The document outlines a methodology for tracking financing in the water, sanitation, and hygiene (WASH) sector across countries to support evidence-based policymaking. It addresses existing gaps in financial data availability and aims to create comparable WASH accounts to assist in planning and allocation of resources. The process includes steps for data collection, analysis, and dissemination of findings to improve financial transparency and aid in policy development.

1. UN-Water Global Analysis and Assessment
of Sanitation and Drinking-Water
UN-Water GLAAS TrackFin Initiative
Tracking financing to sanitation, hygiene and
drinking-water at national level
WHO/ FWC/WSH/ 14.02 January 2014

2. 1
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3. Table of Contents
Table of Contents .................................................................................................................................... 2
List of Figures ......................................................................................................................................... 3
List of Boxes ........................................................................................................................................... 3
List of Tables .......................................................................................................................................... 4
Acknowledgements ................................................................................................................................. 5
Objectives and planning of the testing exercise ...................................................................................... 5
List of acronyms and abbreviations ........................................................................................................ 6
Introduction ............................................................................................................................................. 7
Overview ............................................................................................................................................. 7
Structure of the guidance document .................................................................................................. 11
1 Step 1 – Getting started .................................................................................................................. 13
1.1 Create political buy-in ............................................................................................................. 13
1.2 Identify policy questions ......................................................................................................... 14
1.3 Set-up the team in charge of data collection and analysis ....................................................... 15
1.3.1 Build a strong WASH Accounts team backed up by institutions ..................................... 15
1.3.2 Identify available data and define a data collection plan .................................................. 15
1.3.3 Develop a detailed budget and work plan ......................................................................... 17
2 Step 2 – Collect financial data ........................................................................................................ 18
2.1 Define WASH sector boundaries in terms of services ............................................................ 20
2.2 Identify the main WASH sector actors, map service provision and financial flows ............... 26
2.3 Estimate financial flows and capital assets stocks ................................................................... 34
3 Step 3 – Analyse financial data ...................................................................................................... 39
4 Step 4 – Interpret and disseminate findings .................................................................................... 42
4.1 Analyse and interpret WASH Accounts data to answer policy questions ............................... 42
4.2 Disseminate the policy analysis ............................................................................................... 49
5 Step 5 – Provide feedback on methodological development .......................................................... 50
Methodological Note No 1: Developing WASH services classifications ............................................. 52
MN 1.1. Existing classifications of WASH services ........................................................................ 52
MN 1.2. Summary evaluation: the potential use of existing classifications for the development of
WASH Accounts ............................................................................................................................... 65
Methodological Note No 2: Developing classifications of WASH actors and financing sources ........ 68
MN 2.1. Classifying WASH service uses ......................................................................................... 68
MN 2.2. Classifying WASH service providers ................................................................................. 70
MN 2.3. Classifying WASH financing units .................................................................................... 71
MN 2.4. Classifying WASH financing sources ................................................................................ 73
Methodological Note No 3: Estimating funding of WASH services with a “Financing Source
approach” .............................................................................................................................................. 78
MN 3.1. Obtaining data on financing sources................................................................................... 78
MN 3.2. Potential challenges and how to address them ................................................................... 84
2

4. Methodological Note No 4: Estimating the costs of providing the service with a “Cost-based
approach” .............................................................................................................................................. 86
MN 4.1. Classifying costs ................................................................................................................. 86
MN 4.2. Collecting data on the costs of service provision ............................................................... 90
Methodological Note No 5: Estimating fixed asset stocks ................................................................... 91
MN 5.1. How does estimating fixed asset stocks differ from evaluating investment flows? ........... 91
MN 5.2. Potential methodological challenges with this approach and ways to overcome them ...... 92
MN 5.3. Valuing fixed asset stocks in the testing exercise and next steps ....................................... 94
Methodological Note No 6: Preparing WASH accounts’ tables and indicators ................................... 95
MN 6.1 What are the WASH Accounts tables? ................................................................................ 95
MN 6.2 What are the WASH Accounts indicators? ....................................................................... 103
Annex A – Summary of key steps under the methodology ................................................................ 105
Annex B – The System of Environmental Economic Accounting for Water (SEEA-Water): a brief
introduction ......................................................................................................................................... 108
Annex C - Glossary ............................................................................................................................. 116
Annex D - References ......................................................................................................................... 122
Relevant websites ................................................................................................................................ 123
3
List of Figures
Figure 1 - Overview of proposed methodology to track financing to WASH at national level .............. 9
Figure 2 - Financing flows in the WASH sector: mapping the sector based on consumption,
production & financing ......................................................................................................................... 19
Figure 3 - The value chain of WASH services ..................................................................................... 23
Figure 4 – Mapping financial flows for WASH service provision: illustrative example ...................... 30
Figure 5 - Methodology to estimate WASH Accounts ......................................................................... 36
Figure 6 - Government expenditure on health, education and WASH ................................................. 46
Figure MN 2.1 - Sources of finance for the WASH sector ................................................................... 74
Figure A.1 - The WASH Accounts in relation to the overall System of National Accounts .............. 108
List of Boxes
Box 1 - The System of National Accounts (SNA) .................................................................................. 8
Box 2 - The System of Environmental-Economic Accounting for water (SEEA-Water) .................... 14
Box 3 - Examples of pre-existing information to be collected (as appropriate) ................................... 15
Box 4 - Types of service providers: the example of Burkina Faso ....................................................... 33
Box 5 - Data sources and collection methods ....................................................................................... 37
Box 6 - Filling in data gaps: making assumptions and using keys ....................................................... 38
Box MN 3.1 - Regulatory data on tariffs of service provision from national regulators ...................... 79
Box MN 5.1 - Alternative methodologies for valuing fixed asset stocks ............................................. 93

5. 4
List of Tables
Table 1 – Proposed classification of WASH goods and services ......................................................... 24
Table 2 – Definitions: uses of WASH services, WASH sector actors and financing sources .............. 27
Table 3 – WASH Accounts tables recommended for use ..................................................................... 40
Table 4 - Potential WASH Accounts indicators ................................................................................... 41
Table 5 - Link between WASH Accounts information and policy questions ....................................... 43
Table MN 1.1. Summary of main international systems of classification of goods and services ......... 52
Table MN 1.2- CPC- Central Product Classification ............................................................................ 54
Table MN 1.3 - ISIC- International Standard Industrial Classification ................................................ 60
Table MN 1.4 - COFOG (Classification of the Functions of Government) ......................................... 63
Table MN 1.5 - WASH sector support activities .................................................................................. 65
Table MN 1.6 - Correspondences between CPC, ISIC and COFOG classifications along the water and
sanitation value chain ............................................................................................................................ 66
Table MN 2.1- Classifications of WASH uses, actors and financing sources ...................................... 68
Table MN 2.2 - Proposed WASH Accounts classification of WASH Service uses ............................. 69
Table MN 2.4 - Classification of Water service providers in SEEA-Water ......................................... 70
Table MN 2.5 - WASH Accounts classification of WASH service providers ..................................... 71
Table MN 2.6 - Classification of Water financing sectors in SEEA-Water ......................................... 72
Table MN 2.7 - WASH Accounts classification of WASH financing units ......................................... 72
Table MN 2.8 - WASH Accounts classification of WASH financing sources ..................................... 77
Table MN 3.1 - Gathering data on financing sources ........................................................................... 78
Table MN 4.1 - WASHCost classification of costs in the WASH sector ............................................. 86
Table MN 4.2 - Proposed classification of costs .................................................................................. 88
Table MN 4.3 - Gathering data on costs of service provision .............................................................. 90
Table MN 5.1 - Terminology used in SNAs to evaluate changes in capital asset stocks ..................... 92
Table MN 6.1 - Classifications used in the WASH Accounts .............................................................. 95
Table MN 6.2 - WASH Accounts indicators ...................................................................................... 104
Table WA 1 (SxR) - WASH expenditure by main WASH service and geographical region ............... 96
Table WA 2 (SxU) - WASH expenditure by type of WASH users and service ................................... 96
Table WA 3 (SxP) - WASH expenditure by type of WASH provider and service .............................. 97
Table WA 4 (PxFS) - WASH expenditure by type of financing source and WASH provider ............. 97
Table WA 5 (SxFS)- WASH expenditure by type of financing source and WASH service ................ 98
Table WA 6 (SxFU)- WASH expenditure by financing unit and WASH service ................................ 99
Table WA 7 (PxFU)- WASH expenditure by WASH provider and financing unit ............................ 100
Table WA 8 (PxFU)- WASH expenditure by financing source and financing unit............................ 101
Table WA 9 (CxP)- WASH expenditure by type of cost and WASH provider .................................. 102
Table WA 10 (CxS)- WASH expenditure by type of cost and main WASH service ......................... 102
Table WA 11 (ASxP)- Fixed asset stocks by type of WASH provider ............................................. 103
Table A.1 - Summary of SEEA-Water Accounts ............................................................................... 109
Table A.2 - Hybrid account for supply and use of water .................................................................... 111
Table A.3 - Hybrid Account for water supply and sewerage carried out for Own Use ...................... 112
Table A.4 - Government accounts for water-related collective consumption services ....................... 113
Table A.5 - National Expenditure Account for wastewater management (billions of currency units)114
Table A.6 - Financing Account for waste water management (millions of currency units) ............... 114
Table A.7 - Classification of financing sectors used in the SEEA-Water Financing Accounts .......... 115

6. 5
Acknowledgements
This report has been prepared by Sophie Trémolet and Marie-Alix Prat of Trémolet Consulting
Limited (London), under the leadership and guidance of Bruce Gordon and Didier Allély-Fermé
(WHO-Geneva). This is the second version of the guidance document, which incorporates comments
received from the Technical Advisory Group (TAG) for the TrackFin initiative on the initial version.
We are very grateful for comments provided by all TAG members, including Gérard Payen (United
Nations Secretary General’s Advisory Board on Water - UNSGAB), Dominick de Waal and Guy
Hutton (Water and Sanitation Program - WSP), Véronique Verdeil (World Bank), Patricia Hernandez
(World Health Organisation), Meera Mehta (CEPT – India), Catarina Fonseca (IRC), Richard
Franceys (Cranfield University), Xavier Leflaive (Organisation for Economic Cooperation and
Development), Ricardo Martinez-Lagunes (United Nations Department of Statistics).
Objectives and planning of the testing exercise
The present version of this document is going to be developed following testing activities at country
level in Brazil, Morocco, Ghana and Burkina Faso.
The objectives of the testing exercise are as follows:
 Prepare WASH-Accounts for a small set of countries and extract lessons from those findings;
 Verify data availability and define strategies to deal with lack of data where it occurs;
 Help identify the extent to which statistical data (as opposed to sector data) can be relied upon;
 Contribute to develop the methodology further, particularly where several options have been
identified;
 Provide a basis for revising the guidance document, with concrete examples from the WASH
sector.
Further comments are invited on this document from interested parties at any stage of the process.
These comments, together with findings from the testing phase, will be reflected in the next version of
the document to be released in Autumn 2014.

7. List of acronyms and abbreviations
3Ts, Tariffs, Taxes and Transfers (sources of finance)
AICD Africa Infrastructure Country Diagnostic
AMCOW African Ministers’ Council on Water
CLTS Community-Led Total Sanitation
CRS Creditor Reporting System
CSO Country Status Overview
DAC Development Assistance Committee (OECD)
EFA Education for All
GDP Gross Domestic Product
GLAAS UN-Water Global Analysis and Assessment of Sanitation and Drinking-
Water
IBNET International Benchmarking Network for Water and Sanitation Utilities
IRC IRC International Water and Sanitation Centre
ISIC International Standard Industrial Classification of All Economic Activities
JMP WHO/UNICEF Joint Monitoring Programme for Water Supply and
Sanitation
MDG Millennium Development Goal
MFI Micro Finance Institution
MTEF Medium-term Expenditure Framework
NEA National Education Account
NGO Non-Governmental Organization
NHA National Health Accounts
NSO National Statistical Office
ODA Official Development Assistance
OECD Organisation for Economic Co-operation and Development
PER Public Expenditure Review
POC National level Point of Contact
PPP Purchasing Power Parity
PRSP Poverty Reduction Strategy Paper
SEEA System of Environmental and Economic Accounting
SEEA-Water System of Environmental and Economic Accounting for Water
SFP Strategic Financial Planning
SHA System of Health Accounts
SNA System of National Accounts
UIS UNESCO Institute of Statistics
UN United Nations
UNSD United Nations Statistics Division
UNESCO United Nations Educational, Scientific and Cultural Organization
UNICEF United Nations Children’s Fund
UOE UNESCO/OECD/Eurostat
USAID United States Agency for International Development
WASH Water, Sanitation and Hygiene
WASH Accounts Water, Sanitation and Hygiene Accounts
WHO World Health Organization
WSP Water and Sanitation Program (World Bank)
WSS Water Supply and Sanitation

8. 7
Introduction
Overview
This guidance document sets out a proposed methodology to identify and track financing to the
WASH sector in a coherent and consistent manner across several countries. It is designed to help
countries track financing to the WASH sector on a regular and comparable basis and analyse this
information to support evidence-based policymaking based on useful indicators.
For ease of reference, the output of this exercise is referred to as WASH-Accounts (WASH-A).
Between November 2013 and June 2014, the proposed methodology for the development of WASH-Accounts
will be tested in countries that have expressed an interest in doing so. Based on the findings
of this exercise, a refined methodology will be developed and disseminated widely so as to assist
countries with the provision of sound and reliable financial information for future GLAAS reports.
This will then form the basis for further methodological development and country-level applications
in subsequent years. The long-term aspiration of the TrackFin initiative is to develop a common
approach so that data produced at country level can be used for benchmarking, within and across
countries and as a reference to guide key policy decisions.
Rationale for the development of a shared methodology
This methodology has been developed based on the findings of the WHO and UN-Water GLAAS
Working Paper “Tracking national financial flows into sanitation, hygiene and drinking water”
(Trémolet & Rama, 2012) published in July 2012. The working paper stressed that effective financing
for water, sanitation and hygiene is essential to accelerate and sustain services that could ultimately
save two million lives per year. However, limited availability of financial data and inadequate
monitoring impedes the ability of countries to assess progress and improve performance. The working
paper concluded that our current understanding of financial flows to the water, sanitation and hygiene
(WASH) sector at the national level is limited, with numerous gaps.
Based on these findings, there was a common agreement that a better understanding of financing to
the WASH sector at the national level is critical to support policy development and implementation,
as well as to encourage better and more equitable utilization of existing funds and attract additional
financing to the sector. However, there was also a consensus that this is a difficult and challenging
task, especially considering the poor state of current financial data in the sector. When the data is
available, indicators often do not allow breaking down the information. The working paper therefore
concluded that a multi-year initiative, thereby referred to as the UN-Water GLAAS TrackFin
Initiative would need to be launched in order to gradually develop a methodology that could be used
by a broad range of countries in order to produce comparable financial data on their WASH sector,
that would enable policy makers to make the appropriate analysis.
Demand for sound financial information for the sector was confirmed at the highest political level,
including at the High-Level Meeting organised by Sanitation and Water for All in Washington DC in
April 2012. An evaluation of the UN-Water GLAAS report identified that improved tracking of
financing to the sector is essential and that the GLAAS report has a leading role to play in this area.
These calls for action have provided the basis for the launch of the WASH “TrackFin” initiative (as in
“tracking financing” to WASH) by WHO on behalf of UN-Water.
The development of the present methodology seeks to learn and build upon existing systems for
tracking expenditure, including the System of National Accounts (SNA) (see Box 1 below) and
sector-specific systems, such as the System of Health Accounts (SHA) for the health sector or the
Water Accounts that are to be prepared for the water sector as a whole, in application of the SEEA-Water
framework (System of Environmental-Economic Accounting for Water) designed by the
United Nations Department of Statistics (UNSD) (Annex B provides more detail on this system).

9. 8
Box 1 - The System of National Accounts (SNA)
The system of national accounts (SNA) is a broad structure for national economic accounting. This system was
first adopted by the United Nations in 1952 and revised and updated since. The rules and structure of the SNA
are contained in a manual called System of national accounts 2008. It is the internationally agreed standard set
of recommendations on how to compile measures of economic activity.
The SNA describes a coherent, consistent and integrated set of macroeconomic accounts in the context of a set
of internationally agreed concepts, definitions, classifications and accounting rules. It provides an overview of
economic processes, recording how production is distributed among consumers, businesses, government and
foreign nations. It shows how income originating in production, modified by taxes and transfers, flows to these
groups and how they allocate these flows to consumption, saving and investment. It provides the definitions that
underlie such concepts as gross domestic product (GDP).
Specific areas of learning from the SHA or from the SEEA-Water framework are highlighted
throughout the text with the following symbols.
Learning from the health sector
Learning / aligning with SEEA-Water framework
Objectives of the methodology
The methodology aims to track all financing expenditure made in the WASH sector by all type of
entities in the economy, including governments and public institutions, public and private
organizations, NGOs, foundations, international and national donors, investors and households.
It will enable countries answer five key questions:
1. What is the total expenditure in the WASH sector?
2. Who pays for WASH services and how much do they pay?
3. Which entities are the main funding channels for the WASH sector?
4. How are funds distributed to the different WASH services and expenditure types?
Additional questions may be answered depending on the level of detail that can be reached for
collecting the information and in order to help answer more specific policy questions. At this
relatively early stage, however, the methodology is not encouraging countries to capture every single
financing flow (or capital stock) in the smallest detail but rather to identify ballpark financing
allocations, based on a combination of real data and a number of transparent assumptions (for the
cases where the information base is non-existent or very poor). Early identification of questions that
policy-makers want to address based on WASH Accounts data will be essential so as to ensure that
the data being produced is policy-relevant.
To generate and analyse data in order to answer those questions, the methodology proposes to follow
a series of steps, as outlined in Figure 1 below. Step 5 (“Provide feedback for methodological
development”) has been included so that the results of the testing exercise can be used in order to
improve the methodology used at a global level (including for the GLAAS 2014 report).

10. Figure 1 - Overview of proposed methodology to track financing to WASH at national level
Source: authors.
The development of WASH-Accounts is likely to give rise to a number of specific
challenges. These challenges (and potential solutions) are highlighted in boxes with the
sign to the left.
Target Audience
This methodology has been developed for the use of governments, especially in lower income and
middle-income countries. It is designed to guide the preparation of WASH Accounts in countries so
that they can be used for policymaking, as well as for international reporting, such as for the GLAAS
report. It would also be of interest for bilateral donors, multilateral institutions, NGOs and
philanthropic organisation looking for financial data to support their decisions regarding the design of
their programs, both at international and country levels.

11. Testing the methodology and providing feedback
This version of the guidance document has been prepared with the view that it would be tested in
about up to four participating countries. The objectives of the testing “exercise” are as follows:
 To evaluate the feasibility of collecting financing data on the WASH sector at national or regional
10
level in a way that is comparable and consistent;
 To assess the extent to which national statistical offices are able to provide financial information
on the WASH sector in a way that can be used by sector policy-makers and on reverse, the extent
to which sector policy-makers could express their demands to statistical offices so that
information can be provided in a reliable and standardised manner;
 To identify challenges and potential solutions when applying this methodology, including the
conceptual framework developed to identify and track the financing flows as well as the tools
developed to present the information;
 To get feedback on the long-term feasibility of national WASH-Accounts and on methodological
developments that may be required over the long-term.
Overall organisation arrangements of the testing
The TrackFin initiative is managed by a small secretariat hosted by WHO. In addition to WHO staff
member, the Lead international Consultant (Trémolet Consulting) will provide overall methodological
guidance for the work at international and country level and the Country-level Consultants will
provide guidance and management support to conduct the testing studies at country-level. National
stakeholder groups will be established in each country where the testing will take place, based, where
possible, on existing sector coordination mechanisms.
The approach to the testing exercise will be the same in all countries as described in this document.
 The testing exercise will start by identifying key points of contact at national level, and where
appropriate based on previous contacts established by GLAAS;
 The national level points of contact (which are likely to be within one or several of the lead
Ministries for the sector) will be requested in each country to convey a national level stakeholder
group to oversee the testing exercise and provide feedback. These groups would ideally build on
existing country-level WASH sector coordination platforms (with representatives of the
Ministries in charge of Water, Sanitation and Hygiene and the Ministries of Finance) to which the
Department of Statistics should be invited. The national level point of contact should chair this
national level stakeholder group and be in charge of getting agreement of a country-level
workplan;
 Testing at country level will be carried out by national consultants selected by national authorities
in coordination with WHO, with the support of the Country Consultant. The national level point
of contact, in coordination with WHO team, will prepare terms of reference to reflect country
context, data availability and specific study questions that can be tested in this particular country
so as to engage a local consultant to assist with the data collection and analysis based on the
methodology. These consultants will be funded by WHO. The final selection should be based on a
consensus decision with respect to the team leading the initiative, based on a short-list of potential
consultants that were recommended by key national contact points, the GLAAS secretariat,
national-level WHO offices or the international consultancy team. Based on these ToRs, WHO in
coordination with national authorities will procure the national consultants, who will be briefed by
the national level contact point and the Country Consultant. The latter will also be responsible for
ongoing quality control and providing assistance with the implementation of the methodology;

12.  The national consultants will conduct preliminary work to collect available information and
identify key issues for the application of the proposed Guidance Document to their proposed
country context. They will then identify potential options to address such issues and present those
to a national-level workshop to which all members of the national stakeholder group will be
invited, together with a broader range of actors if available (such as decentralised governments);
 Based on methodological choices formulated at the national-level launch workshop, the national
level consultant will gather necessary data, conduct rapid surveys if necessary, analyse the
information and submit a draft report to the Country Consultant. Following incorporation of
comments and questions from the Country Consultant, this report will then be submitted to the
national stakeholder group for review via the national contact point;
 The national consultants and the national contact point will then organise a final workshop, at
which the results from the analysis will be presented, together with methodological issues
encountered and recommendations for mainstreaming into the national processes and
methodological developments (both at the national level and international level, via revisions to
the international methodology as a result of the testing exercise).
In each country, the aim will be to use as much recent and original work as possible, liaising as
necessary with key experts in WHO regional and country offices, INGOs, NGOs, consultants,
governments, research/academic institutions and multilateral bodies such as the World Bank's Water
and Sanitation Program.
The national-level reports will be developed based on a common format which will be specified in the
national level Terms of Reference. In each country, the national consultants will prepare a maximum
of a 60-page long report (with any additional relevant detail presented in Annexes) and an Executive
Summary. This report will cover three main aspects:
 Results of the analysis for the specific country;
 Policy recommendations that can be inferred from the results of the analysis;
 Recommendations to the WHO secretariat and expert group with respect to how the global
11
methodology could be improved / modified.
Based on the results of the testing exercise, this guidance document will be revised and circulated to
all countries willing to participate to the GLAAS financial data collection exercise.
Structure of the guidance document
This guidance document takes the reader through each of the steps for applying the proposed
methodology. It is structured as follows:
 “Step 1 – Getting started” sets out the initial steps that countries should take in order to get the
exercise of building WASH Accounts going.
 “Step 2- Collect financial data” is the “heart” of this guidance document as it includes guidance
on collecting and organising the data as the input into the WASH Accounts. It recommends
alternative methodologies for such data collection to reflect different circumstances.
 “Step 3 – Analyse financial data” proposes a set of tables that constitute the “WASH Accounts”
(the “output”) and from which a number of standard indicators can be extracted to analyse the
sector. Depending on the policy questions that they want to answer, countries can choose to
prepare only a sub-set of these tables or to drill down on particular aspects by adding more tables.
 “Step 4 – Interpret and disseminate findings” contains guidance with respect to how the data
can be interpreted and used for policy-making, highlighting potential pitfalls and future
methodological developments.

13.  “Step 5 – Provide feedback for methodological development” summarises what is expected
from countries participating in the testing exercise in terms of feedback to be provided on the
objectives and nature of the testing exercise.
The sections are presented in the order in which the activities will need to be conducted. However, it
is important that the teams in charge of carrying the exercise read through the entire guidance
document prior to initiating the exercise.
To complement this guidance, a series of notes has been developed to provide additional background
on the methodology and set out alternative methodologies for specific areas. These notes have been
designed to be stand-alone notes so that they can be used in different circumstances and feedback can
be obtained from different sets of stakeholders and experts depending on their thematic area. During
the testing exercise, each country will be encouraged to use those to firm up their approach and to
provide feedback on the methodology that appears most suitable to meet their needs.
Methodological notes
 No 1: Developing a classification of WASH services
 No 2: Developing a classification of WASH sector actors
 No 3: Estimating funding of WASH services with a “financing source approach”
 No 4: Estimating the costs of providing the service with a “cost-based approach”
 No 5: Estimating capital stocks for WASH using a “fixed asset stock approach”
 No 6: Preparing WASH Accounts tables and indicators
In addition:
 Annex A provides a summary of actions to be undertaken at national level under each step;
 Annex B contains a brief description of the System of Economic and Environmental Accounting
12
for Water (SEEA-Water), with which the WASH Accounts are looking to align over time;
 Annex C includes a glossary of key terms employed in this guide
 Annex D contains a list of useful references and relevant websites.

14. 1 Step 1 – Getting started
A number of preliminary steps need to be completed so as to start the process prior to data collection.
For optimal success, countries should start the preparation of WASH accounts in response to a clearly
expressed policy demand. The construction of WASH Accounts will most benefit countries if the
results are ultimately used by policymakers and sector stakeholders.
13
Step 1 - Summary of tasks to be undertaken
 Create political buy-in:
- Identify a country champion to be the national point of contact (POC)
- Convene a national level stakeholder group to oversee compilation of data and provide
political support to the project
 Identify policy questions:
- Organise an initial kick-off meeting with members of the national level stakeholder group
- Agree on a list of priority policy questions that the data collected will aim to answer
 Set up the team in charge of data collection and analysis:
1. Build a strong WASH Accounts team backed up by institutions
2. Identify available data and define a data collection plan
3. Develop a detailed budget and work plan for data collection and analysis
1.1 Create political buy‐in
The first step will consist of generating political buy-in from high-level members of the
government, within the ministries in charge of WASH services or at the level of the Ministry of
Finance. Creating political will is key to ensure the success of the exercise and to overcome potential
technical difficulties (including limited availability of information, weak information systems or
internal barriers to greater transparency). To that end, a political champion will need to be identified
in the country to lead the exercise, and to appoint a national level point of contact. The latter will
receive a package of information to be disseminated amongst high level government members and
key sector stakeholders to raise awareness on the benefits of gaining a better understanding of
financing to the WASH sector and on the potential policy uses of WASH Accounts.
Once a country expresses interest in preparing WASH accounts, the national level point of
contact (POC) will be requested to convene a national level stakeholder group to oversee their
compilation. This group will be responsible for identifying policy questions and providing feedback
at critical moments when the analysis is being developed. The group will ideally include
representatives of the Ministries in charge of water, sanitation and hygiene and of the Ministry of
Finance, as well as from main utilities, regulators, donors, NGOs and Foundations active in the
country. To the extent possible, the group will build on existing country-level WASH sector
coordination platforms, to which the Department of Statistics should be added (as it may not take part
on a regular basis to WASH sector-level groups). The national level point of contact (POC) will chair
this national level stakeholder group. The chair will also take the lead to establish and manage the
WASH Accounts team responsible for the data collection exercise (see Section 1.3 below).
The national level stakeholder group will provide key political support for the testing exercise.
This is not only important to link the production of WASH Accounts to the policy process and
institutionalise it later on, but also to conduct the present exercise. They can leverage their network to
gather key politicians to formulate the policy questions that WASH Accounts will aim to answer, to
connect a wide range of skills to form the WASH Accounts team and to disseminate the results.

15. 14
1.2 Identify policy questions
To ensure that WASH Accounts are useful for the country and will be used by policymakers to
make decisions based on evidence, WASH Accounts need to be designed to answer policy questions
expressed by policymakers. Although it is expected that countries collect the common basic indicators
on the WASH sector, these policy questions will drive the level of detail that needs to be reached for
data gathering, as well as the selection of complementary indicators that will be calculated in this
exercise. For instance, Ministries might be looking for data on the total expenditure for the WASH
sector to compare it with other countries or sectors, and use this data to advocate for mobilising more
resources for the WASH sector. Policymakers may also wish to know more precisely the exact
financing potential of households to decide how much public support is needed and how household
investments could be better supported.
 Examples of possible policy questions that can be addressed through WASH Accounts can be found in
Section 4.2 “Turning data into policy - Interpreting and disseminating the data”. Methodological Note No
6 contains a list of WASH Account tables and indicators that can be built in order to provide information
to address these policy questions. The national level stakeholder group and the subsequent WASH
Accounts team should therefore familiarise themselves with these Tables prior to starting.
These policy questions will drive the level of detail that countries want to reach with specific aspects
of the analysis, which is why it will be important to agree on these questions prior to defining a data
collection plan. To that end, it is proposed that the national point of contact will gather members
of the national level stakeholder group for a kick-off meeting, in order to agree on a list of
priority policy questions. On this basis, the national level point of contact (POC) will then agree on
tailored Terms of Reference for the testing exercise with WHO secretariat. Those Terms of Reference
will reflect the country’s context, data availability, policy questions that are relevant to the country
and specific methodological questions that can be tested in the country.
Some of the participating countries might be in the process of preparing Water Accounts based on the
SEEA-Water methodology. In those cases, testing the UN-Water GLAAS TrackFin methodology in
parallel with the preparation of Water Accounts will enable to draw conclusions on the extent to
which there are economies of scale relative to data collection and on the compatibility of the
approaches. Box 2 below provides summary information on this methodology.
Box 2 - The System of Environmental-Economic Accounting for water (SEEA-Water)
The System of Environmental-Economic Accounting for Water (SEEA-Water), prepared by the UN Statistics
Division, provides a conceptual framework for organizing hydrological and economic information in a coherent
and consistent manner thus overcoming the tendency to divide issues along disciplinary lines. It is based on the
2003 System of Environmental and Economic Accounting (SEEA) and was further elaborated to reflect the
2008 System of National Accounts (SNA). SEEA-Water provides the framework for developing Water
Accounts, which share a similar structure, definitions and classifications with the SNA. In 2007, the SEEA-Water
framework was adopted as an international standard by the UN Statistical Commission, which encourages
countries to implement it. To date, more than 50 countries have expressed interest in compiling national
environmental-economic accounting for water following the SEEA-Water framework. These are mostly
developed countries (mainly European Union countries, along with Australia), but some developing countries
from different regions of the world are also starting to adopt the framework, including Algeria, Bolivia,
Botswana, Brazil, Colombia, Dominican Republic, Ecuador, Egypt, Jordan, Lebanon, Mauritania, Mauritius,
Mexico, Morocco, Namibia, Palestine, Panama, South Africa, Tunisia and Zimbabwe. At the national level,
SEEA-Water is being implemented gradually, as a step-by-step process. Only a few countries have been able to
develop a complete set of Water Accounts, including for both physical and monetary data. The UN Statistics
Division is encouraging countries to use this system of accounts by organizing regional workshops and
delivering capacity-building activities. Other institutions, such as the World Bank are providing financial
support to countries that wish to adopt this system, in particular through the WAVES partnership.
Source: (United Nations Statistics Division, 2012). See also Annex B.

