Nearly £1 billion of cash recouped from bank fines for rate-rigging has been handed out to charities, but the Government cannot confirm if the money has been used as intended, according to a report.
An investigation by the National Audit Office (NAO) also found the Government may have failed to deliver on its 2015 election pledge to spend £200 million - more than 20% - of the fund on supporting 50,000 apprenticeships.
The NAO report showed that £933 million of a total fund worth £973 million has been allocated to charities, emergency services and the Armed Forces since it was set up in the wake of mammoth fines paid by banks for the Libor and foreign exchange rate-rigging scandals since 2012.
It was announced at the time that all proceeds of the fines would "go to the benefit of the public".
But findings of the NAO report reveal the Government has failed to keep track of the impact that the money has had on good causes.
The NAO said £196 million of grants were handed out from the fund between 2012 and the end of 2015 without any terms and conditions.
It said: "HM Treasury and the Ministry of Defence cannot yet confirm that charities spent all grants as intended."
It added: "The Government cannot yet demonstrate the impact the Libor grant fund has had as it has not been evaluating the impact of the grant schemes on the charity sector."
It said the Ministry of Defence (MoD) is conducting a review of all grants since 2012 to ensure they were spent correctly, while the Treasury has said it will completed an external evaluation by December 2018.
The NAO report was also damning over the Government's election campaign promise to use £200 million of the fund to create 50,000 apprenticeships for unemployed 22-24 year olds.
It said there has been no report of any increase over and above its existing target for three million new apprenticeships, while the Department for Education was not directed to use the cash for a specific policy and cannot demonstrate if the new apprenticeships have been provided.
A Department for Education spokesman insisted the £200 million had been invested in the Government's flagship apprenticeship programme.
He said: "The funding is helping to create three million high-quality apprenticeship starts in England by 2020."
The NAO report comes after Parliament and the media have questioned the transparency of how the money from the fines is being distributed.
The Treasury has yet to commit £40 million of the fund, while £141 million set aside for a covenant grant scheme for the Armed Forces has also yet to be handed out.
The MoD is now using some of the money from the Libor Fund to gauge the needs of the Armed Forces for where the money should be spent.
So far, 729 grants have been awarded to 639 charities and causes and the average grant stands at £800,000, according to the report.