The U.S. Treasury must seek Congressional approval if it wants to funnel some of its $700 billion bailout fund to jobs programs that do not involve financial services firms as intermediaries, a key overseer said on Wednesday.

Elizabeth Warren, chairman of the Congressional Oversight Panel, told CNBC television that the Obama administration cannot simply spend TARP funds "in a jobs program somewhere else."

The panel earlier on Wendesday released a report criticizing TARP for failing to adequately address the home foreclosure crisis and the contraction in credit in the U.S.economy.

"It is not simply a slush fund that can be used on anything anyone wants to do, no matter how worthy," Warren said of TARP.