Asian Development Bank · Asian Development Bank LOCAL WATER UTILITIES ADMINISTRATION WATER...

FINAL REPORT

VOLUME 11: SUPPLEMENTARY APPENDICES K TO S

(FINANCIAL , IMPLEMENTATION ASPECTS )

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Asian Development Bank

LOCAL WATER UTILITIES ADMINISTRATION

WATER DISTRICT DEVELOPMENT SECTOR PROJECT

Project Preparatory Technical Assistance (PPTA) TA No: 7 122 - PHI PÖYRY IDP CONSULT, INC., PHILIPPINES in association with TEST Consultants Inc., Philippines PÖYRY Environment GmbH, Germany

April 2010

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TA No. 7122-PHI: Water District Development Sector Project PPTA – Final Report – Vol. 11

This report consists of 12 volumes:

Volume 1 Main Report

Volume 2 Institutional and Financial Assessment of LWUA

Volume 3 Subproject Appraisal Report: Metro La Union Water District

Volume 4 Subproject Appraisal Report: Quezon Metro Water District

Volume 5 Subproject Appraisal Report: Legazpi City Water District

Volume 6 Subproject Appraisal Report: Leyte Metro Water District

Volume 7 Subproject Appraisal Report: City of Koronadal Water District

Volume 8 Report and Recommendation of the President (RRP)

Volume 9 Supplementary Appendices A to G (Technical Aspects)

A Review and Assessment of Water Supply and Sanitation Sector Outside Metro Manila B Water Sector Laws and Policies C Assessment of Existing Water Supply Systems in Pilot Water Districts D Proposed Water Supply Component for Pilot Water Districts E Non Revenue Water Contract Mechanisms F Sanitation G Health

Volume 10 Supplementary Appendices H to J (Social Aspects)

H Socio-economic Survey I Stakeholder Consultation and Participation J Indigenous Peoples

Volume 11 Supplementary Appendices K to S (Financial, Implementation Aspects)

K Financial Management Assessment L Detailed Project Cost and Financing Plans for Water Districts M Financial Analysis N Financial History of Water Districts O Economic Analysis P Institutional Strengthening and Capacity Building Q Indicators for Measuring Development Objectives and

Performance R Terms of Reference for Consultants (Project Implementation

Support Services) S Profiles of Priority Water Districts from Long-list

Volume 12 Supplementary Appendices T to V (Safeguard Aspects)

T Initial Environmental Examinations U Resettlement Framework V Resettlement Plans


WATER DISTRICT DEVELOPMENT SECTOR PROJECT — PPTA

TA NO. 7122-PHI

FINAL REPORT

SUPPLEMENTARY APPENDICES K - S

K Financial Management Assessment

L Detailed Project Cost and Financing Plans for Water Districts

M Financial Analysis

N Financial History of Water Districts

O Economic Analysis

P Institutional Strengthening and Capacity Building

Q Indicators for Measuring Development Objectives and Performance

R Terms of Reference for Consultants (Project Implementation Support Services)

S Profiles of Priority Water Districts from Long-list


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GLOSSARY AND ACRONYMS

ABD Asian Development Bank ACP asbestos cement pipe AIFC average incremental financial cost A/R accounts receivable AP affected person APIS annual poverty indicator survey ARI acute respiratory infection AusAID Australian Aid barangay village BNA basic needs approach BOT build-operate-transfer BSP basic sanitation package BWSA Barangay Water and Sanitation Association CAP community action plan CBO community-based organization CCF community consultation forum CCI cement-line cast iron (pipe) CDA Cooperatives Development Agency CDD community-driven development CFR case fatality rate CFT community facilitator team CI cast iron (pipe) CKWD City of Koronadal Water District CLTS community-led total sanitation COA Commission on Audit C&P consultation and participation CPC certificate of public convenience CSC community sanitation center CSS city sanitation strategy CY calendar year DBL design-build-lease DBO design-build-operate DBM Department of Budget and Management BDP Development Bank of The Philippines DED detailed engineering design DENR Department of Environment and Natural Resources DFR draft final report DHF dengue hemorrhage fever DILG Department of Interior and Local Government DMA district metering area DOF Department of Finance DOH Department of Health DPWH Department of Public Works and Highways DRA demand responsive approach DSA delineated service area DSCR debt service coverage ratio EA executing agency (LWUA) EARF environmental assessment review framework EIA environmental impact analysis EIRR economic internal rate of return EMP environmental management plan EO executive order EOCC economic opportunity cost of capital


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FGD focus group discussion FMAQ financial management assessment questionnaire forex foreign exchange FS feasibility study FY fiscal year (1 January – 31 December) GFI government financial institution GI galvanized iron (pipe) GIS geographic information system GOCC government owned and controlled corporation GOP Government of the Republic of the Philippines GR (i) government regulation, (ii) general record (in legal cases) HDI Human Development Index HH household HRD human resources development IA implementing agency IBRD International Bank for Reconstruction and Development (World Bank) ICC Investment Coordinating Council (NEDA) ICG internal cash generation IDAP institutional development action plan IDC interest during construction IDCB institutional development and capacity building IEC information-education-communication IEE initial environmental examination IFS Investment and Financial Services (LWUA) IOL inventory of losses IPDP indigenous peoples’ development plan IRA internal revenue allotment IRR implementing rules and regulations IT information technology IWA International Water Association JICA Japan International Cooperation Agency KABP knowledge-attitudes-behavior-practices KFP an adaptation of KAP (knowledge, attitudes and practices) LCWD Legazpi City Water District LG local government LGC local government code LGU local government unit LIDAP local institutional development action plan LIHH low income household LLI local level institutions LMWD Leyte Metro Water District LOI letter of intent lps liters per second LWUA Local Water Utilities Administration MDFO Municipal Development Fund Office MDG Millennium Development Goals M&E monitoring and evaluation MFF Multitranche Financing Facility (ADB) MIS management information system MLUWD Metro La Union Water District MOU memorandum of understanding MPA Methodology for Participatory Assessments MTPDP Medium Term Philippine Development Plan


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MTPIP Medium-Term Public Investment Program MWSS Metropolitan Waterworks and Sewerage System (Metro Manila) NAMRIA National Mapping and Resources Inventory Authority NAPC National Anti Poverty Commission NEDA National Economic Development Authority NGA national government agency NGO non-government organization NPV net present value NRW non-revenue water NSCB National Statistical Coordination Board NSO National Statistics Office NSSMP National Sewerage and Septage Management Program NWRB National Water Resources Board OCR Ordinary Capital Resources (ADB) ODA official development assistance OGCC Office of the Government Corporate Counsel OJT on-the-job training O&M operation and maintenance PB polybutylene (pipe) PD presidential decree PFI private funding institution PHAST Participatory Hygiene and Sanitation Transformation Php, PhP Philippine peso PIU project implementation unit PMO project management office PMU project management unit PNSDW Philippine National Standards on Drinking Water PPMS project performance monitoring system PPTA project preparation technical assistance PRV pressure reducing valve PSA poverty and social assessment psi pounds per square inch PSP private sector participation PWSSR Philippine Water Supply Sector Roadmap QC quality control QM quality management QMWD Quezon Metro Water District RA republic act RIAP revenue improvement action plan RRP report and recommendation of the president (ADB) RWSA Rural Waterworks and Sanitation Association SES socioeconomic survey SHBC sanitation and health behavioral change SLA sub-loan agreement SPAR subproject appraisal report SSC school sanitation centre SCSS simplified community sewerage system SLA subsidiary loan agreement SWG sanitation working group SWM solid waste management TA technical assistance TB tubercolosis TOR terms of reference


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TOT training-of-trainers UFW unaccounted-for water UNICEF USAID

United Nations Children Fund United States Agency for International Development

V variation (contract) VIP ventilated improved pit (latrine) WASCO Water Supply Coordination Office (NAPC) WD water district WHO World Health Organization WPEP Water Supply and Sanitation Performance Enhancement Project WQ water quality WS water supply WSP water service provider WSP-EAP Water and Sanitation Program – East Asia Pacific WSS water and sanitation WTP willingness-to-pay WWTP wastewater treatment plant


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Location Map

Metro La Union WD

Quezon Metro WD Legazpi

City WD

Leyte Metro WD

City of Koronadal WD

Supplementary Appendix K


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FINANCIAL MANAGEMENT ASSESSMENT

Contents

Metro La Union Water District: Financial Management Assessment Report 1 A Introduction 1 B Findings 2 C Conclusions and Recommendations 5 Quezon Metro Water District: Financial Management Assessment Report 20 A Introduction 20 B Findings 20 C Conclusions and Recommendations 24 Legazpi City Water District: Financial Management Assessment Report 40 A Introduction 40 B Findings 40 C Conclusions and Recommendations 44 Leyte Metro Water District: Financial Management Assessment Report 60 A Introduction 60 B Findings 60 C Conclusions and Recommendations 64 City of Koronadal Water District: Financial Management Assessment Report 80 A Introduction 80 B Findings 80 C Conclusions and Recommendations 84 Annexes Annex 1: Financial Management Assessment Questionnaire – MLUWD 6 Annex 1a: METRO LA UNION WATER DISTRICT ORGANIZATIONAL

CHART 17 Annex 1b: MLUWD FINANCIAL ORGANIZATIONAL CHART 18 Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – MLUWD 19 Annex 1: Financial Management Assessment Questionnaire – QMWD 25 Annex 1a: QUEZON METROPOLITAN WATER DISTRICT ORGANIZATIONAL

CHART 36 Annex 1b: QMWD FINANCIAL ORGANIZATIONAL CHART 37 Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – QMWD 38 Annex 1: Financial Management Assessment Questionnaire – LCWD 45 Annex 1a: LEGAZPI CITY WATER DISTRICT ORGANIZATIONAL CHART 55 Annex 1b: LCWD FINANCIAL ORGANIZATIONAL CHART 55 Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – LCWD 56 Annex 1: Financial Management Assessment Questionnaire – LMWD 65 Annex 1a: LEYTE METROPOLITAN WATER DISTRICT ORGANIZATIONAL CHART 75



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Annex 1b: LMWD FINANCIAL ORGANIZATIONAL CHART 76 Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – LMWD 77 Annex 1: Financial Management Assessment Questionnaire – CKWD 85 Annex 1a: CITY OF KORONADAL WATER DISTRICT ORGANIZATIONAL CHART 96 Annex 1b: JOB DESCRIPTION, ACCOUNTING STAFF – CKWD 97



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Metro La Union Water District

FINANCIAL MANAGEMENT ASSESSMENT REPORT

A. Introduction

1. Financial management assessment (FMA) is an attempt to determine the capacity of the executing or implementing agency to effectively manage its financial resources. Such a capacity is critical for the success of the project. FMA involves a review of the accounting system, reporting, auditing, internal controls, cash disbursement and cash flow disbursement arrangements.

2. The main instrument used to facilitate the financial management assessment was the questionnaire furnished by the ADB, which was discussed with the Metro La Union Water District General Manager, the Manager of the Accounting Unit and managers of other relevant units of the water district by the consultants in April 2009. Follow-up interviews were conducted by the consultants to better appreciate some of the responses and to fill up the unanswered items in the questionnaire. Most of the items in the questionnaires were filled up and consolidated by October 2009.

Findings

3. Based on the responses to the financial management assessment questionnaire (FMAQ, see Annex 1), records review, and follow-up interviews, the following observations were made:

1. Implementing Agency

4. The Metro La Union Water District was established under the Local Water District Law by virtue of the Presidential Decree 198 which is known as The Provincial Water Utilities Act of 1973. All local water districts which were formed pursuant to the Local Water District Law are declared government owned and controlled corporations with original charter by the Supreme Court on its decision promulgated last September 13, 1991. The water district being a GOCC falls under the jurisdiction of the Civil Service Commission and the Commission on Audit.

5. The Metro La Union Water District was formed on September 5, 1974 by virtue of the Provincial Board Resolution No. 353. The copy of the resolution forming the water district was filed with the Secretary of the Local Water Utilities Administration on February 13, 1975. Upon compliance with the requirements and policy objectives as contained in the provision of the law, the MLUWD was issued its Conditional Certificate of Conformance (CCC) no.16 on April 28, 1975 by the LWUA. Upon the filing of the resolution of forming the water district, the local government (LGU) concerned looses the ownership, supervision, and control or any right whatsoever over the district except as provided by the law.

6. The MLUWD was formed for the purpose of acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of the district. They are also organized for the purpose of providing, maintaining and operating wastewater collection, treatment and disposal facilities and conducting such other functions and operations incidental to water resource development, utilization and disposal within the district, as are necessary or incidental to the aforementioned purposes1.

7. The MLUWD has the legal status to borrow money to raise funds to pay all cost of any public improvement or in the pursuit of its projects subject to limits prescribed under PD

1 Presidential Decree 198



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198. It has implemented a number of loan projects with LWUA from 1990 to the 1996 composing of two (2) regular loans for the rehabilitation and improvement of its existing water systems and for the development of new water sources amounting to P15.3 million. The water district has also implemented a project loan from the Land Bank of the Philippines amounting to P3.2 million for its expansion programs.

8. The policy making and all powers expressly granted by PD 198 as amended by PD 768 and PD 1479, necessary, implied from or incidental to the powers and purposes abovementioned are exercised by the Board of Directors composed of five (5) members, representing the professional, civic, business, women’s and education sectors. The Chairman of the Board, Mr. Mariano M. Chan, belongs to the professional sector who will be serving a six-year term from 2007 to 2012.

9. Directly under the Board of Directors is the General Manager, Engr. Felipe G. Picazo, who is in-charge of the management and supervision of detailed operation of the water district. There are four divisions directly under the supervision of the General Manager, namely: Administrative, Commercial, Construction and Maintenance and the Engineering and Water Resources Divisions.

10. The MLUWD projects are endorsed by the Board and Management, for review and approval by LWUA.

2. Funds Flow Arrangements

11. Loan funds received by MLUWD from LWUA or from other donor agencies are deposited to the Philippines National Bank. The MLUWD releases fund to suppliers and contractors through this account following their usual payment procedures

12. The funds that will be available for this project is likely to be considered as a sector loan whose proceeds will be disbursed in four batches over a period 2011-2016. Usually re-lending terms include (i) Interest rate of 9.2-10.8%, (ii) maturity period up to 40 years, and (iii) grace period of 4 years. The LWUA relending rate averaging 9.65% per annum is much higher than the indicative interest rate from the Asian Development Bank (ADB)/Department of Finance (DOF) of about 3%. The DOF covers the foreign exchange risk for some of the more recent loans of LWUA. For the ADB WDDSP however, LWUA prefers to pass on the foreign exchange risk to the water district.

13. Counterpart funds are provided from MLUWD ICG funds and WD Equity.

3. Staffing and Organization

14. Under the existing structure, MLUWD financial function is under the responsibility of the Finance Unit. The Unit Head is duly supported by the Senior Corporate Analyst, Corporate Account Analyst, Cashier, and the Property Supply Officer. There are positions that are currently vacant and being proposed to be filled up by 2010. See Annex 1a for the MLUWD Organization Chart. MLUWD’s total workforce is complemented by 41 employees.

15. The Finance Unit handles transaction processing, bookkeeping and financial records, and cost accounting. The Finance Unit is composed of qualified and experienced personnel, who will be responsible for undertaking project finance and accounting. Not all key positions are filled out and most of the staff are holding permanent positions. Please see Annex 1b - Finance Organization Chart and Annex 1c – Job Description of the Accounting Staff.

16. Training is usually provided as part of their career development plan and to inform the accounting staff about changes in government policy such as the New Government Accounting System.



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4. Accounting Policies and Procedure

17. MLUWD has an accounting system that allows proper recording of project financial transactions, including allocation of expenditures in accordance with respective components and sources of funds. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

18. The MLUWD recognizes the use of the Imprest Fund System, the Voucher and Check Disbursement Systems for payments, which generates the Voucher Register and the Monthly Check Disbursement Records, respectively. Inventories are valued using the First In- First Out Method of valuation. Property, plant and Equipment are valued at cost and depreciation is computed using the straight-line method. Receivables are carried at net realizable value where in provision for bad debts is computed monthly using the aging of receivables method.

19. The MLUWD adopts the Billing and Collection System prescribed by the Commercial Practices System (CPS) established by LWUA for all water districts. This Manual contains also the Meter Reading Cycle, the process flow charts, and samples forms basically needed by the WD in the documentation of its day to day activities.

20. Project implementation is being handled by a committee organized specifically for the project. This Committee is composed of members from the Administrative, Finance, Commercial and Technical Division. The Project Management Unit or Committee basically coordinates and monitors project activities.

21. The chart of accounts is adequate to account for all activities of MLUWD. MLUWD follows the standard chart of accounts for government agencies as contained in the NGAS and adopts the prescribed coding system.

22. MLUWD does have a file management system and important papers are kept on a permanent basis while others (such as vouchers) are kept for a period of 10 years as per government rule (Chapter 2. Section 26. PD 1445- Auditing Code of the Philippines).

23. A number of deficiencies have been noted in the 2006 annual audit reports prepared by the COA auditors. Most of the findings are being rectified by the Board and Management.

a. Segregation of Duties

24. Functional responsibilities are segregated as responsibilities for budget, collection, payment, recording, reporting, auditing and custodial responsibilities are assigned to separate groups of officers and staff.

b. Budgeting System

25. The MLUWD budget is prepared by the Management Committee composed of Unit Heads and the GM recommends the budget for approval to the Board of Directors.

26. The budget is prepared for all significant activities in sufficient detail for monitoring. It includes physical as well as financial targets for the year. A monthly variance analysis report is being prepared and submitted to the General Manager for proper notification. Budget variances are being realigned or a supplemental budget is requested and requires the approval of the Board.

27. Project plans and budget of project activities are being developed based on valid assumptions by capable and knowledgeable staff.

c. Payments

28. Invoice-processing and payroll preparation procedures are adequate to provide check and balance of the transactions. Invoices are usually stamped “PAID” upon payment.



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d. Policies Procedures

29. The basis of accounting is the accrual method consistent with the policies of the New Government Accounting System. MLUWD adopts the generally accepted accounting principles in the preparation of its financial reports.

30. The Manual of Operations which contains the policies and procedures that will guide the project activities will be developed during the loan implementation phase.

1. Cash and Bank

31. The Approving authorities for bank transactions are the General Manager or Admin/Finance Manager and the Cashier.

32. All receipts are deposited intact on a timely basis and at present, banks and cash balances are reconciled on a monthly basis. All unusual items for reconciliation are reviewed and approved by a responsible official. MLUWD has instituted adequate controls and procedures for recording receipts and payment.

2. Safeguard over assets

33. The Property Supply Officer under the Finance Unit is responsible for monitoring the MLUWD fixed assets. An annual physical inventory of assets is performed and the results are reconciled with control accounts. Fixed assets (vehicles) are sufficiently covered by insurance.

3. Other office and Implementing entities

34. The water districts are entities that perform project implementation together with LWUA. Periodic reporting and reconciliation of accounts between LWUA and the water districts are being performed. Flow of information and monitoring of project activities are being carried out through officers and staff assigned by LWUA in close coordination with WD management and staff.

4. Internal audit

35. At present, the WD has no Internal Audit Unit which shall provide check and control over the operations of the WD. The current organizational structure is being evaluated to properly segregate the duties and responsibilities among employees to assure check and balance over the transactions of the water district.

5. External Audit

36. Statutory audit is done by an external auditor appointed by the Commission on Audit. The Audit Reports are issued on or before the end of the second quarter of the succeeding year. This is performed in accordance with the International Standards on Auditing. The projects are also subject to the audit of the Commission on Audit as part of their regular audit activities.

37. The state auditors had issued a qualified opinion on the MLUWD 2006 financial statements with the exception on unreconciled balances of P66 million involving the Cash account and the overstatement of Asset account due to erroneous entries.

6. Reporting and Monitoring

38. MLUWD Financial Statements are prepared in accordance with the New Government Accounting System. These Financial Statements are prepared monthly and are audited annually.



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7. Information System

39. The Financial Management System is being done manually. The district’s billing and collection system is computerized. This system is continuously being developed to produce the required financial reports and assures safeguarding of confidentiality, integrity and availability of the data.

Conclusion and Recommendations

40. MLUWD generally follows sound financial management principles in its operations as indicated by the positive responses to the Financial Management Assessment Questionnaire.

41. However, the MLUWD should take action on the COA audit findings and recommendations pertaining to reconciliation of cash, fixed assets, accounts receivables and materials inventory accounts. The unreconciled balances involve material amounts that greatly affect the reliable presentation of these accounts in the MLUWD Financial Statements. This problem should be addressed immediately in order to avoid any irregularities or anomalies.



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Annex 1: Financial Management Assessment Questionnaire - MLUWD

Topic Response Remarks


1.1 What is the entity’s legal status / registration?

The MLUWD was issued its Conditional Certificate of Conformance No. 016 in 1981 by the LWUA as mandated by PD 198.

1.2 Has the entity implemented an externally-financed project in the past (if so, please provide details)?

The district had implemented a number of LWUA funded projects: LWUA Loan 3-139, Php 4 Million,( 1990) LWUA Loan 1-032, Php 14 Million (1996)

1.3 What are the statutory reporting requirements for the entity?

The Auditing Code of the Philippines (P.D. 1445) Chapter 3. Sec. 121. Financial Reports and Statements - 1.) The financial reports shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. and 2.) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards. LWUA requirements: Audited Financial Statements Monthly Bacteriological Test results Monthly Data Sheet

1.4 Is the governing body for the project independent?

The MLUWD has a five-member Board of Directors duly appointed by the Chief Executive (Mayor) of the Local Government Unit (LGU). The professional, education, women’s, civic, and business sectors represents the composition of the Board.

1.5 Is the organizational structure appropriate for the needs of the project?

Need to fill-up vacant positions



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Topic Response Remarks 2. Funds Flow

Arrangements

2.1 Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.

Funds are transferred directly from LWUA to the WDs account.

2.2 Are the (proposed) arrangements to transfer the proceeds of the loan (from the government / Finance Ministry) to the entity satisfactory?

Proceeds of loan should be transferred directly to the WD’s account.

2.3 What have been the major problems in the past in receipt of funds by the entity?

No cash received in the past, only materials are being received by the WD.

2.4 In which bank will the Imprest Account be opened?

Development Bank of the Philippines

2.5 Does the (proposed) project implementing unit (PIU) have experience in the management of disbursements from ADB?

None, only through LWUA

2.6 Does the entity have/need a capacity to manage foreign exchange risks?

No

2.8 How are the counterpart funds accessed?

Counterpart funds are provided from (i) MLUWD ICG funds, (ii) LGU and (iii) WD equity.

2.9 How are payments made from the counterpart funds?

The WD releases the funds to the suppliers/ contractors following their usual payment procedures.

2.10 If part of the project is implemented by communities or NGOs, does the PIU have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies?

N/A

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are

N/A



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Topic Response Remarks proper guidelines formulated to record and value the labor contribution?

3. Staffing

3.1 What is the (proposed) organizational structure of the accounting department? Attach an organization chart.

Please see Annex 1a Presently, the district is classified as Big WD. Eventually, with the expansion program, hiring of personnel will be required.

3.2 Identify the (proposed) accounts staff, including job title, responsibilities, educational background and professional experience. Attach job descriptions and CVs of key accounting staff.

Please see Annex 1b and 1c

3.3 Is the project finance and accounting function staffed adequately?

Not at this time, vacant positions are yet to be filled up

3.4 Is the finance and accounts staff adequately qualified and experienced?

The finance and accounts staff is adequately qualified and experienced but still need additional trainings

3.5 Is the project accounts and finance staff trained in ADB procedures?

No

3.6 What is the duration of the contract with the finance and accounts staff?

Regular employees/permanent appointments

3.7 Indicate key positions not contracted yet, and the estimated date of appointment.

Corp. Account Analyst Procurement Analyst Supply Officer/Property Custodian Adm. Service Assistant

Needs to create HRD

3.8 Does the project have written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff?

3.9 At what frequency are personnel transferred?

Very seldom Field Operations

3.10 What is training policy for the finance and accounting staff?

BIR rulings and regulation/GSIS/Pagibig updates



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Topic Response Remarks 4. Accounting Policies and

Procedures

4.1 Does the entity have an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system?

Yes. The water district has an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components and sources of funds.

4.2 Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

Yes. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

4.3 Is the chart of accounts adequate to properly account for and report on project activities and disbursement categories?

Yes. The chart of accounts is adequate to properly account for and report on project activities and disbursement categories. The water district follows the standard chart of accounts for government offices. It also adopted the prescribed coding system.

4.4 Are cost allocations to the various funding sources made accurately and in accordance with established agreements?

Yes.

4.5 Are the General Ledger and subsidiary ledgers reconciled and in balance?

Yes.

Reconciliation of accounts in process

4.6 Are all accounting and supporting documents retained on a permanent basis in a defined system that allows authorized users easy access?

Yes

Segregation of Duties

4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii)

Yes. These functional responsibilities are performed by different units/persons.



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Topic Response Remarks custody of assets involved in the transaction?

4.8 Are the functions of ordering, receiving, accounting for, and paying for goods and services appropriately segregated?

Yes. These functions are appropriately segregated.

4.9 Are bank reconciliations prepared by someone other than those who make or approve payments?

Yes. Bank reconciliations are prepared by the Accounting Dept. staff, someone other than those who make or approve payments.

In progress

Budgeting System

4.10 Do budgets include physical and financial targets?

Yes.

4.11 Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance?

Yes.

4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required for significant variations from the budget?

Yes. Budget realignment every end of the 3rd quarter; Supplemental budget requires BOD approval.

4.13 Are approvals for variations from the budget required in advance or after the fact?

Yes. Budget realignment is being done before the last quarter of the year.

4.14 Who is responsible for preparation and approval of budgets?

The Division Heads prepare the budget for their respective areas, and recommended for approval by the General Manager. The Board approves the WD budget.

