Audit flags Rs3.17 trillion unapproved supplementary grants in federal accounts

Audit reports for the audit year 2025-26 have raised questions over federal financial management after identifying Rs3,177 billion in unapproved supplementary grants, Rs187 billion in excess spending, Rs87 billion in lapsed funds, and two cases involving embezzlement and misappropriation in the federal government’s accounts for FY2024-25, The News reported. 

Around 92% of supplementary grants worth Rs3,177 billion remained unapproved by parliament. The federal government obtained total supplementary grants of Rs3,454 billion during the year, according to the audit findings.

The Auditor General questioned whether the government had complied with constitutional and parliamentary requirements governing public expenditure.

The reports also found that supplementary grants of Rs1,833 billion were obtained for repayment of loan principal without proper assessment of actual requirements, resulting in excess expenditure.

In another case, spending exceeded the final grant authorised by parliament by Rs187 billion.

The audit also pointed to weaknesses in the budget-making process. Federal entities sought Rs3,809 billion in budgetary allocations without proper need assessment.

Despite seeking large allocations, 115 cost centres failed to utilise Rs87 billion, which eventually lapsed. Supplementary grants of Rs41 billion also remained unspent.

The Auditor General also highlighted violations related to constitutional and financial management requirements.

These included the irregular transfer of Rs7 billion from the Federal Consolidated Fund to the Public Account, in violation of Article 78 of the Constitution.

The reports also noted that Rs24 billion in unclaimed deposits from dead accounts was not transferred to the government account.

The audit identified weaknesses in government accounting and reporting systems, including non-preparation of debt and losses reports and non-maintenance of fixed asset and liabilities registers.

The reports also pointed to missing General Provident Fund subscriptions in individual GP Fund accounts.

The Auditor General observed that most federal entities did not have functional internal audit units.

Chief Internal Auditors had also not been appointed in several organisations, weakening internal oversight and contributing to control failures, irregularities and losses of public money.

The reports identified two cases involving embezzlement, misappropriation of public money and fictitious payments.

Auditors also pointed out 82 cases involving recoveries and 78 cases reflecting weak internal controls.

The Auditor General recommended that cases involving embezzlement of public money be referred to investigation agencies for appropriate action.

The findings are expected to add to debate over fiscal discipline, parliamentary oversight, transparency in public spending and accountability mechanisms within the federal government.