Govt seeks external auditors for Nepra’s financial auditing

KARACHI: The government has sought proposals from auditing firms to conduct financial audit of the Nepra with the regulator recently questioned about keeping exchange rate higher for determining returns to independent power producers, The News learnt on Wednesday.

A document showed that the aspiring chartered accountant firms should be enlisted in the category ‘A’ or ‘B’ in the panel of auditors of the State Bank of Pakistan. The government wants audit of the National Electric Power Regulatory Authority’s (Nepra) to be completed within a period of four months following the end of the current fiscal year.

The purpose of external audit of Nepra’s accounts is to seek an independent opinion whether or not the financial statements of Nepra give a true and fair picture of the authority’s financial position as of June-end.

The power division of ministry of energy found in an internal audit report that the Nepra didn’t calculate average exchange rate as stipulated in the power purchase agreements with independent power producers while allowing returns to them.

The power division presented the internal audit report on quarterly dollar indexation by the Nepra before the Cabinet Committee on Energy. The report found that Nepra used high exchange rates during determination of quarterly indexation. The committee asked the power division to ascertain from the regulator whether it has judicially applied its mind while determining the exchange rates.

“The regulator should also be asked to indicate the remedial measures for rectifying the mistake, for the future and to determine how the losses incurred, if any, could be made good,” an official statement said then.

The document said the audit firm should be registered with the Institute of Chartered Accountants of Pakistan. The firm should have relevant experience in accounting and auditing of government organisation, especially regulatory and autonomous bodies.

“The Nepra statute reflects the desire of the government to establish an autonomous regulator body to improve the efficiency and availability of electric power services by protecting interest of the investor, the operator and the consumers and to do so with a view to promoting competition and to deregulate power sector activities where there is competition,” the document said.

Nepra’s key responsibilities are to issue licences for generation, transmission and distribution of electric power, establish and enforce standards to ensure quality and safety of operation and supply of electric power to consumers, approve investment and power acquisition programs of the utility companies, and determine tariffs for generation, transmission and distribution of electric power.