4.15 Are procedures in place to plan project activities, collect information from the units in charge of the different components, and prepare the budgets?

Yes.

4.16 Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals?

Yes.



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Topic Response Remarks Payments

4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?

Yes.

4.18 Are all invoices stamped PAID, dated, reviewed and approved, and clearly marked for account code assignment?

Yes

.

4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized?

Yes. Fast Buck System at PNB

Policies And Procedures 4.20 What is the basis of

accounting (e.g., cash, accrual)?

The WD employs the accrual and cash basis of accounting.

4.21 What accounting standards are followed?

Commercial Practices Systems and NGAS

4.22 Does the project have an adequate policies and procedures manual to guide activities and ensure staff accountability?

Yes

4.23 Is the accounting policy and procedure manual updated for the project activities?

Yes.

4.24 Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy or procedure to be used by the entity?

Yes.

4.25 Are there written policies Yes



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Topic Response Remarks and procedures covering all routine financial management and related administrative activities?

4.26 Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them?

Yes

4.27 Are manuals distributed to appropriate personnel?

Yes.

Cash and Bank

4.28 Indicate names and positions of authorized signatories in the bank accounts.

GM- Felipe G. Picazo or Admin Mgr. – Virginia C. Laroco and Cash and Check Custodian – Evangelina T. Flores

4.29 Does the organization maintain an adequate, up-to-date cashbook, recording receipts and payments?

Yes. The WD maintains an adequate, up-to-date cashbook, recording receipts and payments.

4.30 Do controls exist for the collection, timely deposit and recording of receipts at each collection location?

Yes. Controls do exist for the collection, timely deposit and recording of receipts at each collection location.

Conduct field collections for delinquent accounts; collection thru bank for current accounts

4.31 Are bank and cash reconciled on a monthly basis?

Yes. Bank and cash are reconciled on a monthly basis.

4.32 Are all unusual items on the bank reconciliation reviewed and approved by a responsible official?

Yes. All unusual items on the bank reconciliation are reviewed and approved by the Finance Officer.

4.33 Are all receipts deposited on a timely basis?

Yes. All receipts are deposited daily.

Safeguard over Assets

4.34 Is there a system of adequate safeguards to protect assets from fraud, waste and abuse?

Yes.

4.35 Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts?

Yes. Uses stockcards and bin cards

4.36 Are there periodic physical Yes, physical inventories of assets and



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Topic Response Remarks inventories of fixed assets and stocks?

stocks are performed annually.

4.37 Are assets sufficiently covered by insurance policies?

Buildings are covered by insurance policies.

Other Offices and Implementing Entities

4.38 Are there any other regional offices or executing entities participating in implementation?

None.

4.39 Has the project established controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities?

N/A

4.40 Does information among the different offices/implementing agencies flow in an accurate and timely fashion?

N/A

.

4.41 Are periodic reconciliations performed among the different offices/implementing agencies?

N/A

Other

4.42 Has the project advised employees, beneficiaries and other recipients to whom to report if they suspect fraud, waste or misuse of project resources or property?

5. Internal Audit

5.1 Is there a internal audit department in the entity?

None.

5.2 What are the qualifications and experience of audit department staff?

5.3 To whom does the internal auditor report?

5.4 Will the internal audit department include the project in its work program?

5.5 Are actions taken on the internal audit findings?



14

Topic Response Remarks 6. External Audit

6.1 Is the entity financial statement audited regularly by an independent auditor? Who is the auditor?

COA

6.2 Are there any delays in audit of the entity? When are the audit reports issued?

None. Audit Reports are issued on or before the end of the second quarter of the succeeding year.

6.3 Is the audit of the entity conducted according to the International Standards on Auditing?

Yes

6.4 Were there any major accountability issues brought out in the audit report of the past three years?

Yes, mostly on cash on hand and in bank transaction, erroneous recordings and non performance of bank reconciliation.

6.5 Will the entity auditor audit the project accounts or will another auditor be appointed to audit the project financial statements?

Yes, LWUA and COA Auditors.

6.6 Are there any recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented?

Adjustments and reforms are currently being undertaken.

6.7 Is the project subject to any kind of audit from an independent governmental entity (e.g., the supreme audit institution) in addition to the external audit?

No.

6.8 Has the project prepared acceptable terms of reference for an annual project audit?

Yes.


7.1 Are financial statements prepared for the entity? In accordance with which accounting standards?

Yes.

7.2 Are financial statements prepared for the implementing unit?

Yes, financial statements are prepared for water districts

7.3 What is the frequency of preparation of financial

Financial Statements are prepared monthly and audited annually



15

Topic Response Remarks statements? Are the reports prepared in a timely fashion so as to useful to management for decision making?

7.4 Does the reporting system need to be adapted to report on the project components?

Yes

7.5 Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?

Yes

7.6 Does the project have established financial management reporting responsibilities that specify what reports are to be prepared, what they are to contain, and how they are to be used?

Yes

7.7 Are financial management reports used by management?

Yes.

7.8 Do the financial reports compare actual expenditures with budgeted and programmed allocations?

Yes.

7.9 Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means?

Prepared manually no automated accounting system yet. Use of spreadsheets.

8. Information Systems

8.1 Is the financial management system computerized?

Partial Billing and collection only

8.2 Can the system produce the necessary project financial reports?

Yes

8.3 Is the staff adequately Yes



16

Topic Response Remarks trained to maintain the system?

8.4 Does the management organization and processing system safeguard the confidentiality, integrity and availability of the data?

Yes



17

Annex 1a: METRO LA UNION WATER DISTRICT ORGANIZATIONAL CHART



18

Annex 1b: MLUWD FINANCIAL ORGANIZATIONAL CHART



19

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF - MLUWD

1. FINANCE OFFICER

Job Description: Supervises, analyzes, interprets and checks financial reports; Maintains inventory of all assets, materials and supplies; Duties and Responsibilities: Prepares bank reconciliation Conducts cash count Prepares monthy financial statements and annual reports Prepares monthly data sheet Supervises record keeping Qualification: Bachelor of Science in Accountancy (preferrably CPA) 2 yrs. Work experience In accounting field

2. CORPORATE ACCOUNT ANALYST

Job Description: Recording of daily transactions in the general ledger and subsidiary Ledgers. Duties and Responsibilities: Prepares check vouchers; Prepares payroll; updates records of sick leave and vacation leave Prepares the trial balance and consolidates the report;

Maintains and records daily transactions to the subsidiary and general

Ledgers. Qualifications: Bachelor of Science in Accounting 2 yrs. Relevant work experience

3. CASHIER

Job Description: In charge of receipts and disbursement transactions Duties and Responsibilities: Receives daily collection and deposits in the bank the following day Disburses payments in terms of checks or working funds Prepares checks of any transaction In charge of payment of payroll Prepares cash position reports and summary of daily collections Qualifications: Bachelor of Science in Commerce 1 yr. relevant working experience Career Service Eligibility – 1st grade



20

Quezon Metropolitan Water District


A. Introduction


43. The main instrument used to facilitate the financial management assessment was the questionnaire furnished by the ADB, which was discussed with the Quezon Metropolitan Water District General Manager, the Manager of the Administrative Department and the respective division managers of relevant units of the water district by the consultants in April 2009. Follow-up interviews were conducted by the consultants to better appreciate some of the responses and to fill up the unanswered items in the questionnaire. Most of the items in the questionnaires were filled up and consolidated by October 2009.

Findings



45. The Quezon Metropolitan Water District was established under the Local Water District Law by virtue of the Presidential Decree 198 which is known as The Provincial Water Utilities Act of 1973. All local water districts which were formed pursuant to the Local Water District Law are declared government owned and controlled corporations with original charter which fall under the jurisdiction of the Civil Service Commission and the Commission on Audit by the Supreme Court on its decision promulgated last September 13, 1991

46. The Quezon Metropolitan Water District was first known as the Lucena-Pagbilao-Tayabas Water District (LUPATA WD) established on May 16, 1975 bearing a Conditional Certificate of Conformance No. 17. By virtue of Board Resolution No. 91-1 dated January 9,1991, its corporate name was changed from LUPATA WD to the present Quezon Metropolitan Water District since it is not only for the three areas that the water services are to be provided but also for the whole province of Quezon. Upon the filing of the resolution of forming the water district, the local government (LGU) concerned looses the ownership, supervision, and control or any right whatsoever over the district except as provided by the law.

47. The QMWD was formed for the purpose of acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of the district. They are also organized for the purpose of providing, maintaining and operating wastewater collection, treatment and disposal facilities and conducting such other functions and operations incidental to water resource development, utilization and disposal within the district, as are necessary or incidental to the aforementioned purposes.

48. The QMWD’s vision is to be the most progressive, independent and financially viable public servant in the delivery of safe, potable and adequate water in whole of Quezon Province.



21

49. The QMWD has the legal status to borrow money to raise funds to pay all cost of any public improvement or in the pursuit of its projects subject to limits prescribed under PD 198. It has implemented a number of loan projects with LWUA from 1977 to the present for the expansion, rehabilitation and improvement of its existing water systems and for the development of new water sources, with a total amount of Php 364 million. These loans were subsequently refinanced by the Development Bank of the Philippines in 2007.

50. The policy making and all powers expressly granted by PD 198 as amended by PD 768 and PD 1479, necessary, implied from or incidental to the powers and purposes abovementioned are exercised by the Board of Directors composed of five (5) members, representing the professional, civic, business, women’s and education sectors. The QMWD Board is under the Chairmanship of Atty. Gilbert D. Camaligan whose term of office is from 2007 to 2012.

51. Directly under the Board of Directors is the General Manager, Enrico B. Pasumbal, who is in-charge of the management and supervision of the detailed operations of the water district. Under the GM are the Assistant General Managers for Operations and Technical Services, and a Branch Operation Department Manager for the Pagbilao Sub-Office and Tayabas Sub-Office.

52. The QMWD projects are endorsed by the Board and Management, for review and approval by LWUA.


53. Loan funds received by QMWD from LWUA or from other donor agencies are deposited to either Land Bank of the Philippines (LBP) or Development Bank of the Philippines (DBP). QMWD releases funds to suppliers and contractors following their usual payment procedures


55. Counterpart funds are provided from QMWD ICG funds and Equity.


56. Under the existing structure, QMWD financial function is carried out by the Finance Division under the Administrative and Finance Department. The Finance Division is further subdivided into three units: Cash Management, Accounting, and Budget Management. QMWD’s total workforce is complemented by 254 employees, 224 are regular employees and 30 are casual employees.

57. The Finance Division handles transaction processing, bookkeeping and financial records, and cost accounting. The Finance Division is complemented by 18 qualified and experienced staff that will be responsible for undertaking project finance and accounting. All key positions are filled out and most of the staff are holding permanent positions. Please see Annex 1b - Finance Organization Chart and Annex 1c – Job Description of Project Accounting Staff.



22

58. Seminars and training are usually provided as part of their career development plan and to inform the accounting staff about changes in government policy such as the New Government Accounting System.


59. QMWD has an accounting system that allows proper recording of project financial transactions, including allocation of expenditures in accordance with respective components and sources of funds. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

60. The QMWD recognizes the use of the Imprest Fund System, the Voucher and Check Disbursement Systems for payments, which generates the Voucher Register and the Monthly Check Disbursement Records, respectively. Inventories are valued using the First In- First Out Method of valuation. Property, plant and Equipment are valued at cost and depreciation is computed using the straight-line method. Receivables are carried at net realizable value where in provision for bad debts is computed monthly using the aging of receivables method.

61. The QMWD adopts the Billing and Collection System prescribed by the Commercial Practices System (CPS) established by LWUA for all water districts. This Manual contains also the Meter Reading Cycle, the process flow charts, and samples forms basically needed by the WD in the documentation of its day to day activities.

62. Project implementation is being handled by a Water District Project Management Unit (WDPMU) organized specifically for the project. The WDPMU is composed of members from the Administrative, Finance, Commercial and Technical Division. The WD Project Management Unit basically coordinates and monitors project activities.

63. The chart of accounts is adequate to account for all activities of QMWD. QMWD follows the standard chart of accounts for government agencies as contained in the NGAS and adopts the prescribed coding system.

64. QMWD does have a file management system and important papers are kept on a permanent basis while others (such as vouchers) are kept for a period of 10 years as per government rule (Chapter 2. Section 26. PD 1445 - Auditing Code of the Philippines).



b. Budgeting System

66. The QMWD budget is prepared by an Executive Committee (EC) represented by Unit Heads. The EC endorses the budget to the GM for approval to the Board of Directors.

67. The budget is prepared for all significant activities in sufficient detail for monitoring. It includes physical as well as financial targets for the year. A quarterly variance analysis report is being prepared and submitted to the General Manager for proper notification. Budget realignment needs the approval of the Board.


c. Payments

69. Invoice-processing and payroll preparation procedures are adequate to provide check and balance of the transactions. Invoices are usually stamped “PAID” upon payment.



23


70. The basis of accounting is the accrual method which is consistent with the policies of the New Government Accounting System. QMWD also adheres to the Generally Accepted Accounting Principles. Starting January 1, 2006, the water district adopted the New Government Accounting System for Government Owned and Controlled Corporation which was issued by the Commission on Audit on the same year.


1. Cash and Bank

72. The approving authorities for bank transactions are the General Manager or the Assistant General Manager for Operations and the Cashier or Dep’t Manager for Admin and Finance.

73. All receipts are deposited intact on a timely basis and at present, banks and cash balances are reconciled on a monthly basis. All unusual items for reconciliation are reviewed and approved by a responsible official. QMWD has instituted adequate controls and procedures for recording receipts and payment.


74. The Property and Supply Officer is responsible for monitoring the QMWD fixed assets. An annual physical inventory of assets is performed and the results are reconciled with control accounts. Fixed assets (buildings and vehicles) are sufficiently covered by insurance.


75. The water districts are entities that perform project implementation together with LWUA. Periodic reporting and reconciliation of accounts between LWUA and the water districts are being performed. Flow of information and monitoring of project activities are being carried out through officers and staff assigned by LWUA in close coordination with QMWD management and staff.

4. Internal audit

76. The QMWD has an Internal Audit Unit which provides check and control over the operations of the WD. The Internal Audit Unit is manned by four experienced and qualified staff headed by the Senior Internal Control Officer. The internal audit findings and recommendations are coursed through the Management to ensure implementation of proposed actions.

5. External Audit


78. Based on the 2007 COA Annual Audit Report, COA disallowed the granting of additional benefits to the Board of Directors, excess payment of traveling allowances to the GM and the granting of RATA to the WD officers.



24


79. QMWD Financial Statements are prepared in accordance with the Philippine Accounting Standards issued by the Accounting Standard Council (ASC). These Financial Statements are prepared monthly and are audited annually.


80. The Financial Management System is being done manually. The billing and collection system is computerized. This system is continuously being developed to produce the required commercial data, financial reports and assures safeguarding of confidentiality, integrity and availability of the data.


81. QMWD generally follows sound financial management principles in its operations as indicated by the positive responses to the Financial Management Assessment Questionnaire. However, COA audit findings and recommendations should be strictly adhered to and action taken should be properly documented and monitored.

82. The QMWD should fast track the development of the automation of its billing and collection system to be more responsive to the present demands of its operation. The WD should exert more effort in the development of an integrated computerization program which will provide links to the commercial and financial operations of the district.

83. The QMWD Board is limited to its policy making activities and should refrain from participating in the detailed management of the district.



25

Annex 1: Financial Management Assessment Questionnaire - QMWD




The Quezon Metropolitan Water District is a government-owned and controlled corporation established in January 29, 1975 bearing Conditional Certificate of Conformance No. 017.


Yes. All previous projects were LWUA financed projects and were subsequently refinanced by the Development Bank of the Philippine on December 2007. Total loan take out is Php 364 Million payable in 15 years at 9% interest rate per annum. DBP PN#2008-115, P371M ( 2008) DBP PN#2008-165, P20M (2008) DBP PN#07-110, P43 M (2008) SM Prime Holdings, P6.5 M(2008)


The Auditing Code of the Philippines (P.D. 1445) Chapter 3. Sec. 121. Financial Reports and Statements - 1.) The financial reports shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. and 2.) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards.


The QMWD Board is composed of five members nominated from the professional, civic, women’s, education and business sectors duly appointed by the Chief Executive (Mayor) of the Local Government Unit (LGU).


Yes. See Organizational Chart in Annex 1.


2.1 Describe (proposed) project funds flow

LWUA funded projects:



26

Topic Response Remarks arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.

LWUA directly disbursed or make payments to suppliers related to project expenditures in behalf of the water district.


Not quite


Additional financing costs (DBP loan) and high interest rates.


Land Bank of the Phil. or DBP




Yes. If foreign exchange losses can’t be absorbed by the WD operations, costs are added to tariff.


WD Equity/ICG


Project expenses paid by the WD form part of WD Equity


N/A Usually through public hearing.

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor

Yes, through the 10% Capital Contribution



27

Topic Response Remarks contribution?

3. Staffing


Please see Annex 1a the Organization Chart QMWD.


Please see Annex 1c, job description of accounting staff.


Yes


Yes


No


Most the staff have permanent appointments.


All key positions have been filled out.


N/A


Generally, no personnel transferred, (seldom)


Accounting updates and seminars

4. Accounting Policies and Procedures

4.1 Does the entity have an accounting system that allows for the proper recording of project

Yes, per COA mandate recording is based on the New Government Accounting System.



28

Topic Response Remarks financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system?




Yes. The chart of accounts is adequate to properly account for and report on project activities and disbursement categories. QMWD follows the standard chart of accounts for government offices. It also adopted the prescribed coding system.


Yes.


Yes. The General Ledger and subsidiary ledgers are reconciled. Variances if any require justifications.


Yes, reliable recording and document safekeeping is observed.


4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii) custody of assets involved in the transaction?


4.8 Are the functions of ordering, receiving,


Purchasing and Accounting Units



29

Topic Response Remarks accounting for, and paying for goods and services appropriately segregated?



Budgeting System


Yes. Concerns mostly on the funding aspect. (How and where do we get the funds)


Yes. The budget is the basis for the annual corporate planning.


A Quarterly Variance Analysis is prepared.


The approval on budget variations are required in advance to provide for proper justifications.

Board approval for budget re-alignment


The Executive Committee is responsible for deliberating each item as contained in the budget.


Yes, each division is tasked to prepare their respective allocations.


Yes, previous years’ and current prices are indices of current evaluation.

Payments

4.17 Do invoice-processing Yes.



30

Topic Response Remarks procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?


Yes.


Yes. Controls do exist for the preparation of the payroll. Any changes to the payroll are properly authorized.

Policies And Procedures

4.20 What is the basis of accounting (e.g., cash, accrual)?

QMWD employs the accrual basis of accounting.


Generally Accepted Accounting Principles (GAAP)


To be developed during the loan implementation phase.


Yes


Yes

4.25 Are there written policies and procedures covering all

Yes



31

Topic Response Remarks routine financial management and related administrative activities?


Yes


Yes

Cash and Bank 4.28 Indicate names and

positions of authorized signatories in the bank accounts.

General Manager – Enrico B. Pasumbal or AGM Operations – Romulo M. Etcubanas And Admin, and Finance Department Manager – Isabelita C. Ibarrola or Cashier – Cecilia L. Oblefias

Chairman signs for disbursement of P.100 M above.


Yes.




Yes. Bank and cash are reconciled periodically.


Yes. All unusual items on the bank reconciliation are reviewed and approved by a responsible official.


Yes. All receipts are deposited on a timely basis.



Yes.

4.35 Are subsidiary records of fixed assets and stocks kept up to date and

Yes.



32

Topic Response Remarks reconciled with control accounts?

4.36 Are there periodic physical inventories of fixed assets and stocks?

Yes, physical inventories of assets and stocks are performed annually.

Reconciliation on-going for variances


Yes, assets are covered by insurance policies.

Vehicles and building only



None


Yes


Yes


Yes

Between LWUA and WD

Other


Yes.

5. Internal Audit


Yes. There is an Internal Audit Department in the water district


The Sr. Internal Control Officer and two Assistant Internal Control Officers are accounting graduates.


The Internal Auditor reports to General Manager.

5.4 Will the internal audit department include the

Yes, the internal audit department includes the project in its work program



33

Topic Response Remarks project in its work program?


Yes, recommendations are coursed through the GM.

6. External Audit


Yes. The auditing unit headed by an Auditor assigned by the Commission on Audit who is a certified public accountant.




Yes


COA reports not available.


Subjected to COA audit



COA only LWUA Resident Engineer




Yes.

7.2 Are financial statements prepared for the

Yes.



34

Topic Response Remarks implementing unit?

7.3 What is the frequency of preparation of financial statements? Are the reports prepared in a timely fashion so as to useful to management for decision making?



Yes


Yes, project management guidelines will later be established to link financial information and physical progress of the project.


Yes.


Monthly Financial Reports are submitted to management


Budget Variance Reports compared actual with budgeted expenditures


Computerization still in progress, prepared through spreadsheets.



Computerization currently in progress.

8.2 Can the system produce Yes



35

Topic Response Remarks the necessary project financial reports?

8.3 Is the staff adequately trained to maintain the system?

Yes


Yes



36

Annex 1a: QUEZON METROPOLITAN WATER DISTRICT ORGANIZATIONAL CHART

QUEZON METRO WATER DISTRICTORGANIZATIONAL STRUCTURE

BOARD OF DIRECTORS

GENERAL MANAGER E (28)

PUBLIC INFORMATION OFFICE

I SR. INFORMATION OFFICER A(18)

1 MINUTE & AGENDA (11)

1 CLERK PROCESSOR B (6)

1 RECORDS OFFICER A (16)

1 HOUSEKEEPER SERV. ASST. (6)

2 INT. CONT. ASST. OFCR. A (10))


INTERNAL AUDIT

I SR. INT. CONTROL OFFICER A(18)

BRANK

OPN DEPARTMENT1 DEPT. MANAGER C (24)

PAGBILAOSUB-OFFICE

1 DIVISION MANAGER C (22)

1 SENIOR CUSTOMER

SERVICE OFFICER (18)

1 SENIOR

ENGINEER A (16)

1 SENIOR CUSTOMER

SERVICE OFFICER (18)

1 SENIOR

ENGINEER A (16)

TAYABASSUB-OFFICE


CONSTRUCTIONDIVISION


MAINLINE CONST’N

1 PRINCIPAL ENGR. D (19)

UTILITIES SERVICE

CONTRUCTION1 SUPV’G ENGR. (18)

WATER MAINT.


UTILITIES SERVICE

MAINTENANCE1 SUPV’G ENGR.(18)

MAINTENANCEDIVISION


1 WATER MAINT.FOREMAN (14)

ENGINEERINGDIVISION


PLANNING SECT.

1 PRINCIPAL ENGR. (19)

DESIGN SECT.


1 SR. WATER UTILITIES

MGMT. OFFICER (18)

1 QUALITY CONTROL

OFFICER (18)

PRODUCTIONDIVISION


1 WATER UTILITIESMGMT. OFFICER (16)

1 SENIORENGINEER B (15)


1 SENIORENGINEER A (14)

1 SECRETARY A (7)

ENGINEER AND

PRODUCTION DEPT.DEPT. MANAGER (24)

CONSTRUCTION &

MAINTENANCE DEPT.1 DEPT. MANAGER C (24)

1 SECRETARY A (7)

CUSTOMER

ACCOUNT DIVISION1 DIVISION MANAGER B (22)

BILLING

1 SR. CSO (18)

COLLECTION

1 SR. CSO (18)DISCONNECTION.RECONNECTION

1 SR. CSC (18)

CUST. REL./SERV./INVESTIGATION

1 SR. CSO (19)

CUSTOMER

SERVICE DIVISION1 DIVISION MANAGER B (22)

ADMINISTRATIVEDIVISION


1 SENIOR CORPORATEACCOUNTANT A (18)

1 CORPORATE BUDGETSPECIALIST A (18)

FINANCE DIVISION


ASST. GEN. MGR FOROPERATIONS

1 ASST. GEN. MGR. C (26)

1 PUBLIC RELATIONOFFICER A (15)


ADMINISTRATIVEDEPARTMENT


1 SENIORCASHIER (18)

1 SUPERVISINGPROPERTY / SUPPLY

OFFICER (18)

1 ADMIN. & GEN.SERVICES CHIEF C (18)

1 SR. INDUSTRIALRELATION MGMT.

OFFICER A (16)

1 TRANSPORTOFFICER A (15)

COMMERCIALSERVICES DEPARTMENT


ASST. GEN. MGR FORTECHNICAL SERVICES

1 ASST. GEN. MGR. A (26)



37

Annex 1b: QMWD FINANCIAL ORGANIZATIONAL CHART

QUEZON METRO WATER DISTRICTADMINISTRATIVE STRUCTURE

ADMINISTRATIVE

DIVISION


1 SENIOR CORPORATE

ACCOUNTANT A (18)

FINANCE DIVISION


ADMINISTRATIVE

DEPARTMENT


1 SR. INDUSTRIAL

RELATION MGMT.OFFICER A (16)

1 IND’L REL. DEV’T OFCR. B 13)

1 IND’L REL. MGMT. ASST. B (8)


1 MATLS/PLAN’G PROC. OFRC B (15)

1 STOREKEEPER A (11)

1 PROCUREMENT ASST. A (9)

1 STOREKEEPER D (4)

1 SUPERVISING

PROPERTY / SUPPLYOFFICER (18)

1 SENIOR WELDER (10)

2 BLDG. ELECTRICIAN (8)

7 UTILITY WORKER A (3)

1 ADMIN. & GEN.

SERVICES CHIEF C (18)

5 DRIVER (4)

6 LIGHT EQUIPMENT OPTR (6)

2 DRIVER MECHANIC B (7)

1 TRANSPORT

OFFICER A (15)

1 CASHIER A (16)

1 CASHIERING ASST. (8)

1 CLERK PROCESSOR (6)

1SR. CORP ACCTS. ANALYST (15)

1 CORP. ACCTS ANALYST (13)

4 SR. ACCT’G PROCESSOR A (12)

1 SR. ACCT’G PROCESSOR B (10)

2 ACCT’G PROCESSOR A (8)


2 CORP. BUDGET ASST. (B)

2 CORP. BUDGET ASST. (8)

1 SENIOR

CASHIER (18)

1 CORPORATE BUDGET

SPECIALIST A (18)



38

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF - QMWD 1. JOB TITLE: Division Manager C

JOB SUMMARY: Supervises employees in utility functions involving financial bookkeeping

And cash handling

TYPICAL DUTIES: Prepares reports as to management planning and control; Prepares reports for regulatory or creditor interest; Supervises activities of bookkeepers and cashier; Establishes Financial office procedures;

Establishes employee performance standards and evaluates employee Performance

ABILITY TO: Effectively supervise commercial employees; prepare concise

meaningful financila reports.

