The federal government’s financial management has come under renewed scrutiny after audit reports for the audit year 2025-26 uncovered widespread budget irregularities, weak financial oversight, and instances of unapproved spending amounting to trillions of rupees. The findings by the Auditor General have raised concerns about compliance with constitutional requirements and the effectiveness of public financial management systems.
One of the most significant observations in the reports was the disclosure that supplementary grants totaling Rs3.177 trillion were not approved by parliament. According to the audit findings, these grants accounted for nearly 92 percent of the total Rs3.454 trillion obtained during the fiscal year 2024-25. The Auditor General questioned whether the government had adhered to constitutional and parliamentary procedures governing public expenditure.
The reports further revealed that supplementary grants worth Rs1.833 trillion were acquired for repayment of loan principal without a proper assessment of actual financial requirements. This resulted in excess expenditure and highlighted weaknesses in budget planning and forecasting. In addition, spending beyond the final grant authorized by parliament amounted to Rs187 billion, raising further concerns about fiscal discipline.
Auditors also found that federal entities requested budget allocations totaling Rs3.809 trillion without adequately evaluating their operational needs. Despite seeking substantial funds, 115 cost centers failed to utilize Rs87 billion, which eventually lapsed. Furthermore, supplementary grants amounting to Rs41 billion remained unused, reflecting inefficiencies in budget execution and resource allocation.
The Auditor General identified multiple constitutional and financial management violations. These included the transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account in violation of Article 78 of the Constitution and the failure to transfer Rs24 billion in unclaimed deposits from dormant accounts into government accounts. The reports also highlighted deficiencies in accounting systems, including the absence of debt and loss reports, incomplete asset and liability registers, and missing General Provident Fund subscription records.
The audit findings additionally pointed to weaknesses in internal oversight mechanisms across federal entities. According to the reports, many departments lack functional internal audit units and have yet to appoint Chief Internal Auditors. Auditors uncovered cases involving embezzlement, misappropriation of public funds, fictitious payments, dozens of recovery cases, and numerous instances of weak internal controls. The Auditor General recommended that serious cases of financial misconduct be referred to relevant investigation agencies, with the findings expected to fuel further debate on fiscal accountability, parliamentary oversight, and transparency in public spending.
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