The TrackFin draft Guidance Document (version January 2014) outlines the methodology proposed for trackfin WASH financing flows at a national level. It aims to provide countries with guidance for collecting comparable financial data and compiling it in a shared format of tables, referred to as WASH Accounts. The methodology has so far been tested in three countries who have officially requested to participate (Brazil, Ghana and Morocco). Based on the results, the methodology will be revised and this guidance document will be updated by the end of 2014 for implementation in other countries.

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