MINIMUM QUALIFICATION Bachelor’s Degree 4 years of relevant experience, 24 hrs. relevant training

CSC-Professinal (2nd level eligibility) 2. JOB TITLE: Senior Corporate Account Analyst

JOB SUMMARY: Maintains complete financial books of accounts relative to receipts and expenditures for all utility functions;

MINIMUM QUALIFICATIONS: Bachelor’s degree 1 yr. relevant experience/4 hrs. relevant training CSC-Professinal (2nd level eligibility) 3. JOB TITLE: Corporate Budget Specialist

JOB SUMMARY: Analyzes financial data; conducts researches and studies and Makes recommendations such as financial tools and

techniques As maybe useful to management; Prepare project studies and determines viability of the

projects

MINIMUM QUALIFICATIONS: Bachelor’s degree 1 yr. relevant experience/4 hrs. relevant training CSC-Professinal (2nd level eligibility)



39

4. JOB TITLE: Senior Accounting Processor A

JOB SUMMARY: Prepares and calculates payroll and maintains payroll register;

Prepares remittances deductions and performs tasks as maybe assigned from time to time

MINIMUM QUALIFICATIONS: Completion of 2 years studies in college 2 years relevant experience/8hrs. relevant training CSC – Sub-Professional ( 1st Level Eligibility)

5. JOB TITLE: Senior Accounting Processor B

JOB SUMMARY: Maintains books of accounts such as subsidiary and general ledger for all balance sheet, income and expense accounts.


6. JOB TITLE: Accounting Processor A

JOB SUMMARY: Maintains financial records relative to receipts and disbursements


7. JOB TITLE: Senior Cashier

JOB SUMMARY: Receives all monies and negotiable instruments from all sources and deposit the same in the bank;

Make disbursements as warranted Accountable for all funds MINIMUM QUALIFICATIONS: Bachelor’s Degree

2 years of relevant experience, 8 hrs. relevant training

CSC-Professinal (2nd level eligibility)



40

Legazpi City Water District


A. Introduction


85. The main instrument used to facilitate the financial management assessment was the questionnaire furnished by the ADB, which was discussed with the Legazpi City Water District General Manager, the Manager of the Accounting Unit and managers of other relevant units of the water district by the consultants in April 2009. Follow-up interviews were conducted by the consultants to better appreciate some of the responses and to fill up the unanswered items in the questionnaire. Most of the items in the questionnaires were filled up and consolidated by October 2009.

Findings



87. The Legazpi City Water District was established under the Local Water District Law by virtue of the Presidential Decree 198 which is known as The Provincial Water Utilities Act of 1973. All local water districts which were formed pursuant to the Local Water District Law are declared government owned and controlled corporations with original charter by the Supreme Court on its decision promulgated last September 13, 1991. The water districts as GOCC’s fall under the jurisdiction of the Civil Service Commission and the Commission on Audit

88. The Legazpi City Water District was formed from the former Albay Provincial Waterworks through a resolution enacted by the Local Chief Executive of the Municipality of Legazpi in October 1980. The copy of the resolution forming the water district was filed with the Secretary of the Local Water Utilities Administration. Upon compliance with the requirements and policy objectives as contained in the provision of the law, the LCWD was issued its Conditional Certificate of Conformance (CCC) no.173 on December 16, 1981. Upon the filing of the resolution of forming the water district, the local government (LGU) concerned looses the ownership, supervision, and control or any right whatsoever over the district except as provided by the law.

89. The LCWD was formed for the purpose of acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of the district. They are also organized for the purpose of providing, maintaining and operating wastewater collection, treatment and disposal facilities and conducting such other functions and operations incidental to water resource development, utilization and disposal within the district, as are necessary or incidental to the aforementioned purposes.

90. The LCWD has the legal status to borrow money to raise funds to pay all cost of any public improvement or in the pursuit of its projects subject to limits prescribed under PD 198. It has implemented a number of loan projects with LWUA from 1987 to the 1993 composing



41

of two regular loans and one soft loan for the rehabilitation and improvement of its existing water systems and for the development of new water sources, with a total amount of P90 million.

91. The policy making and all powers expressly granted by PD 198 as amended by PD 768 and PD 1479, necessary, implied from or incidental to the powers and purposes abovementioned are exercised by the Board of Directors composed of five (5) members, representing the professional, civic, business, women’s and education sectors, under the Chairmanship of Dr. Kerwin T. Sis.

92. Directly under the Board of Directors is the General Manager who is in-charge of the management and supervision of the detailed operation of the water district. There are four divisions directly under the supervision of the General Manager, namely: Administrative, Finance, Commercial and Technical Divisions.

93. The LCWD projects are endorsed by the Board and Management, for review and approval by LWUA.


94. Loan funds received by LCWD from either LWUA or other donor agencies are deposited to the Land Bank of the Philippines or the Veterans Bank of the Philippines. LCWD releases funds to suppliers and contractors following their usual payment procedures


96. Counterpart funds are provided from LCWD ICG funds and WD Equity.


97. Under the existing structure, LCWD financial functions are under the responsibility of the Finance Division. The Finance Division Manager is duly supported by the senior staff of the Accounting Section and the Cash and Budget Management Section. Each section is further subdivided into units. The Accounting Section is subdivided into the Accounting and Cost Accounting units, while the Cash and Budget Management Section is subdivided into the Collection and Cash Management, the Budget and Management Control and the Financial Planning Units. See Annex 1a for the LCWD Organization Chart. LCWD’s total workforce is 100 employees, 74 are regular and 26 are job orders.

98. The Accounting Section comprises transaction processing, bookkeeping, and financial records, and cost accounting. The Cost Accounting Unit is adequately staffed by qualified and experienced personnel, who are responsible for undertaking project finance and accounting. All key positions are filled out and most of the staff are holding permanent positions. Please see Annex 1b for the Finance Organization Chart and Annex 1c for the Job Description of Project Accounting Staff.

99. Trainings and seminars are usually provided as part of their career development plan and to inform the accounting staff about changes in government policy such as the National Government Accounting System.



42


100. LCWD has an accounting system that allows proper recording of project financial transactions, including allocation of expenditures in accordance with respective components and sources of funds. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

101. The LCWD recognizes the use of the Imprest Fund System, the Voucher and Check Disbursement Systems for payments, which generates the Voucher Register and the Monthly Check Disbursement Records, respectively. Inventories are valued using the First In- First Out method of valuation. Property, Plant and Equipment are valued at cost and depreciation is computed using the straight-line method. Receivables are carried at net realizable value wherein provision for bad debts is computed monthly using the aging of receivables method.

102. The LCWD adopts the Read and Bill Systems which generates the Billing Summary, Consumption Patter and Water Bills. They also adopt the Meter Reading Billing and Collection System (MRBCS) wherein the system generates the Collection Summary by dates, Collection Summary by areas, Official Receipts, Water Bills and Individual Collection Report. Also provided by the system are the Daily Cash Receipts and Deposits Records and Daily Report of Collection and Deposit.

103. Project implementation is being handled by a committee organized specifically for the project. This Committee is composed of members from the Administrative, Finance, Commercial and Technical Division. The Project Management Unit or Committee basically coordinates and monitor project activities.

104. The Cost Accounting Unit under the Finance Division handles cost allocation to the various funding sources. All the project accounts are also incorporated in the final account of LCWD.

105. The chart of accounts is adequate to account for all activities of LCWD. LCWD follows the standard chart of accounts for government agencies as contained in the NGAS and adopts the prescribed coding system.

106. LCWD does have a file management system and important papers are kept on a permanent basis while others (such as vouchers) are kept for a period of 10 years as per government rule (Chapter 2. Section 26. PD 1445- Auditing Code of the Philippines).

107. A number of deficiencies have been noted in the annual audit reports prepared by the COA auditors. Most are minor findings which can readily be corrected either through preparation of correcting entries or reclassification entries or through discontinuance of practices which are disallowed by auditors as prescribed by the NGAS.



b. Budgeting System

109. The LCWD budget is prepared by the Budget Unit under the Accounting Section and the Management recommends the budget for approval to the Board of Directors.

110. The budget is prepared for all significant activities in sufficient detail for monitoring. It includes physical as well as financial targets for the year. A quarterly variance analysis report is being prepared and submitted to the General Manager for proper notification.




43

c. Payments

112. Invoice-processing and payroll preparation procedures are adequate to provide check and balance of the transactions. The district has a payroll program called the Stella Personnel Suite which is designed to capture the daily time record of the LCWD personnel through finger scan that generates the payroll data needed to prepare the Summary of Weekly Payroll, Payroll Register, Payroll Slips and the Monthly Deduction Summary for GSIS, Pag-ibig, Medicare and Withholding tax. Invoices were usually stamped “PAID” upon payment.


113. The basis of accounting is the accrual method consistent with the policies of the New Government Accounting System. LCWD adopts the Philippine Accounting Standards issued by the Accounting Standard Council and also adopts the Statement of Financial Accounting Standards and the International Accounting Standards. Starting January 1, 2006, the water district adopted the New Government Accounting System for Government Owned and Controlled Corporation which was issued by the Commission on Audit


1. Cash and Bank

115. The Approving authorities for bank transactions are the General Manager or the Acting General Manager and the Cashier or the Finance Manager.

116. All receipts are deposited intact on a timely basis and at present, banks and cash balances are reconciled on a monthly basis. All unusual items for reconciliation are reviewed and approved by a responsible official. LCWD has instituted adequate controls and procedures for recording receipts and payment.


117. The General Services Section under the Administrative Division is responsible for monitoring the LCWD fixed assets. An annual physical inventory of assets is performed and the results are reconciled with control accounts. Fixed assets are sufficiently covered by insurance.


118. The water districts are entities that perform project implementation together with LWUA. Periodic reporting and reconciliation of accounts between LWUA and the water districts are being performed. Flow of information and monitoring of project activities are being carried out through officers and staff assigned by LWUA in close coordination with the WD management and staff.

4. Internal audit

119. There is an Internal Audit Unit which provides check and control over the operations of the water district directly reporting to the General Manager. This Unit is being handled by three personnel who specialize in the field accounting and all of them are Certified Public Accountants. The internal audit findings and recommendations are coursed through the Management to ensure implementation of proposed actions.

5. External Audit

120. Statutory audit is done by an external auditor appointed by the Commission on Audit. The Audit Reports are issued on or before the end of the second quarter of the succeeding year. This is performed in accordance with the International Standards on Auditing. The



44

projects are also subject to the audit of the Commission on Audit as part of their regular audit activities.

121. The COA Audit findings and recommendations were not presented to the consultants for evaluation but management assures that the findings contained in the 2007 Annual Audit Report are taken into consideration and are being acted upon.


122. LCWD Financial Statements are prepared in accordance with the Philippine Accounting Standards issued by the Accounting Standard Council (ASC). These Financial Statements are prepared monthly and are audited annually.


123. The Financial Management System is not fully computerized. Only the billing and collection system are fully automated. This system is continuously being developed to produce the required financial reports and assures safeguarding of confidentiality, integrity and availability of the data.


124. LCWD generally follows sound financial management principles in its operations as indicated by the positive responses to the Financial Management Assessment Questionnaire.

125. COA indicated in its Annual Audit Report that the LCWD Financial Statements are free of material misstatements and are prepared in accordance with applicable laws, rules and regulations and in conformity with the generally accepted state accounting principles. The overstatement of the Allowance for Doubtful Accounts and the Investment and Marketable Securities Accounts and the understatement for depreciation and loans payable accounts are already being rectified by the water district.

126. At present, LCWD is conducting saturation drive as well as revenue generating initiatives (reduction of NRW) to answer the present needs and demands of its operations. The LCWD management is continuously identifying areas for reforms to be more adept to the needs of the consumers and the community on the whole. LCWD is targeting to increase its service coverage by 20% through the on going saturation drive and increasing the number of service connection by 7,000 to extend coverage to the unserved portion of the population. This will also translate to the maximization of its bulk water supply thereby increasing revenues and reducing operating costs.

127. The LCWD should consider the computerization of its financial management system in line with its future expansion program.



45

Annex 1: Financial Management Assessment Questionnaire - LCWD




The Legazpi Water District is a government-owned and controlled corporation which was established and formed in October 1980 bearing Conditional Certificate of Conformance number 173.


Yes. The water district has undertaken projects financed by LWUA from DANIDA under the following loans: LA 3-206A Php 4 Million (1992) LA 3-206B Php 45.5 Million (1992) LA 3-206SL Php 20.8 Million (1998) LA 3-466 Php 16.5 Million (1995)


Annual Audited Financial Statements required by the Commission on Audit The Auditing Code of the Philippines (P.D. 1445) Chapter 3. Sec. 121. Financial Reports and Statements - 1.) The financial reports shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. and 2.) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards. Monthly Data Sheets and Bacteriological Testing required by LWUA.


The LCWD Board is the governing body of the water district.


Yes.


2.1 Describe (proposed) project funds flow

The Project is likely to be structured as a sector loan whose proceeds will be



46

Topic Response Remarks arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.

disbursed in four batches over the period 2011 - 2016. The funds will be lent to GoP/DOF which in turn will re-lend them to LWUA for relending to the water districts.


Yes.


None.


Land Bank of the Philippines


No.


Yes.


Counterpart funds are provided from water district internally generated funds and through acquisition of asset and donations from the local government unit.


The water district releases the funds to the suppliers/ contractors following their usual payment procedures.


N/A

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and

N/A



47

Topic Response Remarks value the labor contribution?

3. Staffing


Yes. Please see Attached


Please see attached.


Yes.


Yes.


No.


Permanent appointment


None, all key positions are filled out.


None, will utilize existing staff.


On a need to need basis


Based on the career development plan.


4.1 Does the entity have an accounting system that allows for the proper

Yes.



48

Topic Response Remarks recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system?


Yes.


Yes, based on NGAS chart of accounts.


Yes


Yes.


Yes



Yes


Yes



49

Topic Response Remarks 4.9 Are bank reconciliations

prepared by someone other than those who make or approve payments?

Yes

Budgeting System


Yes


Yes


Yes


Approval for variations from the budget is required in advance.


The Budget Unit is responsible for the budget preparation.


Yes


Yes

Payments

4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii)

Yes



50

Topic Response Remarks Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?


Yes


Yes



Accrual


Financial Accounting Standards and International Accounting Standards


Yes


Yes


Yes

4.25 Are there written policies and procedures covering all routine financial management and related administrative activities?

Yes


Yes

4.27 Are manuals distributed to Yes



51

Topic Response Remarks appropriate personnel?

Cash and Bank


Leticia C. Molo – Cashier or Delia A. Lorenzana – Finance Div. Mgr. and Raul L. Chua – Gen.Manager or Barbie Vonetta L. Borromeo – Acctg. GM


Yes


Yes


Yes


Yes


Yes



Yes


Yes


Yes


Yes



None

4.39 Has the project established N/A



52

Topic Response Remarks controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities?


N/A


N/A

Other


Yes

5. Internal Audit


Yes


Must be a Certified Public Accountant


General Manager


Yes


Yes

6. External Audit


Yes, by the Commission on Audit


None, within the ensuing year


Yes



53

Topic Response Remarks 6.4 Were there any major

accountability issues brought out in the audit report of the past three years?

None


COA Auditors


Yes


COA Audit


None yet.



New Government Accounting Standards


Yes


Yes, financial statements are prepared every month


Yes

7.5 Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate

Yes



54

Topic Response Remarks systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?


Yes


Yes


Yes


The financial statements are prepared through spreadsheets.



No


N/A


N/A


N/A



55

Annex 1a: LEGAZPI CITY WATER DISTRICT ORGANIZATIONAL CHART

LEGASPI CITY WATER DISTRICTBITANO, LEGASPI CITY

2008 NEW ORGANIZATIONAL CHART

SENIOR INTERNALCONTROL OFFICER A

(SG-18)

SENIOR INTERNALCONTROL OFFICER B

(SG-16)

INTERNAL CONTROLOFFICER A

(SG-13)

EXECUTIVEASSISTANT B

(SG-17)

DRIVER(SG-4)

BOARD OFDIRECTORS

MINUTES & AGENDAOFFICER B

(SG-11)

ELECTRONICS COMM.SYSTEMS OPERATOR C

(SG-6)

ADMINISTRATIVEDIVISION

ADMINISTRATIVEDIVISION MANAGER C

(SG-22)

FINANCEDIVISION

ADMINISTRATIVEDIVISION MANAGER C

(SG-22)

TECHNICALDIVISION

TECHNICAL DIVISION MANAGER C

(SG-22)

COMMERCIALDIVISION

COMMERCIALDIVISION MANAGER C

(SG-22)

ADMINISTRATIVESERVICES CHIEF C

(SG-18)

SUPERVISING PROPERTY/ SUPPLY OFFICER

(SG-18)

INDUSTRIALRELATIONS

MGT OFFICER ASG-15)

PROCUREMENTOFFICER B

(SG-15)

PROPERTYOFFICER A

(SG-14)

INDUSTRIAL RELATIONS

MGT OFFICER B(SG-13)

PROCUREMENTANALYST A

(SG-13)

ADMINISTRATIONSERVICES ASST. A

(SG-12)

PROPERTY/SUPPLYOFFICER B

(SG-12)

WAREHOUSE/SHIPPINGOFFICER B

(SG-11)

INDUSTRIALRELATIONS

MGT OFFICER C(SG-11)

PROCUREMENTANALYST B

(SG-11)

INDUSTRIALRELATIONS

DEV’T ASSISTANT B(SG-8)

ADMINISTRATIONSERVICES

ASSISTANT C(SG-8)

INSTRUMENTTECHNICIAN A

(SG-8)

PROPERTYASSISTANT B

(SG-8)

DATAENCODER

(SG-7)

ELECTRONICS COMM.SYSTEMS

OPERATOR C(SG-6)

OFFICER EQUIP/TECH MECHANIC B

(SG-6)

UTILITY WORKER A

(SG-3)

SENIOR CORPORATE ACCOUNTANT A

(SG-18)

CORPORATEACCOUNTANT

(SG-15)

(2)SENIOR COPORATE

ACCOUNTANT C(SG-16)

CORPORATEACCOUNTANT

ANALYST(SG-13)

(2)SENIOR ACCOUNTING

PROCESSOR A(SG-12)

FINANCIAL PLANNINGSPECIALIST B

(SG-18)

CASHIER B(SG-14)

CASHIER C(SG-12)

(2)CASHIER A

(SG-16)

FINANCIALPLANNING

ASSISTANT A(SG-11)

SENIOR DATA ENCO-DER-CONTROLLER

(SG-11)

CASHIER D(SG-10)

(3)ACCOUNTING

PROCESSOR A(SG-8)

CLERKPROCESSOR B

(SG-6)

(4)CASHIERINGASSISTANT

(SG-8)

CORPORATE BUDGETASSISTANT

(SG-8)

SENIOR CUSTOMERSERVICE OFFICER

(SG-18)

(2)CUSTOMER SERVICE

OFFICER A(SG-16)

CUSTOMER SERVICEOFFICER B

(SG-14)

(2)CUSTOMER SERVICE

ASSISTANT A(SG-12)

(4)CUSTOMER SERVICE

ASSISTANT B(SG-10)

CUSTOMER SERVICEASSISTANT C

(SG-8)

CUSTOMER SERVICEASSISTANT D

(SG-6)

ELECTRONIC COMM.SYSTEMS

OPERATOR C(SG-6)

CUSTOMER SERVICEASSISTANT D

(SG-6)

DATA ENCODERCONTROLLER

(SG-10)

(3)CUSTOMER SERVICE

ASSISTANT B(SG-10)

(6)CUSTOMER SERVICE

ASSISTANT C(SG-8)

CUSTOMER SERVICEOFFICER B

(SG-14)

(2)CUSTOMER SERVICE

ASSISTANT A(SG-12)

SUPERVISING DATAENCODER

CONTROLLER(SG-13)

SENIOR CUSTOMERSERVICE SUPPORT

(SG-18)

(2)CUSTOMER SERVICE

OFFICER A(SG-16)

SUPERVISINGENGINEER A

(SG-18)

WATER UTILITIESDEV’T OFFICER A

(SG-16)

WATER UTILITIESDEV’T OFFICER B

(SG-14)

SENIOR WATER UTIL.MANAGEMENT

OFFICER(SG-18)

WATER UTIL. MGT./DEV’T OFFICER A

(SG-16)

WATER MAINTENANCEFOREMAN

(SG-14)

WATER UTILITIESDEV’T OFFICER A

(SG-14)

ENGINEER B(SG-12)

SENIOR LABORATORYTECHNICIAN

(SG-12)

PROJECT PLANNING& DEV’T OFFICER C

(SG-11)

(2)SENIOR WATER

MAINTENANCE MAN A(SG-12)

ENGINEERINGASSISTANT B

(SG-8)

DATAENCODER

(SG-7)

RECORDSASSISTANT

(SG-8)

WATER MAINTENANCEMAN B(SG-6)

LABORATORY TECHNICIAN C

(SG-6)

ELECTRONIC COMM.SYSTEMS

OPERATOR C(SG-6)

(10)WATER MAINTENANCE

MAN A(SG-7)

ENGINEERINGASSISTANT A

(SG-10)

(3)SENIOR WATER

MAINTENANCE MAN B(SG-10)

GENERALMANAGER C

(SG-26)

Annex 1b: LCWD FINANCIAL ORGANIZATIONAL CHART

LEGASPI CITY WATER DISTRICTBITANO, LEGASPI CITY

FUNCTION CHART

Boards of Directors(Policy Making)

Dr. Marcelda N. OrbitaSecretary

(Professional)

Mrs. Elsie S. InocandoMember(Woman)

Arch’t. Manulfo S. ImperialMember(Civic)

Atty. Arnaldo M. Espinas6th Member

(LWUA)

Dr. Kerwin T. SiaChairperson(Education)

Mr. Emmanuel B. SalazarVice Chair(Business)

Internal Audit

Raul L. ChuaGeneral Manager C

Personnel Services

Ms. Lourdes B. BienDivision Manager C

CUSTOMER ACCOUNTSSECTION

Recruitment and Training

Procurement

Consumers’ Request andComplaints Servicing

Service Connection Processing

Marketing and Promotion

Planning and Design

Water Supply / QualityMonitoring and Control

Production Operationsand Maintenance

Collection and Cash Management

Budget Management Control

Financial Planning

Construction

Water Systems Maintenance

Water Service Installation/Disconnection/Reopening

Property and SupplyManagement

Buildings, Grounds and GeneralFacilities Management

General Accounting

Cost Accounting

Meter Reading

Billing

ADMINISTRATIVE DIVISION FINANCE DIVISION

Della A. LorenzanaDivision Manager C

COMMERCIAL DIVISION TECHNICAL DIVISION

Ave Florinda BubanDivision Manager C

Barbie Venetta I. BorromeoDivision Manager C

GENERAL SERVICESSECTION

ACCOUNTING SECTION

CASH AND BUDGETMANAGEMENT SECTION

CUSTOMER SERVICE SECTIONHUMAN RESOURCE ANDADMINISTRATIVE SECTION

PLANNING/DESIGN/PRODUCTION SECTION

CONSTRUCTION ANDMAINTENANCE SECTION

*

*As of 01-01-2009



56

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF - LCWD LEGAZPI CITY WATER DISTRICT FINANCE DIVISION PERSONNEL

1. DELIA A. LORENZANA DIVISION MANAGER – C

• Job Description � Prepares work program, financial plan, targets and schedule of activities for

the Finance Division; Prepares also annual division’s budget; Reviews financial statements, financial reports and schedules & conducts financial analysis;

� Oversees, supervises, gives instruction, monitors and control of all specific functions of accounting transactions;

• Minimum Qualification

� Bachelor's Degree � 4 years of relevant experience � 24 hours of relevant training � CS Professional / 2nd Level Eligibility

2. MAUREEN E. MALAZARTE SENIOR CORPORATE ACCOUNTANT C

• Job Description � Prepares other financial reports and schedules; prepares quarterly financial

operating review/analyses and monthly comparative analysis of operation and does related works; analyzes/checks financial statements and other related financial/ management reports; gathers and evaluate cost data and audit information; reviews also financial position of various funds. Also prepares/process general payroll of employees and premium and loan remittances.

• Minimum Qualification

� Bachelor's Degree in Commerce/ Business Administration major in Accounting

� 1 year of relevant experience � 4 hours of relevant training � RA 1080

3. MICHAEL R. DAGSIL CORPORATE ACCOUNTANT (designate)

• Job Description � Handles accounting program; prepares/process vouchers; maintains all

financial books & registers; Prepares monthly financial statements and other financial reports & schedules; Also prepares/process payroll of office job contractors.

• Minimum Qualification � Bachelor's Degree in Commerce/ Business Administration major in

Accounting � 1 year of relevant experience � 4 hours of relevant training � RA 1080

ttt



57

4. JOSE A. BORROMEO, JR. FINANCIAL PLANNING ASSISTANT A

• Job Description � Assists in preparing of financial analyses, evaluation reports, budgets and

other financial forecasts; monitors and controls of approved annual budget and maintains budget registers; prepares/ processes regulatory requirements of government and other entities pertaining to payment of taxes and other financial concerns and does related works.

