, irregularities and losses of public money.
The reports also uncovered two cases involving alleged embezzlement, misappropriation of public money and fictitious payments. Auditors also pointed out 82 cases involving recoveries and 78 cases reflecting weak internal controls.
Expressing concern over the findings, the Auditor General recommended that cases involving serious embezzlement of public funds be referred to investigation agencies for appropriate action.
The audit findings are expected to renew debate over fiscal discipline, parliamentary oversight, transparency in public spending and the effectiveness of accountability mechanisms within the federal government.
The findings and allegations cited in the audit reports have not been independently verified.
This is a developing story.
