This document discusses the UN-Water GLAAS "TrackFin initiative" to develop a standardized methodology for tracking financing for water, sanitation, and hygiene (WASH) services at the national level. The methodology proposes using WASH accounts tables and indicators to analyze (1) total WASH expenditure, (2) how funds are distributed across services, regions, and expenditure types, (3) who pays for WASH services, and (4) how funds are channeled. The approach is modeled on national health accounts. Implementing WASH accounts in select countries aims to inform policy and identify financing gaps to achieve WASH goals.

1. UN-WATER GLAAS
“TRACKFIN INITIATIVE”
IRC 2013 SYMPOSIUM, ADDIS ABABA
Marie-Alix Prat and Sophie Trémolet
April 2013

2. Presentation Overview
2
 Overview of UN-Water GLAAS TrackFin initiative
 Why track WASH financing?
 What is TrackFin?
 Overview of the proposed methodology
 What is the approach to building WASH-Accounts?
 What are the main methodological issues raised?
 What can we expect from implementing WASH-
Accounts?
 What can countries learn from WASH-A?
 What can we learn from the implementation of Health
Accounts?
 Next steps for TrackFin

3. Why track WASH financing?
3
 Benchmark countries and track implementation of commitments
 e.g. eThekwini declaration: countries committed to spend at least 0.5% GDP on
sanitation but there is no existing method to track this type of commitment
 Support policy development and implementation
 Is current and projected public funding sufficient to achieve objectives?
 Does funding need to be increased and, if so, by how much?
 What is the financial burden on households? Are current public policies effective at
leveraging private investment?
 Encourage better utilization of existing funds, e.g.:
 Is financing going to the segments of WASH sector and regions that need it most?
 Is sufficient financing allocated to operations and maintenance as opposed to
investment?
 Is funding to the WASH sector effectively channelled? (especially for donor’s
contribution) How can local governments be supported?
 Attract additional financing to the sector vs. other sectors which are
better able to track financing (e.g. National Health Accounts in more than 100
countries)
There is also a consensus that this is a difficult and challenging task,

4. How is WASH financing tracked
now?
4
 There is no consolidated methodology to track financing to WASH
 Existing studies (WSP work in 2004/2005, AICD, CSOs, WASHCost, PERs of the
World Bank) provide useful data and methodologies, but:
• One-off snapshots, no clear prospect of being repeated
• Tend to be externally-driven with substantial consultant input
• No consistent methodology across countries or institutions
 UN Department of Statistics has launched SEEA-W with broad (and ambitious)
objectives of tracking all hydrological and financial flows
 Contributions of previous GLAAS reports in this area :
 GLAAS 2010 report focused on reporting ODA flows
• Hardly any mention of tariffs: the “paradox” of WASH financing
 GLAAS 2012 report identified a lack of reliable sector financial data
• Sought to improve the methodology: focus on the 3Ts
• Limited number of countries provided data + data reliability is low
• Proposed a methodology to improve financial tracking (Annex B)

5. Why should GLAAS pick up the
5
baton?
 Policy needs expressed at High-Level Meeting (Washington, April
2012)
 Highlighted “substantial financial gap to meet targets”
 Countries committed to increase funding and, overall to:
• Put in place realistic sector financing plans and track their
achievement using standard methodology and formats
• Create specific trackable national budget lines for water, sanitation
and hygiene
 5 countries have committed to track financing at the meeting
 Identifying GLAAS’s mandate and potential role re. financing
 GLAAS is a key input into the High-Level Meeting (alongside JMP)
 GLAAS review: agreement that GLAAS should maintain a strong
focus on investment flows and be embedded in national systems
 GLAAS report: an excellent opportunity to develop methodologies to
track financing at national level in a comparable and consistent
manner through the application of a globally accepted methodology

6. What is the “TrackFin Initiative” ?
6
 Objectives
 Define and test a globally accepted methodology to track WASH
financing at national level
 Develop a methodology to build WASH Accounts (on the model
of National Health Accounts), building upon governments’
statistical systems and mainstreams data collection
 Encourage countries to adopt this common framework to track
their financial data of WASH sector
 TrackFin proposes to address four “simple” questions:
1. What is the total expenditure in the sector?
2. How are the funds distributed to the different WASH services and
expenditure types?
3. Who pays for WASH services and much do they pay?
4. Which entities are the main channels of funding in the WASH
sector?

