NEPRA Kept Rs. 884 Million That Should Have Gone to Govt: Audit

The National Electric Power Regulatory Authority (NEPRA) retained nearly Rs. 884 million in surplus funds instead of transferring the amount to the Federal Consolidated Fund, violating the Nepra Act, 1997, according to the authority’s audit report for FY2024-25.

The audit found that NEPRA posted a 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 regulator is required to transfer all surplus funds, after tax, to the Federal Consolidated Fund. The report said NEPRA’s outstanding payable balance increased from Rs. 221.99 million to Rs. 883.91 million within a year.

The report also identified accounting irregularities, stating that NEPRA recognized revenue on a cash basis instead of the required accrual basis. As a result, revenue was understated by Rs. 91.34 million, raising concerns about the accuracy and reliability of the regulator’s financial statements.

The audit further 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, reflecting weak enforcement and follow up.

According to the report, advances provided to employees increased by more than 51 percent over the past five years to nearly Rs. 984 million, even as the regulator’s liabilities to the federal government continued to rise. The audit said the increase pointed to weak financial planning and spending priorities.

Despite these findings, NEPRA’s financial indicators improved during the period. Its surplus before tax increased 93.5 percent to Rs. 2.52 billion, driven by a 40.3 percent rise in total income, while administrative expenses grew 16.6 percent. Surplus after tax stood at Rs. 1.54 billion.

The audit also criticized NEPRA’s cash management practices, saying surplus funds remained tied up in tax obligations and advance tax adjustments, delaying transfers to the government and reducing financial transparency.

Overall, the report said NEPRA’s improved financial performance was overshadowed by weak governance, poor internal controls, accounting irregularities, and ineffective enforcement. It recommended corrective measures to strengthen compliance, improve financial management, and restore confidence in the country’s power sector regulator.