• Minimum Qualification � Completion of 2 years studies in College � 2 years of relevant experience � 8 hours of relevant training � CS Sub-professional / 1st Level Eligibility

5. LETICIA C. MOLO CASHIER A

• Job Description � Reviews/receives remittances from tellers; make daily bank deposits to

assigned fund accounts; prepares daily cash position reports; attend to various bank transactions; issues checks to payees; releases payroll of employees; recommends fund investments options and does related works.

• Minimum Qualification � Bachelor's Degree � 1 year of relevant experience � 4 hours of relevant training � CS Professional / 2nd Level Eligibility

6. CAROLYN C. HERNANDEZ SENIOR ACCOUNTING PROCESSOR A

• Job Description � Handles records of provident fund and petty cash fund; prepares/process

vouchers; maintains all financial books & subsidiary ledgers; Prepares monthly financial statements and other financial reports. Prepares BIR creditable tax certificates & schedules; and handles employees loan application.

• Minimum Qualification � Completion of 2 years studies in College � 2 years of relevant experience � 8 hours of relevant training � CS Sub-professional/ 1st Level Eligibility

7. AIDA E. BARCELONA SENIOR ACCOUNTING PROCESSOR A

• Job Description � Handles record of Accounts Receivables- Customers; maintains/monitors/

collection including customers’ advance payments; prepares required reports; reconciles also account receivable accounts to commercial division; assist in tellers and cashier’s work and other related works

• Minimum Qualification � Completion of 2 years studies in College � 2 years of relevant experience



58

� 8 hours of relevant training � CS Sub-professional/ 1st Level Eligibility

8. MANNY M. AYDALLA SENIOR ACCOUNTING PROCESSOR A

• Job Description � Handles records of guarantee deposits to other regulatory government

offices; maintain records and process refund of deposits; Prepares schedules of changes in customers deposit, electric consumption record & report & fuel consumption report & other; Handles also accountable forms (water bills and official receipts); Process/ files various documents, records & reports; Performs messengerial & other related clerical works


9. EMY L. PURA ACCOUNTING PROCESSOR A

• Job Description � Handles Materials & Supplies Inventory record; posts/encodes store

requisition slip (SRS), receiving report (RR), returned materials to suppliers (RMS) and retrieved materials (RM); monitors/ tallies/ print report, schedules and other periodic summaries; reconciles/ maintains/ updates stock records and prepares monthly stock status report; assists in tellers on due dates; and other related works

• Minimum Qualification � Completion of 2 years studies in College � 1 year of relevant experience � 4 hours of relevant training � CS Sub-professional/ 1st Level Eligibility

10. ANN MARGARET B. BARNUEVO ADMINISTRATION SERVICES ASSISTANT C

• Job Description � Handles records of other receivables from consumers; prepares, maintains/

updates and reconciles balances of customers accounts; prepares required reports and schedules; assists in checking/monitoring of customers advance payment and accountable forms; act as teller & other related works




59

11. MA LIBRADA A. NUÑEZ ADMINISTRATION SERVICES ASSISTANT C

• Job Description � Assist in handing/ checking of materials and supplies inventory record;

reviews/files accountable forms and other related documents; assist cashier; reconciles/tallies and prepares schedule of collection & deposit; and act as teller on due dates.


12. WENDY P. BAROLA CUSTOMER SERVICE ASSISTANT B

• Job Description � Supervise/monitors teller's works & workload; giving assistance &

instructions and monitoring accomplishment; assists to tellers in accepting payment from paying customers or as tellers' reliever including posting, verifying and tallying collections. Prepares records of daily collections and other reports;


13. ROSELL B. RED 14. SHIELA M. ALLORDE

CASHIERING ASSISTANT • Job Description

� Receives/accepts payments of all sort of collections; posts and balances daily collections; prepares, balances customers accounts and control; handles accountability records for Water Bills and Official Receipts; maintains daily tellers collection logbook and prepares daily collection summary report.




60

Leyte Metropolitan Water District


A. Introduction


129. The main instrument used to facilitate the financial management assessment was the questionnaire furnished by the ADB, which was discussed with the Leyte Metropolitan Water District General Manager, the Manager of the Accounting Unit and managers of other relevant units of the water district by the consultants in April 2009. Follow-up interviews were conducted by the consultants to better appreciate some of the responses and to fill up the unanswered items in the questionnaire. Most of the items in the questionnaires were filled up and consolidated by October 2009.

Findings



131. The Leyte Metropolitan Water District was established under the Local Water District Law by virtue of the Presidential Decree 198 which is known as The Provincial Water Utilities Act of 1973. All local water districts which were formed pursuant to the Local Water District Law are declared government owned and controlled corporations with original charter which fall under the jurisdiction of the Civil Service Commission and the Commission on Audit by the Supreme Court on its decision promulgated last September 13, 1991

132. The Leyte Metropolitan Water District has been in existence for more than 30 years and was formed from the then Leyte Metropolitan Water Supply System and the Tolosa Waterworks System through the Provincial Board Resolution No. 52 series of 1975, adopted on February 19, 1975. The copy of the resolution forming the water district was filed with the Secretary of the Local Water Utilities Administration and upon compliance with the requirements and policy objectives as contained in the provision of the law, the LMWD was issued its Conditional Certificate of Conformance (CCC) no.019 on October 6, 1975. Upon the filing of the resolution of forming the water district, the local government (LGU) concerned looses the ownership, supervision, and control or any right whatsoever over the district except as provided by the law.

133. The LMWD was formed for the purpose of acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of the district. They are also organized for the purpose of providing, maintaining and operating wastewater collection, treatment and disposal facilities and conducting such other functions and operations incidental to water resource development, utilization and disposal within the district, as are necessary or incidental to the aforementioned purposes.

134. The LMWD has the legal status to borrow money to raise funds to pay all cost of any public improvement or in the pursuit of its projects subject to limits prescribed under PD 198. It has implemented a number of loan projects with LWUA and JICA from 1977 to the 1995.



61

Total cost of improvement which started with a Comprehensive Expansion project in 1977 amounted to Php70 million. The WD is also a recipient of a grant fund for the from the Japan International Cooperation Agency amounting to Php750 million and a Presidential Calamity and Social fund of Php15 million for the rehabilitation works of the water system which was badly damaged by typhoon. At present, the LMWD has availed of Php70 million LWUA loan to finance the drilling and construction of two additional wells and two elevated reinforced concrete ground reservoir, including also the installation of transmission and distribution lines.

135. The policy making and all powers expressly granted by PD 198 as amended by PD 768 and PD 1479, necessary, implied from or incidental to the powers and purposes abovementioned are exercised by the Board of Directors composed of five (5) members, representing the professional, civic, business, women’s and education sectors. The incumbent Chairman of the Board, Mr. Teodoro M de Veyra Jr. comes from the business sector who will serve a six-year term of office starting January 2009 to December 2014.

136. Directly under the Board of Directors is the General Manager, Mr. Nestor Villasin, who is in-charge of the management and supervision of the detailed operation of the water district. The GM is supported by two Assistant General Managers, one for the Administrative and Finance and one for Operations.

137. The LMWD projects are endorsed by the Board and Management, for review and approval by LWUA.


138. Loan funds received by LMWD from either LWUA or other donor agencies are deposited to the Development Bank of the Philippines. The LMWD releases funds to suppliers and contractors through this account following their usual payment procedures


140. Counterpart funds are provided from LMWD ICG funds and WD Equity.


141. Under the existing structure, LMWD financial function is under the responsibility of the Finance Department. The Finance Department has the Accounting and Cash Management Divisions. See Annex 1a for the LMWD Organization Chart. LMWD’s total workforce is complemented by 364 employees, 156 are regular, 45 are casuals and 163 are contractuals or job orders.

142. The General Accounting Section comprises transaction processing, bookkeeping, and financial records, and cost accounting. This section is adequately staffed by eight qualified and experienced personnel, who are responsible for undertaking project finance and accounting. All key positions are filled out and most of the staff are holding permanent positions. Please see Annex 1b for Finance Organization Chart and Annex 1c for the Job Description of Project Accounting Staff.



62

143. Trainings and seminars are usually provided as part of their career development plan and to inform the accounting staff about changes in government policy such as the New Government Accounting System.


144. LMWD has an accounting system that allows proper recording of project financial transactions, including allocation of expenditures in accordance with respective components and sources of funds. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

145. The LMWD recognizes the use of the Imprest Fund System, the Voucher and Check Disbursement Systems for payments, which generates the Voucher Register and the Monthly Check Disbursement Records, respectively. Inventories are valued using the Moving Average method of valuation. Property, Plant and Equipment are valued at cost and depreciation is computed using the straight-line method with estimated useful lives ranging from 5 to 30 years. The residual value of the assets is computed at 10% of the asset cost.

146. The LMWD adopts the Billing and Collection System prescribed by the Commercial Practices System (CPS) established by LWUA for all water districts. This Manual contains also the Meter Reading Cycle, the process flow charts, and samples forms basically needed by the WD in the documentation of its day to day activities.

147. Project implementation will be handled by a project management unit organized specifically for the project. This unit will be composed of members from the Administrative, Finance, Commercial and Technical Division. The Project Management Unit basically coordinates and monitors project activities.

148. The General Accounting Section under the Finance Department handles cost allocation to the various funding sources. All the project accounts are also incorporated in the final account of LMWD.

149. The chart of accounts is adequate to account for all activities of LMWD. LMWD follows the standard chart of accounts for government agencies as contained in the NGAS and adopts the prescribed coding system.

150. LMWD does have a file management system and important papers are kept on a permanent basis while others (such as vouchers) are kept for a period of 10 years as per government rule (Chapter 2. Section 26. PD 1445 - Auditing Code of the Philippines).



b. Budgeting System

152. The LMWD budget is prepared by the Budget Unit under the Accounting Section and Management recommends the budget for approval to the Board of Directors.

153. The budget is prepared for all significant activities in sufficient detail for monitoring. It includes physical as well as financial targets for the year. A monthly variance analysis report is being prepared and submitted to the General Manager for proper notification




63

c. Payments

155. Invoice-processing and payroll preparation procedures are adequate to provide check and balance of the transactions. The district has a payroll program which is designed to capture the daily time record of the LMWD personnel through finger scan that generates the data needed to prepare the monthly payroll.


156. The basis of accounting is the accrual method consistent with the policies of the New Government Accounting System. LMWD conforms with the existing accounting and auditing rules and regulations.


1. Cash and Bank

158. The Approving authorities for bank transactions are the General Manager or the Assistant General Manager and the Cashier or Budget Officer.

159. All receipts are deposited intact on a timely basis and at present, banks and cash balances are reconciled on a monthly basis. All unusual items for reconciliation are duly supported by Journal Entry Vouchers and are reviewed and approved by a responsible official. LMWD has instituted adequate controls and procedures for recording receipts and payment.


160. The General Services Section under the Administrative Division is responsible for monitoring the LMWD fixed asset. Issuances of district’s properties to each personnel are covered with Property Accountability Receipt (PAR). An annual physical inventory of assets is performed and the results are reconciled with control accounts. Fixed assets are sufficiently covered by insurance.


161. The water districts are entities that perform project implementation together with LWUA. Periodic reporting and reconciliation of accounts between LWUA and the water districts are being performed. Flow of information and monitoring of project activities are being carried out through officers and staff assigned by LWUA in close coordination with the WD management and staff.

4. Internal audit

162. There is an Internal Audit Unit which provides check and control over the operations of the water district which is attached to the Office of the General Manager. This Unit is being handled by two personnel who conduct operations and technical auditing. The internal audit findings and recommendations are coursed through the Management to ensure implementation of proposed actions.

5. External Audit


164. COA Audit Findings and Recommendations for 2007 were not made available for evaluation. The COA had issued a qualified opinion on the 2007 audited financial



64

statements with the exception on the understatement of the Property, Plant and Equipment account by P247 million and consequently the understatement of the corresponding depreciation.


165. LMWD Financial Statements are prepared in accordance with the New Government Accounting System and with Philippine Accounting Standards issued by the Accounting Standard Council (ASC). These Financial Statements are prepared monthly and are audited annually.


166. The Financial Management System is not fully computerized. Only the billing and collection system are fully automated. This system is continuously being developed to produce the required financial reports and assures safeguarding of confidentiality, integrity and availability of the data.


167. LMWD generally follows sound financial management principles in its operations as indicated by the positive responses to the Financial Management Assessment Questionnaire.

168. The district should take action on the previous year’s COA audit findings and recommendations, and discontinue the granting of allowances to the board and management which were disallowed by the state auditors.

169. Other concerns involve the development of its computerization program, specifically on the billing and collection aspect of the district’s operation, in order to produce informative reports, and that balances be reconciled between the commercial and accounting records.



65

Annex 1: Financial Management Assessment Questionnaire - LMWD

Topic Respons e Remarks



The Leyte Metropolitan Water District is a government-owned and controlled corporation which was established and formed on October 6, 1975 bearing Conditional Certificate of Conformance number 019.


Yes. The water district has undertaken various projects financed by LWUA and JICA. LA 4-2167RL Php 64.9 Million (2004)


Annual Audited Financial Statements required by the Commission on Audit The Auditing Code of the Philippines (P.D. 1445) Chapter 3. Sec. 121. Financial Reports and Statements - 1.) The financial reports shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. and 2.) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards. Financial Reports, Monthly Data Sheets and Bacteriological Testing required by LWUA.


The LMWD Board is the governing body of the water district.


Yes.


2.1 Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB,

ADB to LWUA, then LWUA to Water District.



66

Topic Respons e Remarks government and other financiers.


To be determined once the project will be implemented


None.


It depends on the requirement


No past experience.


No past experience.


Counterpart funds are provided from water district internally generated funds and through acquisition of asset and donations from the local government unit.


The water district releases the funds to the suppliers/ contractors following their usual payment procedures.


N/A

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor contribution?

To be determined



67

Topic Respons e Remarks 3. Staffing


Yes. Attached is a copy of the existing organizational structure of the Finance Department, wherein the Accounting Division and General Accounting Section is attached.


The following are the staff complement of the General Accounting Section: Finance Dept Manager Chief Corporate Accountant B 2 Sr. Corp Acct. Analyst 2 Sr. Acctg. Processor A 1 Sr. Acctg. Processor B 2 Acctg. Processor A

The OIC Finance Dept Manager has been with the WD for more than 18 years. The Chief Corp Accnt is a CPA and has been in the government service for 20 yrs. All accounting staff are accounting graduates.


The existing accounting staff will work on the project


Yes.


Not yet.


To be determined


All key positions are filled out. The existing accounting staff will work on the project


None yet.


Infrequently


To be determined



68

Topic Respons e Remarks 4. Accounting Policies and

Procedures


Yes. All disbursements must be within the approved budget. The existing accounting system will be used for the project unless it will require another system.


Yes. All transactions are evaluated first by the Budget Division to determine funding source. Then it is forwarded to the office of the AGM for approval then to the accounting.


Yes, based on NGAS chart of accounts.


To be determined once the project is implemented.


Yes.


Yes



Yes. Finance Department is segregated to Accounting and Cash Management Division. The Accounting Division is subdivided into Accounting and Property and Supply



69

Topic Respons e Remarks 4.8 Are the functions of

ordering, receiving, accounting for, and paying for goods and services appropriately segregated?

Yes


Yes

Budgeting System


Yes


Yes, monthly progress reports are being prepared to monitor disbursements of funds.


Yes


Prior approval for variations from the BOD is required before disbursements.

Variances are subject to realignment.


The Budget Division is responsible for budget preparation in consultation with other departments. The BOD approves the budget after deliberations.


Yes, all department heads are required to participate on the preparation of their budget.


Yes.

Payments

4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from

Yes, all documents mentioned must be attached to the disbursements voucher for the processing of payment.



70

Topic Respons e Remarks issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?


Yes, this document is attached to the paid vouchers and filed.

Will implement stamping of vouchers


Yes, the personnel division and department heads counterchecks the list of personnel in the payroll.



The district uses the accrual basis of accounting.


Generally accepted accounting principles


Yes (future projects to be determined)


Yes.


Yes, follows COA rules and regulation on accounting procedures.


Yes in conformity with existing accounting rules and regulation

4.26 Do policies and procedures clearly define conflict of

Yes



71

Topic Respons e Remarks interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them?


Yes

Cash and Bank


General Manager or AGM and Cashier or Budget Officer.


Yes, as required by COA


Yes, the district has a system on collections and will be deposited the following day at DBP.


Yes, monthly bank reconciliations are required by COA.


Yes, reconciling items are issued with Journal Entry Vouchers.


Yes, all receipts during the day are deposited the following day.



Yes, issuance of district’s properties to its personnel are covered with Property Accountability Receipt (PAR)


Yes, they are kept up to date.


Yes


Yes, covered by the Government Service Insurance System.


4.38 Are there any other None



72

Topic Respons e Remarks regional offices or executing entities participating in implementation?


None


None.


None.

Other



5. Internal Audit


Yes


Qualifications complies with the Civil Service requirements


General Manager


Yes


Yes

6. External Audit


Yes, by the Commission on Audit

6.2 Are there any delays in audit of the entity? When are the audit reports

None, within the ensuing year Lack of resident auditor



73

Topic Respons e Remarks issued?


Yes, in accordance with GAAS in the Philippines.


None 2007 Audit Report was not presented


COA Auditors


The management is trying to implement all the recommendations made by COA


COA Audit


To be determined



GAAP


Yes


Yes, financial statements are prepared every month

7.4 Does the reporting system need to be adapted to report on the project

To be determined



74

Topic Respons e Remarks components?




To be determined.


Yes, particularly in management decision making.


Yes, this is done monthly


The financial statements are prepared through spreadsheets.

8. Information Sys tems


Not yet.


N/A


N/A


Yes.



75

Annex 1a: LEYTE METROPOLITAN WATER DISTRICT ORGANIZATIONAL CHART

SG11 ITEM # 205

SG27 NESTOR P. VILLASIN

SG 22-5 S. Boyano Item 2R

SG 15-1 M. Pascua Item 65R

SG18

SG15-8 U.J Gamba Item # 4 SG 16-1 I. Devora Item 97R

SG15 (Secretary B) Sg 16-1 JA Holares Item #98R

SG 7 Vacant Item 12

SG25 ITEM # 223

SG7

SG24 SG24

SG 24-2 P. Homeres Item # 117 SG 24 SG24 ITEM # 140

SG 22 ITEM # 213 Sg 22-1 L. Alve Item #124 SG 22-1 P. Quiñones Item # 3 SG 22-1 R. Urmeneta Item 193 SG22

SG 22 SG22 SG22 ITEM 141 SIMBULAN SG22 ITEM # 22 SG 22-1 I. Petilla Item # 47

SG6 ITEM # 29 LARAYOS SG 6-4 M.T. Cua item #57 SG14 ITEM # 228 SG19-1 J. Laudenio I tem # 194 SG18

Sg 16-1 P. Mendoza Item # 41 SG 4-8 A. Modesto Item 11 SG 19 Items 87,178,179 & 180 SG 19-1 M. Manocsoc Item#86

1 Sr. Customer Serv. Offcr.

SG18 ITEM # 163 SG18 SG6 ITEM # 111R SG10-1

SG 18-1 E. Lagramada Item 118 SG 20-1 R. Yanson Item # 125 SG 19-8 A. Baiño Item 30 SG6 ITEM # 112R

SG18 SG 19-2 A. Encina Item # 230 SG10-4 SG 19-8 R. Dacurro Item # 85 SG12 ITEM 190,191

SG19 ITEM # 23 GABRIANA SG10 ITEM#197,198

SG 15-1 P. Domingo I tem # 117 SG 8 SG12 ITEM 155 JAMORA SG10-1 ITEM 154 ORSAL SG 9 ITEM 116Maceda SG 4-8 V. Bacalla Item #13

SG12 SG 16 SG 1- Item 183 & 184 SG10-1 N. Salvacion Item 101

SG 19 SG 4-8 F. Teraza Item # 114

SG 6 ITEM # 217 SG12 ITEM 156 SG 18-4 N. Catindoy Item #227 SG 18 Vacant Item 54

SG10-8 items 160 T.Murillo,162 A. SG 11- Vacant Item # 105

SG10-1 Sg 5 Vacant Item # 109 SG18-1 C. Terrado Item #99

Sg 6-4 R.P. Tuazon I tem 120 SG10 ITEM 166,168,169,171 SG 9 ITEM # 200 J. Sarmiento SG10-8 Item # 88 & 92

Sg 6-1 A. Martinez Item # 122 SG 12 Vacant Item #127 SG9 ITEM 139 SGF16-1 N. Capate Item # 24 SG9-4 A. Coronado Item #83

SG8 ITEM # 38 , R.SORILA

1 Sr. Accounting Proc. A Sg10-4 Rog Tuscano Item # 95

Sg 12-1 G. Vergara Item # 131 SG 8 ITEM # 207 Sg 3-4 R. Silao item # 40 Sg 4-8 R. Gotico Item #14 SG 10-4 Items # 94, 96 & 108 SG 4-8 F. Daban Item # 6SG4 ITEM 62 CAJIPE Sg 14-6 E. Astilla item # 26

1 Sr. Accounting Proc. B SG 14

SG 3 Item # 221 Sg10-1 R. J. Yglesias Item # 129 SG7 ITEM 45 SG8 ITEM # 76 SG6 ITEM 189 R

SG 18-1 C. Llaneta Jr. Item #142 SG 8-8 C. Escarlan Item #28 SG6-4 ITEM 186,187,188

SG 10 M. Petilla Item No 176 SG 18-1 G. Calabia Item# 199R

SG 8-8

SG 16-4 V. Benson Item 144R SG10 ITEM # 75 PRIMO75R Primo SG8 Item # 59 SG 10-1 Item # 64 R SG6-1 ITEM 203Item# 203R SG10

SG 13-1 M. Doque Item 172 SG 18-1 J. Veloso Item #48 SG10-1 ITEM # 53R

SG8

SG 8 M. Tuazon Item No. 133 SG8 ITEM # 78 BACANI

SG6-8 G. Cajustin Item #82 SG 14-8 item 143 R. Cortez SG 14-1 E. Balasanos item #33 SG 6-4 R. Pingol Item #74 SG 8-1 J. Lantaca I tem # 36R SG 4-4 E. Catindoy Item 77 SG 5-4 D. Rogero item # 106 SG 5-8 Rol Tuscano Item 113

Sg6-4 Z. Montecillo Item #121 SG 4-8

SG4 ITEM # 55 OBERA SG 10 ITEM # 225

SG9 SG15-4 ITEM # 31 ADONA SG 4-8 E. Maceda Item # 15 SG5 ITEM 185

SG 16 Vacant Item # 137R SG 14-1 M.R. Tan Item #147 SG 4-8 S. Cortez Item 16 Sg 8-8 D. Quimbo Item # 35

SG6 SG8

SG 13 SG 3-4 R. Camalig item 37 SG5 ITEM # 229 SG10

SG 14- Vacant Item # 145 SG10-3 ITEM # 52 R

SG 3-4 SG 5-4 R. Quimbo Item # 104

SG 15-8 M. Zalavarria Item 135 Sg 8-8 E. Cesora Item # 34 SG10-1 ITEM # 56R SG10 Item # 91

SG14-1 G. Esporas Item136R SG 14-8 V. Peliño Item # 46

SG 8-4 A, Mercado Item #10 SG5-8 G. Sunayod Item # 102

SG 8 Item # 209

SG 9 ITEM # 219 SG 13-1 D. Bernabe Item # 42 SG 4-8 E. Araneta item 66

SG 3-8 P. Abibuag Item 20

Prepared by : As Confirmed by the Board: SG4-4 SG4-8 E. Gagarin Item 44

SG 6-1 R. Tolibas Item # 18R

SG4-4

LEGEND: SG 5-8 T. Macapanas Item 103

EXISTING FILLED - UP PLANTILLA POSITIONSReviewed by : SG8 ITEM # 60

EXISTING VACANT PLANTILLA POSITIONS

VACANT RECLASS SG 8-8 A. Nirza item # 61

VACANT RECATSG 8-4 V. Camilon Item # 50

Approved by :

2 Acctg Proc. A

SG 15 RF Borja Item # 202

SG12 -8 Items # 148 M. Chu,

I Cust. Service Asst A

1 Sr. Accounting Proc. A

1 Sr. Corp. Acct. AnalystItem # 173

Head/Supervising Cashier

1 Cashier B 3 Cust. Service Asst. A

SG 16-1 T. Pacula Item # 134

Z. Campos & R. Coral

UTILITY WORKER A

Supv.Prop./Supply Offcr.

1 Data Encoder Contlr

& R. Alizar Item 201

1 Sr, Cust. Service Officer A149 D. Auticio 150 C. Garcia

1 Customer Service Officer A

SG 12- Vacant Item #165

PROJECT

SG4 ITEM # 67

Llena, G.

1 Sr. Water Maint. Man B

1 Eng'g. Asst. A

SG 16-1 R. Novilla Item # 25

IMPLEMENTATION

1 Engineer A

1 Senior Engineer A

1 Draftsman ACUTTING AT TAPPING

Item146 M. Kintana

2 Customer Service Officer B

1 Water Maint. Man A Hydraulic Analyst

Water Maint. Man C

Water Maint. Man A

SG 14-8 Vacant Item #32

Utility Worker A

Data Encoder

POINT


Meter RepairTesting / Calibration

1 Light Equipt Oper.

TRANSMISSION MAINT.

