"It is well documented that the O'Neill government last year spent K500 million for which there had been no budget allocation," Somare said.
"Confirmation has come with its decision to raise these funds through domestic loans in the current year, an illegal act akin to the retrospective legislation that has become a hallmark of the O'Neill-Namah government.
"Several hundred million more kina were handed out as political favours for the August 2 parliamentary coup that has not been accounted for, in addition to the illicit spending of K500 million."
The sources of information are not clear, but the son of previous PM Sir Michael Somare is likely to have good contacts in PNG's bureaucracy.
"We have been reliably informed that all 2011 government accounts have not been reconciled, including the Waigani Public Accounts held at Bank of PNG, all the individual agency drawing accounts; all trust accounts, receiver and collector revenue accounts and the domestic financing figures.
"It has also been confirmed that more than 90% of donor-funded receipts and expenditures have not been brought into account. All this points to a total financial mess."
Somare said it was not clear how Treasurer Don Polye - who was removed from the finance portfolio in late February - got some of his fiscal figures.
"His departmental accounts are a mess and the department has not adequately implemented the new Integrated Financial Management System.
"If the finance department is admitting the national accounting system and financial management are in a mess, it is clear Peter O'Neill and his treasurer are once again trying to deceive the public, as it has done so many times in the recent past.
"The Governor of the Bank of PNG and the Department of Treasury must immediately come out and tell the truth about the country's financial situation.
"The Auditor General is also challenged to conduct an audit into how the K500 million was used last year, including actual implementation reports, and table its report to parliament and the people of PNG."
Somare said the O'Neill-Namah government used creative accounting to hide vast amounts of overspending which took place last year.
He questioned whether the official K63.7 million budget deficit of 2011 was correct.
"The accurate budget figure will be hundreds of millions in the red with a soaring domestic debt burden that is being carried over into the 2012 financial year," Somare said.