An audit report has highlighted serious financial mismanagement and governance failures within the National Electric Power Regulatory Authority (Nepra). The findings raise fresh concerns about transparency, accountability, and regulatory compliance.
According to the 2025-26 audit for the 2024-25 financial year, Nepra breached its governing law. Despite recording strong financial gains, the authority failed to transfer its full surplus to the Federal Consolidated Fund.
The report stated that Nepra earned a comprehensive income of Rs 1.58 billion. However, it remitted only Rs 921.99 million while retaining nearly Rs 884 million.
Audit Finds Legal and Financial Irregularities
The audit described the retained surplus as a violation of Section 17 of the Nepra Act, 1997. The law requires all post-tax surplus funds to be transferred promptly to the federal treasury.
Meanwhile, payable amounts increased from Rs 221.99 million to Rs 883.91 million within one year. Auditors also criticized Nepra for prioritizing internal spending over its legal obligations.
Furthermore, the authority reportedly departed from its approved accounting policies. Instead of using the accrual method, it recognized revenue on a cash basis.
Consequently, the audit estimated an understatement of income worth Rs 91.34 million. Auditors warned that this weakened the credibility of Nepra’s financial statements.
Weak Enforcement and Rising Employee Advances
The report also revealed Nepra failed to recover Rs 161.94 million from licensees. Despite being classified as doubtful debt, the amount remained unresolved for years.
Additionally, employee advances increased by more than 51 percent over five years, reaching nearly Rs 984 million. The audit questioned these spending priorities as liabilities to the federal government continued rising.
Although Nepra reported improved financial indicators and higher surplus generation, auditors found weak compliance and poor institutional discipline. Therefore, they recommended strict corrective measures to strengthen governance and restore public confidence.