Evaluation Section

(PMS) UNIT

SG 10 A. Dacut # 211

PROCUREMENT

Clerk Processor B Office Equipt. Mech. B

METER READING /

BILL TENDING SECTION

ITEM # 128 & 132

PROPERTY & SUPPLYSECTION

SG 10-8 A. Reli Item #174 3 Customer Service Asst A

SG 12- Item 151-152-153

TRANSPORT OPE. /

ITEM # 222

ITEM # 218

Transport Officer B

1 Auto Mechanic A

ITEM # 43R

SG 15-1 C. Abellar Item # 130

Sg 16-1 M.J. Cua Item # 126

COMP. & BEN./ EMPLOYEES

RELATION SECTION

Clerk Processor B

PERSONNEL SERVICES

1 House Keeping Servs.Asst.

SectionSG 14-1 E. Asis Item 21R

SG3-8 J. Susaya Item #123

1 Cashier B

1 Utility Worker A

5 Cust. Service Asst. B ITEM 73R & 19R


Item 175 Vacant

LEYTE METROPOLITAN WATER DISTRICT

APPROVED ORGANIZATIONAL STRUCTURE

Consultants

Añover 164 A. Verba 167 A.Peque1 Cashier A

4 Cust. Service Asst. B

1 Cust. Service Asst. A

Item # 170

AGM - FINANCE & ADMIN

COMMERCIAL SERVICES

Asst. Gen. Manager B

SG25 ITEM # 214

1 Secretary B

SECTION

DEPARTMENT1 Department Manager C

GEN. ACCOUNTING

DIVISION

SECTION Corp Budget Specialist B

SECTIONSECTION1 Sr. Customer Serv. Offcr.

Sr.Water Maint.Man B

1 Sr. Customer Serv. Offcr.

Item # 220

ITEM 159 JUDAYA


1 Wtr Res. Fac. Tender A

Driver

1 Wtr Res. Fac. Tender A

Ambao Reservior

1 Sr. Corp. Acct. Analyst

SG 22 ITEM # 210

SG 16 ITEM # 80

BLDG./ GROUNDS

Facilities Mngt.RECRUITMENT

ITEM # 81 DELA CRUZ

SG13-1 N. Docil Item #161R

GEN. SRVCS. DIV.1 Division Manager C

HUMAN RES. DIV.

Item # 216

1 Division Manager C1 Division Manager C 1 Division Manager

Cash Mgt. Section

ADMINISTRATIVE

ITEM # 215

DEPARTMENT1 Department Manager C

Indus. Rel. Dev. Officer A

Sr. Indus. Rel. Mgt. Officer A

Office Equipt. Mech. A

SG7 ITEM # 208

1 Department Manager C

FINANCE

DIVISION

DEPARTMENT

CASH MNGT.ACCTG. DIVISION

1 Qlty Ctrl/Assur Officer

1 Principal Engineer D


ITEM 100 DUMAGSA

2 Laboratory Works (RFP)

2 Plant Electrician B

Principal Engr. D

Operation Section

1 Driver2 Plant Equipt Optr E

Operation Section

4 Principal Engineer DClerk Processor B Operations Section1 Engineer A

1 Division Manager C 1 Division Manager

Rapid Filtration Plant

LINES MAINTENANCEWATER METER MAINT.

1 Driver

1 Principal Engr. D

BOD

1 Sr. Int. Control Off. B

AGM - OPERATION

Asst. Gen. Manager B

GENERAL MANAGER B

Min. / Agenda Officer B

OGM

Private Sec. B

Driver / Mech B

1 Sr. Int. Control Off. B

Tech. Asst. A

Civil Security B

Corporate Attorney A

ITEM # 206

Public Info. / Rel.Off. A

(General Manager B)

1 Procurement Asst. B

1 Procurement Off. B

MAINT. SECTION

Supervising Engineer A

Industrial Nurse

Welder ASG 8-1 R. Aragon Item #9

SECTION

SG 10 MSG Santos # 157

Indus. Rel. Mgt. Officer A

Indus. Rel. Mgt. Officer B

SG15-1 N. Agote Item # 119R

Indus. Rel. Mgt. Asst. A Bldg elec. B

Gen. Srvcs Chief A

BILLING / POSTING

Chief Corporate Accountant B Corporate Budget Officer C

SectionTRAINING SECTIONAPPOINTMENT &

PLANNING & DESIGN

NWSC / COMPLAINTS

CUSTOMER ACCOUNTS

ITEM # 158 CESAR

1 Division Manager C

MIS-CCT-DIVISION

SG 22 ITEM # 212

CUSTOMER SERVICES

DIVISION1 Division Manager C

1 Light Equipment Ope.

Division Manager C

RADIO COMMUNICTION

SECTION


1 Clerk Processor B

INFORMATION SYSTEM

Estimator / Programmer

1 Gen. Foreman

TACLOBAN CITYMgt./Info System Design

STATIONSpecialist A

1 Engineer A1 Senior Engineer A

1 Water Maint. Man A Water Maint. Man C

TEAM FOR AREA 1

1 Water Maint. Head

1 Sr. Instrument Tech.

1 Instrument Tech. B

SG 11-8 V. Paglinawan Item #72

2 Utility Worker A

1 Driver

1 Water Maint. Man C

1 Water Maint. Man C

Utap Reservior

ITEM 115

1 Water Res. Fac. Ten.A 1 Ind. Security Guard B

Water Maint. Man A

1 Wtr Res. Fac Tender A1 Sr. Water Maint. Man B

1 Data Encoder ContlrBaiño, J.

Gen. Foreman

TEAM FOR AREA V

TEAM FOR AREA IV SG 18-1 E. Latoja Item #231

1 Plant Helper B

Catilogo,Empillo,Amado

Empillo, E.

ITEM # 69R

ITEM # 89

1 Plant Equipt. Operator E

TEAM FOR AREA II

Utility Worker A

Bernido, C.

Intake Dam Tenders(Plant Equipt Optr E)

1 Draftsman A

ITEM # 93

( Records )

SG 3-4 R. Macanip Item 204

Quality Cntrl Division

Watershed Patrol


ITEM # 84

Sr. Water Utlties Devt Ofcr.

Driver

Lab RFPD

Vacant Item 192

1 Heavy Equipt. Operator

2 Plant Electrician B

Service Driver

PRODUCTION DEPT.1 Department Manager C

Watershed Patrol

Rapid Sand Filter Control

2 Plant Equipt Optr E

ITEM 181,182,

Plant Equipment


Old Treatment Plant

CONSTRUCTION1 Division Manager C

ITEM # 177

Prod Maint. DivisionProd.Oper.Division

1 Secretary BITEM # 224

SG22 G.Caidic ITEM # 226

DIVISION

1 Dept. Manager

MAINTENANCE

ENGINEERING DEPT.

ITEM # 7 Cañete,F.

DIVISION

SECTION

Section

1 Driver

1 Light Equipt. Ope.

NWSCSECTION

Planning & Design


1 Gen. Foreman

Sr. MIS Analyst

TINGIB Senior Data Encoder Controller

1 Water Maint. Man AComputer Operator

ITEM # 107 R

Elect. Comm. Sys. Optr B

STATIONR Canillas &J. Rosel

ITEM # 195,196,

SG 9 Item 8

Payloader Operator

1 Water Maint. Man COffice Equipt. Tech. A

1 Water Maint. Head

Sg 16 Vacant item #71

1 Driver Estimator

1 Engineer A

MAIN SECTION

1 Water Maint. Head

MAINT.OFTRANS./ DIST.

Backhoe operator

Basin Operator

4 Plant Eqpt Optr ESECTION

Chemical Mixing & Dosing

1Industrial Security Guard B

General Manager

Water Maint. Man A

R. Chavez


ALDIN C. SURPIA TERESA A. MONTUBIG

Member Member

1 Qlty. Control/ Ass. Insptr.

Water Maint. Man C

1 Utility Worker A

NESTOR P. VILLASIN ILUMINADO L. LANTAJO, JR.BRIAN SEVERO P. BLAS

Sr. Indus. Rel. Mgt. Officer A

Dept. Manager C - Admin. Srvcs.

1 Water Maint. Man A

ITEM # 63 BLENTE

PASTOR A. HOMERES

TEAM FOR AREA VI

Water Maint Man A

Water Maint. Man C


SG 3-4 A. Tabao Item 391 Water Maint Man BUtility Worker A

Vice - Chairman Secretary Treasurer

1 Cashier D

Customer Service Asst. B 1 Sr. Water Maint. Man B

Water Maint. Man C

EDNA A. LAGRAMADA

TEODORO M. de VEYRA, JR.Chairman

UNDER THE LARGE CATEGORY

1 Carpenter B

INVESTIGATION


Elect.Comm. Sys. Optr. B

DEVELOPMENT

CUSTOMER SALES

1 Cust. Service Officer B

N. KINTANA

ITEM # 27 TAN Item # 110R

Material Testing & Qlty.

1 Draftsman A

1 Cust. Service Officer B UNITR. Aniano1 Sr. Water Maint. Man B

Property Supply Off. A 1 Water Utilities Mgt. Offr. B

Control Assurance Sec.


Item# 138

1 Construction Foreman

Maintenance

Corrective Meter

Sr. Lab.Technician

2 Lab. Technician A

SG 16-8 M. Rosel Item # 58

1 Quality Cntrl/ Assur Ofcr1 Heavy Equipment Optr.

1 Driver

Sg 16-1 R. Mercado Item # 49

SG 4-4 R. Dael Item # 70

2 Plant Equipt. Ope. E

Water /Sewerage

3 Plant Helper B

MAINT. OF SERVICES1 Plant Equipt. Operator E

SG 10-8 Item # 90

1 Water Res. Fac. Ten. A

1 Water Res. Fac. Ten.A

TEAM FOR AREA III

SG10-1 A. Lacdao Item68R

1 Welder

ITEM # 79 Mabini

Water Maint. Man C

of Meterstands

EQUIPMENT SUPPORT

CREW

1 Storekeeper B

Relocation & Maint.

Maintenance Civil Maintenance

EMERGENCY REPAIR


SG 10 Vacant Item 51

Sr. Prop. Supply Officer A

Light Equipment Optr.

Cashiering Assistant



76

Annex 1b: LMWD FINANCIAL ORGANIZATIONAL CHART

LEYTE METROPOLITAN WATER DISTRICTAPPROVED ORGANIZATIONAL STRUCTUREUNDER THE LARGE CATEGORY

SG24-1

SG 22-1

SG 22-1

SG 16-1 P. Mendoza Item # 41

SG 20-1

SG 13-1 N. Docil Item # 161

SG 15-1

SG 19-1

SG 12-1

1 Sr. Accounting Proc. A SG 14-1 E. Asis Item 21R

1 Sr. Accounting Proc. B SG 14-1

SG 10 -1

SG 8-8 Item# 128 Campos,132 Coral

SG 8-1

SG 16-1 Item # 137R

SG 3-4 N. Kintana item # 138

SG 9-1 Item # 219

LEGEND:

EXISTING FILLED - UP PLANTILLA POSITIONS

EXISTING VACANT PLANTILLA POSITIONS

VACANT RECLASS

VACANT RECAT

Supv.Prop./Supply Offcr.

1 Cashier B

SG 16-1 MJ Cua Item126

SG 10-8 A. Reli Item # 174

Cashiering Assistant

ITEM # 133

1 Sr. Accounting Proc. A

Customer Service Asst. B

GEN. ACCOUNTING

SECTION

1 Sr. Corp. Acct. Analyst

Accountant BITEM # 125 YANSON

1 Sr. Corp. Acct. AnalystITEM # 202 R

Item # 173

Head/Supervising Cashier

ITEM # 216


Cash Mgt. Section

Corporate Budget Officer C

1 Department Manager C

ITEM # 124 ALVE

1 Division Manager

FINANCE

ITEM # 215

DEPARTMENT

CASH MANAGEMENTACCTG. DIVISION

1 Storekeeper B

Corp. Budget Specialist B

1 Cashier B

1 Cashier D ITEM # 176

ITEM # 43R

Property Supply Off. A

2 Acctg Proc. A

1 Cashier A

Chief Corporate

Utility Worker A

SG 15-1 C. Abellar item # 130

SG 12-1 G. Vergara item # 131

SG 10-1 R. J.Yglesias item # 129

Sr. Prop. Supply Officer A

Sg 18-4 T. Pacula Item # 134

ITEM # 127

PROPERTY & SUPPLYSECTION

SG14-1 G. Esporas item # 136R



77

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF - LMWD LEYTE METROPOLITAN WATER DISTRICT FINANCE DIVISION PERSONNEL

Department Manager Supervises accounts for and is responsible for the receipts, custody and disbursement of funds Masteral Degree

Supevises the release of salaries, wages & vouchers 4 years in position involving management

Verifies the posting of cash advances, disbursement, collections & deposit and supervision

Issues and signs checks in payment of obligations Career Service (Professional)

Initiates & coordinates budget preparation of all divisions Second Level Eligibility

Division Manager - Accounting Directs and supervises the basic efforts of the Accounting & coordinates with other Bachelor's degree

divisions on financial matters. 4 years relevant experience

Checks and reviews periodic financial reports & submits comprehensive 24 hours of relevant training

financial report to management Career Service (Professional)

Second Level Eligibility

Chief Corporate Accountant B Reviews the application of acctg & auditing rules & regulation Bachelor's degree in Commerce/Business

in all financial transactions. Administration

Prepares financial statements for presentation to BODs, mgt., 3 years relevant experience

statutory bodies. 16 hours of relevant training

Recommends system & procedures on accounting matters RA 1080

Ensures accuracy of information, content in financial reports

and compliance with corporate requirements.

Assist in formulating technical advices needed by mgt. & other

units on accounting matters.

Provides assistance in the formulation of budgetary & accounting policies.

Position Job Description Qualifications



78

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – LMWD (CONTINUED) LEYTE METROPOLITAN WATER DISTRICT FINANCE DIVISION PERSONNEL

Sr. Corporate Accounts Analyst Preparation of monthly, quarterly & annual income statement Bachelor's degree relevant to the job

balance sheet, cash flow statement & statement of changes in equity 1 year relevant experience

Preparation of non-cash journal entry voucher 4 hours relevant training

Checking & verification of cash receipts register & cash disbursement journal Career Service (Professional)

Posting of asset account transactions to subsidiary ledger & prepartion of Second Level Eligibility

corresponding schedule

Checks & verifies liquidation of cash advances

Checks & verifies posting of transactions to proper accounts

Sr. Accounting Processor A Prepares payroll of salaries & other benefits for regular & casual employees Completion of two years studies in college

Post to ledger cards loans & miscellaneous deductions of employees 2 years relevant experience

Checks & reviews computation of overtime payroll, job order salaries, 8 hours of relevant training

agency guard monthly renumerations & meal allowance of PNP personnel Career Service (Subprofessional)

Prepares certificate of employees net take home pay for loan purposes First Level Eligibility

Prepares summary of employees loan deductions for remittance to different

agencies such as DBP, LBP and Postal Bank

Sr. Accounting Processor B Posting of materials & supplies issued & receipts to supplies ledger card Completion of two years studies in college

Assigns cost & charging of accounts of supplies & materials issued 2 years relevant experience

Prepares summary of installed plumbing materials 8 hours of relevant training

Prepares summary of paid installed plumbing materials Career Service (Subprofessional)

Prepares materials & supplies journal First Level Eligibility

Supervising Property Supply Officer Directs, supervises the basic efforts of the property Bachelor's degree

section & evaluates the performance of subordinates 2 year relevant experience

Maintains accurate & up-to-date records of all water district 8 hours of relevant training

properties/equipment/tool & other assets Career Service (Professional)

Assumes the responsibility of safeguarding all water district's Second Level Eligibility

properties

Schedules inventory of all water district properties.

Property Supply Officer A Checks & receives delivered items from suppliers Bachelor's degree

Prepares receiving report for the received items from suppliers 1 year relevant experience

Prepares monthly report for materials & equipment received 4 hours of relevant training

from suppliers Career Service (Professional)




79

Annex 1c: JOB DESCRIPTION, ACCOUNTING STAFF – LMWD (CONTINUED) LEYTE METROPOLITAN WATER DISTRICT FINANCE DIVISION PERSONNEL

Division Manager C - Cash Management Supervises & coordinates the activities of the agency budget Bachelor's degree

Supervises & participates in the preparation of annual, supplemental, 4 years relevant experience

special deficiency budget of the agency in the review & consolidation 24 hours of relevant training

of budgets and build them up into budget proposals for the agency Career Service (Professional)

Prepares & consolidates supporting justification & explanations Second Level Eligibility

Acts financial adviser/officer of the district and advises the management

& other officials on budgeting, accounting & financial matters.

Monitor programs to assure their conformances will the approved

Supervises the distribution & allocation of funds to the different depts.

Cashier B Disburses salaries/wages, overtime, nightshift differential, per diems & other Bachelor's degree

employees' claims & benefits & accounts due to supplier of the district 1 year relevant experience

Receives payments from new applicants for water service connection and misc 4 hours of relevant training

payables of employee & issues corresponding receipts. Career Service (Professional)

Reconciles collection with issued receipts Second Level Eligibility

Reviews & keeps payroll, vouchers & checks paid

Notes running balances of monthly cash disbursement

Cashier D Receipt of water bill payments Bachelor's degree

Preparation of daily collection report & corresponding summary Career Service (Professional)


Cashiering Assistant Check paid water bills, daily collection report, recording, reconcile shortage/overage Completion of two years studies in college

Records cashier's cash collection summary deposit & official receipts 1 year relevant experience

Typing of checks 4 hours of relevant training

Filing disbursement voucher duplicate for the month Career Service (Subprofessional)

First Level Eligibility



80

City of Koronadal Water District


A. Introduction


171. The main instrument used to facilitate the financial management assessment was the questionnaire furnished by the ADB, which was discussed with the City of Koronadal Water District General Manager, the Manager of the Accounting Unit and managers of other relevant units of the water district by the consultants in April 2009. Follow-up interviews were conducted by the consultants to better appreciate some of the responses and to fill up the unanswered items in the questionnaire. Most of the items in the questionnaires were filled up and consolidated by October 2009.

Findings



173. The City of Koronadal Water District was established under the Local Water District Law by virtue of the Presidential Decree 198 which is known as The Provincial Water Utilities Act of 1973. All local water districts which were formed pursuant to the Local Water District Law are declared government owned and controlled corporations with original charter which fall under the jurisdiction of the Civil Service Commission and the Commission on Audit by the Supreme Court on its decision promulgated last September 13, 1991

174. The City of Koronadal Water District was established thru the Sangguniang Bayan Resolution No. 92 series of 1980 of the then Sangguniang Bayan of the Province of South Cotabato. The copy of the resolution forming the water district was filed with the Secretary of the Local Water Utilities Administration. Upon compliance with the requirements and policy objectives as contained in the provision of the law, the CKWD was issued its Conditional Certificate of Conformance (CCC) no.156 on July 17, 1981 by the LWUA. Upon the filing of the resolution of forming the water district, the local government (LGU) concerned looses the ownership, supervision, and control or any right whatsoever over the district except as provided by the law.

175. The CKWD was formed for the purpose of acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of the district. They are also organized for the purpose of providing, maintaining and operating wastewater collection, treatment and disposal facilities and conducting such other functions and operations incidental to water resource development, utilization and disposal within the district, as are necessary or incidental to the aforementioned purposes.

176. The CKWD has the legal status to borrow money to raise funds to pay all cost of any public improvement or in the pursuit of its projects subject to limits prescribed under PD 198. It has implemented a number of loan projects with LWUA from 1995 to the 2008 composing of four (4) regular loans and one (1) soft loan for the rehabilitation and improvement of its



81

existing water systems and for the development of new water sources, with a total amount of P29.6 million.

177. The policy making and all powers expressly granted by PD 198 as amended by PD 768 and PD 1479, necessary, implied from or incidental to the powers and purposes abovementioned are exercised by the Board of Directors composed of five (5) members, representing the professional, civic, business, women’s and education sectors. At present, the CKWD is under the direction of the LWUA Interim Board headed by Acting Administrator Daniel A. Landingin. LWUA has taken over the operations of the water district due to institutional problems.

178. The management and supervision of the CKWD operations is likewise under the Interim General Manager headed by Engr. Fred Fabellon. There are two sections directly under the supervision of the General Manager, namely: Administrative, Commercial and Finance Services Section and Operations and Technical Section.

179. The CKWD projects are endorsed by the Board and Management, for review and approval by LWUA.


180. Loan funds received by CKWD from either LWUA or other donor agencies are deposited to the Development Bank of the Philippines and releases fund to suppliers and contractors following their usual payment procedures


182. Counterpart funds are provided from CKWD ICG funds and WD Equity.


183. Under the existing structure, CKWD financial function is under the responsibility of the Senior Corporate Account Analyst under the Finance Unit. The Unit Head is duly supported by the Corporate Budget Analyst, Senior Accounting Processor and Accounting Processor staff. These positions are currently vacant and being proposed to be filled up by 2010. See Annex 1a for the CKWD Organization Chart. CKWD’s total workforce is composed of 54 employees, 18 are regular and 36 are job orders.

184. The Finance Unit handles transaction processing, bookkeeping, and financial records, and cost accounting. The Finance Unit is currently being filled up by qualified and experienced personnel, who will be responsible for undertaking project finance and accounting. Not all key positions are filled out and most of the staff are holding permanent positions. Please see Annex 1b – Job Description of Project Accounting Staff.

185. Training is usually provided as part of their career development plan and to inform the accounting staff about changes in government policy such as the New Government Accounting System.



82


186. CKWD has an accounting system that allows proper recording of project financial transactions, including allocation of expenditures in accordance with respective components and sources of funds. Controls are in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained.

187. The CKWD recognizes the use of the Imprest Fund System, the Voucher and Check Disbursement Systems for payments, which generates the Voucher Register and the Monthly Check Disbursement Records, respectively. Inventories are valued using the First In- First Out Method of valuation. Property, plant and Equipment are valued at cost and depreciation is computed using the straight-line method. Receivables are carried at net realizable value where in provision for bad debts is computed monthly using the aging of receivables method.

188. The CKWD adopts the Billing and Collection System prescribed by the Commercial Practices System (CPS) established by LWUA for all water districts. This Manual contains also the Meter Reading Cycle, the process flow charts, and samples forms basically needed by the WD in the documentation of its day to day activities.

189. Project implementation is being handled by a WDPMU organized specifically for the project. The PMU is composed of members from the Administrative, Finance, Commercial and Technical Division. The Project Management Unit or Committee basically coordinates and monitors project activities.

190. The chart of accounts is adequate to account for all activities of CKWD. CKWD follows the standard chart of accounts for government agencies as contained in the NGAS and adopts the prescribed coding system.

191. CKWD does have a file management system and important papers are kept on a permanent basis while others (such as vouchers) are kept for a period of 10 years as per government rule (Chapter 2. Section 26. PD 1445 - Auditing Code of the Philippines).



b. Budgeting System

193. The CKWD budget is prepared by the Management Committee composed of Unit Heads and the IGM recommends the budget for approval to the Board of Directors.

194. The budget is prepared for all significant activities in sufficient detail for monitoring. It includes physical as well as financial targets for the year. A monthly variance analysis report is being prepared and submitted to the General Manager for proper notification. Supplemental budgets are requested for unexpected disbursements.


c. Payments

196. Invoice-processing and payroll preparation procedures are adequate to provide check and balance of the transactions. Stamping of Invoices as “PAID” upon payment is still to be implemented.



83


197. The basis of accounting is the accrual method consistent with the policies of the New Government Accounting System. The water district also adheres to Modified Commercial Practices System prepared by LWUA to conform with the NGAS.


1. Cash and Bank

199. The Approving authorities for bank transactions are the Interim General Manager or the Customer Services Officer and Customer Services Assistant D or Customer Services Assistant A.

200. All receipts are deposited intact on a timely basis and at present, banks and cash balances are reconciled on a monthly basis. All unusual items for reconciliation are reviewed and approved by a responsible official. CKWD has instituted adequate controls and procedures for recording receipts and payment.


201. The Administrative Services Officer is responsible for monitoring the CKWD fixed assets. An annual physical inventory of assets is performed and the results are reconciled with control accounts. Fixed assets (vehicles) are sufficiently covered by insurance.


202. The water districts are entities that perform project implementation together with LWUA. Periodic reporting and reconciliation of accounts between LWUA and the water districts are being performed. Flow of information and monitoring of project activities are being carried out through officers and staff assigned by LWUA close coordination with WD management and staff.

4. Internal audit

203. At present, the WD has no Internal Audit Unit which shall provide check and control over the operations of the WD since the current volume of transaction is relatively small and manageable.

5. External Audit


205. Among the major findings contained in the 2007 Annual Audit Report are as follows:

206. The Commission on Audit had expressed no opinion on the 2007 and 2006 Financial Statements due to non-availability of records and pertinent documents brought about by management problem encountered by the water district in 2006. The 2007 financial statements include only the four-month transaction period from August to December.

207. The failure on the part of the COA auditors to vouch for the existence and accuracy of the Property, Plant and Equipment and Material Inventory due to absence of physical inventory reports is one of the reasons for rendering the no opinion audit report.

208. In addition, COA stated in its report that the regularity and legality of the financial transactions entered into by the District are open to questions pending the determination by



84

the Court of Law of the legitimacy of the Board of Directors who had given prior authorization.


209. CKWD Financial Statements are prepared in accordance with the Philippine Accounting Standards issued by the Accounting Standard Council (ASC). These Financial Statements are prepared monthly and are audited annually.


210. The Financial Management System is being done manually. This system is continuously being developed to produce the required financial reports and assures safeguarding of confidentiality, integrity and availability of the data.


211. CKWD generally follows sound financial management principles in its operations as indicated by the positive responses to the Financial Management Assessment Questionnaire.

212. The institutional problems within the CKWD in 2006 severely affected its ability to operate, notwithstanding the major findings contained in the 2007 and 2005 COA Audit Report, as mentioned above. These prompted LWUA to take-over the board and management of the water district to spare the WD from further deterioration. To date, the LWUA Interim Board and Management have restored order to the WD and have greatly contributed to the improved financial well being of the CKWD. The Interim Board and Management are also keen in helping the water district in rectifying all the previous audit findings and abide by the COA audit recommendations.