16. 15
1.3 Set‐up the team in charge of data collection and analysis
1.3.1 Build a strong WASH Accounts team backed up by institutions
Based on these ToRs, the national level point of contact (POC) will set up a WASH Accounts
team to carry out the testing exercise at country level. The WASH Accounts team should ideally
be composed of people with a diverse range of expertise, technical and policy experts from the
WASH sector as well as representatives from the National Statistics Office, and good analytical and
communication skills. The WASH Accounts team will be briefed by the POC and the International
Consultants appointed by WHO. The latter will also be responsible for on-going quality control and
providing assistance with the implementation of the methodology.
To the extent possible, team members should belong to government’s administration, to ensure
capacity building at national level and appropriation of the exercise by the country, regardless of the
fact that the work is then be done through national consultants. For the testing exercise, if national
consultants are funded by WHO, the consultants would be selected and hired by WHO. The selection
will be done at country level based on a short-list of potential consultants, assembled based on
recommendations from the key national contact point, GLAAS secretariat, national-level WHO
offices and the international consultancy team.
Hiring external national consultants would spare financial and human resources from the
national governments and avoid diverting employees away from their ongoing regular
work, in particular given the short time frame for this project. By contrast, if the personnel
conducting the WASH Accounts study are completely external to the government, it may
create the risk that the testing exercise would be a one-off exercise and that skills and
expertise developed along the way are lost.
The WASH Accounts team will conduct preliminary work to collect available information and
identify key issues for the application of the proposed methodology to their proposed country context.
They will then identify potential options to address such issues and present those to a national-level
workshop to which all members of the national stakeholder group will be invited, together with a
broader range of actors if available (such as decentralised governments).
1.3.2 Identify available data and define a data collection plan
The WASH Accounts team will start by identifying available sources of information so as to support
data collection, based on three core principles:
 Use all suitable existing data;
 Adjust existing data to match the objectives of the WASH Accounts;
 Arrange for the collection or generation of the “missing” data.
To keep the costs of the exercise down, countries should identify which data is already available
in previously existing reports. Examples of potential documentation appear in Box 3 below.
Box 3 - Examples of pre-existing information to be collected (as appropriate)
 Household surveys (e.g. Multi Indicator Cluster Surveys)
 Access data from the Joint Monitoring Programme
 The GLAAS Report and survey responses
 Information on the water sector at the level of the National Statistical Offices
 WSP’s Country Status Overviews (in Sub-Saharan Africa only)
 PRSP documents and planned poverty reduction expenditure
 Medium Term Expenditure Frameworks
 National sector plans and policies

17.  National budgets
 Local government budgets (for decentralised WASH sectors, for a sample of localities)
 Utilities’ financial accounts
 Sector financing reports produced by the sector regulator (where they exist)
 OECD Creditor Reporting System and data from the DAC database
 SWA Aid Effectiveness Working Group and Country Processes Working Group documentation
 Data from the IBNET database
 UN-Water Country Briefs
 World Bank Public Expenditure Reviews (PERs)
 United Nations Economic Commissions' relevant studies
 Africa Infrastructure Country Diagnostic studies
 WASH sector reports
 Project-specific documentation
 Reports on decentralisation processes
 Benchmarking reports from utility associations, governments (e.g. Brazil, India) or regulators (e.g. Kenya,
16
Mozambique etc.)
In countries where there has already been some analysis of the WASH financing system, country
profiles and reports on different segments of the system may indicate other data sources. The WASH
Accounts team will also need to interview key informants at stakeholder institutions to identify the
extent to which data is available within those organizations. With respect to private operators and
non-profit organisations, it will be important to seek out umbrella organizations, such as NGOs and
industrial associations, in order to make it easier to find data sources and to ensure that those sources
can be made public. It will also be useful to contact international organizations that may have
database that can complement national sources.
Aligning with National Statistical Offices (NSO) systems. A key area to explore up-stream
of testing the methodology will be to assess the extent to which National Statistical
Offices (NSOs) collect financial data from the WASH sector at a level of detail that allows
drawing conclusions for policy definition. Different types of situations may be identified:
 If NSOs do collect data on WASH, it will be important to work with them to identify
how this data can be extracted and used by sector actors. This would be the best way to
ensure that the data collection exercise is embedded in national systems and can be repeated
over time at least cost. A key area of coordination will also be to identify how NSOs and
sector stakeholders can work together to translate WASH sector policy needs and produce
data at the most appropriate level of disaggregation. WASH sector stakeholders can also
learn from NSOs on data collection methods.
 If the level of detail of WASH statistical data is insufficient (either because NSOs are
poorly performing or they do not collect data from a comprehensive set of WASH service
providers), it will be necessary to initiate a specific sector-level data collection process. It
will be preferable to align with the statistical office’s classification in order to facilitate
integration further down the line.
The type of data that will be needed and potential sources for this data is set out in more detail in
Section 2, which gives a step-by-step guide on how to collect the information. In some cases, it will
be necessary to collect primary data, particularly for the costs of certain service providers (e.g.
informal service providers) or certain financing sources (e.g. household investment in on-site
sanitation) that are unlikely to be routinely collected by NGOs. When such surveys are not possible or
too expensive, it will be necessary to formulate assumptions to derive initial estimates, even if these
are approximate. The exercise will necessarily be limited by data availability. Therefore, the WASH
Accounts team should initially be aiming at a reasonable but optimal level of accuracy, searching for
the 20% of sources that will provide 80% of the needed data.

18. Section 2 of this guidance document proposes a way forward on specific issues depending on the type
of data to be collected: it will therefore be important that the WASH Accounts team reviews this
Section in detail prior to defining its work plan. Conducting additional data collection will clearly
have budgetary implications, which should be identified from the start: it will be important to consider
trade-offs between different types of data collection as well.
1.3.3 Develop a detailed budget and work plan
Once policy questions have been identified and available information has been mapped out, the
WASH Accounts team will be responsible for defining a work plan and detailed budget. These
documents should be approved by the national level stakeholder group. It will be important to start
with reasonable expectations in terms of level of detail and complexity for the information, and to
improve it over time. The WASH Accounts team, in conjunction with the national level stakeholder
group, will need to define the space and time boundaries of the accounts, taking account of the
potential challenges indicated below.
Potential challenges to consider when defining a budget and workplan
 WASH Accounts would preferably cover the entire national territory but could
include detailed information for specific regions only, with data for other regions
based on extrapolations. If there are substantial discrepancies between geographic
areas, regions should be classified into types and data should be obtained from at
least one region from each type, so as to allow a more representative extrapolation of
regional-level data.
 Depending on the organisation of the WASH sector in the country, data
collection will likely be conducted separately in each sub-sector. Typically, in a
developing country, the service provision and financing arrangements for urban
water, urban sanitation, rural water and rural sanitation tend to differ, hence the need
to consider each of the four “sub-sectors” separately. As a result, the analysis may
need to be repeated for each of the four sub-sectors, even though the methodological
tools and approaches for each of the sub-sectors will be the same.
Providing feedback on the methodology
Countries participating to the testing exercise will be invited to comment on the process proposed in
Step 1 to initiate the exercise and create political buy-in within Ministries. Views are sought on
whether it would be useful to gather simplified indicators on the sector (as “Quick Wins”) in Step 1 to
demonstrate to decisions makers that the exercise will be useful so as to show them how the data can
be used. This would aim to create more political support to the team collecting the data.
17

19. 2 Step 2 – Collect financial data
This section sets out the framework for developing WASH Accounts in more detail: it is intended to
serve as a practical guide for the collection of financial data under Step 2.
The WASH Accounts team will need to answer three basic questions in order to collect the data:
 Which WASH services are consumed?
 How are services provided and by whom?
 How much do these services cost and how are they financed?
This framework of analysis is based on the basic premise that all services that are consumed are also
provided and financed in some way, which means that conducting the analysis alongside these three
axes should ultimately yield the same results.
Taking account of “financing losses” in the system
In some cases, financing allocated to the sector may not translate into actual services
consumed, due to various losses along the way. Ideally, these “losses” would need to be
quantified and it could be a long-term objective of the TrackFin initiative to help quantify
how much financing is “budgeted” or “allocated” but does not actually result in service
delivery. This kind of analysis, although important, will most likely be difficult to
conduct in the initial stages of applying the methodology, as it requires keeping track of
many complex datasets simultaneously. At this stage of methodological development, it is
preferable to obtain actual expenditure amounts for all types of flows. This would allow
comparisons between different sources of funding and would provide a more accurate
representation of actual expenditure in the sector. If obtaining actual expenditure
information is proving challenging, it could be possible to estimate it based on budgeted
amounts and estimated percentages of realisation (based on past experiences). (See the
Challenge Box “Identifying which financing flows can be tracked in Section 2.3). In
addition, it could also be useful to complement this with qualitative and quantitative
assessments of the difference between budgeted amounts and actual spending.
Figure 2 below (based on a similar figure for the SHA) presents the main dimensions that need to be
examined in order to track financing to the WASH sector at the national level in a comprehensive and
reliable manner. The following sections provide more detail about what to do to generate this data.
18

20. Figure 2 - Financing flows in the WASH sector: mapping the sector based on consumption, production & financing
19
FINANCING SOURCES
 Tariffs for services provided
 Households’ expenditure for self-supply
 Domestic public transfers
 International public transfers
 Voluntary contributions
 Repayable financing
What is being
financed by whom?
FINANCING UNITS
 National authorities
 Regional authorities
 Local authorities
 Network corporate providers
 Non-network corporate providers
 Economic and quality regulators
 Bilateral and multilateral donors
 Banks and Financial Institutions
 NGOs and community-based
organizations
 Households
COSTS
 Capital costs including hardware and
software
 Operating and minor maintenance costs
 Large capital maintenance costs
 Cost of capital
 Support or software costs
What is being
produced by whom
and at which cost?
SERVICE PROVIDERS
 Government agencies
 Network corporate providers
 Non-network corporate providers
 NGOs and community-based
organizations
 Households (self-provision)
SERVICES
Water supply services
 Water supply through large network
systems
 Basic drinking water supply
Sanitation services
 Sanitation though large network systems
 Basic sanitation
Support services to the WASH sector
 Administration of water and sanitation
programmes
 Regulation of these sector of activities
 Governance and legislation
 Education and capacity building
Water resources Management
 Services in relation to water supply and
sanitation services
What is being
consumed by whom?
TYPES OF USES
 Served domestic use
 Self-provided domestic use
 Served institutional use
 Self-provided institutional use
 Served industrial and commercial use
 Self-provided industrial and commercial
use

21. 20
2.1 Define WASH sector boundaries in terms of services
Step 2.1 - Summary of tasks to be undertaken
 Define a classification of WASH services that will be used for the testing exercise:
- Identify the classifications and categories of WASH services that are being used in the
country.
- Analyse similarities and differences with available international classifications (see Table MN
1.6): can the same categories be used? Is data collected on this basis in the country?
- State very clearly which activities are included in the WASH sector definition, preferably by
reference to international classifications
- Collect data according to these categories if possible or based on aggregate categories (e.g.
water supply services, sanitation services, construction services, support services)
 Specific task for the testing exercise: Provide feedback on the following questions:
- Is the proposed list (see Table 1.) usable and useful in your country to define sector
boundaries?
- What would be the ideal level of aggregation of data that would answer policy questions and
be easily collected at the same time?
- Can WASH data based on international classifications be found in your country?
- Would it be necessary, in your opinion, to refine existing classifications in order to better
match WASH sector needs?
Why is it important to define the WASH sector in terms of services?
The WASH Accounts team will need to start by defining the “boundaries” of the WASH sector
in the country based on a list of potential services to be included.
Adopting and using a common classification of products, services and activities relevant to the
WASH sector is essential in order to ensure that the information produced for the GLAAS exercise
(and beyond) is consistent, comprehensive and comparable. This applies to the collection of financial
information as well as to any other type of information collected through the GLAAS report. Such a
definition often varies from one country to another, and it is therefore essential to clarify what is
included in the sector in the country where the analysis is conducted.
There are several specific objectives (and associated challenges) when defining sector boundaries:
 To identify the list of products and services for which costs and financing sources are to be
tracked through the WASH accounts. Such products and services may be produced jointly with
other water services by certain actors. For example, some water companies that distribute water
may also be involved with managing water resources up-stream or managing irrigation schemes
for agricultural purposes. Other services may be seen by some as going “hand-in-hand” with the
provision of WASH services, such as solid waste management, whereas other countries would not
typically include solid waste management in their sanitation definition. Some countries might
have difficulties including hygiene, as they would not track this on a regular basis. Making
reference to a common list will help countries identify which services should be included (such as
downstream sludge management) and which should be excluded (e.g. building of dams which are
mostly for hydropower generation).
 To define categories of services for which financing should be tracked separately. This could
be done in order to be in a position to draw policy conclusions on whether financing is allocated
to the right type of services or products. In the early stages of implementing the methodology, it
might only be possible to disaggregate based on a few types of services (at the very least, between

22. water and sanitation services). However, the long-term objective for methodological development
is to allocate financing to different service categories so as to improve the detail of the analysis.
To the extent possible, all countries reporting to GLAAS should do so based on a common
definition of the WASH sector. If this is not possible (because of the way in which their water sector
is organised), reporting countries should be explicit about which services are included (or not) in their
definition so that sources of difference can be clearly attributed and understood.
Learning from the health sector – The System of Health Accounts (OECD, 2011) defines the
boundaries of health care activities from an international perspective based on the functions of
health care. Health expenditures are included in Health Accounts based on the following four
elements. To be accounted for, they should involve:
a) A transaction;
b) Which is linked to the consumption of a resident;
c) Whose primary purpose is health (the “purpose” of the spending determines the
health care functions. This is defined as “the type of need that the transaction aims to
satisfy or the kind of objective pursued ”);
d) Which involves the application of a qualified health knowledge (direct or through
21
supervision).
Are included in the boundary of HA, activities which aim to “improve, maintain and prevent
the deterioration of the health status of persons and mitigating the consequences of ill-health
through the application of qualified health knowledge. Based on this criteria, health activities
are classified in 7 main categories of health care functions sub-divided in a total of 36
categories (Health promotion and prevention; Diagnosis, treatment, cure and rehabilitation of
illness; Caring for persons affected by chronic illness; Caring for persons with health-related
impairment and disability; Palliative care; Providing community health programmes and
Governance and administration of the health system). Countries chose what they can classify
based on the nature of their national health statistical systems, the data available and the
ability to implement an accounting framework based on a classification based on health
purpose.
What do we mean by the WASH sector?
Broadly defined, the “WASH sector” refers to the provision of water, sanitation and hygiene
services. These services may be purchased from WASH service providers or self-provided.
The fact that the GLAAS report has been defined in the global monitoring architecture as the report
that enables tracking inputs whilst the JMP tracks outputs and outcomes (particularly in terms of
attaining the MDGs) has a number of implications for the definition of the WASH sector for the
present exercise. The MDGs aim at halving the number of people that do not have access to water and
sanitation. Specific emphasis is placed on the provision of services in or near the home (as opposed to
in working spaces or institutions). This means that for the purpose of tracking financing (i.e. the
“inputs”), it would be preferable to include information from service providers that serve households
(i.e. commonly referred to as “domestic water providers”) and institutions (administrations, schools,
hospitals, etc.) as opposed to commercial, industrial or agricultural users. This can raise challenges as
most municipal service providers serve households and institutions but also other types of customers
(see the box below on typical challenges).
Potential challenges involved with defining the WASH sector and ways to address
such challenges
 WASH service providers serve a wide range of different types of users, including
industrial, commercial and institutional users). This is a key difference with the health
sector, for example, where services are basically consumed by individuals.
Disaggregating financial data to separate out services received by households only is
likely to be time-consuming and in some cases impossible to achieve. In the first

23. instance, we recommend tracking financing for service providers that primarily serve
domestic and institutional users, noting if possible the proportion of revenues (and costs)
that relate to other types of users (such as commercial or industrial).
 Not all WASH services are “provided”: many households or industrial users self-provide
water and sanitation services, particularly when network services are too
expensive or not accessible (households) or network service quality is not satisfactory
(unreliable service hours, inadequate quality, which mean that industrial users develop
their own water supply). These “own-use” activities need to be included (as they are in
the Water Accounts) in order to capture the whole range of services.
 WASH service providers need to carry out other activities up-stream and
downstream of providing services to households in order to contribute to managing
the water cycle sustainably. Boundaries with water resource management are
sometimes difficult to draw. We recommend including the water resource management
activities that a water service provider should undertake as part of its normal activities to
protect water sources but to exclude, to the extent possible, water resource management
for other types of uses, such as irrigation schemes or hydro-energy production.
 None of the existing international classifications has identified hygiene relating to
water and sanitation as a specific product or service category. If hygiene financing is
going to be adequately tracked, this would require developing, adopting and
mainstreaming specific classifications (for products, service providers and functions).
This is not a priority during the first phase of methodological development but would
need to be explored in subsequent stages.
 Water resource management activities do not strictly speaking fall under the
definition of WASH services. However, some of these activities are implemented by
water service providers and are essential for the sustainable provision of such services. It
is therefore recommended, if possible, to take into account financing going to the water
resource management activities that are directly relevant to water and sanitation service
provision but exclude broader water resource management activities, such as the
construction of dams for irrigation purposes for example.
Providing access to water and sanitation is only a subset of the services that are needed in order to
manage the water and sanitation cycle in a sustainable manner whilst serving the needs of all users.
These other activities can be referred to as the WASH services “value chain”, as presented in Figure 3
below.
22

24. 23
Figure 3 - The value chain of WASH services
Source: “Benefits of investing in water and sanitation: An OECD Perspective” (OECD, 2011), p.31
In addition, to ensure that the overall WASH sector is functioning adequately, additional functions
need to be carried out typically at the national ministry level (or regional level, in the case of federal
systems), such as sector planning, management and coordination functions.
 Methodological Note No 1: Developing WASH services classifications provides additional detail on
existing international classifications (with a particular focus on CPC, ISIC and COFOG), how they can be
used to support the analysis of the WASH sector and what modifications might be necessary in order to
enable a more detailed analysis of the sector. Table MN1.4 in Methodological Note No 1 contains a list of
those services and support functions according to existing international classifications (mainly CPC, ISIC
and COFOG). To ease understanding, we have reordered these classifications to match the value chain
presented in Figure 3 above. The classification of WASH goods and services proposed for this exercise is
presented in Figure 1below. As these classes are commonly accepted and used, we recommend using them
to identify the boundaries of the WASH sector and identify which activities should be included or excluded
when tracking transactions to WASH.
Whether or not these services are provided depends on the level of development of the water
sector in a given country. In most developing countries, these services are unlikely to be provided in
a comprehensive manner. For example, where providing access is a priority, wastewater collection
and treatment services are often very limited. However, for the purpose of the testing exercise and to
ensure its global applicability, the classification includes all critical services that would ideally need to
be provided, from which countries can select as appropriate. To the extent possible, we recommend
collecting data according to the categories presented on Table 1 below.

25. 24
Table 1 – Proposed classification of WASH goods and services
Code Category Activities included Included
in
S1 Water supply
services
Water supply
through large
network systems
 Collection of rain water and water from various
sources (from rivers, lakes, wells);
 Purification of water for water supply purposes,
desalting of sea/groundwater by treatment plants;
 Storage of water;
 Large scale transmission / conveyance of water in
pipelines;
 Distribution of water through mains (includes water
pumping and transport in local water networks);
 Management of water connections and consumer
support activities.
ISIC: 36
Basic drinking
water supply
 Collection of rain water and water from various
sources (rivers, lakes, wells) using handpumps,
spring catchments, gravity-fed systems, rainwater
collection and fog harvesting;
 Point-of-use water treatment for drinking purpose;
 Storage of water in tanks;
 Distribution of water through small distribution
systems (pipes, wells or trucks) or local
neighbourhood networks typically with shared
connections/points of use;
 Management of water access points and consumer
support activities,
S2 Sanitation
services
Sanitation though
large network
systems
 Construction of sanitation facilities in households
and communities and connection to large sewage
systems;
 Collection of sewage by large scale sewer systems
including trunk sewers and sewage pumping
stations and drains;
 Sewage treatment and disposal, including residual
sludge disposal;
ISIC 37
Basic sanitation
 Promotion of sanitation, including demand
promotion and sanitation marketing;
 Construction of basic sanitation facilities in
households and communities (latrines, septic
systems, etc.);
 Collection and transport of sludge from onsite
facilities (pits emptying and cleaning services);
 Treatment and disposal of sludge by faecal sludge
treatment facilities;
S3
Support
services to the
WASH sector
 Water and sanitation sector policy making and
governance, including:
o Development of sector policies
o Legislation : Definition and enforcement of
drinking-water and discharge standards for
municipal wastewater
o Regulation of water and sanitation supply
activities and service providers
o Sector planning, including estimating future
sector financial needs
ISIC
8412

26. Code Category Activities included Included
in
25
o Administration of water and sanitation
programmes;
 Education & capacity building in water supply and
sanitation
S4
Water
resources
Management
(linked to
water and
sanitation
services)
Water resources
protection
 Collection and usage of quantitative and qualitative
data on water resources;
 Creation and sharing of water knowledge;
 Conservation and rehabilitation of inland surface
waters (rivers, lakes etc.), ground water and coastal
waters;
 Prevention of water contamination.
River basin
development
Integrated river basin projects and related institutional
activities; river flow control; dams and reservoirs.
What needs to be done under this step?
The WASH Accounts team will need to identify the list of WASH products and services that fall
under the definition of WASH in their own country. In the first instance, it is unlikely that
countries will be able to report financial information for each of those services separately. However,
setting out a clear definition of what is included in their WASH sector will help when examining
potential differences in funding across countries. To the extent possible (i.e. if data is available),
countries should report on financing to different types of WASH services, so as to be able to evaluate
financing allocations between different types of services.
To the extent possible, we recommend collecting data according to existing classifications so as
to ease the collection process and facilitate comparisons. To this end, countries can refer to existing
classifications, which have been developed internationally (as summarised in Table MN1.4. and
discussed in Methodological Note No1). These international classifications do not necessarily reflect
adequately the realities of the WASH sector but they are currently the best available. Over time, the
TrackFin initiative may be in a position to identify areas of weakness and recommend modifications
to existing international classifications if those are likely to be needed.
Countries may want to introduce further disaggregation for certain categories to reflect their
own policy needs. For example, a country with a significant investment backlog for rural sanitation
may want to adopt a higher level of disaggregation for these specific services. Each testing study will
need to define which classification(s) can be used depending on the classifications used in the country
and the amount of data that can reasonably be collected in the given timeframe.
Providing feedback on the methodology
Given that the ultimate goal of the exercise is to embed this data collection in national statistical
processes, feedback will be sought on the appropriateness of existing classifications for the
WASH sector and on the extent to which these classifications may need to be modified. One key
objective of the testing exercise will be to better understand how existing classifications (CPC, ISIC
and COFOG in particular) capture information on financing to WASH and how they are used and
applied in the targeted countries. The WASH Accounts team will be asked to report on the
appropriateness of the presented classifications of WASH services and suggest any modifications to
contribute to the development of a list of WASH services that could be used later.
 Methodological Note No 1: Developing WASH services classifications sets out potential issues with
existing classifications and formulates initiate recommendations as to how these classifications may need to
be amended in order to meet the policy needs of the WASH sector.

27. 2.2 Identify the main WASH sector actors, map service provision and
26
financial flows
Step 2.2 - Summary of tasks to be undertaken
1. Identify and classify WASH actors, financing sources and uses of WASH services
 On the basis of data already gathered in Step 1.3.2, identify the classifications of WASH
actors, financing sources and uses that are being used at country level
 Analyse similarities and differences with the proposed classifications: can some categories be
used? Can collected data fit into the proposed classifications?
 State clearly the classifications of WASH actors, financing sources and uses that will be used
 Organise actors and financing sources into categories using the proposed classification.
2. Map out the financing of the WASH sector (actors and financing flows schematised by
categories)
 Represent the WASH sector actors and financing sources for each of the four sub-sectors (if
necessary, i.e. if there are substantial differences between them)
3. Provide feedback on the methodology:
 Assess if the proposed global classification covers all identified actors and financing sources
at country level and whether it needs to be modified to better adjust to the country’s context.
 Indicate whether a common classification of WASH actors, financing sources and uses is
useful
 Report on any difficulties encountered in carrying out the exercise and ways to address them.
Why is it important to identify WASH actors and financial flows in the sector using a
common methodology?
Identifying the main actors of the WASH sector and the financial flows between them is
essential to understand what type of data needs to be obtained and where it can be obtained.
Building a graphical representation (as shown on Figure 4 below) of financing flows will facilitate
this process, to ensure that all actors and flows and recorded and to communicate the results.
To allow international comparisons and to ensure that the information produced is consistent, it
is preferable that all countries participating in the exercise use the same (or similar)
classification of WASH sector actors and of the financing flows circulating between them.
At present there is no standard classification for actors in the WASH sector. Country-level statistical
offices and WASH sector officials use their own classifications, which vary depending on the
structure of the WASH sector in their country. The present methodology proposes a classification of
WASH sector actors that could be adopted for this purpose and that is sufficiently broad to capture
most (if not all) sector organisations. The proposed classification distinguishes between actors
(service providers and financing units), financing sources (characterised by the origin of the funding),
and the type of use to which the funding is allocated. This proposed classification was developed so as
to align with existing classifications used at an international level, whilst proposing improvements to
overcome certain identified weaknesses with existing classifications. If possible, it should be used
across countries so as to present data on a comparable basis. Table 2 below presents this classification
in a synthetic manner and contains all definitions for WASH sector actors, financing sources and uses
of WASH services used in the present methodology.
 Methodological Note No 2: Developing classifications of WASH actors and financing sources proposes
and justifies a system of classification for the various types of sector actors and financing sources based on a
thorough review of existing classifications. This system is summarised in Table 2 below.

28. 27
Table 2 – Definitions: uses of WASH services, WASH sector actors and financing sources
Code Category Definition
U: Uses of WASH services Type of use of WASH goods and services
U1 Served domestic use Consumption of served water and sanitation services by households that are served by service providers and pay for the service via a
tariff. This would include water supply to households that are connected to the water and/or sewerage network, but also water fetched
from a public standpipe or other providers (e.g. water tankers).
U2 Self-provided domestic
use
Consumption of self-provided water and sanitation services by households. Households have to pay up-front an initial investment (in a
well or private latrine) to have access to the service and then need to cover operating and maintenance costs of their assets.
U3 Served institutional use Consumption of served water and sanitation services by government agencies (such as Ministries, hospitals, schools) and voluntary
organisations such as NGOs, CBOs or foundations. They are served by service providers and pay for the service via a tariff.
U4 Self-provided
institutional use
Consumption of self-provided water and sanitation services by government agencies (such as Ministries, hospitals, schools, etc.)
and voluntary organisations such as NGOs, CBOs or foundations. They make an up-front initial investment to have access to the
service and then need to cover operating and maintenance costs of their assets.
U5 Served industrial and
commercial use
Services used by commercial entities that are purchasing water and sanitation services from a service provider at the industrial or
commercial tariff.
U6 Self-provided industrial
and commercial use
Consumption of self-provided water and sanitation services by industrial or commercial entities.
P: WASH service providers Actors engaged in the production and delivery of WASH services. These would include government institutions providing
support services to the sector.
P1 Government agencies Providers that are integrated in government. This would also include government agencies (such as Ministries, hospitals, schools, etc)
and as well as self-provided municipalities (operating the service directly rather than through a corporatized entity).
P2 Network corporate
providers
Utilities that own and/or operate facilities for production and distribution of water and sanitation services through network systems for
the public, as well as for bulk services. They can be either privately or publicly owned, mandated or independent, large, medium or
small-sized, providing a public service or self-providing the service for their own use.
P3 Non-network corporate
providers
Corporations that provide any WASH good or service along the value chain at a small scale through non-network systems. They
usually involve low skilled labour and small level of initial investments. They can take various organisational forms from cooperatives
to private ventures, and be formal or informal.
P4 NGOs and community-based
organizations
Non-profit making organisations that seek to complement WASH public services. They usually have a formal structure and offer
services to people other than their members, and are, in most cases, registered with national authorities. Community-based
organizations (CBOs) are a type of small NGOs that aim to mobilize, organize or empower their members, usually in a local area.
P5 Households (self-provision)
Households that self-provide the service. They have to pay up-front an initial investment (in a well or private latrine) to have access to
the service and then need to cover operating and maintenance costs of their assets.

29. Code Category Definition
FU: Financing units Institutional entities that provide funding to the sector. They mobilise funding to pay for WASH services. They may allocate
28
funds directly to service providers or channel them through intermediary institutions.
FU1 National authorities Public authority at central government level, including Ministries (ministry of finance, ministry of water or other ministries) or
national institutions
FU2 Regional authorities Public authority operating at the regional level
FU3 Local authorities Public body operating at the level of a smaller geographic area, such as a city, a town, or a district.
FU4 Network corporate
providers
Utilities that own and/or operate facilities for production and distribution of water and sanitation services through network systems for
the public, as well as for bulk services. They can be either privately or publicly owned, mandated or independent, large, medium or
small-sized, providing a public service or self-providing the service for their own use.
FU5 Non-network corporate
providers
Corporations that provide any WASH good or service along the value chain at a small scale through non-network systems. They
usually involve low skilled labour and small level of initial investments. They can take various organisational forms from cooperatives
to private ventures, and be formal or informal.
FU6 Economic and quality
Regulators
Public authority responsible for the overall supervising of the WASH sector in the country (control of tariffs, quality of water,
competition in the sector etc.)
FU7 Bilateral and multilateral
donors
Governments providing official development assistance directly to a country or through multilateral international institutions (UN,
World Bank or regional development banks)
FU8 Banks and Financial
Institutions
A financial institution that provides banking services, such as taking deposits and providing credit facilities and loans to individuals
and/or small businesses and corporations.
FU9 NGOs and community-based
organizations
Non-profit making organisations that seek to complement WASH public services. They usually have a formal structure and offer
services to people other than their members, and are, in most cases, registered with national authorities. Community-based
organizations (CBOs) are a type of small NGOs that aim to mobilize, organize or empower their members, usually in a local area.
FU10 Households Households that self-provide the service (such as on-site sanitation). They either pay up-front through initial investments (in a well or
private latrine) or purchase services from a variety of providers (e.g. water tankers).
FS: Financing sources Where funding originates from. This is what the OECD commonly refers to as the 3Ts (as tariffs, taxes and transfers) for
which we are proposing a slightly amended classification.
FS1 Tariffs for services
provided Payments made by users to service providers for getting access to and for using the service.
FS2 Households’ expenditure
for self-supply
Funding provided by households to invest in or provide the service themselves. Households have to pay up-front an initial investment
(in a well or private latrine) to have access to the service and then need to cover operating and maintenance costs of their assets. This
can be in form of cash, material or time.
FS3 Domestic public
transfers
Public transfers from government agencies (central or local government) to WASH actors. These are often subsidies that come from
taxes or other sources of revenues of the government. This category includes only grants and excludes concessionary loans (which are
included in FS6).
FS4 International public
transfers
Voluntary donations (or grants) from public donors and multilateral agencies that come from other countries. Concessionary loans are
excluded from this category and entirely included in FS6 Repayable Finance.

