Pakistan’s power regulator, the National Electric Power Regulatory Authority (NEPRA), retained nearly Rs. 884 million in surplus funds during FY2024-25 instead of transferring the full amount to the Federal Consolidated Fund, in violation of the Nepra Act, 1997, according to its latest audit report.
The audit revealed that NEPRA posted total comprehensive income of Rs. 1.58 billion during the fiscal year but transferred only Rs. 921.99 million to the federal government. Under Section 17 of the Nepra Act, the authority is required to transfer all surplus funds, after tax, to the Federal Consolidated Fund.
As a result, NEPRA’s outstanding payable balance rose sharply from Rs. 221.99 million to Rs. 883.91 million over the course of the year, the report said.
The audit also flagged accounting irregularities, noting that NEPRA recorded revenue on a cash basis instead of the required accrual basis. This led to an understatement of revenue by Rs. 91.34 million and raised questions about the accuracy and reliability of the regulator’s financial statements.
In addition, the report found that NEPRA failed 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 years without being written off or recovered, highlighting weak enforcement and follow-up mechanisms.
The audit further pointed to a significant rise in employee advances, which increased by more than 51 percent over the past five years to nearly Rs. 984 million. This came even as NEPRA’s liabilities to the federal government continued to grow, indicating weak financial planning and questionable spending priorities.
Despite these issues, NEPRA’s financial performance showed improvement during the period under review. Its surplus before tax surged 93.5 percent to Rs. 2.52 billion, supported by a 40.3 percent increase in total income, while administrative expenses rose by 16.6 percent. Surplus after tax stood at Rs. 1.54 billion.
However, the audit criticized the regulator’s cash management practices, saying surplus funds remained tied up in tax obligations and advance tax adjustments, delaying transfers to the government and undermining financial transparency.
The report concluded that NEPRA’s stronger financial performance was overshadowed by weak governance, poor internal controls, accounting irregularities, and ineffective enforcement. It recommended corrective measures to improve compliance, strengthen financial management, and restore confidence in the country’s power sector regulator.