213. At present, CKWD is constructing its new administration building and is conducting revenue generating initiatives such as such on time payment incentives, metering program, leak repairs, detection of / campaign against illegal connection. The interim management is also in the process of reorganizing the water district and come up with a new organizational structure and fill up the needed vacant positions.

214. The Interim Board and Management should build the level of preparedness of the CKWD in order to properly turn-over the operations in the future. The IGM should be able to find an able and competent replacement for his position. The LWUA Interim Board and Management is enjoined to continuously find ways of improving the water supply capability of the water district as well as identify areas for reform in order to answer the present needs and demands of the water district’s operations, and be more adept to the needs of the consumers and the community on the whole.

215. In addition, the Interim Management should start the computerization of its billing and collection system, modernize its meter reading procedures and consider utilizing the services of banks or nearest payment centers to facilitate collection of water bills.



85

Annex 1: Financial Management Assessment Questionnaire - CKWD




The CKWD was issued its Conditional Certificate of Conformance No. 156 in 1981 by the LWUA as mandated by PD 198.


Yes with the assistance and supervision of LWUA. LWUA Loan 4-2509 SL, P5 M( 2008) LWUA Loan 4-2379 RL, P1 M(2007) LWUA Loan 4-1894 RL, P2.68 M (2003) LWUA Loan 3-786 RL, P5.8 M (1997) LWUA Loan 3-476 RL, P15.2 M (1995)


The Auditing Code of the Philippines (P.D. 1445) Chapter 3. Sec. 121. Financial Reports and Statements - 1.) The financial reports shall comply with the specific requirements of applicable laws and regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. and 2.) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards. LWUA requirements: Audited Financial Statements Monthly Bacteriological Test results Monthly Data Sheet


The CKWD has a five-member Board of Directors duly appointed by the Head ( Mayor) of the Local Government Unit (LGU). The professional, education, women’s, civic, and business sectors represents the composition of the Board.



2.1 Describe (proposed)



86

Topic Response Remarks project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.



No major problem.


Development Bank of the Philippines




Yes.


Counterpart funds are provided from (i) CKWD ICG funds, (ii) LGU and (iii) WD equity.


The WD releases the funds to the suppliers/ contractors following their usual payment procedures.


N/A

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and

N/A



87

Topic Response Remarks value the labor contribution?

3. Staffing


The existing WD staffing structure. The Corporate Account Sr. Analyst; Accounting Processor B and Accounting Processor B (Clerk). Other employees are on a job order basis.


1) Accounting Processor B Degree holder preferably Bachelor of Science in Commerce – Accounting. Computer literate and with knowledge on fundamentals of accounting. Responsibilities: Preparation and filing of disbursement vouchers 2) Sr. Accounting Processor B Degree holder preferably Bachelor of Science in Commerce – Accounting. Computer literate and with knowledge on fundamentals of accounting. Civil Service Eligible Responsibilities: Encoding/recording/maintaining books of accounts (SL/GL) 3) Corporate Account Analyst Accounting Graduate, with Civil Service Eligibility. Responsible for the preparation of financial statements 4) Sr. Corporate Account Analyst Accounting Graduate with relative experience, Civil Service Eligible Responsible for the monitoring of the financial aspects of the WD operation and supervision of the accounting staff



The finance and accounts staff is adequately qualified and experienced but still need additional trainings



88

Topic Response Remarks 3.5 Is the project accounts and

finance staff trained in ADB procedures?

No




Yes


Generally, no personnel transferred


Relative work experience.



Yes. The water district has an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components and sources of funds.




Yes. The chart of accounts is adequate to properly account for and report on project activities and disbursement categories. The water district follows the standard chart of accounts for government offices. It also adopted the



89

Topic Response Remarks prescribed coding system.


Yes.


Yes. The General Ledger and subsidiary ledgers are reconciled and in balance. Discrepancies if any, are adjusted accordingly through an approved Journal Voucher.


Preservation of vouchers for a period of ten (10) years. (Chapter 2. Section 26. PD 1445- Auditing Code of the Philippines.)








Budgeting System


Yes.


Yes.

4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required

Yes.



90

Topic Response Remarks for significant variations from the budget?


Yes.


The Management Committee (Unit heads) prepares the budget and recommended for approval by the General Manager. The Board approves the WD budget.


Yes.


Yes.

Payments

4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?

Yes. Requests are made by departments; Then processed by the purchaser; Recommendation for approval by the BAC; Approval by the General Manager and Actual purchases made by the Purchaser; Goods are checked by the storekeeper and inventories are counter checked by the Accounting Unit.


No

Accounting staff will adopt practice of stamping paid invoices.

4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly

Yes. Controls do exist for the preparation of the payroll under the Administration Unit.



91

Topic Response Remarks authorized?



The WD employs the accrual basis of accounting.


Unified Commercial Practices Systems and NGAS


Yes


Yes.


Yes.




Yes.

Cash and Bank


Engr. Fred F. Fabellon, Interim General Manager, or Rey J. Vargas, Customer Services Officer B and Barby Gail Luanne S. Mananes, Customer Services Assistant D (designated Cashier) or Jose Amormio T. Reyes, Customer Services Assistant A.

4.29 Does the organization maintain an adequate, up-to-date cashbook, recording receipts and

Yes. The WD maintains an adequate, up-to-date cashbook, recording receipts and payments.



92

Topic Response Remarks payments?




Yes. Bank and cash are reconciled on a monthly basis.


Yes. All unusual items on the bank reconciliation are reviewed and approved by a responsible official.


Yes. All receipts are deposited on a timely basis.



Yes.


Yes.


Yes, physical inventories of assets and stocks are performed annually.


Yes, assets are covered by insurance policies.



None.


N/A


N/A

.

4.41 Are periodic reconciliations N/A



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Topic Response Remarks performed among the different offices/implementing agencies?

Other


5. Internal Audit 5.1 Is there a internal audit

department in the entity? None.





6. External Audit


Yes. The auditing unit headed by an Auditor assigned by the Commission on Audit who is a certified public accountant.




Yes


Yes, but pertaining to previous management whose services were already terminated.


LWUA and COA Auditors.



94

Topic Response Remarks 6.6 Are there any

recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented?





Yes. The water district adheres to the Unified Commercial Practices Sytem and the New Government Accounting System.


Yes, financial statements are prepared for water districts





7.6 Does the project have established financial management reporting responsibilities that specify



95

Topic Response Remarks what reports are to be prepared, what they are to contain, and how they are to be used?


Monthly Financial Reports are submitted to management


Yes.


Prepared manually no automated accounting system yet.



No.


N/A


N/A


Yes



96

Annex 1a: CITY OF KORONADAL WATER DISTRICT ORGANIZATIONAL CHART



97

Annex 1b: JOB DESCRIPTION, ACCOUNTING STAFF - CKWD

A. Corporate Account Analyst :

Qualifications: Bachelor’s Degree Relevant to the Job, Career Service (Professional)

1. Consolidation and filing of all unit reports 2. Monitoring of Loans Payable / amortizations Monitoring of Loans Payable /

amortizations 3. Checking of all reports 4. Supervision B. Corporate Budget Analyst Qualifications: Bachelor’s Degree Relevant to the Job, Career Service (Professional) 1. Preparation/consolidation of annual budget 2. Monitoring of disbursements/expenses as against budget C. Sr. Accounting Processor B Qualifications: Completion of 2 years in college, 2 years relevant experience, 8 hours

relevant training, Career Service (Sub-professional) 1. Preparation of Journal Entry Vouchers for every transaction for

a. journal vouchers 2. Monitoring of employees’ advances and maintenance of advances books, includes

checking of liquidation (amount and supporting documents) 3. Preparation of Books of Accounts:

a. Check Disbursement Journal b. Check Register c. Journal Voucher Register

4. Preparation of Balance Sheet, Income Statement and Cash Flow 5. Bank reconciliation 6. Preparation of Monthly Data Sheet (for LWUA) D. Accounting Processor B

Qualifications: Completion of 2 years in college,Career Service (Sub-professional) 1. Check documents for voucher/payment 2. Preparation of withholding tax forms for suppliers 3. Preparation of Disbursement Vouchers – for approval 4. Filing of all documents 5. Preparation of Journal Entry Vouchers for every transaction for

a. check disbursements b. material issuances c. daily cash collection and deposits

6. Preparation of Supplies / Inventory Ledger Card 7. Maintenance of depreciation schedule 8. Preparation of Books of Accounts:

a. Billing Register b. Materials & Supplies Issue Journal c. Cash Receipts & Deposits Journal



98

9. Preparation of the general and subsidiary ledgers 10. Other tasks as assigned from time to time

Supplementary Appendix L


DETAILED PROJECT COSTS AND FINANCING PLANS FOR WATER DISTRICTS



1

Civil Works Equipment Land1 Source Development

a. Well Drilling/Development m 8 1,000,000 8,000.0 - - 2,400.0 5,600.0 8,000.0 857.1 7,142.9 Sub-Total 8,000.0 - - 2,400.0 5,600.0 8,000.0 857.1 7,142.9

2 Pumping Stationa. Pump House including pipings, ls 1 2,904,000 2,497.5 406.6 - 697.0 2,207.1 2,904.1 311.2 2,592.9

production meters, valves, hypochlorinators, etc

b. Electro-mechanical Equipment ls 1 12,200,000 3,050.0 9,150.0 - 8,296.0 3,904.0 12,200.0 1,307.1 10,892.9 including controls & accessories,riser pipes, transformers, powerline extension, etc.

c. Gen-set set 8 550,000 440.0 3,960.0 - 3,124.0 1,276.0 4,400.0 471.4 3,928.6 Sub-Total 5,987.5 13,516.6 - 12,117.0 7,387.1 19,504.1 2,089.7 17,414.4

3 Transmission Facilities ls 1 163,630,080 147,267.0 16,363.0 - 65,452.0 98,178.0 163,630.0 17,531.8 146,098.2 4 Storage Facilities ls 1 29,750,000 28,262.5 1,487.5 - 5,652.5 24,097.5 29,750.0 3,187.5 26,562.5 5 Distribution Facilities ls 1 24,241,140 21,817.0 2,424.0 - 9,696.3 14,544.7 24,241.0 2,597.3 21,643.8 6 NRW Reduction ls 1 12,000,000 7,200.0 4,800.0 - 3,840.0 8,160.0 12,000.0 1,285.7 10,714.3 7 Resettlement Cost ls 1 2,768,150 - 2,768.2 - 2,768.2 2,768.2 296.6 2,471.6 8 Land Acquisition lot 2,600 500 - 1,300.0 - 1,300.0 1,300.0 139.3 1,160.7

SUB-TOTAL 218,534.0 38,591.1 4,068.2 99,157.8 162,035.5 261,193.3 27,985.0 233,208.3 DETAILED ENGINEERING DESIGN 16,970.3 - - 5,091.1 11,879.2 16,970.3 1,818.2 15,152.1 CONSTRUCTION SUPERVISION 11,313.6 - - 1,131.4 10,182.2 11,313.6 1,212.2 10,101.4 PHYSICAL CONTINGENCIES - - - 4,924.0 20,991.9 25,915.9 2,776.7 23,139.2 PRICE CONTINGENCIES 26,125.3 4,084.8 430.6 2,692.0 30,692.0 33,383.9 3,576.9 29,807.1

G R A N D T O T A L 272,943.2 42,675.9 4,498.8 112,996.3 235,780.8 348,777.1 37,369.0 311,408.1

Taxes & Duties

Unit CostTotals (excl

tax)

La Union Metro Water DistrictDetailed Cost Estimates (Php'000)

Component FEC Local TotalSub-Total

Unit Quantity



2

Total

Amount % Amount % Amount % Amount % Amount

A. Investment Cost

Water Supply

Source Development 7,040 88% - 960 12% - 8,000

Pumping Station 17,164 88% - 2,340 12% - 19,504

Transmission Facilities 143,994 88% - 19,636 12% - 163,630

Storage Facilities 26,180 88% - 3,570 12% - 29,750

Distribution Facilities 21,332 88% - 2,909 12% - 24,241

NRW Reduction 10,560 88% - 1,440 12% - 12,000

Resettlement - - 2,768 100% - 2,768

Land Acquisition - - 1,300 100% - 1,300

Detailed Engineering Design 14,934 88% - 2,036 12% - 16,970

Construction Supervision 9,956 88% - 1,358 12% - 11,314

Physical Contingency 22,806 88% - 3,110 12% - 25,916

Price Contingency 29,378 88% - 4,006 12% - 33,384

Total Investment Cost 303,344 - 45,433 - 348,777

B. Interest During Construction - - - - -

TOTAL (A + B) 303,344 87% - 45,433 13% - 0.0% 348,777

La Union Metro Water District

Others (LGU, etc.)

Financing Plan (Php'000)

ADB Loan LWUA Loan WD Equity



3


a. Well Drilling/Development ls 1 23,460,000 23,460.0 - - 7,038.0 16,422.0 23,460.0 2,513.6 20,946.4 b. Surface Water / River Intake lot 0 0 - - - - - - - - c. Spring Intake & Sump Improvement lot 0 0 - - - - - - - -

Sub-Total 23,460.0 - - 7,038.0 16,422.0 23,460.0 2,513.6 20,946.4 2 Pumping Station

a. Pump House including pipings, ls 1 6,405,900 5,509.1 896.8 - 1,537.4 4,868.5 6,405.9 686.3 5,719.6 production meters, valves, hypochlorinators, etc

b. Electro-mechanical Equipment ls 1 20,529,160 5,132.3 15,396.8 - 13,959.8 6,569.3 20,529.1 2,199.5 18,329.6 including controls & accessories,riser pipes, transformers, powerline extension, etc.

c. Gen-set set 3 762,050 228.6 2,057.5 - 1,623.2 662.9 2,286.1 244.9 2,041.2 Sub-Total 10,870.0 18,351.1 - 17,120.4 12,100.7 29,221.1 3,130.8 26,090.3

3 Transmission Facilities ls 1 202,595,290 182,335.8 20,259.5 - 81,038.1 121,557.2 202,595.3 21,706.6 180,888.7 4 Storage Facilities ls 1 24,437,500 23,215.8 1,222.0 - 4,643.2 19,794.6 24,437.8 2,618.3 21,819.5 5 Service Connections no 2,616 1,950 3,060.6 2,040.5 - 1,632.4 3,468.7 5,101.1 546.5 4,554.6 6 Fire Protection Facilities no 1 1,083,480 541.8 541.8 - 379.3 704.3 1,083.6 116.1 967.5 7 Pressure Reducing Valves ls 1 4,572,350 640.1 3,932.2 - 2,743.4 1,828.9 4,572.3 489.9 4,082.4 8 NRW Reduction ls 1 21,027,021 12,616.1 8,410.9 - 6,728.7 14,298.3 21,027.0 2,252.9 18,774.1 9 Stored Materials ls 1 4,357,000 2,178.6 2,178.6 - 2,396.5 1,960.7 4,357.2 466.8 3,890.4

10 Resettlement Cost ls 1 4,082,650 - 4,082.7 - 4,082.7 4,082.7 437.4 3,645.3 11 Land Acquisition sqm 1,600 2,000 - 3,200.0 - 3,200.0 3,200.0 342.9 2,857.1

SUB-TOTAL 258,918.8 56,936.6 7,282.7 123,720.0 199,418.1 323,138.1 34,621.9 288,516.2 DETAILED ENGINEERING DESIGN 20,846.4 - - 6,253.9 14,592.5 20,846.4 2,233.5 18,612.9 CONSTRUCTION SUPERVISION 13,897.7 - - 1,389.8 12,507.9 13,897.7 1,489.0 12,408.7 PHYSICAL CONTINGENCIES - - - 6,070.5 25,879.2 31,949.6 3,423.2 28,526.5 PRICE CONTINGENCIES 31,810.2 6,167.5 788.9 3,466.5 38,761.0 42,227.5 4,524.4 37,703.1 TOTAL (Water Supply) 325,473.1 63,104.1 8,071.6 140,900.7 291,158.6 432,059.3 46,292.1 385,767.3

Taxes & Duties


tax)

Quezon Metro Water DistrictDetailed Cost Estimates (Php'000)


Unit Quantity



4

Total


A. Investment Cost

Water Supply

Source Development 20,645 88% - 2,815 12% - 23,460

Pumping Station 25,715 88% - 3,507 12% - 29,221



Service Connections 4,489 88% - 612 12% - 5,101

Fire Protection Facilities 953 88% - 130 12% - 1,083

Pressure Reducing Valves 4,115 90% - 457 10% - 4,572

NRW Reduction 18,504 88% - 2,523 12% - 21,027

Stored Materials 3,834 88% - 523 12% - 4,357

Resettlement - - 4,083 100% - 4,083



Construction Supervision 12,230 88% - 1,668 12% - 13,898




B. Interest During Construction 89,705 100% - - - 89,705

TOTAL (A + B) 463,599 - 58,164 - 521,764

Quezon Metro Water District

Others (LGU, etc.)

Financing Plan (Php'000)




5


a. Well Drilling/Development m 1 7,400,000 7,400.0 - - 2,220.0 5,180.0 7,400.0 792.9 6,607.1 b. Surface Water / River Intake lot 0 0 - - - - - - - - c. Spring Intake & Sump Improvement lot 0 0 - - - - - - - -

Sub-Total 7,400.0 - - 2,220.0 5,180.0 7,400.0 792.9 6,607.1 2 Pumping Station

a. Pump House including pipings, ls 1 200,000 172.0 28.0 - 48.0 152.0 200.0 21.4 178.6 production meters, valves, hypochlorinators, etc

b. Electro-mechanical Equipment ls 1 3,600,000 900.0 2,700.0 - 2,448.0 1,152.0 3,600.0 385.7 3,214.3 including controls & accessories,riser pipes, transformers, powerline extension, etc.

c. Gen-set set 0 0 - - - - - - - - Sub-Total 1,072.0 2,728.0 - 2,496.0 1,304.0 3,800.0 407.1 3,392.9

3 Transmission Facilities ls 1 37,000,000 33,300.0 3,700.0 - 14,800.0 22,200.0 37,000.0 3,964.3 33,035.7 4 Storage Facilities ls 1 10,000,000 9,500.0 500.0 - 1,900.0 8,100.0 10,000.0 1,071.4 8,928.6 5 Service Connections no 7,995 1,500 7,195.6 4,797.0 - 3,837.7 8,154.9 11,992.6 1,284.9 10,707.7 6 NRW Reduction ls 1 12,566,984 7,540.1 5,026.7 - 4,021.3 8,545.5 12,566.8 1,346.4 11,220.4 7 Land Acquisition lot 1 2,000,000 - 2,000.0 - 2,000.0 2,000.0 214.3 1,785.7

SUB-TOTAL 66,007.7 16,751.7 2,000.0 29,275.0 55,484.4 84,759.4 9,081.4 75,678.0 DETAILED ENGINEERING DESIGN 5,462.1 - - 1,638.6 3,823.5 5,462.1 585.2 4,876.9 CONSTRUCTION SUPERVISION 3,641.4 - - 364.1 3,277.3 3,641.4 390.2 3,251.3 PHYSICAL CONTINGENCIES - - - 1,591.4 6,784.5 8,375.9 897.4 7,478.5 PRICE CONTINGENCIES 7,881.7 1,757.8 209.9 795.6 9,932.7 10,728.3 1,149.5 9,578.9

G R A N D T O T A L 82,992.9 18,509.5 2,209.9 33,664.8 79,302.4 112,967.2 12,103.6 100,863.5

Totals (excl tax)

Legaspi City Water DistrictDetailed Cost Estimates (Php'000)


Unit QuantityTaxes & Duties

Unit Cost



6

Total


A. Investment Cost

Water Supply

Source Development 6,512 88% - 888 12% - 7,400

Pumping Station 3,344 88% - 456 12% - 3,800



Service Connections 10,553 88% - 1,439 12% - 11,993

NRW Reduction 11,059 88% - 1,508 12% - 12,567


Detailed Engineering Design 4,807 88% - 655 12% - 5,462

Construction Supervision 3,204 88% - 437 12% - 3,641





TOTAL (A + B) 97,651 86% - 15,316 14% - 0.0% 112,967

Others (LGU, etc.)

Legaspi City Water DistrictFinancing Plan (Php'000)




7

Civil Works Equipment Land1 Water Treatment Plant

a. Modular Treatment Facility ls 1 0 - - - - - - - - b. Conventional Treatment ls 1 0 - - - - - - - -

Sub-Total - - - - - - - - 2 Transmission Facilities ls 1 0 - - - - - - - - 3 NRW Reduction ls 1 114,861,628 68,916.9 45,944.6 - 36,755.7 78,105.8 114,861.5 12,306.6 102,554.9 4 Resettlement Cost ls 0 0 - - - - - - - 5 Land Acquisition lot 0 0 - - - - - - -

SUB-TOTAL 68,916.9 45,944.6 - 36,755.7 78,105.8 114,861.5 12,306.6 102,554.9 DETAILED ENGINEERING DESIGN - - - - - - - - CONSTRUCTION SUPERVISION 5,053.9 - - 505.4 4,548.5 5,053.9 541.5 4,512.4 PHYSICAL CONTINGENCIES - - - 3,675.6 7,810.6 11,486.2 1,230.7 10,255.5 PRICE CONTINGENCIES 10,350.1 6,428.6 - 1,187.2 17,198.7 18,385.9 1,969.9 16,416.0

G R A N D T O T A L 84,320.9 52,373.2 0.0 42,123.8 107,663.6 149,787.5 16,048.7 133,738.8

Taxes & Duties


tax)

Leyte Metro Water DistrictDetailed Cost Estimates (Php'000)


Unit Quantity



8

Total


A. Investment Cost

Water Supply

Water Treatment Plant - - - - -

Transmission Facilities - - - - -

NRW Reduction 101,078 88% - 13,783 12% - 114,862

Resettlement - - - - -

Land Acquisition - - - - -

Detailed Engineering Design - - - - -




Sub-Total 131,813 88% 0% 17,975 12% - 0% 149,788

B. Interest During Construction - 100% - - - -

TOTAL (A + B) 131,813 - 17,975 - 149,788

Others (LGU, etc.)

Leyte Metro Water DistrictFinancing Plan (Php'000)




9


a. Well Drilling/Development m 480 22,000 10,560.0 - - 3,168.0 7,392.0 10,560.0 1,131.4 9,428.6 b. Surface Water / River Intake lot 0 0 - - - - - - - - c. Spring Intake & Sump Improvement lot 0 0 - - - - - - - -

Sub-Total 10,560.0 - - 3,168.0 7,392.0 10,560.0 1,131.4 9,428.6 2 Pumping Station

a. Pump House including pipings, ls 1 2,678,400 2,303.6 375.0 - 642.9 2,035.7 2,678.6 287.0 2,391.6 production meters, valves, hypochlorinators, etc

b. Electro-mechanical Equipment ls 1 5,279,168 1,319.9 3,959.3 - 3,589.8 1,689.4 5,279.2 565.6 4,713.6 including controls & accessories,riser pipes, transformers, powerline extension, etc.

c. Gen-set set 4 1,233,252 493.4 4,439.7 - 3,502.4 1,430.7 4,933.1 528.5 4,404.6 Sub-Total 4,116.9 8,774.0 - 7,735.1 5,155.8 12,890.9 1,381.2 11,509.7

3 Transmission Facilities ls 1 50,687,184 45,618.6 5,068.7 - 20,274.9 30,412.4 50,687.3 5,430.8 45,256.5 4 Storage Facilities ls 1 46,741,200 44,404.1 2,337.0 - 8,880.7 37,860.4 46,741.1 5,008.0 41,733.1 5 Service Connections no 1,000 1,950 1,170.0 780.0 - 624.0 1,326.0 1,950.0 208.9 1,741.1 6 NRW Reduction ls 1 5,229,000 3,137.4 2,091.7 - 1,673.4 3,555.7 5,229.1 560.3 4,668.8 7 Land Acquisition lot 1 1,000,000 - 1,000.0 - 1,000.0 1,000.0 107.1 892.9

SUB-TOTAL 109,007.0 19,051.4 1,000.0 42,356.1 86,702.3 129,058.4 13,827.7 115,230.7 DETAILED ENGINEERING DESIGN 8,451.8 - - 2,535.5 5,916.3 8,451.8 905.6 7,546.3 CONSTRUCTION SUPERVISION 5,634.6 - - 563.5 5,071.1 5,634.6 603.7 5,030.9 PHYSICAL CONTINGENCIES - - - 2,442.6 10,413.2 12,855.8 1,377.4 11,478.4 PRICE CONTINGENCIES 14,381.5 2,225.9 116.8 1,176.9 17,049.3 18,226.2 1,952.8 16,273.4

G R A N D T O T A L 137,474.9 21,277.3 1,116.8 49,074.5 125,152.3 174,226.8 18,667.2 155,559.6

Totals (excl tax)

City of Koronadal Water DistrictDetailed Cost Estimates (Php'000)


Unit QuantityTaxes & Duties

Unit Cost



10

Total


A. Investment Cost

Water Supply

Source Development 9,293 88% - 1,267 12% - 10,560

Pumping Station 11,344 88% - 1,547 12% - 12,891



Service Connections 1,716 88% - 234 12% - 1,950

NRW Reduction 4,602 88% - 627 12% - 5,229








TOTAL (A + B) 152,439 87% - 21,787 13% - 0.0% 174,226

Others (LGU, etc.)