30. 29
Code Category Definition
FS5 Voluntary contributions
Voluntary donations (or grants) from international and national non-governmental donors including from charitable foundations, Non-
Governmental Organizations (NGOs), civil society organizations and individuals (remittances). Concessionary loans are excluded
from this category and entirely included in FS6 Repayable Finance.
FS6 Repayable financing
Sources of finance that come from private or public sources and ultimately need to be repaid, such as loans (including concessionary
loans and guarantees), equity investments or other financial instruments such as bonds.
This category can be divided down into 2 sub-categories: concessionary repayable financing and non-concessionary repayable
financing.

31. What needs to be done under this step?
The first activity under this step entails identifying and listing all potential actors in the WASH
sector, and gathering basic information on these actors (such as number of entities, legal status
(formal or informal, publicly or privately owned) and geographical coverage). To conduct this
exercise, it will be important to identify whether existing classifications of WASH actors and
financing sources are being used at country level, either at the level of the NSO or by the WASH
sector itself. If such classifications exist and are being used, it will be necessary to analyse similarities
and differences with the classification proposed in the present methodology. It will then be necessary
to state clearly the classifications of WASH actors and financing sources that will be used and to
organise actors and financing sources into categories using the proposed classification.
Once the bulk of this information is collected, the second activity will consist of mapping out how
the sector is organised and financed, as presented schematically in Figure 4 below for a
hypothetical WASH sector. This figure is purely illustrative for an imaginary sector and does not
intend to exhaustively map out all possible financial flows. Mapping out financial flows needs to be
distinguished (and kept separate) from mapping out institutional arrangements. The latter show lines
of responsibilities and allocation of powers and functions (including policy-making, regulation, asset
ownership, service provision, etc…) whereas financial mapping mainly focuses on tracking where the
money comes from, how it travels and who it goes to.
30
Figure 4 – Mapping financial flows for WASH service provision: illustrative example
Source: adapted from (Trémolet & Rama, 2012).
The exercise needs to include and differentiate service providers from all four main subsectors of the
WASH sector, i.e. urban water, urban sanitation, rural water and rural sanitation and most likely map
them out separately. This is because the organisation of each of these four subsectors often varies
substantially. For example, sanitation services may be provided jointly with water services or
separately. In a large number of cases, there is no formal sanitation service provider and households
are required to invest in on-site sanitation and maintain the installations themselves (this is referred to
as “self-supply”).

32. WASH sector actors will be characterised according to the role they play in the financing and
provision of WASH services. Actors will be identified mainly as:
 “service providers” engaged in the production and delivery of WASH services.
 “financing units”, i.e. as actors collecting funds and transferring them to service providers,
(potentially via other financing units who pool and distribute the funding). Typically, these
would include households, domestic and international governments, private corporations and
non-profit organisations;
Potential challenges involved with identifying and mapping WASH sector actors and ways to
address such challenges
 Informal service providers need to be included in the mapping to the extent possible.
Even though the economic activities of informal actors may not be accounted for by
statistical offices, they often represent a large proportion of WASH service provision in
developing countries and need to be taken into account in the classification and
mapping.
 Actors can play different but simultaneous roles in the WASH sector, which means that
it may be difficult to allocate them to a single category. For example, households may be
financing units and self-service providers at the same time. They may be using their own
resources for investing in WASH whilst also receiving government subsidies. All
financing flow information need to be recorded and coded appropriately: a single flow
might needs to be recorded in different ways to reflect this multiplicity of roles.
 Avoiding double-counting of financial flows. Some financing units allocate funds to the
sector from their own resources (such as central government institutions) whilst others
are merely channelling funds provided to them by other institutions (typically, local
governments may act as financial channels particularly when they do not have their own
funds to allocate to the sector). When resources are channelled through several financing
units (for instance from an international donor to a national government and then from
the national government to a local government) , it is important to ensure that funds are
not counted twice i.e. at source and at the point where funds are disbursed to service
providers. We recommend that flows be tracked at the level that is closest to service
provision (in this case the local government), so as to enable maximum disaggregation
of the funding flows. Indeed, any allocation that takes place at the national level is likely
to be much more aggregated. The feasibility of this recommendation needs to be
assessed during the testing exercise.
 Users can also be represented in this figurative mapping. However as users will have
several uses (served or self-provided) and thus can be allocated to several categories, we
prefer using the concept of “use of WASH services” to track the service and level of
service on which the funding is spent (See Methodological Note 2 “MN 2.1. Classifying
WASH service uses”).
Financing flows will be characterised according to the origin of the funding. “Financing sources”
are defined as the flows that are channelled to the service providers and which are differentiated based
on the origin of those funds. Funds for the sector can come from either private sources (including
households via tariffs and own investments or charitable donations or private investments) or public
sources (from taxes, which are either managed by national governments or international governments,
in the form of public transfers through official development assistance). The way in which these
financing sources are described can vary significantly from one sector to another: this is an area where
reaching an agreement on definitions for the WASH sector as a whole would be beneficial. In
addition, as financing sources are not actors per se, it is also important to identify the “financing
units” separately (as described in the box above
31

33. Potential challenges in defining financing sources
Different classification systems refer to “financing sources” in slightly different ways. In the
OECD 3T terminology, “financing sources” refers to where the funding comes from and the
types of funds that can be mobilised to finance the sector. The SEEA-Water terminology
refers to financing units (actors grouped by financing sectors), which are covering the costs.
To add to the confusion, the SHA terminology refers to these “financing units” as “financing
sources”. In the classification recommended in this document, the terminology “financing
sources” has been kept as per the OECD definition and complemented with a reference to
“financing units”, as the actors from which the funds are mobilised.
To the extent possible, we recommend collecting data according to the proposed classifications
to ensure comparability between countries. Countries might not need to use all categories,
depending on the structure of their WASH sector. Countries may want to adapt those categories
and introduce further disaggregation for certain categories to reflect their own policy needs. For
example, a country with a significant investment backlog for rural sanitation may want to adopt a
higher level of disaggregation for these specific services. Each testing study will need to define which
classification(s) can be used depending on the classifications used in the country and the amount of
data that can reasonably be collected in the given timeframe.
The following sections provide guidance on carrying out the data collection for each category.
Identifying the uses of WASH services
The WASH Accounts team will need to identify the types of uses of WASH services. We
recommend using the classification proposed in Table 2. Countries can also use additional criteria
to classify uses depending on the policy questions they wish to answer. For instance domestic uses
can be classified by:
 Demographic groups (ethnicities, urban or rural);
 Socioeconomic strata (level of income, tariff scale);
 Geopolitical entities (regions, districts etc.).
Countries would need to assess the feasibility of collecting data according to these additional
categories, depending on the policy questions they want to answer.
Identifying service providers
The WASH Accounts team will need to identify the entities that are in charge of providing the
services from all four subsectors and the services they are providing.
In order to understand the supply market, assess its dynamics and level of fragmentation, the WASH
Accounts team collect initial data on main providers or type of provider to get an idea of:
 their characteristics and status (ownership, enterprise or non-enterprise, formal or informal);
 WASH services they produce;
 the users covered (type and number);
 external funding they receive;
 their geographical distribution and human resources;
 expenditure reports produced about their activity;
32

34. 33
Box 4 - Types of service providers: the example of Burkina Faso
In Burkina Faso, a public urban utility, ONEA, is in charge of providing water services in the main urban
centres (as well as sanitation services in the big cities). By contrast, service provision in rural areas is
decentralised, with rural communities being responsible for the delivery of water services. While boreholes in
rural areas are managed by water committees or by users’ associations, rural municipalities with a water
network are supposed to sign contracts with private operators. To date, about 70 of such municipalities (30%)
have signed contracts with four official private providers. In the remaining municipalities, the network is either
managed by a recognized community association (20%), by the municipality itself, or by an informal provider.
Informal providers are also found in peri-urban areas. Concerning sanitation, in rural areas, services are
typically self-provided. As a result, the five service providers categories would be used for this exercise: Public
and private utilities (ONEA), NGOs and community-based organizations (in rural areas), Small independent
providers (formal and informal operators in municipalities), Government agencies (municipalities) and
Households (self-provision).
To the extent possible, the WASH Accounts team will classify them in the pre-defined “service
provider” categories presented in Table 2 and differentiate between actors from all four main
subsectors of the WASH sector (urban water services, urban sanitation services, rural water services
and rural sanitation services). To align with SEEA-Water, when a provider operates in several sub-sectors,
it should be categorised in the subsector of its primary activity (i.e. for which its output is
highest).
Identifying financing units
The WASH Accounts team will need to identify relevant financing units providing and/or
allocating funds to the WASH sector. It will collect data on the characteristics and status of these
entities and on the structure they finance, in order to understand whether they act as primary or
secondary source of the funding (i.e. only channelling funds. To the extent of possible they will
classify relevant entities in the pre-defined “financing units” categories presented in Table 2.
Identify financing sources and how funding circulates between WASH sector actors
The WASH Accounts team will then identify the financing sources and how these funding flows
circulate between the previously identified actors. To the extent possible, we recommend collecting
data on financing sources according to the proposed classification presented in Table 2. This
classification has been developed based on existing standards classifications, namely a slightly
modified version of the OECD’s 3 T (“tariffs, taxes and transfers”) approach and SEEA-Water. Such
areas are discussed in Methodological Note No 2: Developing classifications of WASH actors and
financing sources.
Providing feedback on the methodology
Given that the ultimate goal for this data collection is to be embedded in national statistical
processes, feedback will be sought on the appropriateness of the proposed classification of
WASH actors and financing sources and the extent to which this classification may need to be
modified to reflect other existing classifications. The testing exercise will contribute to better
understand how these existing classifications capture information on financing to WASH and how
they are used and applied in the type of countries that we are targeting. It will also help to know
whether data categorised under these classifications can actually be found in developing countries.
The WASH Accounts team will provide comments on the proposed classifications based on the
methodological discussion included in “Methodological Note No 2: Developing classifications of
WASH actors and financing sources”. It will suggest any modifications to contribute to the
development of a shared list of WASH uses, service providers, financing units and sources that could
be used for subsequent GLAAS data collection exercises.

35. 34
2.3 Estimate financial flows and capital assets stocks
Step 2.3 - Summary of tasks to be undertaken
 Identify data required to answer policy questions set out in Step 1.2.
 Identify whether the National Statistics Office already collects data on financing to WASH and if
so, understand their methodology for doing so;
 For financing flows, gather financing data at source, starting with the approach that allows
generating the most comprehensive data set (i.e. either “Financing Source Approach” or “Cost-based
Approach”):
 For financing flows, define a time period over which to gather information (2-3 years);
 Note that both approaches will need to be applied in parallel as they provide complementary
information, particularly needed to allocate costs to types of services;
 Gather data on capital assets using the “Fixed asset stocks approach”
 Collect the data and create a WASH Accounts database:
o Define the structure of the database and the data-records so that it can be maintained on
an ongoing basis;
o Decide which data to acquire;
o Enter existing data into the database;
o Allocate WASH Accounts classification codes to all data entries;
o Identify data gaps and undertake further analysis / surveys to plug in data gaps; and
o Prepare the WASH- Accounts tables.
 Reconcile the data, identify gaps in the information and recommend (and conduct) any
supplementary primary data gathering (such as additional surveys).
 Provide feedback on methodological issues:
o Appropriateness of the categories of costs proposed
o Identify a list of costs and financing sources that are difficult to value and will require
additional methodological development
o Appropriateness of using a Fixed Asset Stocks approach
o When using a Fixed Asset Stocks approach: on methods for asset valuation and on
whether to deal with liabilities alongside assets
Why is it important?
Collecting financial information is the core objective of the TrackFin methodology. Two main types
of financial information can be collected:
 Information on financing flows. This can be used to estimate the "inflows and revenue" into the
sector each year (tariffs, households’ expenditure for self-supply, domestic public transfers,
international public transfers, voluntary transfers and repayable financing) and how much is
“spent” every year on providing different types of services, to cover different types of costs, such
as operating expenditure, small maintenance, capital expenditure or capital maintenance
expenditure.1
1 An indicator such as GDP (Gross Domestic Product) is also a financing flow indicator, as GDP estimates the
total value of goods and services produced in a country from the expenditure on consumption and production. It
indicates the total monetary value of all the finished goods and services produced within a country's borders in a
specific time period (usually in a year). It includes all of private and public consumption, government outlays,
investments and exports less imports that occur within a defined territory. It is calculated based on expenditure
figures reported in the National Accounts.

36.  Information on fixed asset stocks. Alternatively, and in complement, it is important to gather
information on capital stocks, to estimate how much has been invested by economic actors in
building WASH assets over the years. This can also provide the basis for "asset management
planning" which is critical for future financial planning.
So far, most existing financial tracking initiatives have focused on tracking financing flows. Such
methodologies often stem from an emphasis on tracking public financial flows, as public budgets
typically distinguish between “recurrent” expenditure and “development” expenditure (i.e. capital
investment). It is therefore assumed that collecting data on development budgets from public
agencies’ accounts will give a good indication of capital investments. In the present methodology, we
argue that it would be important for the WASH sector to get a better grip on the overall value of its
assets, which means that collecting data on capital stocks, alongside data on financing flows, is
important. The testing exercise gives an opportunity to test the proposed methodology for this.
Collecting information on financing flows can itself be done based on two approaches:
 The “Financing Source Approach” consists of tracking revenues from each financing source to
35
estimate “how much money is allocated to the sector” and aggregate those estimates; and
 The “Cost-based Approach” consists of tracking the costs of different services for service
providers to estimate “what is being spent” and aggregate those expenses to derive total
expenditure figures.
The Financing Source Approach aims at answering questions such as “who are the main sources
of finance for the sector” and “what is being spent” from the point of view of financing sources
and units. In most cases, it is likely to be the most straightforward approach for tracking public
financing flows, as most public entities have a budget allocation for the sector and should be able to
report on this. The WASH Accounts team will seek to collect data on financing units’ budgeted
allocation of resources and expenditures from their financial reports and data sources mentioned
above. However such an approach is often not sufficient when seeking to track how the money is
spent (i.e. how it is distributed between water and sanitation for example) or to gather information on
certain sources of finance, such as households spending for instance.
For this reason, it is often necessary to combine this analysis with a “Cost-based approach” to
evaluate the costs of providing the services. This needs to be done based on a commonly agreed
typology of costs, which would at least distinguish between capital expenditure (including large
maintenance costs, which should be accounted for as a separate item), operating costs and minor
maintenance expenditure.
Finally, the approach that aims at collecting data on fixed assets stocks is referred to as the “Fixed
asset stocks approach”. Information for this approach also needs to be obtained at the level of service
providers, by focusing on obtaining data on their assets (and potentially liabilities) rather than on their
revenues and expenditures. This methodology would allow estimating the value of existing asset
stocks in the sector and is in line with the System of National Accounts. Estimating such values raises
methodological difficulties. However, it would be important to attempt this methodology at least in
some of the countries where the testing exercise is going to be undertaken.

37. These approaches and the way they may be combined to derive meaningful data on WASH financing
are presented schematically on .
Figure 5.
36
Figure 5 - Methodology to estimate expenditure in the WASH sector
See additional methodological notes on how to apply those approaches and data needs:
 Methodological Note No 3: Estimating funding of WASH services with a “Financing Source
approach”
 Methodological Note No 4: Estimating the costs of providing the service with a “Cost-based
approach”
 Methodological Note No 5: Estimating fixed asset stocks
It will also be important to adopt a common terminology for the different categories of costs and
financing sources, and to use the same accounting principles so as to ensure data comparability.
Not only will this permit valid comparisons across activities in the accounts, across the years shown in
the accounts and across countries, it will also permit comparison of national expenditure on WASH
with other economic aggregates, such as gross domestic product. For this reason, it would be
preferable to employ an internationally accepted definition of the term “expenditure”, such as that
used in the system of national accounts (paragraphs 2.63 to 2.79 and Chapter VI of the SNA93
manual for a description of these concepts and definitions). However, aligning and reconciling with
the SNA terminology is likely to take time and to generate difficulties as most WASH sector actors
are not familiar with this terminology. This is a key area where feedback from the testing exercise will
be important, to assess the extent to which the WASH sector should develop its own concepts and
standards or seek to align with standard concepts and terminology as per the SNA.
What needs to be done under this step?

38. The first activity under this step consists of identifying which data needs to be collected and
whether the National Statistics Office already collects data on financing to WASH (what the SHA
refers to as the “top-down approach”) and if so, understand their methodology for doing so.
Information gathered by NSOs can provide useful background and indicate whether or not the NSO
has established systems to gather data from the WASH sector. However, information gathered by the
NSO will have its limitations. First, the SNA focuses on one main aspect of national expenditure,
which is the creation of value in production processes. Therefore this information can mainly be used
to estimate service providers’ costs and revenues. Second, the information gathered through the
National Accounts system is likely to be difficult to understand and interpret by sector actors. This is
because it uses a terminology and concepts that WASH sector actors may not be familiar with and
because this information is unlikely to be at the level of detail that would be required in order to
support policy-making at sector level. Engaging the NSO is important, however, in order to better
understand their current methodologies for gathering data and seek to involve them in the recurrent
preparation of WASH accounts.
The second activity will entail gathering financing data at source, starting with the approach that
allows generating the most comprehensive data set. Initially, it will be necessary to identify the main
data sources from which information on WASH expenditure can be extracted. Making an inventory of
data sources will help keep track of the core data sets which are available and identify where
information is missing and extra investigation needs to be conducted (such as household surveys etc.).
For each type of data, it would be useful to collect the type of information indicated in Box 5 below.
37
Box 5 - Data sources and collection methods
For each data source, it would be important to gather the following type of data:
 Name of data source
 Administration/Institution/ Origin of the source
 Type of data source (registers, business surveys etc.)
 Method of collection (e.g. administrative source, statistical full-scope or sample survey; national source
versus standardised international survey)
 Availability of data (years of data available)
 Concept of the measuring units (costs, expenditures, turnover)
 Variation in the methodology used to estimate data over time
 WASH actors coverage, i.e. can expenditure can be assigned to categories of providers or financing
sources and units?
 WASH service coverage, i.e. can expenditure be assigned to categories of WASH services?
 Configuration of data, i.e. what dimensions of data are available, level of details, by WASH services, uses,
service providers, financing sources, financing units, factors of provision, expenditure type etc.
 Data reliability bands, i.e. how reliable the data is? Is the methodology to compile the data traceable? This
can be assessed with a scoring system.
Based on an initial assessment of the availability of data at the level of financing sources and at the
level of service providers, the WASH Accounts team will start by gathering information using the
approach for which data availability is the greatest and access is easier. The other approaches will
then be introduced in order to fill in gaps and to gather complementary information where more detail
is needed for the purpose of policy analysis. To estimate financing flows, it will be important to apply
both approaches in parallel as some data may only be collected at the level of service providers based
on costs (for example, households’ investment in sanitation) whereas for other data, information
might be more readily available at the level of the source and be expressed as an expenditure.
Ideally, the WASH Accounts team will try to collect those costs at the level of each service provider.
If this is not possible, for instance, in countries with a large number of service providers, they
might need to collect the data from a sample and then extrapolate the results. The WASH Accounts
team will also need to define the timeframe for this analysis. With respect to financing flow data, it
would be preferable to gather data for a period of at least 2 to 3 full financial years, instead of
capturing data for a single year as the latter would risk yielding non-comparable data. Depending on

39. data availability, it will be essential to define what types of financial flows are going to be tracked, as
discussed below.
Identifying which financing flows can be tracked
For a given transaction, different types of financial flows are usually recorded, including:
amounts budgeted and actual expenditure. Although budgetary information is likely to be
easier to collect (particularly for transfers from public institutions), it is preferable to obtain
actual expenditure amounts for all types of flows. This would allow comparisons between
different sources of funding (including with funding provided by households, for which only
actual figures are likely to be available) and would provide a more accurate representation of
actual expenditure in the sector. If obtaining actual expenditure information is proving
challenging, it could be possible to estimate it based on budgeted amounts and estimated
percentages of realisation (based on past experiences). It is essential to clearly record what
types of financing flows are being tracked in order to allow comparisons.
The third activity entails building a database of WASH financial data, based on the initial investigation
conducted. Once the list of data source and WASH actors are complete and the methodologies to be
applied are clearer, the WASH Accounts team will create a WASH Accounts database in which they will
compile all data collected as it becomes available. The structure of this database should be defined so that
it can be maintained on an ongoing basis. The data collection process will be iterative as to refine initial
estimates. The database will be progressively completed through successive estimations, in order to
address remaining data gaps and reconcile estimates from different data sources. Data collection needs to
be carefully planned, so as to avoid burdening data providers with overwhelming data requests in order to
build a cooperative process with them. When filling information into the database, it will be important to
allocate WASH Accounts classification codes to all data entries. The first round of data entry will help to
quickly identify missing information, as well as potential questions arising on data sources (how data have
been estimated, to which category they should be allocated, etc.).
The final activity will consist in trying to reconcile all sets of data, by combining them to refine the
allocation of spending to different categories. If significant gaps are found between the results from
the two approaches to capture financing flow information, further investigation will be required to
identify estimation errors or missing flows. This may require gathering supplementary information
(from primary data sources) or applying estimates or using cost allocation keys to estimate data, as set
out in Box 6 below. If additional data gathering is required, the WASH Accounts team would need to
present this to the national level stakeholder group as this may require additional budget.
38
Box 6 - Filling in data gaps: making assumptions and using keys
There will be some cases where data is not available to estimate comprehensively a category of WASH Accounts.
In this case it will be necessary to resort to other estimation means using other information available. Using “keys”
or pro-rata estimations refers to using the distribution of a proxy variable as a substitute for an actual distribution.
For example, if there is no information on the distribution of expenditure across WASH services for a particular
actor, that distribution of activities might be used as the "key" for allocating the expenditure by service distribution.
Making assumptions might be necessary where insufficient information is available. For instance, if we want to
measure the allocation of “software costs”, (i.e. costs associated with infrastructure development, such as for project
preparation, capacity building, training, community mobilization and behavioural change activities) by activity of a
service provider when we only know the total expenditure of this provider for the provision of WASH goods and
services, it might be necessary to make an assumption on how much support costs can be associated to each of these
activities. Support costs may not be directly linked to the overall expenditure on a service, however. Typically, for a
public provider, support costs represent a higher percentage of the total costs of delivering sustainable sanitation services
than of delivering sustainable water services. This is because households are expected to mostly invest in sanitation,
which means that the support costs committed by the public party may represent a higher share of their total investment
than for water (where public investment, particularly for capital expenditure, is still very much the norm).
These assumptions, once formulated, would need to be tested, possibly by enquiring further into the cost structure of the
service provider. All estimation methods and assumptions should be clearly presented in metadata attached to the final

40. results; they should be justified and well documented. This transparency is a key part of WASH Accounts development
as it provides users of the results with a better understanding of how the data was compiled and assists compilers in
subsequent compilation rounds.
Using small-scale studies and applying results to the population. In some cases, the results of a small-scale
study can be used to estimate the data for a particular component. For example, a survey on the allocation of
expenditure of NGOs can be used to deal with the treatment of NGOs expenditure in WASH Accounts, given
that NGO expenditure (and its allocation) is very often not known to a great level of detail. This approach does
have its risks, however, as the selected sample might not be representative of all NGOs in the country. Thus it is
important to document the methods employed and the potential biases from such methods. This approach can be
used in a variety of areas where there is no separate accounting for WASH expenditure, or for particularly
difficult components (households, NGOs, CBOs etc.).
Providing feedback on the methodology
The methodology for tracking financial costs of WASH services will need to be refined based on the
findings from the testing exercise. Specific issues that will need to be addressed include defining cost
categories (at present, what is proposed is to distinguish at least between capital expenditure and
operations and maintenance expenditure, and potentially separate out large capital maintenance
expenditure as well as tracking separately software costs for policy development and programme
development). If the proposed cost categories are too detailed or difficult to use for extracting
information at source, they might need to be refined and adjusted.
Therefore the WASH Accounts team will be asked to develop and test a cost typology and to
contribute to the discussion on this methodological point.
The testing exercise should bring out key methodological issues that need to be tackled in order to
produce comparable cost information and to ascertain the level of detail on costs that can reasonably
be expected to be collected given the complexity of the sector. Feedback would also be needed on
whether additional guidance is needed (or not) on defining common rules for gathering specific data
items so as to ensure comparability.
Finally, the WASH Accounts team is also asked to contribute to the discussion on tracking financial
flows versus tracking capital stocks. Only certain countries will be expected to measure capital stocks
(also referred to as “gross capital formation” in the SNA language) for WASH and test the application
of this approach at country level to evaluate and report on their feasibility.
39
3 Step 3 – Analyse financial data
Step 3 - Summary of tasks to be undertaken
 Identify the tables and indicators from the list presented in this guidance document, based on
which are most relevant to answer the country’s policy questions;
 Undertake background calculation and compile WASH Accounts Tables;
 Calculate the WASH Accounts indicators;
 Document the compilation process;
 Verify the coherence of the tables;
 Provide feedback on the use of suggested tables.
Why is it important?
In order to conduct analysis and inform policy-making, the WASH Accounts team will need to
build a number of tables to present the information collected in a way that can be analysed and

41. used by policy-makers. These tables are what is referred to collectively as the “WASH
Accounts”. It is on the basis of such tables that comparable indicators can also be derived.
The present methodology proposes a number of standard tables that can be developed to address most
policy needs. The main objective of building these tables is to answer the policy questions identified
at the beginning of the process, including the following questions:
 What is the total expenditure in the sector?
 How are the funds distributed to the different WASH services and expenditure types?
 Who pays for WASH services, and how much?
 Which entities are the main channels of funding for the WASH sector, and what is their share of
40
total spending?
It is important that all participating countries use a basic set of common WASH Accounts tables and
indicators on a similar format, so as to enable international comparisons. Depending on their policy
needs and information availability, countries may choose to prepare a smaller set of tables or to
present more detailed information on certain aspects to address their own priorities.
Table 3 below presents the set of tables we are recommending that countries prepare in order to get a
comprehensive picture of WASH financing in their country.
Table 3 – WASH Accounts tables recommended for use
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 use
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 (SxFU)- WASH expenditure by WASH service and financing unit
Table WA 7 (PxFU)- WASH expenditure by WASH provider and financing unit
Table WA 8 (FSxFU)- WASH expenditure by financing source and financing unit
Table WA 9 (CxP)- WASH expenditure by type of cost and WASH provider
Table WA 10 (CxS)- WASH expenditure by type of cost and main WASH service
Table WA 11 (ASxP)- Asset stocks by type of WASH provider
 “Methodological Note No 6: Preparing WASH accounts’ tables and indicators” presents in more detail the
proposed WASH account tables and indicators. It contains the actual tables, explains how they are built and
what they can be used for.
In addition, the WASH Accounts indicators are a set of key figures that can be derived from the
WASH Accounts tables. They can be a quicker and more digestible way of presenting the information
as a set of headline figures for dissemination of the results.
Table 4 below presents the set of WASH Accounts indicators that can be calculated from the tables.
They refer to the total expenditure to the sector and the allocation of the expenditure according to the
different classifications presented above (per WASH service, provider, financing source) and as a
percentage of total expenditure. Countries would need to select from this long-list of indicators those
that are most useful to their needs. In addition, a set of internationally accepted common indicators
should also be estimated to ensure comparability.

42. 41
Table 4 - Potential WASH Accounts indicators
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 per type of use 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/ government agencies as a % of WASH
public expenditure
 Total capital costs as a % of total WASH expenditure
 Total operating and maintenance costs as a % of total WASH expenditure
 Total large capital maintenance costs as a % of total WASH expenditure
 Capital costs as a % of total water supply expenditure
 Operating and maintenance costs as a % of total water expenditure
 Large capital maintenance costs as a % of total water expenditure
 Capital costs as a % of total sanitation expenditure
 Operating and maintenance costs as a % of total sanitation expenditure
 Large capital maintenance as a % of total sanitation expenditure
 Total WASH fixed asset stocks per capita
What needs to be done under this step?
As a first activity, the WASH Accounts team will need to determine the tables to construct from
the proposed list depending on their usefulness for national policy-making and data availability.
International benchmarking should also be a key consideration when deciding which table to
construct.
In a second sub-step, data from the database built in Step 2.3. will need to be extracted to fill in
the tables. It might be useful to start building background tables first, i.e. starting from the most
disaggregated ones and building up to more aggregated ones.
Throughout this process, it will be important to report on the compilation process and methods used to
estimate the figures appearing in those tables, so as to be able to assess the quality of the data. WASH
Accounts team will need to state very clearly in an accompanying report how they collected and
constructed the tables. Documenting the metadata behind the data in the annex of the tables will
enable to obtain solid and comprehensive data and will ensure that it is appropriately interpreted and
used. At a minimum, background data should include the sources of data, how data were validated
(especially when there are multiple sources of data), the hypothesis used when evaluating data (e.g.
method of accounting chosen), the reasoning behind the selection of data used in the estimation and
the procedures applied to make data usable.

43. In a last sub-step, the WASH Accounts team will need to verify that the data presented in the
tables is robust and internally consistent. It will be important to check that:
 Totals are consistent across all tables. The same total expenditures observed for consumption also
42
hold for provision and financing;
 Totals reported should be equal to the sum of the constituent parts;
 Values of similar expense items from the same classification should be consistent across tables;
The various indicators in relation to the totals, related to the population (per capita value), related
to GDP and related to historical values when there are several times series of WASH Accounts
(percentage change from year to year, growth rates) are plausible.
Providing feedback on the methodology
Countries participating to the testing exercise will be invited to comment on the feasibility of the
approach and of constructing those tables. Following testing, we recommend that a “minimum
common set of WASH Accounts tables” and a minimum common set of indicators be developed and
agreed at international level. These might include additional tables that were not included in the
original set proposed in this draft guidance document (as we have deliberately tried to maintain the
number of tables to a manageable number).
4 Step 4 – Interpret and disseminate findings
Step 4 - Summary of tasks to be undertaken
 Analyse and interpret WASH Accounts data to answer policy questions
 Disseminate the WASH Accounts findings by communicating on the indicators, presenting the
main results and findings of WASH Accounts in a summary report (including key WASH
Accounts tables)
 Write short policy briefs for decision makers focused on a specific policy question
 Provide feedback on ways to disseminate findings
4.1 Analyse and interpret WASH Accounts data to answer policy questions
Why is it important?
Data is not information. In addition to producing tables and indicators, it is important to analyse the
data based on background information on the WASH sector in the country in order to correctly
interpret what the figures are showing. In order to be effectively used by policymakers, this
information needs to be concise, directly meaningful and relevant to them.
Table 5 below summarizes how WASH Accounts tables and indicators can provide elements to
address policy questions and support policy development. It is followed by a discussion of how this
data can be used and interpreted to answer a number of key policy questions, including:
 What is the total expenditure in the sector?
 How are funds distributed?
 Who pays for WASH services?
 How is funding channelled in the WASH sector?

