The show, which includes Elmo and a host of new Pakistani characters, first aired in December and was supposed to run for at least three seasons. The U.S. hoped it would improve education in a country where one-third of primary school-age children are not in class. It was also meant to increase tolerance at a time when the influence of radical views is growing.

U.S. Embassy spokesman Robert Raines said the U.S. Agency for International Development terminated funding for the program, but declined to provide further details.

The Pakistan Today newspaper reported Tuesday that the cause was “severe” financial irregularities at Rafi Peer, citing unnamed sources close to the project.

Officials at Rafi Peer allegedly used the U.S. money to pay off old debts, and awarded lucrative contracts to relatives, the sources claimed.