The National Electric Power Regulatory Authority retained nearly Rs. 884 million in surplus funds instead of transferring the amount to the Federal Consolidated Fund, in violation of the Nepra Act 1997, according to the authority’s audit report for the fiscal year 2024–25.
The audit revealed that NEPRA recorded a total comprehensive income of Rs. 1.58 billion during the year but transferred only Rs. 921.99 million to the federal government. Under Section 17 of the Nepra Act, the regulator is legally required to transfer all surplus funds, after tax, to the Federal Consolidated Fund.
As a result of the partial transfer, NEPRA’s outstanding payable balance to the government rose sharply from Rs. 221.99 million to Rs. 883.91 million within a single year, the report noted.
The audit also highlighted serious accounting irregularities. NEPRA was found to have recognized revenue on a cash basis instead of the legally required accrual basis, leading to an understatement of revenue amounting to Rs. 91.34 million. Auditors said this raised concerns about the accuracy and reliability of the regulator’s financial statements.
In addition, the report flagged NEPRA’s failure to recover Rs. 161.94 million in outstanding dues from licensees. Although the amount had been fully classified as doubtful debt, it remained unresolved for several years without being written off or recovered, pointing to weak enforcement and poor follow-up mechanisms.
Auditors further observed that advances provided to employees had increased by more than 51 percent over the past five years, reaching nearly Rs. 984 million. This rise occurred even as NEPRA’s liabilities to the federal government continued to grow, reflecting weaknesses in financial planning and spending priorities.
Despite these governance concerns, NEPRA’s financial performance improved during the period. The regulator’s surplus before tax rose by 93.5 percent to Rs. 2.52 billion, driven by a 40.3 percent increase in total income. Administrative expenses increased by 16.6 percent, while surplus after tax stood at Rs. 1.54 billion.
The audit also criticized NEPRA’s cash management practices, noting that surplus funds remained tied up in tax obligations and advance tax adjustments. This delayed transfers to the government and reduced overall financial transparency.
The report concluded that while NEPRA’s financial indicators showed improvement, they were overshadowed by weak governance, poor internal controls, accounting deficiencies, and ineffective enforcement.
Auditors recommended corrective measures to strengthen legal compliance, improve financial management, and restore confidence in Pakistan’s power sector regulator.