44. 43
Table 5 - Link between WASH Accounts information and policy questions
WASH Accounts Tables (T) WASH Accounts Indicators (I) Policy questions that data can help answer
Table WA 1 (SxR)- WASH
expenditure by main WASH
service and regional subdivision
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
 What is total funding to WASH? Is current funding sufficient?
 What is the trend in funding? Is it increasing or decreasing?
 How does the level of funding compare to countries with a
similar level of income? With neighbouring countries?
 How does the level of funding compare with other social
sectors (health, education)?
 What is the urban/ rural, water/sanitation split in spending?
 Is spending allocated to WASH subsectors that need it most?
 Is funding going to regions/areas that need it most?
Table WA 2 (SxU)- WASH
expenditure by type of WASH
service and use Total expenditure per type of service use  Which type of use is benefitting from the financial resources
allocated to the WASH sector?
Table WA 3 (SxP)- WASH
expenditure by type of WASH
service and provider
Total expenditure per type of WASH service
Total expenditure per type of WASH provider
 Is spending going to services that need it most?
 Which services do providers allocate funds to?
Table WA 4 (PxFS)- WASH
expenditure by type of WASH
provider and financing source Total expenditure per type of financing source
 Which services and type of providers are funds allocated to?
 By whom is each type of service financed?
 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 public vs. private expenditure?
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?
Table WA 5 (SxFS)- WASH
expenditure by type of WASH
service and financing source
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
Table WA 6 (SxFU)- WASH
expenditure by WASH service
and financing unit
Table WA 7 (PxFU)- WASH
expenditure by WASH provider
Total expenditure channelled through regional and local authorities
as a % of WASH public expenditure
 How is funding in the WASH sector channelled?
 What % of WASH public expenditure is channelled via local
governments and how can they be supported?

45. 44
WASH Accounts Tables (T) WASH Accounts Indicators (I) Policy questions that data can help answer
and financing unit
Table WA 8 (FSxFU)- WASH
expenditure by financing source
and financing unit
Table WA 9 (CxP)- WASH
expenditure by type of cost and
WASH provider
Table WA 10 (CxS)- WASH
expenditure by type of cost and
main WASH service
Total capital costs as a % of total WASH expenditure
Total operating and maintenance costs as a % of total WASH
expenditure
Total large capital maintenance costs as a % of total WASH
expenditure
Capital costs as a % of total water supply expenditure
Operating and maintenance costs as a % of total water expenditure
Large capital maintenance costs as a % of total water expenditure
Capital costs as a % of total sanitation expenditure
Operating and maintenance costs as a % of total sanitation
expenditure
Large capital maintenance as a % of total sanitation expenditure
 Is sufficient spending allocated to operations and maintenance
as opposed to investment?
 Are tariffs/ subsidies/international transfers dedicated to
investment or O&M?
Table WA 11 (ASxP)- Asset
stocks by type of WASH
provider
Total WASH asset stocks per capita
 What is the stock of fixed assets for WASH services and for
each subsector?
 Is the capital stock being increased or run down?

46. What is the total expenditure in the sector?
Information on total WASH expenditure (as a monetary value or as a share of GDP) can provide
elements to answer the following 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 countries with a similar level of income? With
45
neighbouring countries?
 How does the level of funding compare with other social sectors (health, education)?
Answers to these questions could be used to do the following:
Monitor funding trends over time. The country’s level of WASH expenditure could be tracked over
time to evaluate whether the overall financing effort (i.e. coming from all financing sources, rather
than only from government) has increased or decreased. It could be compared with access rates to
WASH services to see how the variation in WASH expenditure over time is correlated to access to
WASH services. This information could be used to raise awareness on the need to attract more
financing to the WASH sector in order to meet agreed physical targets and objectives and inform the
debate about the appropriate mix of public and private financing in the sector.
Benchmark funding to the WASH sector, against other countries or other sectors. If the data is
collected on a comparable, comprehensive and consistent manner, the country’s level of WASH
expenditure could be benchmarked against that in countries with similar income levels or in
neighbouring countries. Total expenditure on WASH could also be compared to expenditure on other
social sectors, such as education and health.
At a later stage of methodological development, this financial data could also be related to outputs and
outcomes in order to estimate value-for-money. This would request having a good monitoring
framework for WASH sector outputs and outcomes in place. It could be used to assess the efficiency
of funding to produce outputs (such as numbers of schemes, facilities and hygiene programmes) and
outcomes (such as access to sustained WASH services). This analysis could be compared across
countries to see how variation in WASH expenditure across countries is correlated with variation in
access to WASH services. If similar countries have similar initial level of WASH services and have
been spending the same amount on WASH for several years with a large discrepancy in outcomes, it
would be useful to investigate the reasons for such a difference, to understand whether this might be
due to a difference in policies, financing strategy, implementation capacity or any other factor.
For instance the latest GLAAS 2012 report (WHO, 2012) collected data on Government expenditure
on health, education and WASH as a share of GDP across 13 countries (see Figure 6 below). It
indicates that median government expenditure on sanitation and drinking-water is one third of that for
health and one sixth of that for education. However, as noted in Trémolet and Rama (2012), this
analysis was based on a small and somewhat unreliable dataset. Once it is based on a broader and
more robust dataset, this analysis could eventually be used to set benchmarks for the level of funding
that should be allocated to deliver sustainable WASH services and used as a reference point in order
to mobilise additional financial resources.

47. 46
Figure 6 - Government expenditure on health, education and WASH
How are funds distributed?
Matrices of WASH expenditure per region/area and of WASH expenditure per subsector, service,
type of providers and expenditure type could provide data to address the following policy questions:
 Is funding going to regions/areas that need it most?
 What is the urban/ rural, water/sanitation split in spending? Is spending allocated to WASH
subsectors that need it most?
 Which services and type of providers are funds allocated to? Is spending going to services that
need it most?
 Is sufficient spending allocated to operations and maintenance as opposed to investment?
The answers to these questions could be used by policymakers for budgeting and planning in order to
perform the following types of analysis:
Identify inequities in spending distribution across regions and population groups. Depending on
countries’ requirements, WASH Accounts could show data on the share of WASH expenditure by
regions or by population groups with the greatest needs (i.e. at a level of disaggregation below the
national level). This could help countries evaluate whether enough financial resources are allocated in
areas where access to WASH services is lower. In turn, such analysis could be used to reduce
inequities across population groups and regions by relocating transfers (both domestic and
international) to those regions and groups that need them most through targeted pro-poor policies.
Allocate funds to sub-sectors, services, providers and programmes. WASH Accounts could provide
information on the share of spending allocated to the different subsectors (urban water, rural water,
urban sanitation and rural sanitation), services (on-site sanitation or piped sewerage, etc.) and types of
providers (public, private, community-based, small or large scale). This would help evaluating
whether funding is currently allocated to services and providers that need it most in order to allocate
budget more efficiently based on evidence.

48. For instance a study on public finance for household sanitation in Dar Es Salaam conducted for
WaterAid revealed that in the period 2006-2010, 99% of public finance was allocated to sewerage and
to wastewater treatment whereas only 10% of the population was connected to the sewer network and
only a mere 3% of the population benefited from wastewater treatment (Trémolet & Binder, 2010).
This kind of information could help enhance the comprehensiveness of public financing, target
funding gaps and allocate funds in a way that would allow all services along the cycle of WASH
activities to function in a sustainable manner. It is also important to track funding to software
activities such as hygiene education and support to community management so as to ensure that these
hardware expenditure on infrastructure development reach maximum impact.
Allocate funds between capital investments and operations and maintenance. The matrix of WASH
expenditure per subsectors, services and types of providers could also indicate whether funds are
spent on capital investments, capital maintenance or operations (and small maintenance). It is
important to check that operation and maintenance activities receive adequate funding so as to be able
to sustain the services delivered via capital investments.
For instance a WASHCost study on the costing of sustainable sanitation service delivery in the state
of Andhra Pradesh in India revealed that in 2009-2011 86% of the Government investments for
sanitation were spent on capital costs, largely on household and institutional toilets. Operation and
maintenance costs only accounted for 8% of the total government investment, and only 2% were used
for direct support costs such as sanitation promotion or training programs, which are usually
considered to be essential to ensure consistent use and maintenance. These findings imply low priority
given to regular maintenance and management (Snehalatha & al, 2011).
A regular tracking of these types of expenditure could help better allocate funding by planning
expenditure on a long term in order to enhance the long-term sustainability of WASH services.
Plan national WASH policies and strategies. By providing a complete picture of current spending,
WASH Accounts could contribute to identifying funding needs and priorities and designing a national
WASH strategy to plan expenditure at a national level according based on such priorities.
Monitor policies’ outcomes and effectiveness. Regular tracking of actual spending to WASH services
overtime could help monitor the efficiency of policies and reallocate budgeted funds based on
evidence. For instance this could be used to evaluate the efficiency of a new policy supporting small
scale sanitation entrepreneurs in a region by looking at outcomes on access to sanitation facilities and
compare trends over time. This could assess the benefits for the population and cost effectiveness and
equity of the policy and whether the government should continue to support it or not.
Who pays for WASH services?
The matrix of WASH expenditure per financing source, per service and per expenditure type could
provide information on financing sources of WASH and help define a financing strategy. It could
provide data to address the following policy questions:
 What is the share of public versus private expenditure?
 What is the financial burden on households? Are policies and utilisation of public funds effective
47
at leveraging private investment, including from households?
 What is the share of donor’s contributions? How much is donor spending out of the total
government’s budget?
 Are governments and donors’ commitments expressed in terms of WASH expenditure respected?
 How/by whom is each type of service financed?
 Are tariffs/ subsidies/international transfers dedicated to investment or Operations and
Maintenance?

49. The answers to these questions could be used by policymakers for budgeting and planning to:
Define a financing strategy. WASH Accounts could provide data on the actual distribution of
financing sources in order to build a full picture of sector financing, something that is not available as
yet in many countries. They would take into account public as well as private (including households)
and donors’ expenditure. This information could be broken down by type of service, so as to build a
better understanding of the sources of finance for on-site sanitation vs. sewerage services for example.
This data could be used to identify whether alternative financing structures are more or less effective
at leveraging investments from private sources (for example, evaluating the amount of public funding
and uses of public funding that might be necessary in order to encourage households to invest in on-site
sanitation). In terms of financing strategy, this data could be used to set maximum level of
household contributions for certain given services for example.
Monitor trends and outcomes of financing strategies over time. WASH Accounts could be used to
compare the outcomes of financing strategies and assess the performance of policies designed to
leverage investment over time. For instance if a country finds that households’ investment in
sanitation facilities is lower than in similar countries, it could set up a policy to leverage private
investment through micro finance schemes that can help households invest in their own facilities. A
regular tracking of household expenditure in sanitation facilities could help monitor the outcome of
this policy and evaluate if it actually increases households investments.
Coordinate donor aid and international transfers. A substantial part of aid transfers to developing
countries is often channelled through NGOs and therefore is not part of a governments’ budget,
making it difficult to evaluate total spending in the sector. WASH Accounts could enable building a
more complete picture of expenditures and thus facilitate greater coordination of WASH financing at
a national level. This would help to better allocate funds according to priorities identified by
governments. WASH accounts data could be used to advocate for joint planning between the
government and development partners.
Track commitments and targets expressed in financial terms. Data on actual spending to WASH
could be used to track governments’ and donors’ commitments with respect to sector financing.
Several governments have made commitments at the international level that have been formulated
with reference to monetary amounts allocated to the WASH sector. For example, the eThekwini
declaration in 2008 committed signatory African countries to establish specific public sector budget
allocations for sanitation and hygiene programs. The stated aspiration was that these allocations
should be a minimum of 0.5% of GDP for sanitation and hygiene. Compiling such an indicator in a
consistent, comprehensive and comparable basis would be essential in order to track the
implementation of such a commitment.
At the 2012 High Level Meeting organised by Sanitation and Water for All, SWA countries made
several commitments that were expressed in monetary terms:
 Some countries committed to invest a specific amount in the sector, totalling approximately 1.6
48
billion USD over the next four years (Afghanistan, Burkina Faso, Niger, Senegal, Sri Lanka);
 Others committed to “increase investments as a specific percentage of their GDP (Bangladesh,
Benin, Cote D’Ivoire, Liberia, Niger, Nigeria, Sierra Leone), of their current sector budget
(Kenya Zimbabwe) or their national budget (Nigeria and Togo)”.
WASH Accounts could be used to see whether such financial commitments have been respected.
They could also be used to estimate the additional financing efforts that would be required to reach
the number of new users they committed to reach in output terms.

50. How is funding channelled in the WASH sector?
The matrix on WASH expenditure per financing unit and per service would help answer policy
questions such as:
 How is funding in the WASH sector channelled?
 What share of WASH public expenditure is channelled via local governments?
 How can financing units be supported?
Answers to these questions could be used by policymakers to:
Define and monitor financing strategies. Local governments often play an important role in
channelling funds to local levels. Data on WASH expenditure per financing units could be used to
evaluate the performance of decentralized financing policies. It could help identify ways to support
local governments that channel such budgets. This data could also be used to study the consequences
of using basket funds to channel financing to local levels.
4.2 Disseminate the policy analysis
This information and analysis can be used at the following stages of the policy process:
 Advocacy / attracting funds;
 Defining financing strategies;
 Budgeting and planning;
 Monitoring;
 Regular tracking of funding, tracking commitments and targets;
 Benchmarking against other sectors or other countries;
 Coordinating donor aid.
There are three main ways in which WASH Accounts findings can be disseminated:
 Produce a consolidated report on the WASH accounts, presenting the WASH Accounts results in
49
a systematic manner in a manner that aims to provide elements to answer key policy questions;
 Publish key indicators from the WASH Accounts on a periodic basis, either via national, regional
and international databases;
 Prepare policy briefs based on results from the WASH Accounts focused on a specific policy
question.
WASH Accounts reports should provide careful documentation of sources and methodological
information so that the observed differences between countries or for one country over time can be
understood and put in proper context.
To the extent possible, these reports should be developed along similar lines and format across
countries to facilitate comparisons and use of the data at both the national and international level. To
the extent possible, the WASH Accounts consolidated reports should contain the following elements:
 Country background information to provide context for understanding the WASH Accounts
findings;
 The tables and indicators proposed above, plus extra ones if need be, that will inform the GLASS
report and national policy;
 Information on data collection and estimation methods (in an Annex); and
 Documentation of the WASH Accounts data sources and any methodological information that is
important to properly interpret the WASH Accounts results.
Country background information in the report will ensure that WASH Accounts data is interpreted in
their proper context. It will briefly describe the WASH sector in the country: the actors involved, the
main financing flows, some contextual elements (e.g. the role of NGOs and the private sector) and

51. major policy issues (e.g. recent reforms, current policies and institutional framework, reforms
required etc.). This country background information could be collected via the broader GLAAS
exercise, on a format that could be referred to as a “mini-CSO” (based on the Country Status
Overview reports that have been prepared for Sub-Saharan Africa). Other data like price index data,
GDP, access rate of access to improved water and sanitation facilities etc. could also be very useful to
interpret the statistics.
In addition to the WASH Accounts summary report, the WASH Accounts team will extract the key
information to answer to the main policy issues expressed in step1 and produce short policy brief on
the specific issues.
The WASH Accounts team will present the WASH Accounts summary report and key
indicators to the national stakeholder group and circulate these policy briefs and the WASH
Accounts findings as widely as possible across WASH policymakers, high level members of the
government, WASH advocates, NGOs and international organizations in the country. This is crucial,
not only to share the findings of the WASH Accounts, but also to raise awareness, gain support and
create future demand for such financial information.
50
5 Step 5 – Provide feedback on methodological development
Step 5 - Summary of tasks to be undertaken
 Produce a synthesis report evaluating your experience using this guidance document;
 Assess and comment upon the appropriateness of the proposed classifications to define the
WASH sector and the way it is financed;
 Assess and comment upon the feasibility to collect such data in the country;
 Assess the methodology proposed to value the financing flows and capital stocks;
 Suggest modifications to improve both the classifications and the methodology;
 Provide feedback on the overall process from an organisational point of view and give indications
about the cost and resource requirements of the exercise
Why is it important?
This guidance document has been designed to provide the basis for a testing exercise to be carried out
in different countries, with a mix of WASH sector organisation and access to information. As part of
the testing exercise, a feedback process will be organised so that the results of the testing can be fed
into the on-going development of the methodology.
What needs to be done under this step?
Below we summarise key areas where feedback is sought from the countries where the testing is
going to be conducted and what might be expected of them, in the context of the preparation of the
GLAAS report 2014 and beyond.
Implementation of the current methodology at national level:
 Appropriateness of the proposed classifications of sector products and services, actors and
financing flows to describe the WASH sector in the country of study, completeness of these
classifications;
 Feasibility of collecting data following these classifications and levels of disaggregation;
 Assessment of the need for a common classification of WASH actors and financing sources;
 Appropriateness of the proposed classification of costs and feasibility to collect data using it;

52.  Assessment of the overall need to modify the proposed classifications to better adjust of the
country’s context and reporting of difficulties encountered to classify data according to the
proposed categories;
 Feasibility of using the proposed approaches to estimate financing flows (the “financing source
approach” and the ”Cost-based approach”), reporting of difficulties encountered when valuing
financing flows and suggestions of solutions to overcome these issues;
 Assessment of the need and feasibility to collect data on capital stocks;
 Appropriateness and feasibility of using the “Fixed Asset Stocks approach” to value assets and
51
whether to deal with liabilities alongside assets;
 Feasibility of obtaining data from National Statistical Offices which is relevant for policy-making
in the WASH sector;
 Feasibility of obtaining data according to the other proposed data sources and suggestion of
additional sources;
 Appropriateness of the proposed tables and indicators to answer the country’s policy questions
and feasibility to collect data to inform them, suggestions of modifications to enhance reporting
tables;
 Appropriateness of the suggested methods to disseminate findings on the WASH Accounts and
suggestions on other ways to do so;
 Assessment of the organisational process to conduct the exercise;
 Assessment of the process to create political buy-in and of the need to gather simplified indicators
or “Quick Wins” in Step 1 to demonstrate to decisions makers that the exercise is useful by
showing them how results can be used.
Future methodological developments
 Need and feasibility of defining additional product codes in order to track financial flows to
WASH;
 Need and feasibility of defining additional cost categories in order to value financial flows;
The WASH Accounts team will produce a synthesis report (20 pages) on their experience with
conducting the testing exercise. They will address the issues presented above and assess the
feasibility to conduct the different steps of this exercise. They will suggest modifications to improve
the methodology and classifications proposed. Finally they will provide feedback on the overall
process of conducting the exercise from an organisational point of view (team composition, process to
collect data, costs and resource requirements, timing, etc.)

53. 52
Methodological Note No 1: Developing WASH services classifications
Objectives. This note provides additional information on existing internationally-accepted methods of
classification for water-related products, services and activities. These classification methods have
been integrated into the SEEA-Water, with which the UN-Water GLAAS TrackFin methodology is
proposing to coordinate. The note also highlights areas for long-term methodological development
where additional international standard classifications may need to be developed in order to better
capture the nature of WASH activities to the level of detail that is relevant for policy-making. The
health sector has adopted a similar process as it has developed its own policy-relevant system of
classification.
MN 1.1. Existing classifications of WASH services
This section presents a list of the main existing international classification systems and identifies how
they are capturing water, sanitation and hygiene activities. There are three main international systems
of classification that can be used to categorise industries, activities, goods and services, as follows:
Table MN 1.1. Summary of main international systems of classification of goods and services
Classification Purpose Reference
CPC Ver.2
Classifies goods and services to help answer the question:
Table MN 1.2
(Central Product
“what is being consumed?”
Classification)
ISIC REV.4
(International Standard
Industrial Classification of
All Economic Activities)
Classifies service providers to help answer the question:
“who provides those goods and services?”
Table MN 1.3
COFOG (Classification of
the Functions of
Government)
Classifies functions performed to ensure that these products
are provided. There are also other functional classifications
such as CEPA (Classification of environment protection
activities), but they are less used.
Table MN 1.4
The nature of these classifications is explained below, followed by an explanation of the codes that
are most relevant to the WASH sector.
CPC (Central Product Classification) is a system used in national accounts to classify all goods and
services, based on their physical properties and intrinsic nature and on their industrial origin. A
full list of CPCs that could potentially apply to WASH services is provided in Table MN 1.2 below.
The main CPC codes that relate to water and sanitation are CPC 18000 (natural water) and CPC
94100 (Sewerage, sewage treatment and septic tank cleaning services). These are the water and
sanitation-related CPCs which are directly consumed and produced by water and sanitation service
providers (those that fall under the service provider categories of ISIC 36 and ISIC 37, as defined
further below). They have been included on the first page of Table MN 1.2.
In addition, however, other products need to be produced to enable service delivery to take place.
These relate to construction industry-related products, such as sub-categories CPC 53200 (engineering
works), CPC 54200 (general construction services of civil engineering works) or CPC 54340 (water
well drilling and septic system installation services). In SEEA-Water, these products are not
considered to be produced by the water and sanitation industry, but are still a crucial component of the
activities that need to be undertaken to deliver sustainable water and sanitation services.

54. Learning from SEEA-Water. SEEA-Water simplified standard tables identify only two of
the products related to Water: CPC 18000 (natural water) and CPC 94100 (sewerage, sewage
treatment and septic tank cleaning services). This might be because they track products that are
produced by water and sanitation industries (ISIC 36 and 37) and deem that other products are
produced by the construction industry. However, to track expenditure related to capital
investments, it is essential to track water and sanitation-related construction services as well.
The CPC classification identifies other water distribution related products that are important to track,
such as water distribution on own account (CPC 69200) or the distribution of water not through mains
(such as via trucks, as in CPC 86530). Finally, CPC 91123 is a very aggregated category that includes
public administrative services related to housing and community amenities, which includes among
many other services, public administrative services for water supply and sewage system operation.
In sum, CPC is the internationally recognised classification of products and services. It is
comprehensive and includes all economic activities, but the breakdown of activities in categories is
not always adapted to the needs of WASH Accounts. For instance, sanitation and hygiene promotion
are not clearly identified in separated categories (there is no CPC linked to those services in
particular), although they may be aggregated in another “public service” categories with other non-
WASH education activities. In addition, services provided by the government (i.e. public
administrative functions) are classified on a very aggregated basis, which does not allow identifying
specific functions of government. This classification provides the underlying basis for all
classifications but needs to be complemented in some places by more specific classifications. For
example, COFOG (the Classification of Functions of Government) goes into more detail in
classifying government functions by purpose as its name indicates.
In Table MN 1.2 below, we provide a list of CPC codes that directly relate to the provision of water
and sanitation services. The description of what the code includes is directly extracted from the UN
Statistics definition, whereas the column on the right includes our comments and potential issues
regarding the applicability of these classifications for the development of WASH Accounts.
53

55. 54
Table MN 1.2- CPC- Central Product Classification
(Source: http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=25)
CPC code Title What it includes Comments and issues about applicability for
WASH Accounts
18000 Natural water This subclass includes:
- potable and non-potable water, suitable for further use, including:
· treated water (e.g., from desalination plants, water treatment plants)
· untreated water (e.g., obtained directly from natural sources)
This subclass also includes:
- used water suitable for further use
This subclass does not include:
- sea water, cf. 16200
- steam and hot water, cf. 17300
- mineral waters containing added carbon dioxide, cf. 24410
- waters individually bottled as beverages, cf. 24410
- distilled water, cf. 34250
- sewage and other wastewater, i.e. water not suitable for further use, cf. 39990
 This category does not allow distinguishing
between potable and non-potable water
 This category tracks water as a “product” but
does not include the related distribution services,
which are tracked through separate codes (such
as CPC 86330 or CPC 86350)
94100 Sewerage, sewage treatment and septic tank cleaning services
94110 Sewerage and
sewage
treatment
services
This subclass includes:
- sewage removal services usually provided using equipment such as waste pipes,
sewers or drains
- sewage treatment services using dilution, screening and filtering, sedimentation,
chemical precipitation, etc.
This subclass does not include:
- collection or purification of water, cf. 18000
- construction, repair and alteration of sewers and sewer pipelines, cf. 54241,
54251
- distribution of water through mains on own account, cf. 69210
- distribution of water through mains on a fee or contract basis, cf. 86330
94120 Septic tank
emptying and
cleaning
services
This subclass includes:
- emptying and cleaning of cesspools and septic tanks
- servicing of chemical toilets
53200 - Civil engineering works

56. 55
CPC code Title What it includes Comments and issues about applicability for
WASH Accounts
53231 Aqueducts and
other water
supply
conduits,
except
pipelines
This subclass includes:
- aqueducts, water conduits and similar waterways designed to convey water for the
purpose of water supply, except pipelines
This subclass does not include:
- waterworks for irrigation or flood control, cf. 53234
- long-distance pipelines, cf. 53241
- local pipelines, cf. 53251
This code corresponds to ISIC Rev.4 code(s) 4220
53233 Dams This subclass includes:
- dams and similar water-retaining structures
- embankments for coastal and other waterside areas
This code corresponds to ISIC Rev.4 code(s) 4290
 Expenditure related to dams should only be
included to the extent that dams are mostly for
water supply or expenditure could be apportioned
relative to use.
53251 Local pipelines This subclass includes:
- local gas pipelines and water and sewer mains
- local hot-water and steam pipelines
This code corresponds to ISIC Rev.4 code 4220
53253 Sewage and
water treatment
plants
This subclass includes:
- sewer systems
- sewage disposal plants
- water treatment and purification plants
This subclass does not include:
- pipelines and water and sewer mains, cf. 54241 (long-distance) and 54251
(local), respectively
This code corresponds to ISIC Rev.4 code(s) 4220

57. 56
CPC code Title What it includes Comments and issues about applicability for
WASH Accounts
54200 - General construction services of civil engineering works
54241 General
construction
services of
long-distance
pipelines
This subclass includes:
- construction, repair, alteration and restoration services for:
· long-distance overland, underground and submarine pipelines for the conveyance
of petroleum products, gas, water or other products
· pumping stations and similar related structures
This subclass does not include:
- urban gas or water distribution systems through mains, cf. 53251
- trenching services, cf. 54330
This code corresponds to ISIC Rev.4 code 4220
54251 General
construction
services of
local pipelines
This subclass includes:
- construction, repair and alteration services for:
· local gas pipelines and water and sewer mains
· local hot-water and steam pipelines
This subclass does not include:
- trenching services, cf. 54330
This code corresponds to ISIC Rev.4 code 4220
54253 General
construction
services of
sewage and
water treatment
plants
This subclass includes:
- construction, repair, alteration and restoration services for:
· sewage disposal plants
· water treatment and purification plants
This subclass does not include:
- construction services of pipelines and of water and sewer mains, cf. 54241 (long-distance)
and 54251 (local), respectively
This code corresponds to ISIC Rev.4 code(s) 4220

58. 57
CPC code Title What it includes Comments and issues about applicability for
WASH Accounts
54340- Water well drilling and septic system installation services
54341 Water well
drilling
services
This subclass includes:
- special trade construction services involving drilling or digging water wells
- installation services of water well pumps and well piping systems
This code corresponds to ISIC Rev.4 code(s) 4220
54342 Septic system
installation
services
This subclass includes:
- installation services of septic systems, including:
· aerobic septic systems
· evaporation-transpiration (ET) septic systems
· greywater systems
· holding tank septic systems
· pressure dosing septic systems
· septic disinfection systems
· chemical, composting, incinerating & waterless toilets
This subclass also includes:
- construction services of leach fields or drainfields
This code corresponds to ISIC Rev.4 code(s) 4220
69200- Water distribution (on own account)
69210 Water
distribution
through mains,
except steam
and hot water
(on own
account)
This subclass includes:
- own-account distribution of water through mains
- maintenance of water meters
This subclass does not include:
- installation of water meters, cf. 54611
- reading of water meters, cf. 85999
- operation of irrigation systems for agricultural purposes, cf. 86119
- water distribution services through mains (on a fee or contract basis), cf. 86330
 It is not clear whether this applies mostly to
industrial own uses or whether it would also
include own provision by households or by
communities to community members. For
example, if a community sets up a piped
community water scheme, it would be important
to clarify whether those services would be
included in here.
69230 Water
distribution,
except through
mains (on own
account)
This subclass includes:
- own-account distribution of water by trucks and other means
This subclass does not include:
- operation of irrigation systems for agricultural purposes, cf. 86119
- water distribution services, except through mains (on a fee or contract basis), cf.
86350 - This code corresponds to ISIC Rev.4 code(s) 3600

59. 58
CPC code Title What it includes Comments and issues about applicability for
WASH Accounts
86300- Support services to electricity, gas and water distribution
86330 Water
distribution
services
through mains
(on a fee or
contract basis)
This subclass does not include:
- water distribution services through mains on own account, cf. 69210
- operation of irrigation systems for agricultural purposes, cf. 86119  The content of this category is not entirely clear
86350 Water
distribution
services,
except through
mains (on a fee
or contract
basis)
This subclass includes:
- water distribution services except through mains, e.g., distribution by trucks
This subclass does not include:
- transport of water by trucks (without distribution), cf. 65119
- water distribution services by trucks etc. on own account, cf. 69230
- operation of irrigation systems for agricultural purposes, cf. 86119
 It would be important to clarify whether small-scale
private delivery of water to households by
trucks would be included in this category.
91123 Public
administrative
services related
to housing and
community
amenities
This subclass includes:
- public administrative services related to housing and overall community
development, water supply, sanitation and street lighting
- public administrative services related to the development, monitoring and
evaluation of housing and housing standards (other than construction standards)
- public administrative services related to rent control and eligibility standards for
state-subsidized housing
- public administrative services related to housing for the general public or for
people with special needs
- dissemination of public information about housing
- services provided by government offices, bureaux, departments and programme
units involved in developing and administering regulations concerning water
supply
- public administrative services related to refuse collection and disposal, sewage
system operation and street cleaning
- public administrative services related to pollution standards, including the
dissemination of information regarding pollution
This subclass does not include:
- waste collection and disposal services, cf. 942, 943
- sewerage and sewage treatment services, cf. 94110
 This category of public administrative services
does include services related to water and sewage
but this category is very aggregated. It would
therefore need to be disaggregated through
combining with other statistical classification
systems.

