Rs3,177 billion spent without parliamentary approval in FY25, reveals audit

• 115 cost centres fail to utilise Rs87bn allocation.
• Auditor General flags two embezzlement, misappropriation cases.
• Most federal entities lack functional internal audit units.

The federal government’s financial management has come under serious scrutiny after audit reports for the audit year 2025-26, covering the accounts of the federal government for FY2024-25, revealed widespread budgetary irregularities, weak financial controls, unapproved spending worth trillions of rupees and cases of embezzlement of public money, The News reported.

One of the most alarming findings is that 92% of supplementary grants amounting to Rs3,177 billion remained unapproved by parliament, despite the government obtaining total supplementary grants of Rs3,454 billion during the year. The audit report questions the government’s compliance with constitutional and parliamentary requirements governing public expenditure.

Latest reports, shared with The News by a parliament source, also highlighted 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 instance, expenditure exceeding the final grant authorised by parliament amounted to Rs187 billion.

The reports further revealed that federal entities sought Rs3,809 billion in budgetary allocations without proper need assessment, raising concerns about the credibility of the budgeting process. Ironically, despite demanding huge allocations, 115 cost centres failed to utilise Rs 87 billion, which ultimately lapsed, while supplementary grants worth Rs41 billion also remained unspent.

The Auditor General also pointed to constitutional and financial management violations. These include the irregular transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account in contravention of Article 78 of the Constitution, as well as the failure to transfer Rs24 billion in unclaimed deposits from dead accounts to the government account.

The audit reports identify serious weaknesses in government accounting and reporting systems, including the non-preparation of debt and losses reports, non-maintenance of fixed asset and liabilities registers and missing General Provident Fund (GP Fund) subscriptions in individual GP Fund accounts.

The Auditor General observed that most federal entities do not have functional internal audit units, while Chief Internal Auditors have not been appointed in many organisations. The absence of effective internal oversight, according to the audit, contributed to internal control failures, irregularities and losses of public funds.

The reports also uncovered two cases involving embezzlement, misappropriation of public money and fictitious payments, besides 82 cases in which recoveries were pointed out by auditors and 78 cases reflecting weak internal controls.

Expressing concern over the findings, the Auditor General recommended that cases involving serious embezzlement of public money be referred to investigation agencies for appropriate action.

The audit findings are likely to trigger renewed debate over fiscal discipline, parliamentary oversight, transparency in public spending and the effectiveness of accountability mechanisms within the federal government.