Audit flags Rs3.177 trillion in unapproved federal spending during FY25

ISLAMABAD: Federal audit reports for the 2025-26 audit year, covering the federal government’s accounts for FY2024-25, have raised serious questions over public financial management after identifying extensive budget irregularities, weak controls, unapproved expenditure running into trillions of rupees and cases involving embezzlement of public money.

According to the audit findings, supplementary grants totalling Rs3,454 billion were obtained during the year, but 92 per cent of that amount — Rs3,177 billion — remained without parliamentary approval. The reports question whether the government complied with constitutional and parliamentary requirements governing public expenditure.

Supplementary grants and excess spending

Supplementary grants worth Rs1,833 billion were obtained for repayment of loan principal without proper assessment of actual needs, which led to excess expenditure. In a separate instance, spending went beyond the final grant authorised by parliament by Rs187 billion.

The audit further found that federal entities sought Rs3,809 billion in budget allocations without adequate need assessment, casting doubt on the reliability of the budgeting process. Despite requesting large sums, 115 cost centres did not utilise Rs87 billion, which lapsed, while supplementary grants amounting to Rs41 billion also remained unused.

Constitutional and accounting concerns

The Auditor General highlighted violations linked to constitutional and financial management rules. These included the transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account in violation of Article 78 of the Constitution, as well as the failure to move Rs24 billion in unclaimed deposits from dead accounts into the government account.

The reports also pointed to broader weaknesses in accounting and reporting practices, including the non-preparation of debt and losses reports, failure to maintain registers for fixed assets and liabilities, and missing General Provident Fund subscriptions in individual GP Fund accounts.

Internal controls and recoveries

According to the Auditor General, most federal entities do not have functional internal audit units, and many organisations have yet to appoint chief internal auditors. The audit said the lack of effective internal oversight contributed to control failures, irregularities and losses of public funds.

The findings included two cases involving embezzlement, misappropriation of public money and fictitious payments. Auditors also pointed out 82 cases involving recoveries and identified 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 further action. The audit is expected to intensify discussion over fiscal discipline, parliamentary oversight, transparency in spending and the effectiveness of accountability mechanisms within the federal government.