60. ISIC (International Standard Industrial Classification of All Economic Activities) is a United
Nations system for classifying economic data according to types of economic activities. The activity
carried out by a unit is the type of production in which it engages. An “industry” is defined as a set of
production units engaged primarily in the same or similar kind of productive economic activity. This
classification examines only the type of activities undertaken and does not distinguish who performs
them by legal status (i.e. whether the producers are governmental, non-governmental or private).
Two main categories relate to WASH activities:
 ISIC class 36 (collection, treatment and supply of water); and
 ISIC class 37 (sewerage).
These two categories of activities are the ones that are used by SEEA-Water in their Economic
Accounts. However, they do not capture the full range of activities involved in providing access to
water and sanitation services. ISIC 36 and 37 are service oriented: they do not include activities
related to:
 The construction of WASH infrastructure and equipment such as pipelines and sewerage network,
water abstraction and storage facilities, sanitation facilities, water utilities, and sewerage and
waste water treatment plants (ISIC 42);
 Water resources management;
 Activities linked to government collective activities (ISIC 84).
These are considered as goods and services required for delivering water and sanitation services (ISIC
36 and 37). As such, they are taken into account in the SEEA-Water Economic Accounts as
intermediate consumption or fixed capital formation, as appropriate.
In addition, the activities linked to government collective activities are all aggregated in ISIC 84. As a
result, government activities that specifically relate to the water and sanitation sector cannot be
separated out.
There are a number of issues with these classifications. ISIC 36 does not allow separating water
provided for domestic use from water provided for industrial use or for irrigation canals. In addition,
ISIC 37 does not explicitly include faecal sludge management or hygiene promotion. Finally, whereas
ISIC 84 refers to the management of water supply programmes, it specifically excludes the
management of sanitation programmes, even though these would need to be clearly identified
separately from the provision of sewerage and sewage treatment services.
Table MN 1.3 below presents a summary of the ISIC codes that are likely to be relevant for the
elaboration of WASH Accounts, with a summary of the main comments on these categories.
59

61. 60
Table MN 1.3 - ISIC- International Standard Industrial Classification
Source: http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=27&Lg=1
ISIC
code
Title What it includes Comments and issues about applicability for WASH
Accounts
3600 Water
collection,
treatment and
supply
This class includes water collection, treatment and distribution activities for
domestic and industrial needs. Collection of water from various sources, as
well as distribution by various means is included. The operation of irrigation
canals is also included. However the provision of irrigation services through
sprinklers, and similar agricultural support services, is not included.
This class includes:
‐ collection of water from rivers, lakes, wells etc.
‐ collection of rain water
‐ purification of water for water supply purposes
‐ treatment of water for industrial and other purposes
‐ desalting of sea or ground water to produce water as the principal
product of interest
‐ distribution of water through mains, by trucks or other means
‐ operation of irrigation canals
This class excludes:
‐ operation of irrigation equipment for agricultural purposes, see ISIC
0161
treatment of wastewater in order to prevent pollution, see ISIC 3700
(long-distance) transport of water via pipelines, see ISIC 4930
This class does not allow separating out water supply for
domestic uses (at least at an aggregate level). Doing so would
require excluding:
- treatment of water for industrial and other purposes
- operation of irrigation canals.
This class is focused on activities relating to service provision
but does not include the construction of the infrastructure
necessary to provide those services. This is because, in the ISIC
logic, the construction of water and sewerage infrastructure is
assumed to be the responsibility of construction companies (for
which construction is the primary purpose) and not of the
industries in charge of providing water and sanitation services.
There are limitations to this approach, however:
 Water and sewerage service providers may choose to build
at least part of the infrastructure themselves;
 Infrastructure building costs (gross capital formation) need
to be included in the WASH Account exercise, as they
represent a significant proportion of costs.
3700 Sewerage
This class includes:
- Operation of sewer systems or sewer treatment facilities
- Collecting and transporting of human or industrial wastewater from one
or several users, as well as rain water by means of sewerage networks,
collectors, tanks and other means of transport (sewage vehicles etc.)
- emptying and cleaning of cesspools and septic tanks, sinks and pits from
sewage; servicing of chemical toilets
- treatment of wastewater (including human and industrial wastewater,
water from swimming pools etc.) by means of physical, chemical and
biological processes like dilution, screening, filtering, sedimentation etc.
- maintenance and cleaning of sewers and drains, including sewer rodding
 Although this class is called “sewerage", it does include on-site
sanitation activities (emptying and cleaning of
cesspools and septic tanks).
 Although there is a clear reference to transport of faecal
sludge, it is not clear whether treatment of faecal sludge is
also included
 Hygiene services are not explicitly included in here

62. 61
ISIC
code
Title What it includes Comments and issues about applicability for WASH
Accounts
4220 Construction of
utility projects
This class includes the construction of distribution lines and related buildings
and structures that are integral part of these systems.
This class includes:
- construction of civil engineering constructions for:
· long-distance pipelines, communication and power lines
· urban pipelines, urban communication and power lines; ancillary
urban works
· water main and line construction
· irrigation systems (canals)
· reservoirs
- construction of:
· sewer systems, including repair
· sewage disposal plants
· pumping stations
· power plants
- water well drilling
This class excludes
- project management activities related to civil engineering works, see
ISIC 7110
8412 Regulation of
the activities of
providing
health care,
education,
cultural
services and
other social
services,
excluding
social security
This class includes public administration of programmes aimed to increase
personal well-being: health, education, culture, sport, recreation,
environment, housing, social services.
This class specifically includes:
‐ administration of potable water supply programmes
- administration of waste collection and disposal operations
- administration of environmental protection programmes
- administration of housing programmes
This class excludes:
- sewage, refuse disposal and remediation activities, see ISIC 37, 38, 39
- compulsory social security activities, see ISIC 8430
human health-related activities, see ISIC division 86
 This class aggregates the administration of very different
public programmes, including the administration of potable
water supply programmes but excluding sewage activities.
As such, it is unlikely to provide sufficient detail on support
functions carried out by Governments, which is where using
the COFOG classification can provide additional detail. In
countries where a COFOG classification is not applied,
using this broader category might be considered for
constructing WASH Accounts.
 This class excludes the administration of sewage and
sanitation programmes, even though public programmes
need to be developed independently from the provision of
the services themselves.

63. COFOG (Classification of the Functions of Government) is a classification of expenditure by the
Government according to purpose. It classifies transactions, such as outlays on final consumption
expenditure, intermediate consumption, gross capital formation and capital and current transfers by
the Government according to the function that the transaction serves. These COFOG categories allow
breaking down further the broad ISIC category in which water supply and sewage administration are
included, i.e. ISIC 8412 (Public Administration).
Four COFOG categories relate to water management in general and are used as such in SEEA-Water:
waste water management, soil and ground water protection, environmental protection not elsewhere
classified, and water supply. These COFOG categories refer to collective services of government
(formulation and administration of government policy, the setting and enforcement of public
standards, the regulation, licensing or supervision of producers, etc., as in the case of education and
health). The categories COFOG 05.2 and 06.3 should not be confused with activities of “sewerage”
and “water collection, treatment and supply”, classified under ISIC divisions 37 and 36, respectively,
which are considered to be individual services as opposed to collective services. Table MN 1.4. below
presents a summary of the COFOG codes that are likely to be relevant for the elaboration of WASH
Accounts, with a summary of the main comments on these categories.
Other classifications of government activities for environmental protection have been developed
and could potentially be referred to. For example, CEPA (Classification of Environmental Protection
Activities) was developed by Eurostat in cooperation with the United Nations to classify
environmental protection activities, environmental protection products and expenditures for
environmental protection. These environmental protection activities are production activities in the
sense of the SNA as they combine resources, such as equipment, labour, manufacturing techniques
and information network or products in order to create an output of goods or services. In the case of
water, CEPA includes “waste water management” and “protection and remediation of soil, ground
water and surface water”. SEEA-Water uses the CEPA definition of wastewater management to
classify expenditure for activities and measures aimed at preventing the pollution and protection of
water through reductions in the release of wastewater into inland surface water and seawater. As a
CEPA category does not exist for water management and exploitation, SEEA-Water has created this
classification, which corresponds to ISIC 36 and part of ISIC 84. However, according to the UN
department of statistics, this classification is not really used in developing countries. We therefore do
not recommend that specific references be made to this classification.
Finally, “Classifications of Expenditure According to Purpose” might be useful in some cases (and
are referred to by the System of Health Accounts). These are primarily designed to classify
transactions undertaken by households, non-profit institutions serving households (NPISHs),
government and producers that result in payables. They are used in the System of Health Account to
define the classifications of the functions of health care (ICHA-HC), health providers (ICHA-HP) and
the factors of provision (ICHA-FP).
COICOP is used to classify only a single kind of outlay, which is the individual consumption
expenditures of households, NPISHs and general government. Three classes of purposes relate to the
WASH sector:
62
 Class 01.2.2: Mineral waters, soft drinks, fruit and vegetable juices
 Class 04.4.1: Water supply
 Class 04.4.3: Sewage collection
COPP is used to classify intermediate consumption and capital outlays of mainly non-financial and
financial corporate enterprises. Only one class is related to the WASH sector:
 Class 03.2.0: Outlays on wastewater management (as defined in CEPA Class 2)
COPNI is used to classify a range of transactions, including outlays on final consumption expenditure,
intermediate consumption, gross capital formation and capital and current transfers, by NPISHs.
There are no classes relates to water.

64. 63
Table MN 1.4 - COFOG (Classification of the Functions of Government)
Source: http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=4
COFOG
code Title What it includes Issues about applicability for WASH accounts
5 Environmental protection
5.2 Waste water
management
This group covers sewage system operation and waste water treatment.
Sewage system operation includes management and construction of the
system of collectors, pipelines, conduits and pumps to evacuate any waste
water (rainwater, domestic and other available waste water) from the points
of generation to either a sewage treatment plant or to a point where waste
water is discharged to surface water.
Wastewater treatment includes any mechanical, biological or advanced
process to render waste water fit to meet applicable environment standards
or other quality norms.
 This category includes both construction and management
of the sewage system operation and wastewater treatment.
5.3 Pollution
abatement
This group covers activities relating to ambient air and climate protection,
soil and groundwater protection, noise and vibration abatement and
protection against radiation.
These activities include construction, maintenance and operation of
monitoring systems and stations (other than weather stations); construction
of noise embankments, hedges and other anti-noise facilities including the
resurfacing of sections of urban highways or railways with noise reducing
surfaces; measures to clean pollution in water bodies; measures to control or
prevent the emissions of greenhouse gases and pollutants that adversely
affect the quality of the air; construction, maintenance and operation of
installations for the decontamination of polluted soils and for the storage of
pollutant products; transportation of pollutant products.
It includes :
-Administration, supervision, inspection, operation or support of activities
relating to pollution abatement and control;
- grants, loans or subsidies to support activities relating to pollution
abatement and control.
 The component relative to cleaning pollution in water
bodies is only a small sub-set of this broader category.

65. 64
COFOG
code Title What it includes Issues about applicability for WASH accounts
5.6 Environmental
protection (not
elsewhere
classified)
This group includes :
- Administration, management, regulation, supervision, operation and
support of activities such as formulation, administration, coordination and
monitoring of overall policies, plans, programmes and budgets for the
promotion of environmental protection; preparation and enforcement of
legislation and standards for the provision of environmental protection
services; production and dissemination of general information, technical
documentation and statistics on environmental protection.
Includes: environmental protection affairs and services that cannot be
assigned to (05.1), (05.2), (05.3), (05.4) or (05.5).
 This is a very broad category which might make it difficult
to specifically identify activities that relate to water and
sanitation.
6 Housing and community amenities
6.3 Water supply This group includes :
-Administration of water supply affairs; assessment of future needs and
determination of availability in terms of such assessment; supervision and
regulation of all facets of potable water supply including water purity, price
and quantity controls;
- construction or operation of non-enterprise-type of water supply systems;
- production and dissemination of general information, technical
documentation and statistics on water supply affairs and services;
- grants, loans or subsidies to support the operation, construction,
maintenance or upgrading of water supply systems.
It excludes: irrigation systems (04.2.1); multi-purpose projects (04.7.4);
collection and treatment of waste water (05.2.0).
 The category "construction or operation of non-enterprise-type
of water supply systems" is not necessarily clear
 With regard to grants, loans or subsidies, it is not clear
whether the amounts included include only the
administration charges or the grants and subsidies
themselves

66. MN 1.2. Summary evaluation: the potential use of existing classifications for
65
the development of WASH Accounts
Existing classifications are not always adequate to capture the reality of the WASH sector and answer
policy questions. CPC categories are too infrastructure based and ISIC categories do not explicitly
include some services that are essential in developing countries such as faecal sludge management.
Therefore in the short term, we recommend using a list of water and sanitation services as
proposed in this methodology for the purpose of tracking financing to WASH (See Table 1). It
reflects the main activities alongside the WASH value chain, with the main caveat that these activities
primarily relate to water and sanitation and do not adequately reflect hygiene.
However, we recognise that there is an important advantage in relying on existing international
classifications: It may ease data collection and allow greater comparability of data across countries,
assuming that countries apply those classifications in a standard manner. Table MN 1.6. below
presents the categories proposed in this methodology to build WASH Accounts and the
correspondences with international classifications. Water Resource Management activities that are
directly relevant to water and sanitation services provision (S4 as per our proposed classification) are
not explicitly mentioned as a separate category in CPC, ISIC, and COFOG, which is why no
correspondence is proposed on Table MN 1.6. below.
In the longer term, we would encourage the WASH international community to examine
whether a revised and more disaggregated international standard classification of WASH
services would be needed in order to more closely match the sector’s analytical and policy
needs. A long-term objective may entail setting up a more disaggregated international classification
of WASH sector functions and services that can be aggregate up to the existing ISIC classification.
If this long-term objective was pursued, we have identified the following issues with the existing
classifications that would need to be addressed:
 Some countries have developed their own classifications based on the international ones and
coherence between those different classifications is not always guaranteed;
 Some categories aggregate several services and it may difficult to separate out data;
 The detail on support services (usually provided by the Government) is rather limited. Usually,
the following types of sector support activities need to be provided, as shown on the Table below.
These activities are alluded to in international classifications but not specifically identified.
Table MN 1.5 - WASH sector support activities
 Develop sector policies and programmes
 Sector planning, including estimating future sector financial needs
 Reform water sector management
 Mobilize financial resources and structure investment projects
 Carry out tariff reforms
 Regulate service providers
 Protect water resources necessary for drinking-water supply (e.g. establish catchment protection
zones, establish and enforce voluntary agreements, establish regulations)
 Define and enforce drinking-water and discharge standards for municipal wastewater
 Conduct sanitation promotion and hygiene promotion campaigns
Feedback from the testing studies will be essential to identify how data is classified at country level
(particularly at the level of statistical offices), whether it is possible to use the classification proposed
in this document or whether it would be preferable to use international standard classifications (ISIC,
CPC etc.). Feedback will also be sought on whether modifications to the existing international
classifications might be needed. To this end, we have included in the steps of the methodology
specific questions where feedback from the national WASH Account teams will be sought.

67. 66
Table MN 1.6 - Correspondences between CPC, ISIC and COFOG classifications along the water and sanitation value chain
Value chain CPC (Central Products Classification) ISIC (International Standard Industrial Classification) COFOG
Products and Services ISIC code and description What it includes Purpose of the
expenditure
Water supply
services (S1)
53233 Dams 4290
Construction of other
civil engineering
projects
53231 Aqueducts and other water supply
conduits, except pipelines 4220 Construction of utility
projects
54341 Water well drilling services Water well drilling and septic system
installation services
18000 Natural water
3600 Water collection,
treatment and supply
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 to
produce water as the principal
product of interest
69210
Water distribution through mains,
except steam and hot water (on own
account) Distribution of water through mains
86330 Water distribution services through
mains (on a fee or contract basis)
69230 Water distribution, except through
mains (on own account) Distribution of water by trucks or
other means
86350
Water distribution services, except
through mains (on a fee or contract
basis)
Sanitation
services (S2)
54342 Septic system installation services 4220 Construction of utility
projects
Water well drilling and septic system
installation services
94120 Septic tank emptying and cleaning
services 3700 Sewerage
Collection of sewage by sewer
systems or sewage treatment
facilities

68. 67
Value chain CPC (Central Products Classification) ISIC (International Standard Industrial Classification) COFOG
Products and Services ISIC code and description What it includes Purpose of the
expenditure
94110 Sewerage and sewage treatment
services
Treatment and disposal of sewage by
sewer systems or sewage treatment
facilities
Unallocated
construction
activities (for
both water
and sanitation
services) ( S1
and S2)
53251 Local pipelines (water and sewerage)
4220 Construction of utility
projects
Construction of pipelines and long
distance transport of water and
sewage
53253 Sewage and water treatment plants Construction of sewage disposal
plants
54241 General construction services of
long-distance pipelines
Construction of pipelines and long
distance transport of water and
sewage
54251 General construction services of
local pipelines
Construction of pipelines and long
distance transport of water and
sewage
54253 General construction services of
sewage and water treatment plants
Support
services (S3) 91123 Public administrative services related
to housing and community amenities 8412
Regulation of the
activities of providing
health care,
education, cultural
services and other
social services,
excluding social
security
Public administration of programmes
aimed to increase personal well-being:
health, education, culture,
sport, recreation, environment,
housing, social services
This class includes:
- administration of potable water
supply programmes
- administration of waste collection
and disposal operations
5.2 Waste water
management
6.3 Water supply

69. Methodological Note No 2: Developing classifications of WASH actors
and financing sources
Objectives. This note complements and provides the rationale for the guidance provided in Section
2.2. of the main guidance document. The note highlights the importance to clearly define and identify
WASH sector actors (including WASH uses, service providers and financing units) and the main
financing sources. Some of these categories warrant a full classification that can be used across
countries in a comparable manner and later on used by statistical offices in order to compile the
necessary data on an ongoing basis. Others (such as financing units) do not as they would vary
substantially from country to country.
This note is based on information on existing internationally-accepted methods of classification for
water actors and financing sources. It especially looks at the classifications used by SEEA-Water on
which the UN-Water GLAAS TrackFin methodology is proposing to build upon and at the OECD 3Ts
classification of financing sources. The note highlights potential issues with existing classification and
formulates recommendations on the classifications that can be used across countries for the
development of WASH Accounts.
This note provides additional rationale for definitions underlying the classifications of WASH actors
and financing sources as briefly defined in the table below.
68
Table MN 2.1- Classifications of WASH uses, actors and financing sources
Classifications Definition
Uses Types of use of WASH goods and services (domestic served or self-provided,
industrial and commercial, institutional etc.)
WASH sector actors:
Service providers Actors engaged in the production and delivery of WASH services. These
would include government institutions providing support services to the
sector.
Financing units Institutional entities that provide funding to the sector. They mobilise
funding to pay for WASH services. They may allocate funds directly to
service providers or channel them through intermediary institutions.
Financing sources Where funding originates from: what the OECD commonly refers to as
the 3Ts (as tariffs, taxes and transfers) and for which we are proposing a
modified classification (see Table MN 2.7)
MN 2.1. Classifying WASH service uses
Classifying WASH service uses is important because, although the GLAAS report (and this WASH
Accounts methodology) is proposing to focus on domestic use, separating out information that relates
to domestic uses from the rest (i.e. use of water and sanitation services for industrial, commercial,
institutional and in some cases, agricultural purposes) might be challenging.
Therefore a classification of WASH service uses can provide a useful tool for conducting this type of
analysis. The proposed WASH Accounts classification of WASH service uses is set out in Table MN
2.3. Countries can also define their own sub-categories of WASH service uses with an added level of
detail in order to meet their own policy needs.

70. 69
Table MN 2.2 - Proposed WASH Accounts classification of WASH Service uses
WASH service uses Proposed definition
U1 Served domestic use Consumption of served water and sanitation services by households
that are served by service providers and pay for the service via a tariff.
This would include water supply to households that are connected to
the water and/or sewerage network, but also water fetched from a
public stand pipe or other providers (e.g. water tankers).
U2 Self-provided domestic use Consumption of self-provided water and sanitation services by
households. Households have to pay up-front an initial investment (in a
well or private latrine) to have access to the service and then need to
cover operating and maintenance costs of their assets.
U3 Served institutional use Consumption of served water and sanitation services by government
agencies (such as Ministries, hospitals, schools, etc.) and voluntary
organisations such as NGOs, CBOs or foundations. They are served by
service providers and pay for the service via a tariff.
U4 Self-provided institutional use Consumption of self-provided water and sanitation services by
government agencies (such as Ministries, hospitals, schools, etc.)
and voluntary organisations such as NGOs, CBOs or foundations. They
pay up-front an initial investment to have access to the service and then
need to cover operating and maintenance costs of their assets.
U5 Served industrial and
commercial use
Services used by commercial entities that are purchasing water and
sanitation services from a service provider at the industrial or
commercial tariff.
U6 Self-provided industrial and
commercial use
Consumption of self-provided water and sanitation services by
industrial or commercial entities
Focusing on “uses” rather than “users”
We are proposing to track financing by types of uses rather than users. The main reason for
this is that users cannot always be attributed to a single category. For example, domestic
users might get water from multiple sources, including through self-provided sources or
different types of providers (networked or non-networked). As a result, those users would
invest in their own systems (e.g. a water well) but also pay a tariff to obtain piped water
supplies. It is therefore difficult to define “user categories” that can capture such multiple
modes of access to water services. However, it is essential for the WASH Accounts to
capture information relative to different financial allocations to these types of uses.
Defining categories of “uses” rather than of users allows overcoming such difficulties. The
key criteria to distinguish “uses” will be to rely on the types of tariff applied to them based
on each country's system. If a use is paid for based on the “institutional tariff” then it would
be counted under “institutional use”. In order to interpret the data, it would be useful to
complement it with coverage data showing how many households are concerned by
different types of uses.
Distinguishing between “served” and “self-provided” domestic uses
An important distinction is between services used by domestic users that are connected to
network supplies and those that need to self-provide the services (calling on the services
from a range of non-networked service providers). This is because it would be useful to
track the extent to which costs and expenditures are different for these types of uses.
However, data may be difficult to disaggregate in order to make that distinction in practice.

71. Learning from SEEA-Water classification of WASH service users
In order to define a relevant classification, it is useful to refer to the way in which SEEA-Water
classifies water users, as set out below, based on the ISIC classification system (see Table MN1.3.
for more detail on the ISIC classification system). SEEA-Water defines service users rather than
uses. Table MN2.1. below presents a summary of how WASH service users are classified in the
SEEA-Water methodology.
70
Table MN 2.3 - Classification of water services users in SEEA-Water
Categories of water services users in SEEA-Water Explanation and correspondence
 Specialized producers: (intermediate consumption)
- ISIC 36 water Producers
- ISIC 37 sewerage services Producers
 ISIC 36 and ISIC 37 producers may
those services for their own use
 Other Producers (ISIC 1-3, 5-33,41-43, 35, 38, 39,
45-99) (intermediate consumption)
 These would include producers invo
types of activities which consume w
sanitation for industrial or commerc
 Households  Domestic use
 General Government
- can be disaggregated into central and local
government
 Institutional use
 Rest of the world  International users: with respect to w
and sanitation, these would not be r
MN 2.2. Classifying WASH service providers
Classifying WASH service providers is important to analyse which type of providers receive funding
(and from where) and how they spend these funds. In addition, WASH service providers often hold
information on costs of water services, so identifying WASH service providers is key to identifying
where cost data might be held.
SEEA-Water classifies producers “into relevant ISIC categories, regardless of the kind of ownership,
type of legal organization and mode of operation. Therefore even when activities for water collection
treatment and supply (ISIC 36) and sewerage (ISIC 37) are carried out by the government, they are
classified to the extent possible in the specific division (ISIC 36 and 37).” It also presents in separate
tables the production of water and sewerage services self-provided by households and water related
collective consumption services by the general government. Table MN 2.4. presents the different
categories of water service providers used in SEEA-Water.
Table MN 2.3 - Classification of Water service providers in SEEA-Water
Categories of water service providers
 Specialized producers:
- ISIC 36 water Producers
- ISIC 37 sewerage services Producers
 Other Producers (ISIC 1-3, 5-33,41-43, 35, 38, 39, 45-99)
 Households (as producers for own use)
 General Government (as producer of water related collective consumption services)
- can be disaggregated into central and local government
This classification of service providers was used as a basis for the definition of categories of WASH
service providers for the purpose of the WASH accounts, as set out in Table MN 2.4 below. This
classification can be used for both water and sanitation providers in two separate tables.

72. 71
Table MN 2.4 - WASH Accounts classification of WASH service providers
WASH service providers Definition
P1 Government agencies
Providers that are integrated in government. This would
include government agencies (such as Ministries, hospitals,
schools, etc) as well as municipalities (operating the service
directly rather than through a corporatized entity).
P2 Network corporate providers
Utilities that own and/or operate facilities for production and
distribution of water and sanitation services through network
systems for the public, as well as for bulk services. They can
be either privately or publicly owned, mandated or
independent, large, medium or small-sized, providing a public
service or self-providing the service for their own use.
P3 Non-network corporate providers
Corporations that provide any WASH good or service through
non-network systems. They usually involve low skilled labour
and small level of initial investments. They can take various
organisational forms, from cooperatives to private ventures,
and be formal or informal.
P4 NGOs and community-based
organizations
Non-profit making organisations that seek to complement
WASH public services. They usually have a formal structure
and offer services to people other than their members, and are,
in most cases, registered with national authorities.
Community-based organizations (CBOs) are a type of small
NGOs that aim to mobilize, organize or empower their
members, usually in a local area.
P5 Households (self-provision)
Households that self-provide the service. They have to pay up-front
an initial investment (in a well or private latrine) to have
access to the service and then need to cover operating and
maintenance costs of their assets.
The classification focuses on the type of institutional sector that owns them (government, corporation
or household). Depending on policy needs, countries could introduce additional criteria to characterise
service providers such as: public or private, formal or informal, size of the utility, mandated or
independent etc. Where corporate providers are self-providing and not serving domestic customers,
this should be noted specifically and potentially excluded from overall figures.
It is critical to include households as self-providers. In a large number of cases for instance, there is
no formal sanitation service provider. As a result, households invest in on-site sanitation solutions and
maintain those installations themselves (“self-supply”). Thus, households’ expenditures on self-supplied
sanitation in particular accounts for a large part of sanitation services and therefore need to
be clearly identified in the classification.
Countries are encouraged to use the proposed classification to the extent that it is possible even
though it might be difficult to obtain data on certain categories of producers (such as self-supply from
households). They could prioritize data collection for the more relevant types of providers depending
on their importance and weight in the WASH services supply market.
MN 2.3. Classifying WASH financing units
It is important to identify where the money is ultimately coming from, i.e. from which type of actor.
Financing units are defined as the institutional entities that provide funding to the sector. They
mobilise funding to pay for WASH services. They may allocate such funding directly to service
providers or channel it to the sector through other financing units, who act as intermediary institutions
by pooling and distributing funding to the sector.

73. To identify sources of financing, SEEA-Water identifies the “financing sectors” (as the entities
actually bearing the cost) and characterises them by type of ownership, including: General
Government (which can be disaggregated between central and local government); Non-for-profit
institutions serving households; Corporations; Households; Rest of the world. These financing sectors
are shown in Table MN2.6. below.2
72
Table MN 2.5 - Classification of Water financing sectors in SEEA-Water
Categories of Financing sectors
 General Government
- It can be disaggregated into central and local government
 Not-for-profit institutions serving households
 Corporations
- Specialized producers: (ISIC 36 water Producers; ISIC 37 sewerage services Producers)
- Other Producers (ISIC 1-3, 5-33,41-43, 35, 38, 39, 45-99)
 Households
 Rest of the world
In the same way, we propose classifying financing units by type of institutional sectors as this might
be the most relevant information to answer policy questions on the origins and channels of funds
received by service providers. The proposed classification for WASH financing units is presented in
Table MN 2.6 below.
Table MN 2.6 - WASH Accounts classification of WASH financing units
Financing units Definition
FU1 National authorities
Public authority at central government level, including Ministries
(ministry of finance, ministry of water or other ministries) or national
institutions
FU2 Regional authorities Public authority operating at the regional level (or any other
intermediary level between national and local government)
FU3 Local authorities
Public body operating at the level of a smaller geographic area, such
as a city, town, or a district, depending on the country’s
administrative structure
FU4 Network corporate
providers
Utilities that own and/or operate facilities for production and
distribution of water and sanitation services through network systems
for the public, as well as for bulk services. They can be either
privately or publicly owned, mandated or independent, large, medium
or small-sized, providing a public service or self-providing the
service for their own use.
FU5 Non-network corporate
providers
Corporations that provide any WASH good or service along the value
chain at a small scale through non-network systems. They usually
involve low skilled labour and small level of initial investments. They
can take various organisational forms from cooperatives to private
ventures, and be formal or informal.
FU7 Bilateral and multilateral
donors
Governments providing official development assistance directly to a
country or through multilateral international institutions (UN, World
Bank or regional development banks)
FU8 Banks and financial
Institutions
A financial institution that provides banking services, such as taking
deposits and providing credit facilities and loans to individuals and/or
2 Additional detail on how this data is used in the SEEA-Water accounts is provided in Annex B.

74. 73
Financing units Definition
small businesses and corporations.
FU9 NGOs and community-based
organizations
Non-profit making organisations that seek to complement WASH
public services. They usually have a formal structure and offer
services to people other than their members, and are, in most cases,
registered with national authorities. Community-based organizations
(CBOs) are a type of small NGOs that aim to mobilize, organize or
empower their members, usually in a local area.
FU10
Households (for
investments in self-provided
services)
Households that self-provide the service (such as on-site sanitation).
They either pay up-front through initial investments (in a well or
private latrine) or purchase services from a variety of providers (e.g.
water tankers).
MN 2.4. Classifying WASH financing sources
Next, it is important to identify what the “financing sources” for the sector are, i.e. the type of
financial flows that are mobilised to fund the sector and where they are coming from. To identify
typologies of financing sources, it is useful to refer to previous work in this area, from within the
water sector and based on the SNA. Existing classification systems have their strengths and
weaknesses, which is why we have proposed a consolidated classification of WASH financing
sources to be used for WASH accounts, as set out below.
WASH sector financing sources according to the OECD: the 3Ts
Since the Camdessus report on water financing (Winpenny, 2003), the water sector has been referring
to three main sources of finance for the water sector as the “3Ts”, i.e. tariffs, taxes and transfers, to
which must be added repayable financing sources. The way in which these sources of finance can be
combined to cover the costs of water service provision has been summarised by the OECD in the
Figure MN 2.1. below (OECD, 2010).