City of Koronadal Water DistrictFinancing Plan (Php'000)


Supplementary Appendix M


FINANCIAL ANALYSIS



1

La Union Metro Water DistrictFINANCIAL INTERNAL RATE OF RETURN(Php '000)

Revenues O&M Revenues O&M Revenues O&M RevenuesO&M

(+10%)Revenues

(-10%)O&M

Revenues (-10%)

O&M (+10%)

2011 21,242 (21,242) 21,242 (21,242) 23,366 (23,366) 21242 (21,242) 21,242 (21,242) 21,242 (21,242)

2012 - - 150,315 (150,315) - - 150,315 (150,315) - - 165,346 (165,346) - - 150315 (150,315) - - 150,315 (150,315) - - 165,346 (165,346)

2013 - - 143,836 (143,836) - - 143,836 (143,836) - - 158,220 (158,220) - - 143836 (143,836) - - 143,836 (143,836) - - 158,220 (158,220)

2014 19,445 2,227 - 17,218 - - - - 19,445 2,227 0 17,218 19,445 2,450 0 16,995 17,500 2,227 0 15,273 17,500 2,450 0 15,051

2015 36,159 11,161 - 24,998 19,445 2,227 - 17,218 36,159 11,161 0 24,998 36,159 12,278 0 23,882 32,543 11,161 0 21,382 32,543 12,278 0 20,266

2016 62,580 12,402 - 50,179 36,159 11,161 - 24,998 62,580 12,402 0 50,179 62,580 13,642 0 48,938 56,322 12,402 0 43,921 56,322 13,642 0 42,680

2017 62,166 16,912 45,254 62,580 12,402 - 50,179 62,166 16,912 0 45,254 62,166 18,604 0 43,562 55,949 16,912 0 39,037 55,949 18,604 0 37,346

2018 85,780 21,015 64,765 62,166 16,912 - 45,254 85,780 21,015 0 64,765 85,780 23,116 0 62,664 77,202 21,015 0 56,187 77,202 23,116 0 54,086

2019 85,711 25,403 60,308 85,780 21,015 - 64,765 85,711 25,403 0 60,308 85,711 27,943 0 57,768 77,140 25,403 0 51,737 77,140 27,943 0 49,197

2020 109,281 29,703 79,578 85,711 25,403 - 60,308 109,281 29,703 0 79,578 109,281 32,674 0 76,608 98,353 29,703 0 68,650 98,353 32,674 0 65,679

2021 108,185 34,165 74,020 109,281 29,703 - 79,578 108,185 34,165 74,020 108,185 37,581 70,604 97,366 34,165 63,202 97,366 37,581 0 59,785

2022 129,087 38,418 90,669 108,185 34,165 - 74,020 129,087 38,418 90,669 129,087 42,260 86,827 116,178 38,418 77,760 116,178 42,260 0 73,918

2023 115,441 42,568 72,873 129,087 38,418 - 90,669 115,441 42,568 72,873 115,441 46,825 68,616 103,897 42,568 61,329 103,897 46,825 0 57,072

2024 129,973 46,561 83,413 115,441 42,568 - 72,873 129,973 46,561 83,413 129,973 51,217 78,757 116,976 46,561 70,415 116,976 51,217 0 65,759

2025 116,260 47,766 68,494 129,973 46,561 - 83,413 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2026 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2027 116,260 47,766 13,517 54,978 116,260 47,766 13,517 54,978 116,260 47,766 16,220 52,274 116,260 52,543 13517 50,201 104,634 47,766 13,517 43,352 104,634 52,543 14,868 37,223

2028 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2029 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2030 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2031 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2032 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2033 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2034 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2035 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2036 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2037 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2038 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2039 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2040 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

2041 116,260 47,766 68,494 116,260 47,766 - 68,494 116,260 47,766 68,494 116,260 52,543 63,718 104,634 47,766 56,868 104,634 52,543 0 52,092

FIRR 15.33% FIRR 13.70% FIRR 14.15% FIRR 14.73% FIRR 13.39% FIRR 11.72%

NPV 323,187 NPV 276,179 NPV 295,523 NPV 291,557 NPV 231,998 NPV 175,110

Incremental

Base Hypothesis

Incremental IncrementalNet

Project Cost

NetIncrementalYear Incremental

Project Cost

Net Project

Cost (+10%)

NetProject Cost

Sensitivity Analyses1 Year Delay in

Operation Project Cost

Net Project

Cost (+10%)

Net



2

Quezon Metro Water DistrictFINANCIAL INTERNAL RATE OF RETURN(Php '000)


(+10%)Revenues

(-10%)O&M

Revenues (-10%)

O&M (+10%)

2011 39,428 (39,428) 39,428 (39,428) 43,370 (43,370) 39428 (39,428) 39,428 (39,428) 39,428 (39,428)

2012 - - 121,349 (121,349) - - 121,349 (121,349) - - 133,484 (133,484) - - 121349 (121,349) - - 121,349 (121,349) - - 133,484 (133,484)

2013 - - 229,054 (229,054) - - 229,054 (229,054) - - 251,960 (251,960) - - 229054 (229,054) - - 229,054 (229,054) - - 251,960 (251,960)

2014 63,778 14,706 - 49,073 - - - - 63,778 14,706 0 49,073 63,778 16,176 0 47,602 57,400 14,706 0 42,695 57,400 16,176 0 41,224

2015 55,134 19,687 35,446 63,778 14,706 - 49,073 55,134 19,687 0 35,446 55,134 21,656 0 33,478 49,620 19,687 0 29,933 49,620 21,656 0 27,964

2016 96,864 25,810 71,054 55,134 19,687 - 35,446 96,864 25,810 0 71,054 96,864 28,391 0 68,473 87,178 25,810 0 61,368 87,178 28,391 0 58,786

2017 86,717 32,990 53,727 96,864 25,810 - 71,054 86,717 32,990 0 53,727 86,717 36,289 0 50,428 78,045 32,990 0 45,055 78,045 36,289 0 41,756

2018 131,876 39,937 91,940 86,717 32,990 - 53,727 131,876 39,937 0 91,940 131,876 43,930 0 87,946 118,689 39,937 0 78,752 118,689 43,930 0 74,758

2019 120,770 46,736 74,035 131,876 39,937 - 91,940 120,770 46,736 0 74,035 120,770 51,409 0 69,361 108,693 46,736 0 61,958 108,693 51,409 0 57,284

2020 168,491 51,393 117,098 120,770 46,736 - 74,035 168,491 51,393 0 117,098 168,491 56,532 0 111,959 151,642 51,393 0 100,249 151,642 56,532 0 95,110

2021 154,803 59,191 95,612 168,491 51,393 - 117,098 154,803 59,191 95,612 154,803 65,111 89,693 139,323 59,191 80,132 139,323 65,111 0 74,212

2022 194,169 64,613 129,556 154,803 59,191 - 95,612 194,169 64,613 129,556 194,169 71,074 123,095 174,752 64,613 110,139 174,752 71,074 0 103,678

2023 163,138 69,865 93,272 194,169 64,613 - 129,556 163,138 69,865 93,272 163,138 76,852 86,286 146,824 69,865 76,959 146,824 76,852 0 69,972

2024 215,201 74,945 140,256 163,138 69,865 - 93,272 215,201 74,945 140,256 215,201 82,439 132,762 193,681 74,945 118,736 193,681 82,439 0 111,242

2025 183,117 79,846 103,271 215,201 74,945 - 140,256 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2026 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2027 183,117 79,846 20,392 82,879 183,117 79,846 20,392 82,879 183,117 79,846 24,470 78,801 183,117 87,831 20392 74,895 164,805 79,846 20,392 64,567 164,805 87,831 22,431 54,544

2028 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2029 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2030 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2031 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2032 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2033 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2034 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2035 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2036 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2037 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2038 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2039 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2040 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974

2041 183,117 79,846 103,271 183,117 79,846 - 103,271 183,117 79,846 103,271 183,117 87,831 95,286 164,805 79,846 84,959 164,805 87,831 0 76,974



Incremental

Base Hypothesis


Project Cost


Project Cost

Net Project

Cost (+10%)

NetProject Cost



Net Project

Cost (+10%)

Net



3

Legaspi City Water DistrictFINANCIAL INTERNAL RATE OF RETURN(Php '000)


(+10%)Revenues

(-10%)O&M

Revenues (-10%)

O&M (+10%)

2011 15,326 (15,326) 15,326 (15,326) 16,858 (16,858) 15326 (15,326) 15,326 (15,326) 15,326 (15,326)

2012 - - 44,585 (44,585) - - 44,585 (44,585) - - 49,043 (49,043) - - 44585 (44,585) - - 44,585 (44,585) - - 49,043 (49,043)

2013 - - 42,329 (42,329) - - 42,329 (42,329) - - 46,561 (46,561) - - 42329 (42,329) - - 42,329 (42,329) - - 46,561 (46,561)

2014 17,769 3,243 14,526 - - - - 17,769 3,243 0 14,526 17,769 3,568 0 14,202 15,992 3,243 0 12,749 15,992 3,568 0 12,425

2015 9,118 6,487 2,631 17,769 3,243 - 14,526 9,118 6,487 0 2,631 9,118 7,135 0 1,982 8,206 6,487 0 1,719 8,206 7,135 0 1,070

2016 36,961 9,075 27,886 9,118 6,487 - 2,631 36,961 9,075 0 27,886 36,961 9,983 0 26,979 33,265 9,075 0 24,190 33,265 9,983 0 23,282

2017 24,312 11,639 12,673 36,961 9,075 - 27,886 24,312 11,639 0 12,673 24,312 12,803 0 11,509 21,881 11,639 0 10,242 21,881 12,803 0 9,078

2018 49,359 14,179 35,180 24,312 11,639 - 12,673 49,359 14,179 0 35,180 49,359 15,597 0 33,762 44,423 14,179 0 30,244 44,423 15,597 0 28,826

2019 35,949 16,682 19,267 49,359 14,179 - 35,180 35,949 16,682 0 19,267 35,949 18,350 0 17,599 32,354 16,682 0 15,672 32,354 18,350 0 14,004

2020 61,785 19,186 42,599 35,949 16,682 - 19,267 61,785 19,186 0 42,599 61,785 21,105 0 40,680 55,607 19,186 0 36,420 55,607 21,105 0 34,502

2021 47,712 21,591 26,120 61,785 19,186 - 42,599 47,712 21,591 26,120 47,712 23,751 23,961 42,940 21,591 21,349 42,940 23,751 0 19,190

2022 71,227 23,991 47,236 47,712 21,591 - 26,120 71,227 23,991 47,236 71,227 26,390 44,837 64,105 23,991 40,113 64,105 26,390 0 37,714

2023 50,844 26,346 24,498 71,227 23,991 - 47,236 50,844 26,346 24,498 50,844 28,981 21,863 45,760 26,346 19,413 45,760 28,981 0 16,779

2024 71,688 28,668 43,019 50,844 26,346 - 24,498 71,688 28,668 43,019 71,688 31,535 40,152 64,519 28,668 35,850 64,519 31,535 0 32,984

2025 51,023 30,981 20,042 71,688 28,668 - 43,019 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2026 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2027 51,023 30,981 7,525 12,517 51,023 30,981 7,525 12,517 51,023 30,981 9,030 11,012 51,023 34,079 7525 9,419 45,921 30,981 7,525 7,415 45,921 34,079 8,278 3,564

2028 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2029 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2030 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2031 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2032 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2033 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2034 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2035 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2036 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2037 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2038 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2039 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2040 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842

2041 51,023 30,981 20,042 51,023 30,981 - 20,042 51,023 30,981 20,042 51,023 34,079 16,944 45,921 30,981 14,940 45,921 34,079 0 11,842



Net Project

Cost (+10%)

NetYear Incremental

Project Cost

Net Project

Cost (+10%)

NetProject Cost



Incremental

Base Hypothesis


Project Cost

NetIncremental



4

Leyte Metro Water DistrictFINANCIAL INTERNAL RATE OF RETURN(Php '000)


(+10%)Revenues

(-10%)O&M

Revenues (-10%)

O&M (+10%)

2011 31,081 (31,081) 31,081 (31,081) 34,189 (34,189) 31081 (31,081) 31,081 (31,081) 31,081 (31,081)

2012 - - 23,310 (23,310) - - 23,310 (23,310) - - 25,641 (25,641) - - 23310 (23,310) - - 23,310 (23,310) - - 25,641 (25,641)

2013 - - 31,436 (31,436) - - 31,436 (31,436) - - 34,579 (34,579) - - 31436 (31,436) - - 31,436 (31,436) - - 34,579 (34,579)

2014 36,592 6,830 24,900 4,862 - - 24,900 (24,900) 36,592 6,830 27,390 2,372 36,592 7,513 24900 4,179 32,933 6,830 24,900 1,203 32,933 7,513 27,390 (1,970)

2015 18,213 7,484 25,747 (15,018) 36,592 6,830 25,747 4,015 18,213 7,484 28,321 (17,593) 18,213 8,232 25747 (15,766) 16,391 7,484 25,747 (16,839) 16,391 8,232 28,321 (20,162)

2016 40,194 7,565 13,315 19,314 18,213 7,484 13,315 (2,587) 40,194 7,565 14,647 17,982 40,194 8,321 13315 18,557 36,174 7,565 13,315 15,295 36,174 8,321 14,647 13,207

2017 21,551 6,949 14,602 40,194 7,565 - 32,629 21,551 6,949 0 14,602 21,551 7,644 0 13,907 19,396 6,949 0 12,447 19,396 7,644 0 11,752

2018 41,330 6,303 35,026 21,551 6,949 - 14,602 41,330 6,303 0 35,026 41,330 6,934 0 34,396 37,197 6,303 0 30,893 37,197 6,934 0 30,263

2019 21,709 5,625 16,084 41,330 6,303 - 35,026 21,709 5,625 0 16,084 21,709 6,187 0 15,521 19,538 5,625 0 13,913 19,538 6,187 0 13,350

2020 41,632 4,913 36,719 21,709 5,625 - 16,084 41,632 4,913 0 36,719 41,632 5,404 0 36,228 37,468 4,913 0 32,556 37,468 5,404 0 32,064

2021 39,839 4,165 35,674 41,632 4,913 - 36,719 39,839 4,165 35,674 39,839 4,581 35,257 35,855 4,165 31,690 35,855 4,581 0 31,274

2022 59,133 3,380 55,753 39,839 4,165 - 35,674 59,133 3,380 55,753 59,133 3,718 55,416 53,220 3,380 49,840 53,220 3,718 0 49,502

2023 56,587 2,555 54,032 59,133 3,380 - 55,753 56,587 2,555 54,032 56,587 2,811 53,776 50,928 2,555 48,373 50,928 2,811 0 48,117

2024 75,313 1,689 73,624 56,587 2,555 - 54,032 75,313 1,689 73,624 75,313 1,858 73,455 67,782 1,689 66,093 67,782 1,858 0 65,924

2025 72,070 780 71,290 75,313 1,689 - 73,624 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2026 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2027 72,070 780 0 71,290 72,070 780 - 71,290 72,070 780 0 71,290 72,070 858 0 71,212 64,863 780 0 64,083 64,863 858 0 64,005

2028 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2029 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2030 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2031 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2032 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2033 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2034 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2035 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2036 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2037 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2038 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2039 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2040 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005

2041 72,070 780 71,290 72,070 780 - 71,290 72,070 780 71,290 72,070 858 71,212 64,863 780 64,083 64,863 858 0 64,005



Incremental

Base Hypothesis


Project Cost


Project Cost

Net Project

Cost (+10%)

NetProject Cost



Net Project

Cost (+10%)

Net



5

City of Koronadal Water DistrictFINANCIAL INTERNAL RATE OF RETURN(Php '000)


(+10%)Revenues

(-10%)O&M

Revenues (-10%)

O&M (+10%)

2011 9,502 (9,502) 9,502 (9,502) 10,452 (10,452) 9502 (9,502) 9,502 (9,502) 9,502 (9,502)

2012 - - 58,116 (58,116) - - 58,116 (58,116) - - 63,927 (63,927) - - 58116 (58,116) - - 58,116 (58,116) - - 63,927 (63,927)

2013 - - 88,383 (88,383) - - 88,383 (88,383) - - 97,221 (97,221) - - 88383 (88,383) - - 88,383 (88,383) - - 97,221 (97,221)

2014 24,498 16,001 8,497 - - - - 24,498 16,001 0 8,497 24,498 17,601 0 6,897 22,048 16,001 0 6,048 22,048 17,601 0 4,447

2015 31,939 19,695 12,244 24,498 16,001 - 8,497 31,939 19,695 0 12,244 31,939 21,665 0 10,274 28,745 19,695 0 9,050 28,745 21,665 0 7,080

2016 46,382 20,107 26,275 31,939 19,695 - 12,244 46,382 20,107 0 26,275 46,382 22,117 0 24,264 41,744 20,107 0 21,637 41,744 22,117 0 19,626

2017 41,382 20,518 20,864 46,382 20,107 - 26,275 41,382 20,518 0 20,864 41,382 22,570 0 18,812 37,244 20,518 0 16,726 37,244 22,570 0 14,674

2018 53,376 20,999 32,377 41,382 20,518 - 20,864 53,376 20,999 0 32,377 53,376 23,099 0 30,277 48,039 20,999 0 27,039 48,039 23,099 0 24,939

2019 48,581 21,545 27,035 53,376 20,999 - 32,377 48,581 21,545 0 27,035 48,581 23,700 0 24,881 43,723 21,545 0 22,177 43,723 23,700 0 20,023

2020 61,491 22,142 39,349 48,581 21,545 - 27,035 61,491 22,142 0 39,349 61,491 24,356 0 37,135 55,342 22,142 0 33,200 55,342 24,356 0 30,986

2021 56,661 22,734 33,927 61,491 22,142 - 39,349 56,661 22,734 33,927 56,661 25,007 31,654 50,995 22,734 28,261 50,995 25,007 0 25,988

2022 68,198 23,397 44,801 56,661 22,734 - 33,927 68,198 23,397 44,801 68,198 25,736 42,462 61,378 23,397 37,982 61,378 25,736 0 35,642

2023 59,122 24,084 35,037 68,198 23,397 - 44,801 59,122 24,084 35,037 59,122 26,493 32,629 53,209 24,084 29,125 53,209 26,493 0 26,717

2024 68,708 24,873 43,835 59,122 24,084 - 35,037 68,708 24,873 43,835 68,708 27,360 41,348 61,837 24,873 36,964 61,837 27,360 0 34,477

2025 59,531 25,633 33,898 68,708 24,873 - 43,835 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2026 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2027 59,531 25,633 9,554 24,344 59,531 25,633 9,554 24,344 59,531 25,633 11,465 22,433 59,531 28,197 9554 21,781 53,578 25,633 9,554 18,391 53,578 28,197 10,509 14,872

2028 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2029 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2030 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2031 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2032 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2033 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2034 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2035 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2036 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2037 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2038 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2039 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2040 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382

2041 59,531 25,633 33,898 59,531 25,633 - 33,898 59,531 25,633 33,898 59,531 28,197 31,335 53,578 25,633 27,945 53,578 28,197 0 25,382



Net Project

Cost (+10%)

NetYear Incremental

Project Cost

Net Project

Cost (+10%)

NetProject Cost



Incremental

Base Hypothesis


Project Cost

NetIncremental

Supplementary Appendix N


FINANCIAL HISTORY OF WATER DISTRICTS



1

METROPOLITAN LA UNION WATER DISTRICTIncome Statement, 2004-2008 (in Php)

2004 2005 2006 2007 2008Operating Revenues

Water Sales 51,976,428.00 54,199,198.00 58,053,506.84 67,373,749.99 65,459,645.33Other Operating Revenues 3,402,237.00 3,843,841.00 3,093,461.98 4,370,761.85 4,052,006.76Total Operating Revenues 55,378,665.00 58,043,039.00 61,146,968.82 71,744,511.84 69,511,652.09

Operating ExpensesPayroll 12,888,991.00 13,720,223.00 13,875,643.80 13,620,940.65 13,145,558.88Power Cost 13,786,019.00 17,174,998.00 20,285,922.13 19,991,925.54 16,653,934.43Chemicals 881,527.00 681,726.00 1,496,077.81 1,664,292.25 956,481.36Maintenance 5,976,399.92 5,409,000.00 4,285,596.75 5,670,721.83 6,976,918.88Other O&M 7,435,000.08 7,102,449.00 9,510,738.45 9,988,521.69 10,076,644.26Franchise TaxBad Debts 274,373.00 285,411.00 307,502.09 357,027.00 338,060.61Depreciation 1,369,337.00 1,435,712.00 1,774,361.11 1,836,668.98 4,218,096.60Total Operating Expenses 42,611,647.00 45,809,519.00 51,535,842.14 53,130,097.94 52,365,695.02

Net Operating Income 12,767,018.00 12,233,520.00 9,611,126.68 18,614,413.90 17,145,957.07Less: Interest Expense 3,076,061.00 1,116,797.00 101,527.00 30,053.64 0.00Net Income 9,690,957.00 11,116,723.00 9,509,599.68 18,584,360.26 17,145,957.07



2

METROPOLITAN LA UNION WATER DISTRICTCash Flow Statement, 2005-2008 (in Php)

2004 2005 2006 2007 2008Sources of Cash

Collection of Revenues - CY 54,389,285.86 56,884,761.46 66,783,962.36 65,403,335.73Collection of Receivables - PYOther Receipts 4,853,002.96 6,193,569.22 5,711,906.24 5,713,054.98 Total Sources of Cash 59,242,288.82 63,078,330.68 72,495,868.60 71,116,390.71

Uses of CashCapital Expenditures Payment of Cola Diffential 1,420,350.00 6,147,340.00 12,591,450.37 17,048,242.25 O & M and Working Capital 55,236,015.29 65,587,170.64 60,419,112.44 54,897,577.34 Reserves 0.00 0.00 0.00 Total Uses of Cash 56,656,365.29 71,734,510.64 73,010,562.81 71,945,819.59

Increase(Decrease) in Cash 2,585,923.53 -8,656,179.96 -514,694.21 -829,428.88Add: Cash Balance, Beg. 6,015,407.17 8,601,330.70 -54,849.26 -569,543.47Cash Balance, End. 8,601,330.70 -54,849.26 -569,543.47 -1,398,972.35



3

METRO LA UNION WATER DISTRICTBalance Sheets, 2004-2008 (in Php)

2004 2005 2006 2007 2008Fixed Assets Fixed Assets in Operation 99,473,604.00 104,873,936.00 108,723,378.04 111,208,520.88 114,851,981.71 Less: Accum. Depreciation 26,768,376.00 28,317,873.00 30,457,359.83 32,360,116.48 38,959,640.65 Net Fixed Assets in Operation 72,705,228.00 76,556,063.00 78,266,018.21 78,848,404.40 75,892,341.06 Add: Work-in-Progress 1,305,620.00 0.00 0.00 0.00 0.00 Total Fixed Assets 74,010,848.00 76,556,063.00 78,266,018.21 78,848,404.40 75,892,341.06Current Assets Cash 6,015,407.00 8,601,331.00 -54,849.26 -569,563.47 -1,398,992.35 Special Deposits and Misc. Funds 837,163.00 837,163.00 837,163.30 1,032,121.90 1,032,121.90 Investments 0.00 300,000.00 300,000.00 481,067.09 481,067.09 Accounts Receivable 9,278,072.00 9,255,097.00 10,053,883.15 10,402,468.19 10,215,257.71 Inventory 3,389,916.00 4,438,283.00 5,599,031.66 5,465,078.51 3,200,626.92 Prepayments 257,800.00 256,800.00 451,050.30 264,800.30 264,800.30 Other Current Assets 55,512.00 55,512.00 55,512.35 55,512.35 55,512.35 Total Current Assets 19,833,870.00 23,744,186.00 17,241,791.50 17,131,484.87 13,850,393.92 ReservesTOTAL ASSETS 93,844,718.00 100,300,249.00 95,507,809.71 95,979,889.27 89,742,734.98

Current Liabilities Accounts Payable 37,940,120.00 62,174,518.00 67,173,931.85 49,104,466.23 35,209,653.88 Customers' Deposits 1,516,777.00 1,598,769.00 1,675,024.21 1,834,902.21 1,996,143.71 Current Maturities 1,835,114.00 152,125.00 248.35 248.35 248.35 Total Current Liabilities 41,292,011.00 63,925,412.00 68,849,204.41 50,939,616.79 37,206,045.94

Long-Term Debts (LTD) Loans Payable 12,905,716.00 10,471,139.00 10,471,139.06 10,471,139.06 10,471,139.06 Deferred Credits 2,051,054.00 1,606,235.00 2,008,088.85 2,067,506.22 2,106,667.06 Total LTD 14,956,770.00 12,077,374.00 12,479,227.91 12,538,645.28 12,577,806.12

Total Liabilities 56,248,781.00 76,002,786.00 81,328,432.32 63,478,262.07 49,783,852.06Equity

WD Contribution Capital Contribution Government 2,120,248.00 2,120,248.00 2,120,247.50 2,120,247.50 2,120,247.50 Other Paid-in Capital 22,508.00 22,508.00 22,508.40 22,508.40 22,508.40 Retained Earnings 35,453,181.00 22,154,707.00 12,036,621.49 30,358,871.30 37,816,127.02 Total Equity 37,595,937.00 24,297,463.00 14,179,377.39 32,501,627.20 39,958,882.92

TOTAL LIABILITIES AND EQUITY 93,844,718.00 100,300,249.00 95,507,809.71 95,979,889.27 89,742,734.98



4

QUEZON METROPOLITAN WATER DISTRICTIncome Statement, 2004-2008 (in Php)


Water Sales 158,016,401.50 157,147,179.07 165,530,795.41 170,447,421.47 171,342,017.35Other Operating Revenues 13,417,477.66 12,681,659.99 16,647,742.16 13,249,046.36 13,906,023.51 Total Operating Revenues 171,433,879.16 169,828,839.06 182,178,537.57 183,696,467.83 185,248,040.86

Operating and Maintenance ExpensesPayroll 51,065,952.27 48,193,029.13 49,672,765.77 48,857,180.73 46,603,040.69Power Cost 4,638,524.23 11,938,249.78 13,368,358.83 11,187,745.19 13,908,729.90Chemicals 1,662,494.00 2,192,105.00 2,915,022.00 1,577,768.30 2,783,074.05Maintenance 20,026,978.76 21,854,438.51 18,638,136.45 17,146,160.34 15,843,833.56Other O&M 32,847,770.50 33,306,850.70 34,440,601.61 36,339,049.09 59,762,677.29Franchise TaxBad Debts 962,301.90 0.00 0.00 0.00 0.00Depreciation 6,877,431.41 7,643,318.76 9,123,245.80 9,635,102.98 16,132,762.08 Total Operating Expenses 118,081,453.07 125,127,991.88 128,158,130.46 124,743,006.63 155,034,117.57

