ISLAMABAD: A sweeping audit of Pakistan’s federal civil accounts for 2025-26 has laid bare a staggering landscape of financial mismanagement, uncovering trillions of rupees in irregular expenditures, unrecovered receivables, and systemic governance breakdowns across numerous ministries, divisions, and autonomous bodiesp>
The 399-page report from the Auditor General of Pakistan paints a troubling picture of weak financial controls, poor oversight, and a pervasive failure to account for public funds. The Higher Education Commission (HEC) topped the list of entities with the most audit observations, recording 31 paras, or audit objections. It was followed by the Trade Development Authority of Pakistan with 18, and the Ministry of Food Security with 17.
2>Unmonitored Billions in Development Schemes
One of the most significant findings targets the Cabinet Division, where auditors have questioned the utilisation of Rs75 billion allocated for federal and provincial development schemes under the Sustainable Development Goal Achievement Programme (SAP), commonly referred to as MPs’ schemes. The audit report notes that the division failed to obtain mandatory monthly progress reports and completion certificates from executing agencies. Without scheme-wise and region-wise data, auditors stated they could not verify whether the funds promoted balanced regional development. The Cabinet Division did not respond to repeated queries, and the report recommends establishing a centralised digital monitoring system for tracking these funds.
Trillion-Rupee Liability Crisis
The Economic Affairs Division faces one of the largest financial observations in the report. Audit scrutiny revealed that a colossal Rs1.927 trillion in principal, interest, and exchange-risk liabilities from foreign relent loans remained outstanding and unrecovered from various state-owned entities as of mid-2025. The division’s management provided no response to the audit observations, leaving a massive question mark over the country’s debt recovery mechanisms.
The report also highlights decades-long institutional inertia. For instance, auditors flagged that 298 acres of land allotted to Quaid-e-Azam University in Islamabad have remained under illegal occupation by private settlers for nearly 50 years. The university also failed to deposit Rs177 million in deducted income tax into the government treasury, citing a severe financial crisis.
Procurement Irregularities and Unrecovered Dues
The Ministry of National Health Services came under fire for procuring vaccines worth Rs1.1 billion at higher rates by not complying with a federal cabinet decision. The Federal Government Polyclinic Hospital was cited for irregular procurement of medicines worth Rs508 million. Meanwhile, the Pakistan Electronic Media Regulatory Authority (PEMRA), under the Information Division, was questioned over the non-recovery of Rs87 million in outstanding fees and fines.
At the Ministry of Maritime Affairs, the Karachi Dock Labour Board recorded several major irregularities, including the non-recovery of Rs433 million in cess, recurring losses of Rs1.9 billion, and irregular bonus payments of Rs343 million.
Massive Losses and Idle Assets
Auditors identified a staggering Rs59 billion loss caused by the Pakistan Standards and Quality Control Authority’s failure to impose late-payment charges under the Ministry of Science and Technology. The same ministry was found to have maintained 45 unauthorised bank accounts with balances of around Rs3 billion outside the Federal Consolidated Fund and failed to withdraw Rs7.3 billion in matured investments.
The Ministry of National Food Security is facing scrutiny for the non-recovery of Rs1.9 billion in cotton standardisation fees and wasteful expenditure of Rs193 million on aircraft spare parts. The report also notes that an aircraft belonging to the Plant Protection Department crashed in 2020, but five years later, the inquiry remains incomplete. Additionally, 15 deregistered aircraft have been left idle for years instead of being auctioned, causing a loss of over Rs42 million.
Accountability Vacuum
The audit report records observations of Rs324 million against the National Accountability Bureau (NAB), including Rs277 million spent from its regular budget on law officers and experts instead of the designated Recovery and Reward Fund. NAB did not concede any wrongdoing. The Ministry of Religious Affairs was found not to have obtained audited statements and adjustment accounts involving Rs45 billion, raising serious concerns about the verification of massive expenditures.
Across the board, several departments either failed to respond to audit observations or defended practices that auditors deemed irregular. The report underscores a deep-seated accountability vacuum, with unresolved questions hanging over the management of public finances at the highest levels of the federal government.