75. 74
Figure MN 2.1 - Sources of finance for the WASH sector
Source: (OECD, 2010), Innovative financing mechanisms for the water sector
The OECD defines these sources of finance as follows:
 “Tariffs” are funds contributed by users of WSH services for obtaining the services. Users
generally make payments to service providers for getting access to the service and for using the
service. When the service is self-provided (for example, when a household builds and operates
their household latrine), the equity invested by the household (in form of cash, material or time -
“sweat equity”) would also fall under “tariffs”.
 “Taxes” refer to funds originating from domestic taxes which are channelled to the sector via
transfers from all levels of government, including national, regional or local. Such funds would
typically be provided as subsidies, for capital investment or operations. “Hidden” forms of
subsidies may include tax rebates, soft loans (i.e. at a subsidised interest rate) or subsidised
services (such as subsidised electricity).
 “Transfers” refer to funds from international donors and charitable foundations (including
NGOs, decentralized cooperation or local civil society organizations) that typically come from
other countries. These funds can be contributed either in the form of grants, concessionary 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.
Due to the capital-intensive ‘lumpy’ nature of WASH sector investments (with relatively large
investments with a long asset-life), it is seldom possible to finance all necessary investments up-front.
If additional financing cannot be raised, either by reducing costs or by increasing the 3Ts, it is

76. standard practice for the financing gap to be “bridged” via a mix of repayable financing sources,
which may include the following:3
- Bank loans, including commercial finance, microfinance and concessionary loans (i.e. loans from
donors that would include a grant or transfer element in the form of an interest rate below market
rate or a grace period, for example);
- Equity provided by investors with the expectation that such equity can be repaid and would earn a
rate of return on the capital invested. In going concerns, equity may be provided over very long
periods of time and may therefore not be repaid. A hidden form of public subsidy (or transfer)
may consist of making an equity investment with no expectation of a repayment or a return;
- Other financial instruments, such as bonds, whereby a debt title is sold in the market to a large
group of bond investors. Bond issuers may include municipalities (i.e. “municipal bonds”) or
public and private companies (“corporate bonds”).
Evaluation of the relevance of the OECD 3T typology for the WASH Accounts
The OECD 3T typology is relevant to WASH Accounts in the sense that it categorises the flows of
funding according to their origin and to their nature (for example, distinguishing between revenues
from the service and external subsidies). Referring to this terminology can be an advantage as it has
become well known and accepted in the sector over the recent years, where it has been useful to
convey in simple terms a number of key concepts about WASH sector financing, such as the idea that
full-cost recovery from tariffs should not be the only objective and that sustainable cost recovery from
a mix of the 3Ts could be a good alternative objective.
However, concerns regarding this typology have been raised in previous consultations with sector
stakeholders, as summarised below:
 Some have expressed that this typology is mainly known amongst international organizations and
External Support Agencies (donors, NGOs etc.); its appropriation by developing country actors is
still in progress.
 The terminology used can be confusing in the context of some developing countries. As the
WASH Accounts are meant to be used by policy makers it would be important that the
terminology of the classifications is straight forward and easily understood without allowing for
any interpretation.
Specific concerns have been raised about the 3T terminology and how it may introduce confusion.
These concerns are set out below:
 The term “Tariff” is understood in common language as the tariff paid by users to utilities.
However the OECD typology includes in this category payments made by households for self-provision.
These two types of funds are substantially different, with different data sources. Thus
we would recommend separating the two types of financing sources out if possible, under the
overall category of tariffs (which could be renamed as “household expenditure for self-supply”).
 The OECD typology includes under the item “Transfer” “funds from international donors and
charitable foundations (including NGOs, decentralized cooperation or local civil society
organizations) that typically come from other countries”. However, in several countries (such as
India or many Latin American countries), the term “transfer” is often used to refer to central
government budget that is allocated to local governments in decentralised settings. This is part of
what the OECD’s terminology refers to as “taxes”, although this term is relatively vague and may
be misunderstood by developing countries’ governments.
Therefore given the interpretations that could arise around the terminology we recommend adapting
the terminology of the OECD typology of financing sources for the purpose of preparing the WASH
Accounts. A revised classification is suggested in Table MN2.7. below. To derive this revised
3 For large, capital intensive service providers individual loans may be repaid but the total debt level may not reduce as loans
are 'rolled-over' or renewed to maintain the same balance between debt and equity finance.
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77. classification, it was also useful to examine in detail and learn from the SEEA-Water typology of
financing sectors, as set out below.
WASH sector financing sources according to SEEA-Water: financing units and sectors
Analysis of the financing sectors identified by SEEA-Water (Table MN 2.5 above) have helped us
identify categories of financing sources that are not explicitly considered by the OECD 3T
terminology, such as transfers from Not-for-profit institutions serving households (which might be in
kind or in cash, and may originate from domestic voluntary sources as opposed to only international
transfers) as well as international transfers from the rest of the world which might not be described as
Official Development Assistance (such as transfers from non-OECD donors, including from the
BRICS).
WASH Accounts proposed classification of financial sources
In summary, we are recommending the adoption of a classification of financial sources that would
broadly align with the 3T terminology but provide additional disaggregation and reconcile with the
SEEA-Water terminology. The proposed classification of financing sources is shown on Table MN 2.7
below, with relevant definitions.
76

78. 77
Table MN 2.7 - WASH Accounts classification of WASH financing sources
WASH-Account
financing sources Proposed definition
Correspondence
with OECD
Typology of
financing sources
Correspondence
with SEEA-Water
categories
of financing
sectors
FS1
Tariffs for
services
provided
Payments made by users to service providers
for getting access to and for using the service.
TARIFFS
Part of funding
via
“Corporations”
FS2
Households’
expenditure for
self-supply
Funding provided by households to invest in
or provide the service themselves. Households
have to make up-front an initial investment (in
a well or a private latrine) to have access to
the service and then need to cover operating
and maintenance costs of their assets. This can
be in form of cash, material or time
(sometimes referred to as “sweat equity”).
Households
FS3 Domestic public
transfers
Public transfers from government agencies
(central or local government) to WASH
actors. These are often subsidies that come
from taxes or other sources of revenues of the
government. This category includes only
grants and excludes concessionary loans
(which are included in FS6).
TAXES Governments
FS4 International
public transfers
Voluntary donations (or grants) from public
donors and multilateral agencies that come
from other countries. Concessionary loans are
excluded from this category and entirely
included in FS6 Repayable Finance.
TRANSFERS
Rest of the world
FS5 Voluntary
contributions
Voluntary donations (or grants) from
international and national non-governmental
donors including from charitable foundations,
Non-Governmental Organizations (NGOs),
civil society organizations and individuals
(remittances). Concessionary loans are
excluded from this category and entirely
included in FS6 Repayable Finance.
Not-for-profit
institutions
serving
households
FS6 Repayable
financing
Sources of finance that come from private or
public sources and ultimately need to be
repaid, such as loans (including concessionary
loans and guarantees), equity investments or
other financial instruments such as bonds.
This category can be divided down into 2 sub-categories:
concessionary repayable financing
and non-concessionary repayable financing.
REPAYABLE
FINANCE
Part of funding
via
“Corporations”

79. Methodological Note No 3: Estimating funding of WASH services with a
“Financing Source approach”
Objectives. This note provides guidance for tracking financing flows in the WASH sector using a
“financing source approach”. It is based on a review of the experience of the System of Health
Accounts in estimating financing sources. For each type of financing source, it indicates what the
potential sources of information might be and identifies what can be the challenges (and associated
solutions) with identifying those financing sources.
MN 3.1. Obtaining data on financing sources
As mentioned in in the Guidance Document, there are several types of financing sources that can be
drawn upon to finance the sector. Identifying information on each of these financing sources can be
done in several ways, as outlined in Table MN 3.1 below. The most appropriate methods for gathering
data on financing sources needs to be defined on a country by country basis, depending on data
availability. Additional guidance on gathering information on each type of financing source is
provided below the Table.
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Table MN 3.1 - Gathering data on financing sources
Categories of financing sources Data sources and collection methods
Tariffs for services provided
(FS1)
 Use existing sources where available, such as IBNET, national
regulators or service providers’ associations, strategic financial
planning exercises at national level
 For main service providers, obtain turnover data per WASH service; in
decentralized countries, organize a survey of formal service providers
 Organize an inventory and survey of other service providers (including
small-scale informal providers) to assess their overall tariff revenues
Households’ expenditure for self-supply
(FS2)
 Rely on existing household survey data on coverage
 Organize ad hoc household surveys to assess their investments in self-provided
water or sanitation
Domestic public transfers (FS3)  National and local government actual expenditure data, based on data
collection by national bureau of statistics or specific questionnaires
International public transfers
(FS4)
 OECD DAC database
 National and local government financial accounts
Voluntary transfers (FS5)
 National and local government financial accounts
 Surveys of NGOs and other charitable organizations about their
investments
Repayable financing (FS6)  Surveys of commercial banking sector
FS1: Tariffs for services provided
Information on tariffs paid to “official” WASH service providers exists at a disaggregated level
(i.e. at the level of each service provider) but obtaining this information usually requires careful
examination of the service providers’ financial accounts and tariff schedules.

80. Some countries or organisations have gathered data on average tariffs in a given country or in
different cities,4 whilst other organisations gather and present data on tariff structures at country level.
However, few (if any) countries collect data on a consistent and regular basis on the total amounts of
revenues that are generated through tariffs paid by users for services provided.
The present methodology requires gathering such data, both at an aggregate and at a disaggregated
level:
 Aggregate information on revenues from tariffs: this is the aggregate of all revenues generated
from all types of services at the level of service providers, based on what is usually referred to as
“turnover from sales of water / sanitation services”, as extracted from the profit and loss accounts
of service providers;
 Disaggregated information on revenues from tariffs: in most cases, obtaining disaggregated
information on the distribution of revenues from tariffs between various services (water,
sanitation and other services) or various regions would need to be obtained based on commercial
data. This requires a specific visit (or sending a questionnaire) to each service provider.
Collecting this type of data is likely to be difficult when the provision of WASH services is highly
decentralized, resulting in a large number of service providers and when informal service providers
play an important role i.e. serve a large share of the market.
To overcome these potential difficulties, the WASH Accounts team can try to obtain data from:
 National water sector regulators (e.g. NWASCO, the National Water Supply and Sanitation
79
Council in Zambia, or PURC in Ghana, WASREB in Kenya, etc.);
 National utility associations (e.g. ABCON5 in Brazil);
 Global surveys and databases that collect information on tariffs, such as the International
Benchmarking Network for Water and Sanitation Utilities (IBNET) benchmarking platform
managed by the World Bank;
 Strategic Financial Planning exercises for the sector, which might have been conducted under
the leadership of international organisations such as the OECD or the World Bank.
Box MN 3.1 - Regulatory data on tariffs of service provision from national regulators
Data on tariff structures can be available from the national regulator of water and sewerage. For example, Ofwat
(the Office of Water Services) is the economic regulator of the water industry in England and Wales.
Ofwat monitors and approves every year each company’s water and sewerage charges to check that they respect
the price limits set. It used to publish results in yearly charges reports. These price limits are set by the regulator
every 5 years by assessing in detail the operators business and financial models. To conduct such price reviews,
they rely on financial models that capture all financial flows, including revenues (from tariffs and other sources)
and sources of repayable finance. The regulator builds into the price limits, and therefore the tariffs charged to
customers, the cost of servicing the debt and equity by estimating the value of the regulatory capital asset base.
All this information is made publically available online, except where any information is deemed commercially
sensitive.
As mentioned above, tariff surveys are unlikely to estimate total revenues from tariffs but are more
likely to include data on average tariffs or tariff structures. The WASH Accounts team would
therefore need to process this data, using complementary datasets on the number of customers and
their respective consumption (this could become a somewhat complex exercise when tariffs are
structured based on consumption blocks, in which case, some approximation are likely to be
necessary).
4 For example, the OECD data for a set of cities and countries around the world (OECD, 2009. Managing Water for All - An
OECD perspective on pricing and financing. Paris: OECD Publications.)
5 Associação Brasileira das Concessionárias Privadas de Serviços Públicos de Água e Esgoto.

81. In the case of informal service providers, it is unlikely that information will be readily available on
their revenues from tariffs. Where such informal service providers are serving a substantial share of
the market, surveys based on a representative number of informal service providers (and their
customers) will therefore need to be conducted in order to obtain data on the revenues from tariffs that
they perceive. The tariffs they charge from their customers are likely to be higher than the tariffs
applied by formal operators but the volumes consumed will inevitably be lower, so information on
tariffs as well as volumes consumed will need to be collected for a representative sample. This data
would then need to be extrapolated based on information on the average number (and size) of
informal service providers (but excluding households, which are covered in the next category).
FS2: Households’ expenditure for self-supply
The second type of financing source coming directly from households relates to what we are
referring to as “households’ out-of-pocket expenditure for self-supply”.6 This financing source is
most relevant for household investments in water self-supply solutions (such as private or community
wells, water tanks, etc.) and household level sanitation. It is an important financing source to track as
it can represent a substantial portion of investments made by households but also by the country as a
whole in water and sanitation. Yet, it is the financing source that is typically tracked the less or in the
less reliable manner.
In order to assess financing flows from households, the WASH Accounts team can use existing
household surveys to obtain information on coverage rates, as these would indicate how many
households have invested in household-level on-site sanitation. When such coverage data is updated
on a regular basis (for example, the WHO-UNICEF Joint Monitoring Program is currently conducting
surveys every two years but is considering carrying them out every year), it would be possible to track
the amount of investments carried out by households over time. In many countries, however, coverage
information is not gathered on an annual basis in a reliable manner. Given this, it would not be
possible (or even necessary) to try and track annual levels of expenditure made by households on self-supply.
This means that estimating these expenditures lends itself better to a “capital stock” approach
rather than to a “financing source approach (see “Methodological Note No5).
In order to generate a comprehensive picture of financing sources for the sector, however, it would be
useful to derive estimated investment flows from households. This could be done by taking coverage
estimates for two available dates (which might be 5, 10 or 15 years apart if the best reliable
information is the census) and estimating the trend in coverage between those two dates to derive
annual investment flows. To enhance accuracy, these coverage estimates would need to reflect the
type of investments that households have made (for example, the type of latrines). Coverage estimates
then need to be combined with information on the average household investment by type of
investment category, based on existing surveys or project-related information.
If reliable coverage information is not available, it would be necessary to conduct ad-hoc household
surveys to assess their investments. Such surveys are likely to be necessary in any case to estimate the
value of household investment for different types of investments, such as types of latrines.
Conducting this type of surveys would be greatly facilitated by the use of mobile phone technologies
to reduce the cost of data gathering and minimise the risk of error. Such mobile phone technologies
have been used extensively already to gather information on water points (what is referred to as
“water point mapping”), including information on the geographical location, related investment costs
and functionality of rural hand-pumps for example. This information (particularly that on investment
costs) will be of critical interest to fill in the data gap on household investments in self-supply.
6 Note that in the OECD 3T terminology, these are included in “tariffs”. We are proposing to separate them out, partly
because the methodology for their estimation is likely to be different.
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82. FS3: Domestic public transfers
Domestic public transfers are public funds transferred by government agencies (either at
central or decentralised government level) to WASH sector actors. Such funds would typically be
provided as subsidies, for capital investment or operations. This category includes only pure grants
and excludes repayable finance, even concessionary loans (which are included in FS6 – Repayable
Finance). “Hidden” forms of subsidies may include tax rebates or subsidised services (such as
subsidised electricity). Explicit subsidies are a priority for the tracking exercise. In the first stage of
methodological development, it would be sufficient to simply mention the existence of hidden
subsidies rather than to seek to quantify them (such quantification could be the subject of
methodological development later down the line). In addition, in this first stage, we are
recommending focusing on “budgeted public transfers”, complemented by spot checks to evaluate the
extent to which “budgeted amounts” differ from effective spend.
Public transfers: distinguishing between “budgeted” and effectively spent
One important distinction when it comes to public transfers (for domestic and international
public transfers alike) is that there might be a substantial difference between what is
“budgeted” and what is effectively spent. In some countries effective spent might
systematically be under what has been budgeted. This can be linked to a number of
reasons, including political obstacles, low management and “absorptive” capacity, or
difficulties with planning and implementing investment projects. At this stage of
methodological development, it will be easier to obtain information on budgeted public
transfers so it is recommended to focus on this type of data gathering. However,
particularly in countries where there is a substantial gap between budgeted amounts and
effective spending, it would be necessary to complement this with qualitative and
quantitative assessments of the difference between budgeted amounts and actual spending.
Data on public transfers channelled to the WASH sector need to be collected from a wide range of
stakeholders and sources, including national and local governments or other public financing units,
such as, for example, common funding baskets which are set up when a sector-wide approach to pool
funding is adopted for the sector. This will need to be based on the sector financial flow mapping
exercise conducted in Step 2.2.
In some cases, aggregated data at a national level can be found in some countries in established tools
for tracking and planning financial resources. For example, the Total Sanitation Campaign in India
had a solid system of reporting, both for public financial flows and for achievements, which can be
used to some extent for this purpose (although independent spot-check verifications might be needed).
FS4: International public transfers
In this category we only include voluntary donations from public donors and multilateral agencies
that come from other countries. These funds can be contributed either in the form of grants or
guarantees. Other forms of repayable finance from international donors, such as concessionary loans,
are excluded from this category and entirely included in FS6 Repayable Finance.
To obtain data on international public transfers, the WASH Accounts team can consult:
 The OECD-CRS and OECD DAC databases: it tracks most transfers in the form of official
development assistance (ODA) from donor countries and international organizations (bilateral and
multilateral cooperation). It is the best database available at this stage and gives the ability to
track separately grants and (concessionary) loans. However, there are a number of caveats with
this database. First, data does not always match detailed data that can be obtained at national
level. Therefore, some degree of triangulation is likely to be needed. In addition, it is only
recently that the OECD DAC database started differentiating spending on water from spending on
sanitation, and no further disaggregation is available at this stage. Finally, the database covers
81

83. only international public transfers from OECD countries and does not currently include important
non- OECD aid flows such as those coming from China, Arab states or India.
 National and local government financial accounts: They can be used to complement and refine
data from OECD database at a national level. In case of conflicting information, however, it
would be essential to state which source has been given priority (depending on reliability).
Collecting data on ODA and the issue of concessionality
The OCDE database tracks official development assistance (ODA) from donor countries
and international organizations, according to the following definition:
“Financial flows to countries and territories on the DAC which are:
- provided by official agencies, including state and local governments, or by their
82
executive agencies; and
- each transaction of which:
a) is administered with the promotion of the economic development and welfare of
developing countries as its main objective; and
b) is concessional in character and conveys a grant element of at least 25%,
calculated at a rate of discount of 10 per cent (except for capitalised interest
included in re-schedulings of ODA loans which is recorded as ODA, regardless of
the grant element of the rescheduling.)”
Therefore to allocate the expenditure between FS4 (International public transfers) and FS6
(Repayable Finance), it is necessary to distinguish repayable loans from pure concessional
finance (100% of grant element). Details on the conditionality of the financing flows can
be found on the OECD databases and corroborated with national level information.
Source: http://www.oecd.org/dac/38429349.pdf
FS5: Voluntary transfers
Voluntary donations may come from international and national non-governmental donors including
from charitable foundations, Non-Governmental Organizations (NGOs), civil society organizations
and individuals (remittances). Only donations that are 100% pure grants are included in this category.
All forms of repayable finance (including concessionary loans and guarantees) are included in the
category FS6 Repayable Finance. In many developing countries, there are frequently many voluntary
organisations contributing funding to the water and sanitation sector in-cash or in-kind (for example,
by digging a well or providing equipment). In most countries, such transfers are not recorded in a
reliable fashion and there is therefore little transparency about their actual contribution to sector
financing.
To obtain data on such transfers, the WASH Accounts team could consult:
 National and local government financial accounts: some governments have started collecting
information on voluntary transfers to the water and sanitation sector, with the objective of
ensuring better coordination of such financial flows. This is the case in Bangladesh, for example,
where NGO financing needs to be recorded in the public sector budget, thereby greatly
simplifying the task of collecting financial information on their contribution. This type of
initiative, if deemed successful, could be replicated in other countries in order to improve
coordination and facilitate the task of obtaining and recording information on such flows.
 Surveys of NGOs and other charitable organizations about their investments: given the
current lack of transparency on spending on WASH by the voluntary sector, some international
NGOs have taken the initiative to record such flows in a more reliable manner, for example, as
undertaken by Washfunders. Other initiatives, such as that developed by Interaction, the largest
coalition of US-based NGOs, seek to map NGO-funded projects at country level (see an example
for Haiti here). However, this information is not specifically gathered for water and sanitation and
is only available for a very small number of countries at present.

84. FS6: Repayable financing
This category includes all types of repayable finance, including concessionary loans or guarantees.
Information on repayable financing to the sector is very limited, but some can be found in existing
data bases:
 The OECD-CRS database contains information on concessionary lending;
 The International Financing Review compiles data on commercial loans or bonds;
 The World Bank Private Participation in Infrastructure database reports the amount of
capital investments that is committed by private operators at the start of the contract. It is
commonly used to track private investment in infrastructure. Although private operators are not
financing sources as such, they can “bridge” the financing gap temporarily.
Separating “concessional” from “non-concessional” repayable finance
The FS6 category can be further broken down in two sub-categories: Concessionary
Repayable Finance and Non-concessionary Repayable Finance.
The allocation of repayable finance flows between these two sub-categories can be done in
two ways:
- In a first instance, we can start by bluntly characterising the flows as “concessional” or
“non-concessional” based on the ownership status of the lender. A repayable flow
coming from a public sector agency could be characterised as “concessional” and a
repayable flow coming from a private sector agency will be characterised as “non-concessional”.
However, some public sector agencies can themselves be involved in
83
providing loans at market rates.
- To obtain a more refined estimation of these flows, we would recommend obtaining
data on the lending conditions for specific loans where there are doubts about the
category in which they fall. Concessional loans include a grant element, in the form of
a subsidised interest rate or a grace period. We recommend using the OECD definition
of ”concessional” to allocate the flows to the sub-categories. “Concessionary
Repayable Finance” would include repayable flows that convey a grant element of a
least 25 per cent, calculated at a rate of discount of 10 per cent (except for capitalised
interest included in reschedulings of ODA loans which is recorded as concessional,
regardless of the grant element of the rescheduling.)
Source: http://www.oecd.org/dac/38429349.pdf
However, the WASH Accounts team might need to complement this information with surveys of the
commercial banking sector, to better understand the extent to which they are currently financing the
water and sanitation sector and through which kind of instrument (commercial loans, bonds, equity
issuance, guarantees, etc.).
Given that such financial flows are by definition “repayable”, reflecting such flows into the WASH
accounts is not straightforward: the box below indicates how the System of Health Accounts is
handling the treatment of loans, for example. We are proposing to use a similar methodology in the
case of the WASH Accounts.
Lessons from the health sector: handling of loans in the System of Health Accounts
Loans increase the funds available to a provider or financing agent. In the health accounts,
financing agents are defined as the units that channel finance to the sector by pooling funds
together from different sources and re-distributing them to service providers.
Loans are not included directly in the health accounts, because they affect the balance sheet
(assets and liabilities) of the financing agent. What does appear in the SHA is the money that

85. the financing agent releases into the health care system. Since most loans are spent as soon as
they are disbursed, the distinction matters more for the purposes of attributing the funds to a
financing source than for the level of health expenditure.
Loan repayments do not appear in the health accounts because they represent a change in
assets rather than a current expenditure for health. In effect, they are funds that were already
registered in the health accounts when the disbursement was spent.
On the other hand, it is appropriate to include interest payments made on outstanding debt as
part of health spending, provided that the debt was directly related to the financing agent’s
health activity. Most accounting systems separate loans and loan repayment from other
transactions, so this treatment is not difficult to implement in practice. In systems where such
a separation is not made, health accountants should be on the lookout for budget line items
that indicate the infusion of new capital or the repayment of loans or retirement of other debt,
and eliminate those entries from the total for the financing agent.
From a policy perspective, it is important to show the effect of new loans or of loan
repayments on a given financing agent or class of financing agents, this can be done in an
exhibit table. This type of exhibit can inform policy-makers without detracting from the
presentation of the current state of the health care system's ability to deliver care.
MN 3.2. Potential challenges and how to address them
Collecting information on revenue sources will give rise to a number of challenges and, as a result,
cannot be relied upon as the sole methodology for data collection.
Allocating resources from financing sources to different financing units is likely to be problematic.
For example, domestic public transfers are not systematically allocated to different types of services,
84

86. particularly when funding for water and sanitation is part of overall transfers from central to
municipal governments.
To overcome this challenge, it might be necessary to estimate “revenue allocation keys” in order to
reconstruct the portion of such funding flows that is allocated to WASH services. Such allocation
keys can be more or less precise, based on the level of information available. One potential method
would be to estimate the costs relative to different uses or different services (based on a “Cost-based
Approach” as described in 2.3 and Methodological Note No 4: Estimating the costs of providing the
service with a “Cost-based approach”) and to use these to derive allocation keys to be applied to
revenue sources.
Another potential difficulty is to avoid double-counting, particularly when resources are allocated
from international donors to national governments and from national governments to local
governments. In that case, it is important not to count a financial flow twice, i.e. at source (such as the
national government as the financing unit) and at the point where funds are disbursed to service
providers (i.e. at the level of the financing unit through which funds are channelled which in this case
would be the local government).
Depending on what makes more sense given the country’s institutional set-up, it would be important
to define where the flows are going to be tracked and stick to that specific rule. We recommend that
flows be tracked at the level that is closest to service provision, so as to enable maximum
disaggregation of the funding flows.
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87. Methodological Note No 4: Estimating the costs of providing the
service with a “Cost‐based approach”
Objectives. This note provides guidance for tracking financial costs of WASH services. It draws from
the experience of Health Accounts in estimating costs and also presents existing costs classification
that could be referred to. It then discusses specific issues such as tracking the full costs of the service,
defining cost categories now and for the future and, in particular, what type of cost categories may
need to be obtained, at the very least distinguishing between capital expenditure and operations and
maintenance expenditure, and potentially large capital maintenance expenditure. Software costs for
policy development, programme development, etc. will also need to be tracked separately if possible,
although this might be difficult to do at an aggregate level.
MN 4.1. Classifying costs
For the purpose of data comparability across countries, it will be important to use the same cost
categories and commonly agreed methodologies to estimate such costs.
At the international level at present, there are no standard classifications of costs that are used in both
the urban and rural sub-sectors alike. In the urban sub-sector, country-level regulators define cost
items in a specific manner (this if the case of Ofwat in England and Wales, for example, which has
defined cost categories in order to set prices in an uniform manner for all water and sewerage
companies). International utility benchmarking exercises, such as IBNET developed with support
from the World Bank, seek to benchmark operating costs (defined as the unit operational cost per
cubic metre of water produced or sold) but does not attempt to benchmark investment costs, as “they
tend to differ widely from one year to another due to the lumpiness of the investments”. As a result,
the IBNET toolkit suggests measuring the capital intensity of a utility based on the gross fixed asset
value (a capital stock indicator) per capita served. However, they also state that: “Unfortunately there
is often limited information available about asset values and until more emphasis is placed on this
item the values derived must be treated with caution” (see Methodological Note No5 for more
information about how asset values can be derived).
For the rural and peri-urban sector, the WASHCost project led by IRC of the Netherlands has defined
a cost typology that seeks to capture the entire life cycle costs of investing in WASH services. The
cost definitions developed by WASHCost were inspired by the cost categories that are typically used
for urban water and sewerage services and were extended to the rural water and sanitation sectors.7
These cost categories are shown on Table MN4.1. below.
86
Table MN 4.1 - WASHCost classification of costs in the WASH sector
Cost component Explanation
Capital expenditure, including
hardware and software
Initial costs of putting new services into place: “hardware” such as pipes,
toilets and pumps and one-off “software” costs such as associated training
and consultations.
Operating and minor
maintenance expenditure
Routine maintenance and operation costs to keep services running (e.g.
wages, fuel or any other regular purchases). Neglect has long-term
consequences for service delivery, such as expensive capital (maintenance)
expenditure and/or service failure.
Capital maintenance
expenditure
Occasional large maintenance costs for the renewal, replacement and
rehabilitation of a system. These essential expenditures are required before
failure occurs to maintain service levels and need to be planned for.
7 However, they do not include any specific mention of water resource costs or environmental costs, which may
need to be done in subsequent methodological development.

