Federal audit reports for the year 2025-26, covering government accounts for FY2024-25, have exposed financial irregularities, including unapproved expenditure running into trillions of rupees, weak internal controls, and cases of embezzlement of public funds.
The most significant finding concerns supplementary grants.
Out of Rs3,454 billion in total supplementary grants obtained during the year, Rs3,177 billion, 92 percent were never approved by parliament, raising serious questions about compliance with constitutional and parliamentary requirements governing public expenditure.
Supplementary grants worth Rs1,833 billion were obtained for loan principal repayments without proper assessment of actual requirements, leading to excess expenditure. Spending beyond the final grant authorised by parliament reached Rs187 billion.
The reports further found that federal entities sought Rs3,809 billion in budgetary allocations without adequate needs assessment. Despite these large demands, 115 cost centres failed to utilise Rs87 billion, which subsequently lapsed, while supplementary grants worth Rs41 billion also went unspent.
The Auditor General identified constitutional violations in the management of public funds, including the irregular transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account, contravening Article 78 of the Constitution.
Additionally, Rs24 billion in unclaimed deposits from dormant accounts was not transferred to the government account as required.
Systemic weaknesses in government accounting were also documented. These include the failure to prepare debt and loss reports, the non-maintenance of fixed asset and liabilities registers, and missing General Provident Fund (GP Fund) subscriptions in individual accounts.
The audit found that most federal entities lack functional internal audit units and that Chief Internal Auditors have not been appointed in many organisations. The absence of internal oversight contributed to financial control failures and losses of public money.
Two cases of embezzlement, misappropriation, and fictitious payments were identified. Auditors also flagged 82 cases requiring recoveries and 78 cases reflecting weak internal controls.
The Auditor General has recommended that cases involving embezzlement be referred to relevant investigation agencies for further action.
