Federal Audit Flags Billions in Irregularities Across Pakistan
A major federal audit has raised fresh concerns over Pakistan’s public financial management after identifying billions of rupees in irregular expenditures, unrecovered funds, weak controls and governance lapses across several ministries, divisions and autonomous bodies. The findings, reported on Friday, place renewed pressure on federal institutions to explain how public money was allocated, monitored and recovered during the audit year.
According to the Auditor General of Pakistan’s audit report for 2025–26, multiple federal entities recorded audit observations involving poor documentation, unauthorised financial practices, delayed recoveries and missing compliance mechanisms. The report covers civil accounts of the federal government and highlights weaknesses in departments ranging from education and food security to maritime affairs, health, science and technology.
The Higher Education Commission recorded the highest number of audit paras, while other bodies facing scrutiny include the Trade Development Authority of Pakistan, Ministry of National Food Security, Ministry of Science and Technology, Pakistan Agricultural Research Council, Pakistan Atomic Energy Commission, National Health Services and the Education Division. Several other departments, including the Cabinet Division, Economic Affairs Division, Information Division, NAB and Religious Affairs, were also cited.
Auditors raised a significant objection over the Cabinet Division’s handling of Rs75 billion allocated for development schemes under the Sustainable Development Goal Achievement Programme, commonly associated with lawmakers’ schemes. The audit noted that required progress reports and completion certificates were not obtained, making it difficult to verify whether funds were used according to approved objectives and regional priorities.
The Economic Affairs Division also came under scrutiny after auditors pointed to Rs1.927 trillion in unrecovered liabilities linked to foreign relent loans, including principal, interest and exchange-risk obligations. The report states that the management did not provide a response to audit concerns, leaving major questions about recovery efforts from state-owned entities and other recipients of foreign-funded financing.
In the education sector, the audit highlighted long-standing land and tax-related issues at Quaid-i-Azam University, including hundreds of acres allegedly under illegal occupation and millions in deducted income tax that had not been deposited on time. The report also questioned the retention and investment of scholarship and centre funds, urging stronger financial controls and clearer policy compliance.
Other observations covered a wide range of federal bodies. The audit flagged non-recovery of dues by Pemra, financial irregularities at the Karachi Dock Labour Board, questioned expenditures within NAB, procurement and recovery issues in the National Food Security Ministry, and vaccine and medicine procurement concerns in the health sector. The Ministry of Science and Technology faced some of the largest objections, including alleged losses, unauthorised bank accounts and failure to transfer surplus funds properly.
The audit findings matter because they come at a time when Pakistan is under pressure to improve fiscal discipline, reduce leakages and ensure that limited public resources are spent transparently. Weak internal controls and delayed recoveries can affect development spending, service delivery and public confidence in institutions, especially when the federal budget is already constrained by debt servicing and rising expenditure demands.
The next stage will likely involve responses from the concerned departments and possible examination by parliamentary oversight forums. Until ministries provide explanations, recover disputed amounts or correct procedural failures, the report is expected to remain a major accountability issue for the federal government and a test of Pakistan’s commitment to financial transparency.