It's most definitely not working as intended. It's just unfinished as in, player taking over the universe is not a contingency that was planned for. What should happen? I don't know. He should not be starved for money, though.
Treat it as a final win-or-lose condition and end the game.
If you have a colony, it should give a "Congratulations, you destroyed all enemies and conquered the sector. You win the game. Have a nice day. Game Over!"
If you have no colonies, it should give something like the game over screen from Atari's Missile Command. Flash "THE END" among flames to represent total sector collapse and death.