88. Cost component Explanation
Cost of capital The cost of borrowing money or investing in the service instead of another
opportunity. It also includes any profits that service providers may earn
and that are not reinvested. It has a direct impact on the ability to maintain
a service financially.
Expenditure on direct support Post-construction support costs (e.g. training for community or private
sector operators, users or user groups). These costs are often forgotten in
rural water and sanitation estimates but are necessary to achieve long-term
functionality and scale.
Expenditure on indirect support The cost of planning and policy-making at the governmental level,
including strengthening the skills and capacities of professionals and
technicians. These costs have a direct impact on the long-term
sustainability of projects.
Source: Adapted from WASHCost (2010a)
This classification clearly identifies cost items that are typically neglected, and therefore not
adequately budgeted for, such as capital maintenance expenditure or expenditure on direct (or
indirect). For example, the methodology explicitly considers software costs—that is, expenditure on a
range of “software” activities required to ensure that such services are delivered effectively.8 These
software activities are extremely varied and broad in scope; they range from the costs of managing the
sector at the level of the ministry (staff costs employed in planning, budgeting, interaction with
international donors, monitoring and evaluation, technical assistance, etc.) down to the costs of
capacity-building or hygiene education activities at the local level.
If validated, such cost classification could be used as a standard way of accounting for costs in the
WASH sector in the long term. However, this classification appears to be more useful from the point
of view of project planning and budgeting than for tracking costs at a national level. Indeed, it may be
difficult to use the WASHCost classification in the context of the present testing study, as some of the
cost categories (such as capital maintenance expenditure, cost of capital or expenditure on direct and
indirect support) are not consistently tracked in most countries at present. Typically, most
government- or NGO-led programmes do not account separately for software costs associated with
capital expenditure or for expenditure on direct or indirect support. Overtime, using a costing
classification based on the WASHCost classification could be considered.
For the testing exercise, we recommend using a cost typology that at least distinguishes between
capital expenditure (including large maintenance costs) and operating and minor maintenance
expenditure at the level of each service provider. Support (or “software”) costs could be collected at
the aggregate level for the sector (e.g. expenditure of the water ministry) as well as at the level of each
particular service and be incorporated into either operating costs (if they are “recurrent” in nature) or
capital expenditure (if they are “one-off” costs associated with the development of a specific capital
investment project).
In this document, we use the terms “cost” and “expenditure” interchangeably. The word “cost” is
more likely to be used for utilities and “expenditure” for governments or households. The overall
category is referred to as a “cost classification”.
The classification of cost types that we are proposing to use for the testing exercise is summarised in
Table MN 4.2. below.
8 Trémolet, Kolsky & Perez (2010) also explicitly accounted for software costs when deriving the costs of
providing on-site sanitation at the household level.
87

89. 88
Table MN 4.2 - Proposed classification of costs
Type of costs Definition
C1
Capital costs
including hardware
and software
Initial costs of putting new services in place, including “hardware” such as
pipes, toilets and pumps and one-off associated “software” costs, such as for
detailed design (engineering studies) or associated training and consultations.
C2 Operating and
maintenance costs
Routine maintenance and operation costs to keep services running (e.g. wages,
fuel or any other regular purchases). Operating expenditures is the recurrent
(regular, ongoing) spending to provide WASH goods and services: labour,
fuel, chemicals, materials, and purchases of any bulk water. Maintenance
expenditure is the routine expenditure needed to keep systems running at
design performance, but does not include major repairs or renewals which are
recognised as not recurrent.
C3 Large capital
maintenance costs
Occasional large maintenance costs for the renewal, replacement and
rehabilitation of a system that goes beyond routine maintenance to repair and
replace equipment, in order to keep systems running. These essential
expenditures are required before failure occurs to maintain service levels and
need to be planned for. If this cannot be separated out from capital
expenditure (C1), this should be included with this category of spending and
explicitly mentioned as such.
C4 Cost of capital This is estimated based on the cost of borrowing money (interest paid for the
loan) and the cost of equity (if a return is paid to shareholders).
C5 Support or software
costs
Includes expenditure on direct and indirect support:
 Expenditure on direct support (ExpDS) includes expenditure on both pre-and
post-construction support activities directed to local-level
stakeholders (e.g. training for community or private sector operators, users
or user groups).
 Expenditure on indirect support (ExpIDS) includes the cost of planning
and policy-making at the governmental level, including strengthening the
skills and capacities of professionals and technicians. These costs have a
direct impact on the long-term sustainability of projects.
A number of methodological issues relative to the estimation of such costs can be anticipated at this
stage, as highlighted below:
Estimating capital expenditure and large capital maintenance expenditure. Annual flows of capital
expenditure (and large capital maintenance) are usually estimated based on the service providers’
balance sheet. The asset base included in the balance sheet will evolve from one year to the next on
the basis of new investments (also referred to as “gross capital formation” in the System of National
Accounts) which would be reflected as an increase in assets) and depreciation of existing assets (also
referred to as “consumption of fixed capital” in the SNA).
Based on a service provider’s balance sheet, it is therefore possible to estimate how much the service
provider has invested every year. In the case of service providers that are providing different types of
services (such as water and sanitation), in order to allocate such costs by type of service, it would be
necessary to obtain data on the recent (and planned) investment programme. The allocation by type of
service could be done based on actual investments (particularly if the utility itself has done such
allocation) or by using estimated ratios if the utility has not done the allocation itself (i.e. 40%
investment for water, 60% for sanitation for example). Over time, it would be necessary to aim for as
much actual allocation as possible. All associated software expenditure, which has been a one-off and
undertaken specifically to support this hardware investment could be associated with it (such as
supporting design studies or planning).
As a note of caution, however, there are a number of reasons for which such “capital investment
flows” may not be a robust indicator of an actual trend in investment, as discussed in more detail in
Methodological Note No 5: Estimating fixed asset stocks . As a result, the approach of estimating
capital investment flows may need to be complemented by an estimation of capital stocks.

90. The cost of capital will need to be estimated based on financial accounts. Typically, the cost of
capital is made up of two main elements: financial costs, which correspond to the costs of repaying
the interest of the debt associated with capital investment (this is the cost of renting the capital and
can usually be identified separately in financial accounts); and the return on equity capital, which is
paid out as dividends to shareholders (or other benefits) in the event of profit-making companies.
Given the potential difficulties in estimating the return on equity capital and the profit element for
not-for-profit companies, the System of Health Accounts uses different approaches to capture costs
and expenditure for for-profit and non-profit / government providers, as discussed in the box below.
Learning from the health sector: distinguishing between for-profit and non-profit/
89
government providers.
The System of National Accounts (as well as the System of Health Accounts) establishes a
distinction for evaluating costs of market and non-market providers. In the case of market
(for-profit) providers, the value of goods and services they produce is estimated based on the
revenue they receive from the sale of these goods. As a result, this can be done by compiling
information on the total amount paid for these goods and services at the point of
consumption. As a result, data valuing their output from the country’s national accounts may
be very useful for these kinds of providers.
In the case of non-market (non-profit or government) providers, the value would be estimated
based on the cost of production, as these goods and services are not necessarily sold or sold
at a price that reflects the true cost of production. Costs would be typically calculated as the
actual expenditure on inputs such as staff remuneration (including all benefits) and supplies.
This would include budgetary expenditures on salaries, supplies, and other inputs. It may also
include goods and services (such as free electricity) provided to those facilities by other
government agencies.
Estimating operating and maintenance expenditure. Operating and minor maintenance expenditure
can be derived from the income and expenditure statement (profit and loss account) of the service
providers. In the event of joint service provision (water and sanitation), it will be necessary to allocate
such costs to these respective services. If the utility does not already do it based on actual costs,
allocation keys will need to be used, which means that additional information will need to be
collected, including on the individual cost factors (such as energy, chemicals, spare parts, etc.) and on
the number of staff per service.
Using the share of revenues by service as an allocation key is unlikely to be helpful and could
introduce distortions, as there are frequently cross-subsidies between water and sanitation, which
means that tariff revenues from sanitation for example may actually be much lower than the actual
costs generating by those services. When applying a “Cost-based approach”, it would be necessary to
analyse costs in order to identify what are the actual costs of each service. To do so, it would be
necessary to rely on recent tariff studies or pre-existing information or to do it only for a small sample
of utilities, as it can be a time-consuming exercise.
Estimating support or software costs. Software costs can be included in two main ways: expenditure
on indirect support (such as for policy development, sector planning, budgeting, etc…) can be
estimated at a national level. It might be possible to extract those costs directly from the National
Accounts, as there are categories in the National Accounts that capture information on “support
services to the water and sanitation sector” (see Table MN 1.4 which contains our recommended
classification of WASH services).
Regarding those costs that are directly related to the provision of a particular service, those costs
might either be elicited based on the costs of NGOs and other support organisations (including

91. government) that support service delivery or at the level of service providers that have called on such
NGOs to support the development of their services. Those costs are typically difficult to track,
however. In the case of NGOs, for example, having access to their costs on a consolidated basis can
be difficult and they would seldom separate out hardware from software costs. It would therefore be
recommended to estimate such costs on a sample basis for a representative sample of NGOs.
MN 4.2. Collecting data on the costs of service provision
Potential sources of cost data vary depending on which agencies incur those costs. Table MN 4.3.
below lists potential sources of costs by type of service provider.
90
Table MN 4.3 - Gathering data on costs of service provision
Categories of
service providers Data sources and collection methods
P1 Government
agencies
 Public expenditure accounts presented to national parliaments
 National budget
 Annual budget for each relevant financing unit
 Supplementary information to determine cost allocation if needed (such as
number of staff per department, percentage of their time dedicated to a sub-sector)
P2 Public and private
utilities
 Service providers’ annual financial statements (balance sheet and profit and
loss accounts)
 Supplementary information to determine cost allocation if needed:
o Number of staff per department, percentage of their time dedicated to a
given service
o Number of customers per service, unit cost of production, average
investment costs per type of investment
o Investment programme (realisations by category of investment spending)
o Activity-based costing reports
o Any recent tariff study that might have been undertaken to estimate costs of
production, historically and going forward
P3
Small independent
providers (formal
and informal)
 Survey of a sample of small independent providers on their total production
costs
P4
NGOs and
community-based
organizations
 Annual financial statements
 Detailed costing / cost benchmarks for a number of representative projects
P5 Households (self-provision)
 Households survey,
 Detailed costing / cost benchmarks for typical household investments
Learning from the health sector: the costs of self-provision of WASH services
Whereas the actual costs to households will be estimated (such as investment or operating
costs), free labour provided by households to build latrines for example should not be
included in consistency with the System of National Accounts, which does not include non-monetary
contributions (this is also in line with the practice in the System of Health
Accounts). The value of these activities can be estimated, but it cannot be part of the total
used for comparison of WASH expenditure with other economic aggregates or for
international comparisons.

92. Methodological Note No 5: Estimating fixed asset stocks
Objectives. This note indicates why it is important to estimate fixed asset stocks for the sector, as well
as estimating financial flows. It indicates how this would allow linking with existing accounting
conventions (such as in the System of National Accounts) and highlights potential methodological
challenges for doing so (and ways to address those).
MN 5.1. How does estimating fixed asset stocks differ from evaluating
91
investment flows?
Methodological Note No 4: Estimating the costs of providing the service with a “Cost-based
approach” indicated how to track financing flows to the sector, including investment flows (capital
expenditure). There are several limitations with tracking investment flows, however:
 Tracking investment flows can potentially generate misleading results, as investment flows
typically vary from year to year due to capital programming and realization. For example, if a
country is building a large asset at a national scale (e.g. a dam or a transmission pipe), capturing
the nominal value of that investment in each year as the asset is being built would show up as an
investment peak followed by much lower levels of investment. At a global level, this may be
interpreted as the country having “deprioritized” investment once this large asset has been built,
when in fact the asset would be producing benefits and investment needs are subsequently lower.
 Capturing the entire value of an investment in a given year does not allow differences in the
asset lives of such investments to be reflected. Following on the example mentioned above,
taking into account the entire value of a new asset with an asset life of, say, 50 years in the year in
which such investment is made ignores the fact that such an asset delivers benefits over a long
period.
 Some very important investments (e.g. households’ out-of-pocket expenditure for self-supply)
cannot be tracked in such a way because no data is available on annual investment flows for
this type of expenditure. What is available is information (mostly from household surveys) on
service coverage at different points in time (i.e. when the household surveys are conducted) rather
than annual investment flows.
To complement tracking investment flows, it can be useful to estimate the value of existing fixed
asset stocks and track how such value evolves over time. Such a methodology has numerous
advantages, as follows:
 It would allow tracking all sources of investment on a comparable basis, thereby overcoming
the problem of a lack of data on annual capital investment flows for significant investors, such as
households for on-site sanitation. This was the approach taken by the World Bank-led AICD
report (Africa Infrastructure Country Diagnostic) when estimating current investments in the
sector, for example. On the basis of this kind of approach, they found that households are the most
significant investors in the WASH sector in sub-Saharan Africa.
 It would allow reflecting whether existing assets are providing a service or not. For example, at
a subsequent stage of methodological development, it would be possible to exclude from the
“asset base” the value of assets that are not functioning, bearing in mind that such proportion can
be significant (for example, several estimates indicate that 50% of all manual hand-pumps in sub-
Saharan Africa are non-functional at any given time).
 It would provide a sounder basis for estimating future costs—in particular, the costs of
attaining the MDGs. For example, the WHO global costing exercise (first produced in 2004 and
updated in 2012, see (Hutton, 2012)) is currently based on a relatively “crude” estimate of the
total asset stock by combining JMP figures on coverage with the best available estimates of unit
costs, based on the service ladder. Based on the value of this stock of assets, the authors apply a
ratio to derive projected operations and maintenance costs. However, good unit cost values are not

93. always available at the national level. These estimates would therefore be strengthened if more
reliable estimates for asset stocks were available.
 It is in line with the United Nations System of National Accounts, the standard methodology
used by governments to compile and track information on economic activity. According to the
UN Statistics Division, statistics bureaux in each country should already be compiling
information on asset stocks for all economic activities, including for water and sanitation.
Concepts such as “gross fixed capital formation” and “stocks of fixed assets” are already defined
in a standard manner in SNA 2008. Table MN 5.1. below summarises the definitions used by the
SNA and could therefore be referred to or used in the WASH Accounts.
92
Table MN 5.1 - Terminology used in SNAs to evaluate changes in capital asset stocks
Definition
Consumption of fixed capital
Cost of the decline in value of the producer's stock of fixed assets as a result
of physical deterioration, foreseen obsolescence or normal or accidental
damage in the accounting period. It corresponds to “depreciation” in the
business management terminology. It should reflect the use of capital as a
factor of production. It includes the use of buildings, equipment and other
capital goods such as vehicles. It excludes the rentals paid on the use of
equipment or buildings, and fees, commissions, royalties, etc., payable under
licensing arrangements, which are included as the purchase of services.
Gross fixed capital formation
Total value of the fixed assets that service providers have acquired during the
accounting period (less the value of the disposal of these assets) and that are
used repeatedly or continuously for more than one year in the production of
services and goods. This is what corresponds to investments made in that year.
Opening stocks of fixed assets Value of fixed assets at the start of the period (usually an accounting year).
Closing stocks of fixed assets
Closing stocks = opening stocks + gross fixed capital formation –
consumption of fixed capital + other changes in volume of asset + holding
gains/losses on assets
Where:
 Other changes in the volume of the asset are those that are not due to
transactions, such as changes in classification, discoveries and natural
disasters.
 Holding gains/losses on assets are the changes in the price of assets.
Source: System of National Accounts (2008).
MN 5.2. Potential methodological challenges with this approach and ways
to overcome them
This type of methodology has not been explicitly adopted in previous exercises that have sought to
track financial flows to the WASH sector, however.
This is probably due to the fact that there are a number of methodological difficulties with adopting
a “fixed asset stock” approach, which would require further consideration, including the
following:
Existing information on fixed assets is often very poor in the WASH sector, for a number of
reasons. Few entities have developed a comprehensive and reliable asset register. The ownership of
the assets is frequently unclear, and there is frequent confusion about who has paid for the assets and
who effectively owns the assets. If such a methodology was adopted on a large scale, however, it
could provide added incentives to WASH service providers for improving asset registries, which are
useful tools for improved asset management.
Existing information may not always distinguish between water and wastewater. Some utilities
currently split the valuation of their assets between water and wastewater but this is by no means

94. universal. Again, the adoption of a more systematic approach to valuing capital stocks could give
incentives for utilities to split the values of water and wastewater in their balance sheets.
Most importantly, to obtain comparable capital asset stock values, it would be necessary to agree on
a common methodology for valuing assets across the sector. There are a number of existing
methodologies for valuing assets, which can produce very different values, especially if the asset base
combines assets that have been built at different times. Alternative methodologies for valuing fixed
asset stocks are presented in the Box below. Different service providers may be using different rules,
even within the same country.
93
Box MN 5.1 - Alternative methodologies for valuing fixed asset stocks
Valuing assets at their current book value, i.e. as they are recorded in the service providers’ balance sheet. This
is likely to be the simplest method for asset valuation, at least in the first instance, as these values can be directly
extracted from companies’ balance sheets. The book value is based on the original expenditure of the asset less
any depreciation incurred since the asset was purchased plus any capital maintenance expenditure since incurred
on that asset. Applying this method can lead to distortions, however, as different service providers may use
different conventions for valuing assets in their balance sheets. Some may value assets at their historical costs
(adjusted for depreciation and in some case, for inflation), whilst others would have adjusted the value of assets
based on their replacement value.
Valuing assets at their historical cost: this methodology estimates how much it cost to build when it was built,
adjusted for depreciation and inflation. In the case of many utilities, water and sewerage assets have been
acquired a long time ago, although they are still delivering benefits. Their historical value would therefore be
very low (as the assets have been or almost been depreciated) despite the fact that they are still providing
services. Other utilities might have updated the value of assets in their books.
Valuing assets at their replacement value, also referred to as the Modern Equivalent Asset value. This is
equivalent to how much it would cost to replace the given asset by its modern equivalent at today’s cost, i.e. by
an investment using the latest technologies but providing the same level of service. This kind of valuation can
provide values that are closer to actual values but conducting such a “revaluation” exercise can be complicated,
costly and time-consuming which means that it is seldom done, unless there is a clear motivation for doing it
(such as the introduction of private sector participation, which would call for valuing the asset base before
letting a contract).
Asset valuation methods vary from one country to another. For example, Ofwat (2005), compared methods for
valuing capital bases in six different countries for which they were comparing the regulatory systems as a
whole. In England and Wales, values for capital employed are based on an initial value estimated at the time of
privatisation in 1989, adjusted for subsequent depreciation and new investment. Companies also report MEA
values: the estimated cost of assets of equivalent productive capability to satisfy the remaining service potential
of the asset, less accumulated current cost depreciation. Australian companies report the current replacement
cost of the asset in a similar way to the companies in England and Wales.
Source: Ofwat (2005), “International comparison of water and sewerage service”, March 2005.
The System of National Accounts (2008) also formulates recommendations as to how valuing assets
and reflect those in the balance sheets, which can be used for reference.
A few points of caution when valuing assets:
It would be important to obtain information about who invested in such an asset in the first place.
If this information is going to be used in order to track financial sources to the sector, it will be
important to know who financed its construction in the first place. For water utilities, for example,
investment funds may come from internally generated revenues, government subsidies or
international transfers.

95. For investments carried out by households, it will be necessary to formulate a number of
assumptions. Deriving the value of the capital stock in which households have invested over time can
be done based on the number of existing facilities multiplied by the unit costs of these facilities,
minus government subsidies.9 Given the typical lack of information about when the investments have
been made by households, this is equivalent to valuing household assets based on an MEA approach
(Modern Equivalent Asset). In order to be consistent, it might therefore be preferable to use an MEA
approach for all other types of assets as well, although this might be difficult to achieve if no prior
valuation of assets using this method has been adopted in the country or for the utility.
MN 5.3. Valuing fixed asset stocks in the testing exercise and next steps
In conclusion, given the methodological difficulties entailed with estimating fixed asset stocks, the
testing exercise will need to test the feasibility of alternative methods for estimating fixed asset
values and potential errors or biases in doing so. Countries that take on the exercise of valuing asset
stocks will need to state clearly which method has been used for valuing assets and whether this
method has been used consistently across service providers or asset types. It might be possible to do
so only on a sample basis.
Valuing fixed asset stocks may be more complex the first time round (when the initial value of the
asset base needs to be determined) but would become comparatively easier for subsequent iterations.
It would require identifying existing assets for each service provider and valuing those assets. It
would also help with defining reference values for other types of costs, such as operating costs and
capital maintenance costs, which can be estimated as a percentage of asset values (if no other reliable
estimate can be gathered at a reasonable cost).
A next step in the refinement of the methodology could be to adopt a full “Fixed Asset Stock”
approach for the sector, by tracking not only assets, but also liabilities (i.e. the loans that have been
provided to finance such assets), so as to derive a value for the net capital stock. Such a “Fixed Asset
Stock” approach at the sector level is recommended, for example, by the International Monetary Fund
(2001) in its Government finance statistics manual.
9 An additional complication is that in national accounts, households are not considered to be “investors”; instead, they
purchase consumer durables (which would be classified as investments if purchased by an establishment). As a result, for
households, the consumer durable is recorded as consumed the moment it is purchased. It is therefore important to record the
purchase of consumer durables by households and estimate the lifetime of the equipment. The treatment of these household
investments will need to be discussed and agreed with experts in System of National Accounts and statistics.
94

96. Methodological Note No 6: Preparing WASH accounts’ tables and
indicators
Objectives of this note. This note sets out the proposed tables for the WASH Accounts. A summary list
of the proposed Tables is presented in Step 3 of the main document. Preparing all these tables would
enable countries to build a full picture of their WASH sector financing for policy uses (as detailed in
Section 4.1. Analyse and interpret WASH Accounts data to answer policy questions). This
Methodological Note contains the structure of the proposed tables together with a justification for
putting them forward and the list of indicators that can be calculated based on those tables.
MN 6.1 What are the WASH Accounts tables?
WASH Accounts tables are a means of displaying information on the consumption, production and
financing activities for a country’s WASH sector. Reporting the data and estimates in a comparative
way, using standard tables, allows carrying out comparisons across countries and is thus useful for
international comparisons.
The rows and columns of the WASH Accounts are based on the classifications presented elsewhere in
this methodology, including:
 Table 1 – Proposed classification of WASH goods and servicess;
 Table 2 – Definitions: uses of WASH services, WASH sector actors and financing sources;
 Table MN 4.2 - Proposed classification of costs.
In addition, some of the proposed WASH Account tables include a breakdown by region or service
areas, which is why we have included this in the table below, which summarizes all the different types
of classifications (and labels) used in the WASH Accounts.
95
Table MN 6.1 - Classifications used in the WASH Accounts
Classifications Definition
WASH services (S) WASH services and products provided by WASH service providers and
consumed by the users. See Table 1 for more the classification.
Uses of WASH services (U) Type of use of WASH goods and services. See Table 2.
WASH providers (P) Actors that are engaged in the production of WASH goods and services. See
Table 2.
Financing sources (FS) Where funding originates from before being channelled by financing entities.
See Table 2.
Financing units (FU)
Institutional entities that provide funding to the sector. They mobilise funding
to pay for WASH services. They may allocate funds directly to service
providers or channel them through intermediary institutions.. See Table 2.
Costs (C) Type of costs (or expenditure type) borne by service providers for providing
WASH services. See Table MN 4.2.
Service areas (R) Regions where WASH services are provided and consumed. Would vary from
one country to another.
WASH Accounts tables are constructed in a way to track the flows of financing between these
dimensions. The classifications can be applied to WASH costs individually to produce expenditure
tables for a single dimension (Expenditure by type of WASH uses, service providers, financing
sources etc.). Additional information can be gained from cross-classifications that use two or more
dimensions. Many combinations of two and three dimensions tables can be created. The choice of
tables will depend on their usefulness and the feasibility to construct them. A selection of main two
dimensions tables is presented in the present methodology.

97. Recommended common WASH Accounts tables
Below, we provide additional explanation about each proposed WASH Accounts table and the
type of information they allow analysing. For ease of reference and to facilitate comparisons,
each of these tables is referred to with a number and a code indicating which information it
contains. The convention used is that the labels for the WASH Accounts tables refer first to the row
classification and then to the column classification. For example, Table WA 1 presenting the
allocation of WASH expenditure by main WASH service (S) and regional subdivision (R) is referred
to as the SxR table, with WASH services (S) appearing in rows and regional subdivisions (R) in
columns.
Table WA 1 (SxR) - WASH expenditure by main WASH service and regional subdivision. This
table shows the total expenditure on each main type of WASH service by main geographical areas. To
respond to country-specific policy needs, countries can choose the level of regional disaggregation
(i.e. overall, urban/rural, by region etc...) and the level of service disaggregation below the main
service categories presented in MN1.
96
Table WA 1 (SxR) - WASH expenditure by main WASH service and geographical region
Areas Urban Rural
R1 R2 R3 R4
Main WASH
services millions of currency units Regional sub-division
1
Regional sub-division
2
Regional Sub-division
3
Regional Sub-division
4 Total
S1 Water supply services
S2 Sanitation services
S3 Support services to the
WASH sector
S4 Water resources
Management
Total
Table WA 2 (SxU) -WASH expenditure by type of WASH service and use. This table shows the
expenditure of financing units on the different type of WASH services and uses. It tells us “who
consumes what”. This is not done by types of users but rather by types of uses. This table provides a
summary presentation of the demand for WASH services in the country, i.e. who is consuming what
type of WASH service.
Table WA 2 (SxU) - WASH expenditure by type of WASH uses and service
WASH uses (U) U1 U2 U3 U4 U5 U6
Main
WASH
services
millions of
currency units
Served
domestic
use
Self-provided
domestic use
Served
institutional
use
Self-provided
institutional
use
Served
industrial and
commercial
use
Self-provided
industrial
and
commercial
use
Total
S1 Water supply
services
S2 Sanitation services
S3 Support services to
the WASH sector
S4 Water resources
Management
Total
Table WA 3 (SxP) - WASH expenditure by type of WASH service and provider. This table shows
the expenditure of service providers on the different types of WASH services. It tells us “who

98. provides what”. This table provides a summary presentation of the WASH supply market in the
country, i.e. who are the providers involved and how spending to the sector is channelled through
different providers. It displays the relative importance of each type of provider on the market.
97
Table WA 3 (SxP) - WASH expenditure by type of WASH provider and service
WASH providers P1 P2 P3 P4 P5
Main
WASH
services
millions of currency
units
Government
agencies
Network
corporate
providers
Non-network
corporate
providers
NGOs and
community-based
organizations
Households
(self-provision)
Total
S1 Water supply
services
S2 Sanitation services
S3 Support services to
the WASH sector
S4 Water resources
Management
Total
Table WA 4 (PxFS) - WASH expenditure by type of WASH provider and financing source. It
addresses the question “where does the money come from” by presenting the different sources of
revenue for each type of service provider. It enables to follow the resource flows in the WASH sector,
from the columns displaying the origin of the funds to the rows displaying the recipients and users of
these funds. The table also shows the relative importance of each type of revenue stream in financing
the activity of each type of provider and the sector overall.
Table WA 4 (PxFS) - WASH expenditure by type of financing source and WASH provider
Financing sources FS1 FS2 FS3 FS4 FS5 FS6
WASH
providers
millions of
currency units
Tariffs for
services
provided
Households’
expenditure
for self-supply
Domestic
public
transfers
International
public
transfers
Voluntary
contributions
Repayable
financing Total
P1 Government
agencies
P2
Network
corporate
providers
P3
Non-network
corporate
providers
P4
NGOs and
community-based
organizations
P5 Households (self-provision)
Total
Table WA 5 (SxFS) - WASH expenditure by type of WASH service and financing source. This
table shows the financing path to fund the provision of WASH services. It addresses the question
“who finances what” by presenting the different sources of revenue for each type of WASH service.

99. This table enables to follow the resource flow to the WASH sector from the columns displaying the
origin of the funds to the rows displaying the activities on which they are spent.
98
Table WA 5 (SxFS)- WASH expenditure by type of financing source and WASH service
Financing
sources FS1 FS2 FS3 FS4 FS5 FS6
Main
WASH
services
millions of
currency units
Tariffs for
services
provided
Households’
expenditure
for self-supply
Domestic
public
transfers
International
public
transfers
Voluntary
contributions
Repayable
financing Total
S1 Water supply
services
S2 Sanitation
services
S3
Support services
to the WASH
sector
S4 Water resources
Management
Total
Table WA 6 (SxFU) - WASH expenditure by WASH service and financing unit. This table (see
next page) shows how much is spent by each financing unit on which WASH service. It describes
how overall financing units allocate their resources to the main types of WASH services. It addresses
the question “who funds what”.
Table WA 7 (PxFU)- WASH expenditure by WASH provider and financing unit. This table (see
next page) shows how much is spent by each financing unit on which type of WASH service provider.
It shows the financing path to fund the provision of WASH services. It addresses the question “who
funds who”.
Table WA 8 (FSxFU)- WASH expenditure by financing source and financing unit. This table
(see next page) shows how overall financing units allocate their financial resources to the sector, i.e.
through which type of financial sources.

100. 99
Table WA 6 (SxFU)- WASH expenditure by financing unit and WASH service
Financing
Units FU1 FU2 FU3 FU4 FU5 FU6 FU7 FU8 FU9 FU10
Main
WASH
services
millions of
currency units
National
authorities
Regional
authorities
Local
authorities
Network
corporate
providers
Non-network
corporate
providers
Economic
and quality
Regulators
Bilateral and
multilateral
donors
Banks and
Financial
Institutions
NGOs and
community-based
organizations
Households Total
S1 Water supply
services
S2 Sanitation
services
S3
Support
services to the
WASH sector
S4
Water
resources
Management
Total

101. 100
Table WA 7 (PxFU)- WASH expenditure by WASH provider and financing unit
Financing
Units FU1 FU2 FU3 FU4 FU5 FU6 FU7 FU8 FU9 FU10
WASH
providers
millions of
currency units
National
authorities
Regional
authorities
Local
authorities
Network
corporate
providers
Non-network
corporate
providers
Economic
and quality
Regulators
Bilateral
and
multilateral
donors
Banks and
Financial
Institutions
NGOs and
community-based
organizations
Households Total
P1 Government
agencies
P2
Network
corporate
providers
P3
Non-network
corporate
providers
P4
NGOs and
community-based
organizations
P5
Households
(self-provision)
Total

102. 101
Table WA 8 (PxFU)- WASH expenditure by financing source and financing unit
Financing
Units FU1 FU2 FU3 FU4 FU5 FU6 FU7 FU8 FU9 FU10
Financing
Sources
millions of
currency units
National
authorities
Regional
authorities
Local
authorities
Network
corporate
providers
Non-network
corporate
providers
Economic
and quality
Regulators
Bilateral
and
multilateral
donors
Banks and
Financial
Institutions
NGOs and
community-based
organizations
Households Total
FS1
Tariffs for
services
provided
FS2
Households’
expenditure
for self-supply
FS3
Domestic
public
transfers
FS4
International
public
transfers
FS5 Voluntary
contributions
FS6 Repayable
financing
Total

103. Table WA 9 (CxP) - WASH expenditure by type of cost and WASH provider. This table shows
how different types of providers allocate their resources to cover the different types of costs. It
answers the question “what type of costs are funded and by whom”.
102
Table WA 9 (CxP)- WASH expenditure by type of cost and WASH provider
WASH
providers P1 P2 P3 P4 P5
Cost type millions of
currency units
Government
agencies
Network
corporate
providers
Non-network
corporate
providers
NGOs and
community-based
organizations
Households
(self-provision)
Total
C1
Capital costs
including
hardware and
software
C2
Operating and
maintenance
costs
C3
Large capital
maintenance
costs
C4 Cost of capital
C5 Support or
software costs
Total
Table WA 10 (CxS) - WASH expenditure by type of cost and WASH service. This table shows on
which type of costs resources are spent to provide each WASH service.
Table WA 10 (CxS)- WASH expenditure by type of cost and main WASH service
Main WASH
services S1 S2 S3 S4
Cost type millions of currency
units
Water supply
services
Sanitation
services
Support services
to the WASH
sector
Water
resources
Management
Total
C1
Capital costs
including hardware
and software
C2 Operating and
maintenance costs
C3 Large capital
maintenance costs
C4 Cost of capital
C5 Support or software
costs
Total
Table WA 11 (ASxP) - Asset stocks by type of WASH provider. This table presents the stock of
assets for each type of WASH provider. This enables to evaluate the stock of assets for the sector as a
whole, reflecting what has been invested over time by each type of service provider (including
households for self-service).

104. 103
Table WA 11 (ASxP)- Fixed asset stocks by type of WASH provider
WASH providers P1 P2 P3 P4 P5
Asset
stocks
millions of
currency units
Government
agencies
Network
corporate
providers
Non-network
corporate
providers
NGOs and
community-based
organizations
Households
(self-provision)
Total
AS1 Closing stocks of
fixed assets
MN 6.2 What are the WASH Accounts indicators?
The WASH Accounts indicators are key figures on WASH sector expenditure that can be derived
directly from the WASH Accounts tables. These indicators are meant to be directly relevant to
national policy makers and for international reporting. The outcome of the testing will be to agree on
an international common set of indicators, that countries could complement with their own indicators.
Due to difficulties with comparing national currency units, it is recommended to use ratios (such as
ratio of WASH spending to GDP) to the extent possible, rather than currency amounts, in order to
avoid the distorting impact of exchange rates. However some indicators such as the Total expenditure
on the WASH sector at the national level and Total expenditure on WASH per capita will be
presented in currency units. The conversion from local currency amounts into international dollar
amounts using a current exchange rate or a PPP exchange rate will need to be considered and
documented.
Table MN 6.2 below presents the main indicators that can be used depending on the country’s policy
questions.
Benchmarking and presenting indicators in context
Certain indicators would benefit from being presented by comparison with actual levels of
GDP. For example, the figure that shows the percentage of WASH sector expenditure as a
percentage of GDP (Figure 9 in the 2010 GLAAS report) does not give an indication of the
relative sizes of GDP from one country to the next. It would be preferable to chart the
percentage of WASH expenditure on the x-axis and show GDP per capita on the y-axis.
This would enable seeing whether there is any type of “GDP impact” on WASH sector
spending.

