• Audit report reveals only 13pc of funds directed towards public good
• Exposes recurring systemic issues in federal govt finances
• Massive supplementary grants allocated without parliamentary approval
• 87pc of expenditure in FY24 on debt, interest payments
ISLAMABAD: The Auditor General of Pakistan (AGP) has identified a record over Rs375 trillion worth of irregularities, financial mismanagement and loss of public money in the affairs of the federal government and departments and entities working under its control.
The AGP expressed grave concern that only 13 per cent of public funds were directed towards the public good, raising significant questions about the country’s financial affairs.
In its report for the audit year 2024-25, the AGP examined the accounts of the federal government, including ministries, divisions and other government bodies, for FY24. The report said that the “recurrence of these irregularities indicates that systemic issues were cropping up either due to inadequate oversight mechanisms or inappropriate design of internal controls”.
It pointed out unnecessary allocation of supplementary grants leading to blocking of public funds, massive supplementary grants without approval of the parliament, demand for budget without need assessment leading to surrender of budget, lapse of funds due to non-surrendering of funds in time and non-recording of commitments leading to poor budget management.
It said that “a high percentage of expenditure, i.e. 96.26pc, was expended on General Public Service, which includes 86.69pc on repayment of debt and interest payments during 2023-24, which was 91.42pc during 2022-23”.
Therefore, the federal government was left with a meagre 13.31pc of total expenditure for socio-economic functions (other than debt), which is slightly higher than the last year‘s percentage of 8.58pc.
Some of the key audit findings included a massive Rs284.17tr procurement-related issues, Rs85.6tr worth of defective, unexecuted and delayed civil work and Rs2.5tr worth of receivables and recovery-related issues.
There were Rs1.228tr worth of non-settlement of circular debt issues, Rs958bn worth of violation of law and regulations, Rs677.5bn of weak internal control, Rs628bn of poor asset management and Rs281bn worth of poor contract management.
There were Rs165bn worth of audit findings relating to miscellaneous financial issues, Rs73bn worth of value for money and service delivery issues and Rs92bn worth of loss to the state due to non-recovery of government shares and encroachment on public land.
The report noted that although many government entities had internal audit setups, the financial irregularities observed during the current audit reflect that this function failed to deliver effectively. “The efficient functioning of internal audit would have helped the management in effective implementation of internal controls and strengthening the internal control environment in audited entities,” it observed.
The audit analysis revealed certain deficiencies and shortcomings that were shared with the management and all the stakeholders, which include the Accountant General of Pakistan Revenue (AGPR), Controller General of Accounts (CGA), Ministry of Finance and all principal accounting officers of the relevant ministries and divisions and other entities for corrective measures.
The report revealed that 29pc (Rs513.87bn) of supplementary grants for FY24 had been issued without parliamentary approval, an unauthorised action. Non-surrender of savings under 12 grants led to a lapse of Rs212.08bn, and Rs12.6bn worth of expenditure exceeded the approved grants.
It said that as per the appropriation accounts for the financial year 2023-24, there was a total provision of Rs46.57tr. However, after surrender and supplementary grants, the final allocation was Rs 40.315tr. The actual expenditure was Rs39.945tr, with Rs369.97bn (0.92pc) savings, which was lower than the final allocation.
Overall appropriation figures revealed that the federal government approved supplementary grants of Rs1.765tr, of which Rs513.87bn was not approved by parliament. It said the Ministry of Finance claimed that supplementary grants not approved by parliament during the year would be presented for regularisation at the time of the next budget.
The AGP is required under Articles 169 and 170 of the Constitution to conduct an audit of the accounts of federal and provincial governments and the accounts of any authority or body established by these governments.
The consolidated audit report of the federal government is based on audits of the accounts of 7,879 formations working under entities of the federal government for the financial year 2023-24, and also contains some audit observations for the previous years.
The audit was conducted during 2024-25 on a test check basis to report significant audit findings to the stakeholders. The report includes only the systemic issues and audit findings carrying high monetary value.
Relatively less significant issues shall be pursued with the respective principal accounting officers (PAO) and, if unresolved, have to be brought to the notice of the Public Accounts Committee in the next year‘s audit report.
The AGP claimed that its audit activities had contributed towards adding value to the control mechanism of organisations, which complied with audit recommendations. As a result of the audit, management‘s awareness about internal controls and overall financial discipline has improved compliance with rules and regulations.
Published in Dawn, August 22nd, 2025