7. Overview of the proposed methodology
to track financing to WASH at national
7 level

8. Defining the “boundaries” of the WASH
sector
8
 The guidance document proposes common classifications to ensure that the
information produced for the GLAAS exercise (and beyond) is consistent,
comprehensive and comparable.
Cod
Category Proposed definition
e
This category includes all activities necessary for water distribution :
Collection of rain water and water from various sources, from rivers, lakes, wells
Purification of water for water supply purposes, desalting of sea or ground water
Water supply Distribution of water through mains, by trucks or other means.
S1
services It also includes the construction activities to build water distribution and water resources management
infrastructures and the associated assets:
Construction of dams, aqueducts and other water supply conduits, except pipelines
Water well drilling services
This category includes :
Installation of septic systems
Sanitation
S2 Collection of sewage by sewer systems or sewage treatment facilities (Septic tank emptying and cleaning
services
services)
Treatment and disposal of sewage by sewer systems or sewage treatment facilities
Unallocated This category includes the construction activities for both water and sanitation infrastructures and the associated
construction assets:
activities (for Construction services of pipelines and long distance transport of water and sewage
S3
both water and
sanitation Construction services of local pipelines
services) Construction services of sewage and water treatment plants
This category includes the public administrative services related to water and sanitation services :
Administration of potable water programmes
S4 Support services
Administration of waste collection and disposal operations

9. Establishing a common classification of
WASH actors and financing flows
9
Correspondence
Correspondence
WASH-Account financing with SEEA-Water
Proposed definition with OECD Typology
sources categories of
of financing sources
financing sectors
Tariffs for services Payments made by users to service providers for Part of funding via
FS1
provided getting access to and for using the service. “Corporations”
Funding provided by households to invest in or provide TARIFFS
Households’ out-of-
the service themselves. This can be in form of cash,
FS2 pocket expenditure Households
material or time (sometimes referred to as “sweat
for self-supply
equity”).
Public transfers from government agencies (central or
Domestic public local government) to WASH actors. These are often
FS3 TAXES Governments
transfers subsidies that come from taxes or other sources of
revenues of the government.
Funds from public donors and multilateral agencies
that come from other countries. These funds can be
International public
FS4 contributed either in the form of grants, concessionary Rest of the world
transfers
loans (i.e. through the grant element included in a
concessionary loan) or guarantees.
Funds from international and national non-
governmental donors including from charitable TRANSFERS
foundations, Non-Governmental Organizations (NGOs)
Non-for-profit
and civil society organizations. These funds can be
FS5 Voluntary transfers institutions serving
contributed either in the form of grants, concessionary
households
loans (i.e. through the grant element included in a
concessionary loan, in the form of a subsidised interest
rate or a grace period) or guarantees.
Refers to sources of finance that come from private
Private repayable sources and ultimately need to be repaid, such as REPAYABLE Part of funding via
FS6
financing loans, equity investments or other financial instruments FINANCE “Corporations”

10. Mapping financial flows for WASH
10
service provision
Source: adapted from Trémolet & Rama (2012)

11. Defining methodologies to capture
information on national expenditure to
11 WASH

12. Defining a common set of tables to
present the information
12
WASH- Accounts tables
Table WA 1 (SxR)- WASH expenditure by main WASH service and regional
subdivision
Table WA 2 (SxU)- WASH expenditure by type of WASH service and user
Table WA 3 (SxP)- WASH expenditure by type of WASH service and provider
Table WA 4 (PxFS)- WASH expenditure by type of WASH provider and financing
source
Table WA 5 (SxFS)- WASH expenditure by type of WASH service and financing
source
Table WA 6 (SxFA)- WASH expenditure by WASH service and financing agent
Table WA 7 (PxFA)- WASH expenditure by WASH provider and financing agent
Table WA 8 (CxP)- WASH expenditure by type of cost and WASH provider
Table WA 9 (CxS)- WASH expenditure by type of cost and main WASH service
Table WA 10 (ASxP)- Asset stocks by type of WASH provider