105. 104
Table MN 6.2 - WASH Accounts indicators
Table (T) Indicator (I) that can be derived
Table WA 1 (SxR)- WASH expenditure by main WASH service and
regional subdivision
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
Table WA 2 (SxU)- WASH expenditure by type of WASH service and
use
Total expenditure per type of service use
Table WA 3 (SxP)- WASH expenditure by type of WASH service and
provider
Total expenditure per type of WASH service
Total expenditure per type of WASH provider
Table WA 4 (PxFS)- WASH expenditure by type of WASH provider
and financing source
Total expenditure per type of financing source
Table WA 5 (SxFS)- WASH expenditure by type of WASH service and
financing source
Total government domestic transfer expenditure and as a % of WASH expenditure
Total international transfer expenditure and as a % of WASH expenditure
Total household expenditure as a % of WASH expenditure
Table WA 6 (SxFU)- WASH expenditure by WASH service and
financing unit
Table WA 7 (PxFU)- WASH expenditure by WASH provider and
financing unit
Table WA 8 (FSxFU)- WASH expenditure by financing source and
financing unit
Total expenditure channelled through regional and local authorities as a % of WASH public
expenditure
Table WA 9 (CxP)- WASH expenditure by type of cost and WASH
provider
Table WA 10 (CxS)- WASH expenditure by type of cost and main
WASH service
Total capital costs as a % of total WASH expenditure
Total operating and maintenance costs as a % of total WASH expenditure
Total large capital maintenance costs as a % of total WASH expenditure
Capital costs as a % of total water supply expenditure
Operating and maintenance costs as a % of total water expenditure
Large capital maintenance costs as a % of total water expenditure
Capital costs as a % of total sanitation expenditure
Operating and maintenance costs as a % of total sanitation expenditure
Large capital maintenance as a % of total sanitation expenditure
Table WA 11 (ASxP)- Fixed asset stocks by type of WASH provider Total WASH fixed asset stocks per capita

106. Annex A – Summary of key steps under the methodology
Objective. This Annex provides a summary of the different steps outlined in this methodology, It will
provide the basis for preparing the Terms of Reference for conducting the exercise at national level.
105
Step 1 – Getting started Summary of tasks to be undertaken
 Create political buy-in:
o Identify a country champion to be the national point of contact (POC)
o Convene a national level stakeholder group to oversee compilation of data and provide
political support to the project
 Identify policy questions:
o Organise an initial kick-off meeting with members of the national level stakeholder group
o Agree on a list of priority policy questions that the data collected will aim to answer
 Set up the team in charge of data collection and analysis:
o Build a strong WASH Accounts team backed up by institutions
o Identify available data and define a data collection plan
o Develop a detailed budget and work plan for data collection and analysis
Step 2 – Collect financial data
Step 2.1 - Define WASH sector boundaries in terms of services
 Define a classification of WASH services that will be used for the testing exercise:
o Identify the classifications and categories of WASH services that are being used in the
country.
o Analyse similarities and differences with available international classifications (see Table
MN1.4): can the same categories be used? Is data collected on this basis in the country?
o State very clearly which activities are included in the WASH sector definition, preferably by
reference to international classifications
o Collect data according to these categories if possible or based on aggregate categories (e.g.
water supply services, sanitation services, construction services, support services)
 Provide feedback on the following questions:
o Is the proposed list (see Table MN1.4.) usable and useful in your country to define sector
boundaries?
o What would be the ideal level of aggregation of data that would answer policy questions and
be easily collected at the same time?
o Can WASH data based on international classifications be found in your country?
o Would it be necessary, in your opinion, to refine existing classifications in order to better
match WASH sector needs?
Step 2.2 - Identify the main WASH sector actors, map service provision and financial flows
 Identify and classify WASH actors, financing sources and uses of WASH services
o On the basis of data already gathered in Step 1.3.2, identify the classifications of WASH
actors, financing sources and uses that are being used at country level
o Analyse similarities and differences with the proposed classifications: can some categories
be used? Can collected data fit into the proposed classifications?
o State clearly the classifications of WASH actors, financing sources and uses that will be
used
o Organise actors and financing sources into categories using the proposed classification.
 Map out the financing of the WASH sector (actors and financing flows schematised by
categories)
o Represent the WASH sector actors and financing sources for each of the four sub-sectors (if
necessary, i.e. if there are substantial differences between them)
 Provide feedback on the methodology:

107. o Assess if the proposed global classification covers all identified actors and financing sources
at country level and whether it needs to be modified to better adjust to the country’s context.
o Indicate whether a common classification of WASH actors, financing sources and uses is
106
useful
o Report on any difficulties encountered in carrying out the exercise and ways to address
them.
Step 2.3 - Estimate financial flows and capital assets stocks
 Identify data required to answer policy questions set out in Step 1.2.
 Identify whether the National Statistics Office already collects data on financing to WASH and if
so, understand their methodology for doing so;
 For financing flows, gather financing data at source, starting with the approach that allows
generating the most comprehensive data set (i.e. either “Financing Source Approach” or “Cost-based
Approach”):
 For financing flows, define a time period over which to gather information (2-3 years);
 Note that both approaches will need to be applied in parallel as they provide complementary
information, particularly needed to allocate costs to types of services;
 Gather data on capital assets using the “Fixed Asset Stock Approach”
 Collect the data and create a WASH Accounts database:
o Define the structure of the database and the data-records so that it can be maintained on
an ongoing basis;
o Decide which data to acquire;
o Enter existing data into the database;
o Allocate WASH Accounts classification codes to all data entries;
o Identify data gaps and undertake further analysis / surveys to plug in data gaps; and
o Prepare the WASH- Accounts tables.
 Reconcile the data, identify gaps in the information and recommend (and conduct) any
supplementary primary data gathering (such as additional surveys).
 Provide feedback on methodological issues:
o Appropriateness of the categories of costs proposed
o Identify a list of costs and financing sources that are difficult to value and will require
additional methodological development
o Appropriateness of using a Fixed Asset Stock approach
o When using a Fixed Asset Stock approach: on methods for asset valuation and on whether
to deal with liabilities alongside assets
Step 3 - Analyse financial data
 Identify the tables and indicators from the list presented in this guidance document, based on
which are most relevant to answer the country’s policy questions;
 Undertake background calculation and compile the WASH Accounts Tables;
 Calculate the WASH Accounts indicators;
 Document the compilation process;
 Verify the coherence of the tables;
 Provide feedback on the use of suggested tables.
Step 4 - Interpret and disseminate findings
 Analyse and interpret WASH Accounts data to answer policy questions
 Disseminate the WASH Accounts findings by communicating on the indicators, presenting the
main results and findings of WASH Accounts in a summary report (including key WASH
Accounts tables)
 Write short policy briefs for decision makers focused on a specific policy question
 Provide feedback on ways to disseminate findings

108. Step 5 - Provide feedback on methodological development
 Produce a synthetic report evaluating your experience using this guidance document;
 Produce a synthesis report evaluating your experience using this guidance document;
 Assess and comment upon the appropriateness of the proposed classifications to define the
107
WASH sector and the way it is financed;
 Assess and comment upon the feasibility to collect such data in the country;
 Assess the methodology proposed to value the financing flows and capital stocks;
 Suggest modifications to improve both the classifications and the methodology;
 Provide feedback on the overall process from an organisational point of view and give indications
about the cost and resource requirements of the exercise

109. Annex B – The System of Environmental Economic Accounting for
Water (SEEA‐Water): a brief introduction
108
1. Objectives of SEEA‐Water
SEEA-Water (United Nations Statistics Division, 2012) is the conceptual framework prepared by the
United Nations Statistics Division to organize hydrological and economic information in a coherent
and consistent manner.
SEEA-Water was developed with the objectives of standardizing concepts and methods in water
accounting. The advantage of the SEEA-Water approach is that it provides a tool to integrate
hydrological and economic information in support of environmental-economic analysis, thus
overcoming the tendency to divide issues along disciplinary lines. SEEA-Water is potentially an
important tool for policy-makers, as it provides them with indicators to monitor the interaction
between the environment and the economy, with a database for strategic planning and policy analysis
to identify sustainable development paths and appropriate policy instruments for implementing them.
In 2010 the International Recommendations for Water Statistics (United Nations Statistics Division,
2012) were adopted to assist countries in the implementation of SEEA-Water. SEEA-Water has been
divided into four areas of policy application presented in Figure A.1. in order to prioritise its
implementation in countries according to policy demand. WASH Accounts are linked to the first
quadrant “Improving drinking and sanitation services.”
Figure A.1 - The WASH Accounts in relation to the overall System of National Accounts
The SEEA-Water framework comprises the five categories of accounts:
 Category 1: Physical supply and use tables describing the flows of water from the environment
within the economy and back to the environment;
 Category 2: Emission accounts describing the amounts of pollutants added to water as a result of
production and consumption;
 Category 3: Hybrid and economic accounts linking the physical accounts with the monetary
information of the national accounts, disaggregated for water and sanitation;
 Category 4: Water asset accounts;

110.  Category 5: Quality accounts describing the quality of water and the changes in quality; these
109
accounts are still experimental.
Of these, category 3 (hybrid and economic accounts) is particularly interesting in terms of tracking
national financial flows to water and sanitation services. This category of accounts aligns physical
information with monetary information on supply and use. These accounts are referred to as
“hybrid” because they combine different types of measurement units. In these accounts, physical
quantities can be compared with the matching economic flows. This category of accounts includes
information on the costs associated with water use and supply, such as water abstraction, purification,
distribution and wastewater treatment. It also provides information on financing - for example, the
amount users pay for the services of wastewater treatment, and the extent to which these services are
subsidized by the government and other units. These accounts can help governments take decisions in
terms of cost recovery policies and water allocation policies and can be used in economic models to
evaluate potential costs and benefits of putting in place new infrastructure.
Hybrid and economic accounts describe in monetary terms the use and supply of water-related
products to identify:
1. the costs associated with the production of these products;
2. the income generated by their production;
3. the investment in water-related infrastructure and the costs to maintain them ;
4. the fees paid by the users for water-related services as well as the subsidies received.
2. SEEA‐Water tables purpose and content
Hybrid and economic accounts are composed of three types of tables:
1. The Hybrid Supply and Use Tables, consolidated in the Hybrid Account for Supply and Use
of Water;
2. The Economic Accounts that expand the “hybrid accounts” for (a) water‐related activities
carried out for own use (Hybrid Accounts for water supply and sewerage for Own Use) and
(b) government expenditures for water‐related services (Government Accounts for water-related
collective consumption services);
3. The National Expenditure Accounts and Financing Accounts for water-related activities
classified by purpose.
Figure A.1 summarises the tables and data that comprises SEEA-Water.
Table A.1 - Summary of SEEA-Water Accounts
Tables Information Water Sanitation W&S
Hybrid supply Table
Water and sewerage services output of
(HST)
industries by ISIC categories x
Hybrid Use Table
(HUT)
Water and sewerage services use and
consumption by type of users (intermediate and
final)
x
Hybrid Account for
Supply and Use of
Water (HASU)
Output and consumption (intermediary and
final) of water and sewerage services, by type of
producers (ISIC) and users (industries,
households and the government).
x

111. 110
Hybrid Accounts for
water supply and
sewerage for Own
Use (HAOU)
Costs of production of water and sewerage
supply for own use, for ISIC industries and
household x
Government
Accounts for water-related
collective
consumption services
(GA)
Costs of production of government water-related
collective consumption services (by COFOG
categories) x
National Expenditure
Accounts (NEA)
Expenditure for use of water and sewerage
services by type of users and beneficiaries (2
tables)
Financing Accounts
(FA)
Expenditure by financing sectors bearing the
costs of the water and sewerage services
consumed by type of users (2 tables)
a. The supply and use hybrid accounts
x x
x x
The Hybrid Account for Supply and Use of Water juxtapose the standard System of National
Accounts (SNA) supply and use tables with the corresponding physical tables describing the
volumes of supplied and used water.
The Hybrid Account for Supply and Use of Water presented in Table A.2. provides information on
the output and consumption of water and sewerage services produced by ISIC categories of
industries. ISIC class 36 and 37 corresponding to the suppliers of water and sewerage services are
particularly relevant for supply. The account presents data on water-related output, the intermediate
consumption and use of water and sewerage services, including their costs of purchase, and the total
value added produced by these industries. Output and consumption are estimated at purchaser’s price.
It provides also information on gross fixed capital formation for water-related infrastructure by
industry, which represents the investments in fixed capital related to water (infrastructures). It finally
shows the closing stocks of fixed assets for water supply and sanitation (e.g. pumps and dams). They
represent the total value of infrastructure in place and are distinguished between water supply and
wastewater services assets.

112. 111
Table A.2 - Hybrid account for supply and use of water
Source: (United Nations Statistics Division, 2012)
b. Further disaggregation of hybrid accounts
To provide a complete picture of the economy of water, the hybrid account is expanded into two
additional tables: (a) water-related activities carried out for own use and (b) government
expenditures for water-related services. These activities are not identified explicitly in the SNA and
their costs are incorporated into those of the principal activity of the entity (industry, household or
government). The SEEA-Water identifies them to better assess how much is spent by each economic
activity for the provision of water and sanitation services.
The “Hybrid Account for water supply and sewerage carried out for Own Use” presented in Table
A.3. identifies the intermediate costs and outputs of activities carried out by household and
industries for their own use. Costs are categorised by type of activities (water and sewerage services).
Since reliable market prices do not generally exist for these activities, the value of the output of these
activities is by convention equal to the costs of production, that is the sum of intermediate
consumption, compensation of employees, consumption of fixed capital and other taxes (less
subsidies) on production.

113. 112
Table A.3 - Hybrid Account for water supply and sewerage carried out for Own Use
Source: (United Nations Statistics Division, 2012)
The Government Accounts for water-related collective consumption services presented in Table
A.4. identifies governmental expenditures according to the Classification of the Functions of
Government (COFOG). It classifies expenditures of the government by type of expenditure according
to the function that the transaction serves. The following functions classified in COFOG are relevant
for water:
 Wastewater management
 Soil and groundwater protection
 Environmental protection not elsewhere classified (related to water)
 Water supply
COFOG categories refer to collective services of the government. The collective consumption
services are assumed to be produced and used by the government. The value of these activities is
equal to the costs of their production, namely, the sum of intermediate consumption, compensation of
employees, consumption of fixed capital and other taxes less subsidies on production. These accounts
can be further disaggregated for central, state and local governments.

114. 113
Table A.4 - Government accounts for water-related collective consumption services
Source: (United Nations Statistics Division, 2012)
c. The National Expenditure and Financing Accounts for water‐related
activities classified by purpose
These accounts are compiled for water-related activities of the Classification of Environmental
Protection Activities and Expenditure) (CEPA), namely wastewater management and water
management and exploitation. For each of these two activities, the expenditure is allocated by
beneficiaries: “producers”, “final consumers” (households and governments) and “rest of the world”.
Producers are further disaggregated into “specialised producers” and “other producers”. Specialized
producers are defined as those that carry out an environmental protection activity as their principal
activity. “Other producers” are those that use environmental protection services (including the use of
such services for own use) and connected and adapted products for their intermediate consumption,
invest in the production of environmental protection services for own use and receive specific
transfers for environmental protection.
The National Expenditure Accounts disaggregate the expenditure of resident units and financed by
resident units by type of costs. Table A.5. presents the standard National Expenditure Account for
wastewater management. The elements of costs are disaggregated in:
 Use of services by resident unit (except “specialized producers” to avoid double-counting);
 Use of “adapted and connected products”10 for intermediate and final consumption;
 Gross capital formation for producing the services;
 Specific transfers received to contribute to the financing of environmental protection.
The sum corresponds to the total domestic use of the services.
10 In the case of wastewater management, adapted products include, for example, phosphate-free washing
products and highly biodegradable products. Connected products include, for example, septic tanks, biological
activators of septic tanks and services for collecting septic tank sludge.

115. 114
Table A.5 - National Expenditure Account for wastewater management (billions of currency units)
Source: (United Nations Statistics Division, 2012)
The Financing Account presents how national expenditures on water and wastewater management
is financed by identifying the financing sector (sector providing the financing) and the
beneficiaries (the units benefiting from the financing) as well as the amount being financed. Table
A.6. presents the standard Financing Accounts for waste water management. Financing units are
classified according to the institutional sectors of national accounts (general government, which can
be further disaggregated under central and local government, non-profit institutions serving
households, corporations and households). Entries in the column describe how the expenditures are
financed.
Table A.6 - Financing Account for waste water management (millions of currency units)
Source: (United Nations Statistics Division, 2012)
Table A.7 provides information on the classification of financing sectors of SEEA-Water used in the
Financing Accounts and the type of funding included in each category.

116. 115
Table A.7 - Classification of financing sectors used in the SEEA-Water Financing Accounts
SEEA-Water classification of
Financing sectors
Type of funding included in the SEEA-Water Financing
Accounts
General Government (central and
local government)
- Subsidies to producers : specific transfers, investment
grants (that are not earmarked taxes)
- Transfers to government agencies
- Social transfer in kind to households
Not-for-profit institutions serving
households
- Social transfer in kind to households
Corporations - Own funds to finance their production and capital formation
- Subsidies to other producers
- Tariff paid as users to utilities
- Earmarked taxes from corporations
Households - Tariff paid by users (Households) to utilities
- Household out-of-pocket expenditure for self-supply
- Earmarked taxes from households
Rest of the world - International cooperation funds
- Other flows received from the rest of the world (not
specified)

117. 116
Annex C ‐ Glossary
Note that terms which appear in Italics are defined elsewhere in the glossary.
Term Definition Source
Bond A method of borrowing used by private companies,
governments or municipalities consisting of the issue of
fixed interest securities, repayable in a specified date.
Certain government bonds have no fixed redemption date,
and can be sold at their prevailing market price.
Small Scale
Finance for
Water and
Sanitation
(Trémolet,
2012)
Capital expenditure (CapEx),
including hardware and
software
Initial costs of putting new services into place, including
“hardware” such as pipes, toilets and pumps and one-off
“software” costs such as associated training and
consultations.
WASHCost
Capital maintenance
expenditure (CapManEx)
Occasional large maintenance costs for the renewal,
replacement and rehabilitation of a system that goes beyond
routine maintenance to repair and replace equipment, in
order to keep systems running. These essential expenditures
are required before failure occurs to maintain service levels
and need to be planned for.
WASHCost
Closing stocks of fixed assets Closing stocks = opening stocks + gross fixed capital
formation – consumption of fixed capital + other changes in
volume of asset + holding gains/losses on assets
Where:
 Other changes in the volume of the asset are those that
are not due to transactions, such as changes in
classification, discoveries and natural disasters.
 Holding gains/losses on assets are the changes in the
price of assets.
SNA (SNA
2008)
Commercial loan A loan extended by commercial banks or development
finance agencies at commercial rates, i.e. interest rates that
reflect market conditions.
Compensation of human
resources (employees and self-employed
professional
remuneration)
Total remuneration paid by an enterprise to an employee in
return for work performed during the accounting period. It
includes wages and salaries and all forms of social benefits,
payments for overtime or night work, bonuses, allowances,
as well as the value of in-kind payments such as the
provision of uniforms for medical staff. This category also
includes the remuneration of the income of non-salaried
self-employed professionals.
SNA (SNA
2008)
Concessionary loan (or ‘soft
loan’)
A loan provided on concessionary lending terms, which may
include a lower interest rate than the market rate, a longer
repayment period or a grace period.
Small Scale
Finance for
Water and
Sanitation
Consumption of fixed capital Cost of the decline in value of the producer's stock of fixed
assets as a result of physical deterioration, foreseen
obsolescence or normal or accidental damage in the
accounting period. It corresponds to “depreciation” in the
SNA (SNA
2008)

118. 117
Term Definition Source
business management terminology. It should reflect the use
of capital as a factor of production. It includes the use of
buildings, equipment and other capital goods such as
vehicles. It excludes the rentals paid on the use of
equipment or buildings, and fees, commissions, royalties,
etc., payable under licensing arrangements, which are
included as the purchase of services.
Domestic public transfers Public transfers from government agencies (central or local
government) to WASH actors. These are often subsidies that
come from taxes or other sources of revenues of the
government. These are referred to as “taxes” in the OECD
3T terminology.
WASH
Accounts
Equity investments A form of finance in which investors take an ‘equity stake’,
which means that they purchase shares in an entity. This
enables them to share the risk of that entity (through
fluctuations in the share price) in return for the prospect of
sharing its profits (through dividend payments). The higher
the investment risk, the higher the expected level of return.
Small Scale
Finance for
Water and
Sanitation
Factors of production Factor inputs used by providers to produce the goods
and services consumed or the activities conducted in the
system. Are included:
 the costs of production (intermediary consumption +
gross valued added + Compensation of human
resources + Other taxes less subsidies on production +
Consumption of fixed capital);
 Gross fixed capital formation;
 Changes in the stock of assets.
SNA (SNA
2008)
Financing Act of providing funding
Financing sources Where funding originates from before being channelled by
financing units. The OECD 3T typology refers to financing
sources as tariffs, taxes and transfers, to which must be
added private repayable financing. We are proposing that
the WASH Accounts classify financing sources as: Tariffs
for services provided, Household out-of-pocket expenditure
for self-supply, Domestic public transfers, International
public transfers, Voluntary transfers, Private repayable
financing.
WASH
Accounts
Financing units Institutional entities that provide funding to the sector. They
mobilise funding to pay for WASH services. They may
allocate funds directly to service providers or channel them
through intermediary institutions.
WASH
Accounts
Funding Monetary value of the funds provided to support a given
activity.
Households’ out-of-pocket
expenditure for self-supply
Funding provided by households to invest in or provide the
service themselves. This can be in form of cash, material or
time (sometimes referred to as “sweat equity”). This would
form part of tariffs as per the OECD 3T terminology.
WASH
Accounts
Grant A form of development aid without repayment obligations.
Grants might be untied or carry explicit or implied political
and commercial obligations. Grants are usually provided by
Small Scale
Finance for
Water and

119. 118
Term Definition Source
IFIs, governments, foundations and specific funds with
different policies, procedures and technical products. A
grant can be blended with other kinds of finance to produce
a suitable financing package for a particular project.
Sanitation
Gross Domestic Product GDP derives from the concept of value added. Gross value added
is the difference between output and intermediate consumption.
GDP is the sum of gross value added of all resident producer units
plus that part (possibly the total) of taxes on products, less
subsidies on products, that is not included in the valuation of
output. Next, GDP is also equal to the sum of the final uses of
goods and services (all uses except intermediate consumption)
measured at purchasers’ prices, less the value of imports of goods
and services. Finally, GDP is also equal to the sum of primary
incomes distributed by resident producer units.
SNA 2008
2.138 (SNA
2008)
Gross fixed capital formation Total value of the fixed assets that service providers have
acquired during the accounting period (less the value of the
disposal of assets) and that are used repeatedly or
continuously for more than one year in the production of
services and goods.
SNA (SNA
2008)
Gross valued added Gross value added = output – intermediate consumption
Gross value added is a measure of the contribution to GDP
made by an individual producer, industry or sector. It is the
value of output less the value of the goods and services,
excluding fixed assets, consumed as inputs by a process of
production (intermediate consumption).
Once the value added has been generated, it can be
decomposed in the primary factors for generation of income,
according to the following formula:
(Gross) value added = (gross) operating surplus +
compensation of employees + taxes – subsidies
SNA (SNA
2008)
Guarantees A contract by a third party (C) to underwrite a financial
commitment entered into by two parties (A and B).
Guarantees can be used by national governments to reduce
the risks of borrowing and bond issues by their sub-sovereign
bodies and by international agencies to increase
the creditworthiness of developing country institutions and
support specific projects within them.
Small Scale
Finance for
Water and
Sanitation
Intermediate consumption
(materials and services used)
Total value of goods and services used for the provision of
goods and services (not produced in-house) bought in from
other providers and other industries of the economy. All the
materials and services are to be fully consumed during the
production activity period.
SNA 2008
6.123 (SNA
2008)
International public transfers Funds from public donors and multilateral agencies that
come from other countries. These funds can be contributed
either in the form of grants, concessionary loans (i.e.
through the grant element included in a concessionary loan)
or guarantees. This category is included in the OECD 3T
typology as “transfers”. Official Development Assistance
constitutes a subset of international public transfers as it
only captures funding originating from countries that are
part of the OECD Development Assistance Committee.
WASH
Accounts

120. 119
Term Definition Source
Microfinance institutions Refers to schemes for extending credit, savings, insurance,
money transfers and other financial products to small
business, farmers and other low-income borrowers who
cannot get access to normal bank loans.
Small Scale
Finance for
Water and
Sanitation
Net value added Net value added = Gross valued added – consumption of
fixed capital = output – intermediate consumption –
consumption of fixed capital
Net value added is obtained from Gross value added less the
Consumption of fixed capital that occurs when the reduction
in the value of the fixed assets used in production during the
accounting period results from physical deterioration,
normal obsolescence or normal accidental damage.
SNA (SNA
2008)
Official Development
Assistance (ODA)
Grants or loans to countries and territories on the DAC List
of ODA Recipients (developing countries) and to
multilateral agencies which are: (a) undertaken by the
official sector; (b) with promotion of economic development
and welfare as the main objective; (c) at concessional
financial terms (if a loan, having a grant element of at least
25 per cent). The OECD DAC database at present only
tracks ODA flows from OECD member countries but is
looking to develop coverage of other non-OECD donors.
OECD
Operating and maintenance
expenditure
Routine maintenance and operation costs to keep services
running (e.g. wages, fuel or any other regular purchases).
Operating expenditures is the recurrent (regular, ongoing)
spending to provide WASH goods and services: labour,
fuel, chemicals, materials, and purchases of any bulk water.
Maintenance expenditure is the routine expenditure needed
to keep systems running at design performance, but does not
include major repairs or renewals which are recognised as
not recurrent.
WASHCost
Private repayable financing Refers to sources of finance that come from private sources
and ultimately need to be repaid, such as loans, equity
investments or other financial instruments such as bonds.
WASH
Accounts
Service providers Actors that are engaged in the production of WASH goods
and services.
WASH
Accounts
Software cost Cost of software activities associated with infrastructure
development, such as for project preparation, capacity
building, training, community mobilization and behavioural
change activities
Subsidies A subsidy is a grant given generally by the government to
economic actors in various forms, such as a cash transfer, a
tax reduction or inputs at lower prices (such as free land). A
subsidy can be given to economic actors as an incentive to
deliver goods and/ or services that benefit society. A
subsidy can also be provided to households below the
poverty line to enable them to access basic goods and
Small Scale
Finance for
Water and
Sanitation

121. 120
Term Definition Source
services. Subsidies are sometimes provided to support utility
infrastructure projects and may include ‘hardware subsidies’
(to reduce the initial capital investment costs), ‘operating
subsidies’ (to cover losses incurred during service
operation) or ‘software subsidies’ (to cover the software
costs associated with the infrastructure development, such
as for project preparation, capacity building and training). A
hidden form of public subsidy may consist of making an
equity investment with no expectation of a repayment or a
return.
Support or software costs Includes expenditure on direct and indirect support.
Expenditure on direct support (ExpDS) includes expenditure
on both pre- and post-construction support activities
directed to local-level stakeholders (e.g. training for
community or private sector operators, users or user
groups).
Expenditure on indirect support (ExpIDS) includes the cost
of planning and policy-making at the governmental level,
including strengthening the skills and capacities of
professionals and technicians. These costs have a direct
impact on the long-term sustainability of projects.
WASHCost
Tariffs Funds contributed by users of WASH services for obtaining
the services. In the OECD 3T typology, tariffs include two
types of funding:
 Tariffs for services provided
 Households’ out-of-pocket expenditure for self-supply
The WASH Accounts terminology proposes to separate out
these two types of funds to avoid confusion.
OECD 3T
typology
(OECD, 2009)
Tariffs for services provided Payments made by users to service providers for getting
access to and for using the service.
WASH
Accounts
Taxes Funds originating from domestic taxes which are channelled
to the sector via transfers from all levels of government,
including national, regional or local. Such funds would
typically be provided as subsidies, for capital investment or
operations. “Hidden” forms of subsidies may include tax
rebates, concessionary loans (i.e. at a subsidised interest
rate) or subsidised services (such as subsidised electricity).
OECD 3T
typology
(OECD, 2009)
Transfers Funds from international donors and international charitable
foundations (including NGOs, decentralized cooperation or
local civil society organizations) that typically come from
other countries. These funds can be contributed either in the
form of grants, concessionary 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.
The WASH Accounts terminology proposes to separate
international public transfers and voluntary transfers to
avoid confusion.
OECD 3T
typology
(OECD, 2009)
Voluntary transfers Funds from international and national non-governmental
donors including from charitable foundations, Non-

122. 121
Term Definition Source
Governmental Organizations (NGOs) and civil society
organizations. These funds can be contributed either in the
form of grants, concessionary 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.

123. Annex D - References
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Barnett, C., & al. (2001). The Application of National Health Accounts Framework to HIV/AIDS in
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De, S., & al. (2003). Has Improved Availability of Health Expenditure Data Contributed to Evidence-
Based Policymaking? Country Experiences with National Health Accounts.
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Stockholm World Water Week.
Maeda, A., & al. (2012). Creating Evidence for Better Health Financing Decisions: A Strategic Guide
for the Institutionalization of National Health Accounts. The World Bank.
McIntyre, D., & al. (1995). Health Expenditure and Finance in South Africa. South Africa: Health
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OECD. (2011). A System of Health Accounts. Paris: OECD Publications.
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OECD. (2009). Managing Water for All - An OECD perspective on pricing and financing. Paris:
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SNA 2008. (2009). System of National Accounts 2008. New York: United Nations.
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The World Bank . (2010). Harnessing National Health Accounts to Strengthen Policymaking -
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Trémolet. (2012). Small-scale finance for water and sanitation. Stockholm: EU Water Initiative and
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122

124. Trémolet, S., & Rama, M. (2012). Tracking national financial flows into sanitation, hygiene and
drinking water. Geneva: WHO.
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123
Relevant websites
National Health Accounts
http://www.who.int/nha/en/
UN Statistics Division – International classifications registry
http://unstats.un.org/unsd/cr/registry/regct.asp?Lg=1
SEEA-Water
http://unstats.un.org/unsd/envaccounting/seeaw/