Audit flags NEPRA for retaining Rs884 million surplus instead of transferring it to federal fund 

An audit report has flagged financial and governance lapses at the National Electric Power Regulatory Authority (NEPRA), including the retention of nearly Rs884 million that should have been transferred to the Federal Consolidated Fund, Business Recorder reported. 

According to the audit report for 2025-26, covering FY2024-25, NEPRA recorded total comprehensive income of Rs1.58 billion but remitted only Rs921.99 million to the federal fund.

The report said the authority retained Rs883.91 million, in violation of Section 17 of the NEPRA Act, 1997, which requires surplus funds after tax to be transferred to the government.

Payable amounts to the government increased from Rs221.99 million to Rs883.91 million within one year, the audit noted.

The report also found that NEPRA recorded revenue on a cash basis instead of the required accrual basis, resulting in an understatement of income by Rs91.34 million.

The audit further flagged Rs161.94 million in outstanding dues from licensees, saying the amount had remained unresolved for years despite being fully provided for as doubtful debt.

Employee advances also rose by more than 51% over five years to nearly Rs984 million, while NEPRA’s liabilities towards the federal government continued to increase.

NEPRA’s financial performance improved during FY2024-25, with surplus before tax rising 93.5% to Rs2.52 billion.

Total income increased 40.3%, administrative expenses rose 16.6%, and surplus after tax stood at Rs1.54 billion.

The surplus ratio increased from 21.92% in FY2020-21 to 25.97% in FY2024-25, while return on assets rose from 18.25% to 42.81%.

Return on capital employed increased from 51.42% to 217.15%, and return on equity rose from 37.73% to 135.88%.

However, the audit said improved financial performance had not been matched by compliance with statutory requirements, internal controls or recovery enforcement.

It recommended corrective measures to ensure timely transfer of surplus funds, proper revenue recognition and recovery of outstanding dues from licensees.