Illinois Audit and Loss Control Training Workshop Fall 2014 Intro Welcome 1. Introductions 2. Instructor, Students 3. How many of you have performed an audit? 4. What do you want to get out of today s workshop? Name them 1
Objectives Review Audit basics using software Discuss common mistakes and how to avoid them Discuss what to do about defaults Review financial calculations Discuss what to do next with the audit Review consistent messaging about the audit Agenda for Today 1. AWWA Audit History & Review 2. How to conduct a Audit. 3. Common Pitfalls, part 1 Lessons learned 4. Common Pitfalls, part 2 How to avoid making the same mistakes 5. Understanding Validity 6. Communicating about the Audit 7. Open Discussion 2
Audit Definitions and Background Why are we doing this? The Illinois Environmental Protection Agency (IEPA) is committed to helping water utilities reduce system inefficiencies that increase the cost of service for utilities and their customers, inefficiencies that can also lead to increased demand for potable water in a way that negatively impacts the viability our state s water resources. Over the next year, IEPA will work directly with water utilities and other partners on the specific problem of water loss from distribution systems. We need to better understand the extent of water lost from leaking pipes, lack of metering, meter inaccuracies and unauthorized consumption. At the same time, we hope to introduce strategies that can improve the efficiency of water production and delivery from water utilities of all sizes across the state. This should help save utilities and their customers substantial amounts of money relatively quickly, with a minimum of up-front investment 3
IWA/AWWA Standard Balance Own Sources Imported Total System Input ( allow for known errors ) Exported Supplied Authorized Consumption Losses Billed Authorized Consumption Unbilled Authorized Consumption Apparent Losses Real Losses Revenue Non- Revenue Billed Exported Billed Metered Consumption Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorized Consumption Customer Metering & Data Inaccuracies Leakage on Mains Leakage on Service Lines (before the meter) Leakage & Overflows at Storage Real Losses Also called Physical Losses water that enters the distribution system, but never reaches a user. Includes: Leakage on transmission and distribution mains Storage tank overflows Service Line leakage up to customer meter Reducing real losses creates an additional resource which reduces operating costs and can be used to defer capital expenditure 4
Apparent Losses Also called Paper or Economic Losses water that reaches a user, but is not properly measured or paid for. Includes: Theft Customer metering inaccuracies Data handling errors Reducing Apparent losses increases revenue but creates no new water Non-Revenue (NRW) Is the difference between the volume of water produced and the volume of water billed to customers It consists of three elements with different values in $/gallon: Real Losses Apparent Losses Unbilled authorized consumption (political losses) Use this term instead of unaccounted-for-water 5
AWWA M36 Manual and Free Audit Software IL Loss Control Manual Guidance Manual based on Georgia Manual GA convened 12 in- and out-of-state experts Stakeholder input collected Informational sessions Email communication Free download from www.isawwa.org 6
Balance Development Top-Down = desktop exercise using existing estimations and records understanding of terminology and data required only as good as the data that is used! Bottom-Up = detailed investigation into actual policies and practices better estimates of water use by the fire department quantify water used in line flushing metering of all authorized uses 7