13. Defining a common set of indicators to
present the information
13
Indicator (I)
Total expenditure on the WASH sector at the national level
Total expenditure on WASH in the country as share of GDP
Total expenditure on WASH per capita
Total expenditure on WASH as a % of total public spending
Total expenditure on urban and on rural drinking-water as a % of total WASH expenditure
Total expenditure on urban and on rural sanitation as a % of total WASH expenditure
Total expenditure on urban and on rural hygiene as a % of total WASH expenditure
Total expenditure per type of service user as a % of total WASH expenditure
Total expenditure per type of WASH service as a % of total WASH expenditure
Total expenditure per type of WASH provider as a % of total WASH expenditure
Total expenditure per type of financing source as a % of total WASH expenditure
Total government domestic transfers expenditure and as a % of WASH expenditure
Total international transfers expenditure and as a % of WASH expenditure
Total household expenditure as a % of WASH expenditure
Total expenditure channelled through regional and local authorities as a % of WASH public
expenditure
Recurrent and capital expenditures as a % of total WASH expenditure
Total CAPEX expenditure on water supply as a % of total water expenditure
Total OPEX expenditure on water supply as a % of total water expenditure
Total CAPEX expenditure on sanitation as a % of total sanitation expenditure
Total OPEX expenditure on sanitation as a % of total sanitation expenditure

14. What can we expect from
14
implementing WASH-Accounts?
 WASH-A will help address policy questions so as to
provide the basis for better planning, budgeting,
monitoring and coordination of financing to the sector
 The expected uses of WASH-A are based on the
experience of Health Accounts (HA) in the health sector
:
 HA have generated useful evidence for country-level
policymaking as well as for cross-country comparisons
 HA have been increasingly institutionalised in developing
countries and used by policymakers to reform health systems
and allocate financing more efficiently.

15. 1. What is the total expenditure on
WASH ?
15
 Related policy questions :
 Is current funding sufficient?
 What is the trend in funding? Is it increasing or decreasing?
 How does the level of funding compare to neighbouring countries?
 How does the level of funding compare with other social sectors (health,
education)?
 Input in policy development :
 Monitor WASH expenditure trends over time
 Benchmark funding to the WASH sector, against other countries or other
sectors (health, education)
 Raise awareness on the need to attract more financing to the WASH
sector so as to meet agreed physical targets and objectives
 Compare financial to outputs and outcomes in the WASH sector to
estimate the efficiency of financing

16. 2. How is funding distributed?
16
 Related policy questions :
 Is funding going to regions/areas that need it most? (rural vs urban)
 Is spending allocated to WASH subsectors and services that need it most?
(water vs sanitation)
 Is sufficient spending allocated to operations and maintenance as opposed
to investment?
 Input in policy development :
 Identify inequities in the distribution of spending across regions and
population groups
 Allocate funds to sub-sectors, services, providers and programmes
 Plan national WASH policies and strategies
 Monitor policies’ outcomes and effectiveness.
 Evidence from Health Accounts:
 In Mexico, HA enable to compare per capita health expenditure between
state. They are used to identify funding needs and allocate budget to the
neediest states allocation.

17. 3. Who pays for WASH services?
17
 Related policy questions :
 By whom is each type of service financed? What is the share of public vs. private
expenditure?
 What is the financial burden on households? Are policies and utilisation of public
funds effective at leveraging private investment, including from households?
 What is the share of donor’s contribution? How much is donor spending out of
the total government’s budget?
 Are government and donors’ commitments on WASH financing respected?
 Input in policy development :
 Define financing strategies;
 Monitor trends and outcomes of financing strategies over time;
 Coordinate donor aid and international transfers;
 Track commitments and targets expressed in financial terms.
 Evidence from Health Accounts:
 In Rwanda, sub-accounts for HIV /AIDS revealed that households were carrying
93.5% of the expenditures for prevention and treatment of this disease. These
findings were used by the Ministry of Health to design targeted interventions to
improve HIV/AIDS prevention financing

18. 4. How is funding channelled?
18
 Related policy questions :
 E.g. What % of WASH public expenditure is channelled via local
governments?
 Input in policy development :
 Define and monitor financing strategies
 Evaluate the performance of decentralized financing policies
 Identify ways to support local governments that channel such budgets
 Evidence from Health Accounts:
 In the Philippines, HA have been used to evaluate the impact of the
government’s decentralization reform in 1993. They showed that
spending on public health care (that benefit to the community at large)
actually increased between 1991 and 1997, largely thanks to increased
funding from local governments, which allocated more than half of their
health resources to public health care .

19. Next steps
19
 Test the TrackFin draft Guidance Document in 3-4
countries :
 Morocco, Brazil, Ghana and Vietnam have expressed interest
 Inviting interest from other countries to join the initiative
 Results of these exercises will be presented in an annex
of GLAAS 2014 on the TrackFin process and findings in
test countries
 Learn from this testing for development of a revised
methodology for GLAAS 2016 and development of
WASH Accounts in other countries

20. 20 Thank you for your attention!
Sophie@tremolet.com
Marie-alix@tremolet.com
gordonb@who.int
allelyd@who.int