The federal government’s financial management has come under fresh scrutiny after audit reports for the 2025-26 audit year flagged widespread budget irregularities, weak financial controls, unapproved spending worth trillions of rupees and cases involving embezzlement of public funds.
Among the most significant findings, the Auditor General reported that supplementary grants amounting to Rs. 3.177 trillion — or 92 percent of the total Rs. 3.454 trillion obtained during FY25 — had not been approved by parliament, raising questions over compliance with constitutional and parliamentary requirements governing public expenditure.
The audit reports also found that supplementary grants worth Rs. 1.833 trillion were obtained for repayment of loan principal without proper assessment of actual requirements, resulting in excess expenditure. In addition, spending beyond the final grant authorized by parliament reached Rs. 187 billion.
Auditors said federal entities sought budget allocations totaling Rs. 3.809 trillion without adequately assessing their actual needs. Despite requesting large sums, 115 cost centers failed to utilize Rs. 87 billion, which ultimately lapsed, while supplementary grants worth Rs. 41 billion remained unspent.
The Auditor General also identified a number of constitutional and financial management violations. These included the transfer of Rs. 7 billion from the Federal Consolidated Fund to the Public Account in violation of Article 78 of the Constitution, as well as the failure to transfer Rs. 24 billion in unclaimed deposits from dormant accounts to the government account.
The reports pointed to serious weaknesses in accounting and reporting systems, including the absence of debt and loss reports, failure to maintain fixed asset and liabilities registers, and missing General Provident Fund subscriptions in individual accounts.
According to the audit findings, many federal entities still do not have functional internal audit units and have yet to appoint Chief Internal Auditors. The reports also uncovered two cases involving embezzlement, misappropriation of public money and fictitious payments, along with 82 recovery cases and 78 instances of weak internal controls.
The Auditor General recommended that serious embezzlement cases be referred to investigation agencies, with the findings likely to intensify debate over fiscal discipline, parliamentary oversight and accountability in public spending.