Net Operating Income 53,352,426.09 44,700,847.18 54,020,407.11 58,953,461.20 30,213,923.29Less: Interest Expense (9,526,677.98) (8,883,734.91) (21,009,881.17) (47,438,573.44) (37,723,057.35)Net Income 43,825,748.11 35,817,112.27 33,010,525.94 11,514,887.76 -7,509,134.06



5

QUEZON METROPOLITAN WATER DISTRICTCash Flow Statement, 2004-2008 (in Php)

2004 2005 2006 2007 2008Sources of Cash

Collection of Revenues - CY 157,775,665.10 168,408,330.22 174,129,038.47 178,115,144.24Collection of Receivables - PY (net of bad debt)Other Receipts 32,426,664.82 23,983,594.84 22,386,151.74 21,826,754.77Grant FundsProceeds of Loan 0.00 0.00 34,408,299.35 35,730,000.00 Total Sources of Cash 190,202,329.92 192,391,925.06 230,923,489.56 235,671,899.01

Uses of Cash Project Investment 29,774,782.74 25,633,602.33 6,359,587.09 5,632,725.57 Other Capex/Payables 40,236,492.41 28,005,787.99 32,685,161.27 28,011,170.32 Debt Service- Existing Loans 6,140,091.79 9,055,455.55 12,114,565.59 12,723,282.78 Commitment Charges/interest 29,187,818.05 21,012,794.17 47,237,832.37 43,344,588.54 Total Debt Service 35,327,909.84 30,068,249.72 59,352,397.96 56,067,871.32 O & M Expenses and Working Capital 83,772,747.90 105,980,000.24 116,205,285.17 134,899,127.40 Franchise Tax 0.00 1,879,677.73 3,375,448.12 3,379,096.49 Total Uses of Cash 189,111,932.89 191,567,318.01 217,977,879.61 227,989,991.10

Increase(Decrease) in Cash 1,090,397.03 824,607.05 12,945,609.95 7,681,907.91Add: Cash Balance, Beg. 782,402.43 1,872,799.46 2,697,406.51 15,643,016.46Cash Balance, End. 1,872,799.46 2,697,406.51 15,643,016.46 23,324,924.37



6

QUEZON METROPOLITAN WATER DISTRICTBalance Sheet, 2004-2008 (in Php)

ASSETS 2004 2005 2006 2007 2008Fixed Assets Fixed Assets in Operation 311,348,998.80 336,952,363.66 344,531,896.38 633,054,875.58 633,357,774.93 Less: Accum. Depreciation 54,848,333.19 62,301,217.96 71,424,463.76 81,059,566.74 94,258,450.73 Net Fixed Assets in Operation 256,500,665.61 274,651,145.70 273,107,432.62 551,995,308.84 539,099,324.20 Add: Work-in-Progress 337,352,633.04 447,412,014.31 490,864,317.56 230,385,989.36 247,511,646.39 Total Fixed Assets 593,853,298.65 722,063,160.01 763,971,750.18 782,381,298.20 786,610,970.59Current Assets Cash 794,402.33 1,886,299.46 2,709,406.51 15,658,382.82 34,655,514.25 Accounts Receivable 22,124,457.24 24,498,890.19 26,467,215.57 27,868,899.65 25,630,629.19 Inventory 18,488,299.46 14,683,400.49 17,370,264.09 12,434,000.22 12,869,317.02 Investments 21,903,339.86 14,652,211.42 10,661,506.25 11,290,066.97 1,690,600.00 Other Current Assets 4,313,781.87 4,026,519.07 4,472,214.25 5,754,214.25 8,929,503.09Total Current Assets 67,624,280.76 59,747,320.63 61,680,606.67 73,005,563.91 83,775,563.55 ReservesTOTAL ASSETS 661,477,579.41 781,810,480.64 825,652,356.85 855,386,862.11 870,386,534.14

LIABILITIES AND EQUITYCurrent Liabilities

Accounts Payable 17,118,083.89 37,547,462.97 42,184,021.88 24,170,974.21 18,613,159.21 Customers' Deposits 11,066,314.70 12,383,457.70 13,634,252.25 14,968,832.68 15,765,569.41 Current Maturities 14,805,750.00 14,805,750.00 14,805,750.00 14,805,750.00 0.00 Deferred Credits 9,584,816.93 9,584,816.93 9,585,316.93 9,585,316.93 9,585,316.93 Total Current Liabilities 52,574,965.52 74,321,487.60 80,209,341.06 63,530,873.82 43,964,045.55

Long-Term Debts (LTD) Loans Payable 294,134,795.96 339,577,189.52 345,077,862.27 367,263,263.03 412,397,443.93

Equity WD Contribution Other Paid-in Capital 7,215,560.00 7,215,560.00 7,215,560.00 15,868,987.91 15,868,987.91 Retained Earnings 307,552,257.93 360,696,243.52 393,149,593.52 408,723,737.35 398,156,056.75 Total Equity 314,767,817.93 367,911,803.52 400,365,153.52 424,592,725.26 414,025,044.66

TOTAL LIABILITIES AND EQUITY 661,477,579.41 781,810,480.64 825,652,356.85 855,386,862.11 870,386,534.14



7

LEGAZPI CITY WATER DISTRICTIncome Statement, 2004-2008 (in Php)

2004 2005 2006 2007 2008Operating Revenues Water Sales 80,921.38 81,037.12 81,659.61 84,920.52 120,458.07 Other Revenues 7,232.32 7,696.19 8,078.67 8,459.36 10,901.77 Total Revenues 88,153.70 88,733.31 89,738.27 93,379.88 131,359.84

Operating Expenses Payroll 13,989.96 13,989.96 13,989.96 13,989.96 13,989.96 Power Cost 824.39 824.39 824.39 824.39 824.39 Maintenance 9,296.78 9,257.17 31,984.90 10,899.39 8,431.47 Other O & M 41,270.42 42,331.16 29,334.76 45,505.89 86,282.86 Depreciation 13,769.39 13,630.92 13,592.35 14,169.59 14,233.48 Total Operating Exp. 79,150.94 80,033.61 89,726.36 85,389.22 123,762.17

Net Operating Income 9,002.75 8,699.70 11.92 7,990.66 7,597.67 Less: Interest Expense 8,977.70 8,679.34 - 7,977.81 7,602.82 Net Income 25.06 20.36 11.92 12.85 (5.14)



8

LEGAZPI CITY WATER DISTRICTCash Flow Statement, 2004-2008 (in Php)

2004 2005 2006 2007 2008Sources of Cash Collection of Revenues 83,660.28 83,575.16 83,197.75 88,819.93 121,815.45 Collection of Receivables 6,502.42 4,841.00 4,319.71 4,938.23 5,923.91 Other Receipts 859.53 138.25 497.21 7,440.41 943.12 Transfer of Funds/Special Deposits - 203.63 11,312.42 6,078.34 8,275.25 Total Sources of Cash 91,022.23 88,758.04 99,327.10 107,276.91 136,957.72

Uses of CashCapital Expenditures 14,151.72 12,507.22 20,134.21 8,827.03 7,000.12 Equity Other Capex/Payables 10,574.68 11,386.72 12,641.24 9,726.42 6,780.02 Debt Service- 11,404.53 11,382.37 10,433.84 12,073.98 10,996.79 O & M Expenses and Working Capital 46,389.24 41,005.28 47,163.99 60,753.59 99,494.47 Reserves 5,542.55 10,938.33 6,861.60 5,233.70 11,795.27 Franchise Tax 1,000.00 - 5,127.16 4,294.15 5,207.25 Total Uses of Cash 89,062.71 87,219.93 102,362.05 100,908.87 141,273.93

Increase(Decrease) in Cash 1,959.52 1,538.11 (3,034.95) 6,368.04 (4,316.21) Add: Cash Balance, Beg. 3,055.99 5,015.51 6,553.62 3,518.67 9,886.71 Cash Balance, End. 5,015.51 6,553.62 3,518.67 9,886.71 5,570.51



9

LEGAZPI CITY WATER DISTRICTBalance Sheet, 2004-2008 (in Php)

2004 2005 2006 2007 2008 ASSETS

Fixed Assets Fixed Assets in Operation 231,985,566 245,852,395 256,485,695 272,460,032 275,828,182 Less: Accum. Depreciation 80,546,588 90,626,956 99,268,115 111,256,512 125,752,931 Net Fixed Assets in Operation 151,438,978 155,225,439 157,217,580 161,203,520 150,075,251 Add: Work-in-Progress 2,031,571 475,083 11,921,304 6,121,814 4,785,110 Total Fixed Assets 153,470,549 155,700,522 169,138,884 167,325,334 154,860,361Current Assets Cash 5,949,016 8,465,035 4,993,154 11,372,235 5,246,405 Accounts Receivable 4,747,041 5,682,583 7,994,390 9,171,723 14,147,190 Inventory 11,503,712 11,372,643 17,238,932 17,119,347 19,452,685 Other Current Assets 83,062 85,707 91,406 140,791 1,219,752Total Current Assets 22,282,831 25,605,968 30,317,882 37,804,096 40,066,032 Reserves 3,230,749 8,944,700 7,185,297 5,988,494 11,808,233 Other Assets 7,110,776 12,142,430 11,738,229 11,292,693 12,106,572 Long-term Investments 1,053,134 1,170,899 1,972,934 1,150,000 1,121,236TOTAL ASSETS 187,148,039 203,564,519 220,353,226 223,560,617 219,962,434

LIABILITIES AND EQUITYCurrent LiabilitiesAccounts Payable - - - - 10,835,908 Customers' Deposits 702,212 700,962 700,962 700,962 580,557 Current Maturities 12,944,934 10,748,899 14,229,937 20,514,251 12,009,533 Other Current liabilities 2,447,255 869,112 11,494,982 2,194,271 3,811,900 Total Current Liabilities 16,094,401 12,318,973 26,425,881 23,409,484 27,237,898 Long-Term Debts (LTD)Loans Payable 72,147,740 69,110,090 65,962,453 62,568,480 58,756,580 Other Long-term liabilities 1,178,821 1,178,821 1,178,821 - - Total 73,326,561 70,288,911 67,141,274 62,568,480 58,756,580 EquityGovernment Equity 533,952 533,952 533,952 533,952 533,952 Donated CapitalOther Paid-in Capital 150,000 20,510,145 150,000 12,850,774 5,791,404 Retained Earnings 97,043,125 99,912,538 126,102,119 124,197,927 127,642,600 Total Equity 97,727,077 120,956,635 126,786,071 137,582,653 133,967,956 TOTAL LIABILITIES AND EQUITY 187,148,039 203,564,519 220,353,226 223,560,617 219,962,434



10

LEYTE METROPOLITAN WATER DISTRICTIncome Statement, 2004-2008 (in Php)


Water Sales 168,309,461 169,735,096 179,983,851 182,574,775 179,331,582Other Operating Revenues 11,312,007 10,393,265 2,099,952 8,470,166 8,621,032 Total Operating Revenues 179,621,468 180,128,361 182,083,803 191,044,941 187,952,614

Operating ExpensesPayroll 33,082,309 25,010,628 27,428,624 29,997,584 34,133,198Power Cost 2,522,879 2,285,620 2,721,549 2,464,534 1,816,036Chemicals 2,862,541 2,319,631 4,681,779 4,149,649 5,167,179Maintenance 28,983,095 19,242,588 4,565,854 8,510,361 6,928,676Other O&M 42,377,092 48,491,796 66,235,104 86,496,907 73,023,687Franchise TaxBad Debts 421,731 574,007 433,067 449,885 375,797Depreciation 38,449,095 54,019,198 43,238,614 19,898,153 19,998,322 Total Operating Expenses 148,698,740 151,943,467 149,304,591 151,967,073 141,442,896

Net Income 30,922,728 28,184,894 32,779,212 39,077,868 46,509,718Less: Interest Expense 7,344,049 9,425,320 376,754 7,495,972 5,468,483Net Operating Income 23,578,679 18,759,574 32,402,458 31,581,897 41,041,235



11

LEYTE METROPOLITAN WATER DISTRICTCash Flow Statement, 2004-2008 (in Php)

2004 2005 2006 2007 2008Sources of Cash

Collection of Revenues - CY 175,857,897.11 179,542,940.29 179,983,850.76 169,822,694.78 172,112,575.53Other Receipts 6,775,675.38 56,400,034.54 2,099,952.71 17,459,591.21 20,657,669.36Grant Funds 386,034.46 0.00 0.00 0.00 0.00Proceeds of Loan 41,457,307.86 0.00 11,428,000.00 0.00 0.00 Total Sources of Cash 224,476,914.81 235,942,974.83 193,511,803.47 187,282,285.99 192,770,244.89

Uses of CashCapital Expenditures 65,893,047.82 15,812,411.12 11,994,335.93 4,069,473.95 3,673,866.13 Project Investment 13,218,316.48 13,459,237.22 422,973.81 1,479,428.20 2,701,534.52 Other Capex/Payables 598,167.83 132,920.16 0.00 0.00 0.00 Debt Service - Existing Loans 3,438,253.00 20,571,082.51 21,027,711.68 30,257,401.16 14,665,620.00 O & M Expenses and Working Capital 129,934,820.55 153,104,290.05 126,901,109.40 134,673,417.45 122,641,644.66 Reserves 2,004,786.50 0.00 0.00 0.00 0.00 Total Uses of Cash 215,087,392.18 203,079,941.06 160,346,130.82 170,479,720.76 143,682,665.31

Increase(Decrease) in Cash 9,389,522.63 32,863,033.77 33,165,672.65 16,802,565.23 49,087,579.58Add: Cash Balance, Beg. 7,592,983.04 16,982,505.67 49,845,539.44 83,011,212.09 99,813,777.32Cash Balance, End. 16,982,505.67 49,845,539.44 83,011,212.09 99,813,777.32 148,901,356.90



12

LEYTE METROPOLITAN WATER DISTRICTBalance Sheet, 2004-2008 (in Php)

2004 2005 2006 2007 2008 ASSETS

Fixed Assets Fixed Assets in Operation 1,053,676,125 1,069,488,536 693,829,899 823,884,708 1,089,959,071 Less: Accum. Depreciation 315,500,479 367,611,949 325,781,863 155,032,296 360,927,755 Net Fixed Assets in Operation 738,175,645 701,876,587 368,048,036 668,852,412 729,031,316 Add: Work-in-Progress 28,900,782 42,360,019 43,234,677 45,276,070 38,928,470 Total Fixed Assets 767,076,427 744,236,607 411,282,714 714,128,482 767,959,786Current Assets Cash 21,996,459 49,845,539 86,133,145 102,935,710 152,023,290 Accounts Receivable 28,590,893 30,509,841 33,577,442 33,397,198 35,363,824 Inventory 30,181,984 30,693,308 31,380,745 27,551,661 24,458,698 Other Current Assets 1,849,735 1,212,591 8,724,895 8,403,547 8,266,751Total Current Assets 82,619,071 112,261,279 159,816,228 172,288,116 220,112,563 Reserves 3,862,287 3,490,414 0 0 0 Other Assets 9,657,469 7,840,493 341,398,664 71,092,947 4,729,121 Long-term Investments 0 0 3,622,090 3,805,812 3,990,262TOTAL ASSETS 863,215,255 867,828,792 916,119,696 961,315,357 996,791,732


Accounts Payable 5,557,222 19,453,173 20,303,840 18,754,247 15,715,133Customers' Deposits 19,178,341 20,653,049 21,946,108 21,573,238 20,958,971Current Maturities 4,902,540 874,911 21,012,354 10,561,637 12,259,467Other Current liabilities 19,892,158 54,923,565 6,268,951 13,493,264 16,022,139 Total Current Liabilities 49,530,261 95,904,698 69,531,254 64,382,386 64,955,710

Long-Term Debts (LTD)Loans Payable 55,306,019 48,100,919 22,271,062 21,508,758 9,249,291Other Long-term liabilities 1,587,781 2,396,619 3,167,766 2,827,383 3,680,319 Total 56,893,800 50,497,537 25,438,828 24,336,141 12,929,609

EquityWD ContributionDonated Capital 5,069,243 5,069,243 5,069,243 5,069,243 6,176,499Other Paid-in Capital 752,616,046 752,616,046 752,616,046 752,616,046 752,616,046Retained Earnings -894,094 -36,258,731 63,464,325 114,911,543 160,113,868 Total Equity 756,791,194 721,426,557 821,149,614 872,596,831 918,906,413

TOTAL LIABILITIES AND EQUITY 863,215,255 867,828,792 916,119,696 961,315,357 996,791,732



13

KORONADAL WATER DISTRICTIncome Statement, 2004-2008 (in Php)

2004 2005 2006 * 2007 2008Operating Revenues

Water Sales 17,642,471.00 17,606,588.00 5,038,567.70 26,962,884.53Other Operating Revenues 212,451.00 2,073,779.00 233,429.68 1,792,744.24 Total Operating Revenues 17,854,922.00 19,680,367.00 5,271,997.38 28,755,628.77

Operating ExpensesPayroll 8,135,861.00 9,168,118.00 591,701.42 8,101,365.12Power Cost 105,783.52 2,992,267.36Chemicals 224,107.50Maintenance 459,760.36 726,711.89Other O&M 7,340,783.00 8,272,165.00 1,094,679.57 4,822,033.92Franchise Tax 101,485.59Bad DebtsDepreciation 265,064.18 Total Operating Expenses 15,476,644.00 17,440,283.00 2,251,924.87 17,233,035.56

Net Operating Income 2,378,278.00 2,240,084.00 3,020,072.51 11,522,593.21Less: Interest Expense 1,671,207.00 1,883,246.00 0.00 1,714,071.82

Net Income 707,071.00 356,838.00 3,020,072.51 9,808,521.39

* Data for 2006 are not available.



14

KORONADAL WATER DISTRICTCash Flow Statement, 2005-2008 (in Php)

2005 2006 2007 2008Sources of Cash

Collection of Revenues - CY 18,181,481.00 0.00 3,369,537.95 22,778,780.39Collection of Receivables - PY (net of bad debt)Other Receipts 1,821,938.00 0.00 330,194.93 1,812,521.39Proceeds of Loan 2,888,945.00 Total Sources of Cash 20,003,419.00 0.00 3,699,732.88 27,480,246.78

Uses of CashCapital ExpendituresEquity Project Investment 12,489,600.00 0.00 48,425.00 3,586,259.28 Other Capex/Payables 15,532,191.00 1,404,979.97 11,899,669.62 Debt Service- Existing Loans 570,937.00 0.00 0.00 0.00 Proposed Loan Commitment Charges 1,861,228.00 62,400.00 Total Debt Service O & M Expenses and Working Capital 1,222,400.52 8,056,667.45 Total Uses of Cash 30,453,956.00 0.00 2,675,805.49 23,604,996.35

Increase(Decrease) in Cash -10,450,537.00 0.00 1,023,927.39 3,875,250.43Add: Cash Balance, Beg. 10,709,236.00 10,291,932.00 632,400.95Cash Balance, End. 258,699.00 0.00 11,315,859.39 4,507,651.38



15

KORONADAL WATER DISTRICTBalance Sheet, 2004-2008 (in Php)

2004 2005 2006 * 2007 2008 ASSETS

Fixed Assets Fixed Assets in Operation 39,159,199.00 48,049,184.00 28,349,853.00 32,094,717.57 Less: Accum. Depreciation 7,126,507.00 7,243,984.00 2,875,049.00 3,140,113.18 Net Fixed Assets in Operation 32,032,692.00 40,805,200.00 25,474,804.00 28,954,604.39 Add: Work-in-Progress 320,415.00 7,616,037.00 1,529,161.00 1,529,161.00 Total Fixed Assets 32,353,107.00 48,421,237.00 27,003,965.00 30,483,765.39Current Assets Cash 10,709,236.00 258,699.00 11,315,859.39 4,507,651.38 Accounts Receivable 2,882,620.00 2,706,599.00 4,966,871.98 6,499,025.82 Inventory 931,360.00 304,536.00 2,715,237.70 1,314,467.00 Other Current Assets 0.00 44,774.00 12,000.00 15,618,059.83Total Current Assets 14,523,216.00 3,314,608.00 19,009,969.07 27,939,204.03 ReservesTOTAL ASSETS 46,876,323.00 51,735,845.00 46,013,934.07 58,422,969.42


Accounts Payable 230,463.00 4,573,034.00 1,526,799.56 3,465,974.62 Customers' Deposits 91,185.00 91,185.00 Current Maturities 2,544,859.00 2,544,859.00 Other Liabilities 134,353.00 308,063.00 39,057.00 260,738.19 Total Current Liabilities 364,816.00 4,881,097.00 4,201,900.56 6,362,756.81

Long-Term Debts (LTD) Loans Payable 21,263,204.00 20,692,267.00 16,756,179.00 19,620,124.00

Deferred Accounts 2,273,400.00 2,273,400.00Equity

WD Contribution 380,419.00 380,419.00 380,419.00 380,419.00 Other Paid-in Capital 803,952.00 803,952.00 Retained Earnings 24,867,884.00 25,782,062.00 21,598,083.51 28,982,317.61 Total Equity 25,248,303.00 26,162,481.00 22,782,454.51 30,166,688.61

TOTAL LIABILITIES AND EQUITY 46,876,323.00 51,735,845.00 46,013,934.07 58,422,969.42

* Data for 2006 are not available.

Supplementary Appendix O


ECONOMIC ANALYSIS

Contents

1 Macroeconomic and Sectoral Context 1 2 Economic Rationale of the Project 1 3 Methodology for Economic Analysis 2 4 Economic Viability of the Project 2 4.1 Economic Benefits 2 4.2 EIRR and Sensitivity Tests 3 4.3 Project Sustainability 4 4.4 Distributional Analysis and Poverty Impact 5 5 Project Beneficiaries 6

Tables 1 EIRR Water Supply 4 2 AIEC and Cost Recovery, Water Supply 5 3 Poverty Impact Ratio, Water Supply 5 4 Subproject Beneficiaries until 2035, Water Supply 6 Annexes 1 Parameters and Values for Economic Analysis of Water Supply for 2015 and 2025, 5 Water Districts 7 2 EIRR & Sensistivity Tests, Metro Quezon Water District 8 3 EIRR & Sensistivity Tests, Legazpi Water District 9 4 EIRR & Sensistivity Tests, Metro La Union Water District 10 5 EIRR & Sensistivity Tests, Metro Leyte Water District 11 6 EIRR & Sensistivity Tests, Koronadal City Water District 12

1 Supplementary Appendix O


ECONOMIC ANALYSIS

1. MACROECONOMIC AND SECTORAL CONTEXT 1. Before the global economic slowdown hit the country in 2008, the Philippine economy has been growing at rates averaging 5.7%. From 5% in 2005, GDP growth increased to 5.4% in 2006 and further accelerated to its highest rate of 7.2% in 2007. However, in 2008, largely as a result of the global economic downturn, the economy grew at a much slower pace of only 4.6%. The pace of growth further decelerated up until about the middle of 2009 and seemed to have picked up some steam during the second half. By the end of 2009, economic growth is projected to reach 1.6% and in 2010, it is expected to gradually accelerate to 3.3%.2 Inflation is currently at its lowest level and is expected to average 4% in 2009 and 4.5% in 2010. 2. Despite the consistent, positive growth of the domestic economy during the past years, however, poverty incidence in the country still remains high. In 2006, the number of families falling below the poverty line was estimated at 26.9%3. While no recent poverty estimates have yet been released for both national and regional levels showing the possible impact on poverty level of the current economic downturn, it is generally believed that the number of poor has risen. As an indicator, the latest Social Weather Survey undertaken by the Social Weather Station (SWS) indicates that self-rated poverty during the fourth quarter of 2008 was up to 52%, from the average of 50% in 2007.4 3. In the water supply sector, the situation across the country and in the Project areas, needs further improvements. Available statistics show that 80% of the country’s current population have access to safe water supply but only 67% are connected to piped network.5 Still a large proportion of the population depends on non-piped sources such as shallow wells and deep wells, most of which are unprotected, and on more unsafe sources like rivers. 4. The Philippine Government has set a target of achieving population service coverage for safe drinking water of 92%-96% by 2010.6 Under the Millennium Development Goals, the target coverage is 86.8%. 2. ECONOMIC RATIONALE OF THE PROJECT 5. The proposed investments in water supply are designed to increase piped water service coverage in the Project areas. Providing safe water is not only one of the Government’s important economic and social objectives but also aims to address the Millennium Development Goals (MDG) of: (i) eradicating extreme poverty and hunger (Goal 1), reducing child mortality (Goal 4), (iii) combating major diseases (Goal 6), and (v) improving population access to improved water supply and sanitation services (Goal 7). 6. The participating water districts will partly finance but fully implement, operate and manage the Project investments as they do for the existing water supply systems. Direct intervention by Government in the provision of this basic urban service stems from the lack of participation of other sectors, particularly private investors, in the sector’s development. With a growing population, the lack of investments in capacity expansion and proper maintenance of facilities means that an increasing number of the population, especially the poor, will

2 Latest revision on the growth forecasts, ADB Economic Outlook, Philippines, 2009. 3 Latest official poverty estimate from the National Statistical Coordination Board (NCSB). 4 The Social Weather Survey was conducted on November 22-December 1, 2008. 5 Philippine Water Supply Sector Roadmap, 2008. 6 Medium Term Philippine Development Plan, 2004-2010.



continue to be deprived of this essential service which could have long-term effects on their health and well-being. 7. Direct involvement of the Government in this Project therefore addresses this market failure in the provision of water supply services. In doing so, the Government will be exercising two of its basic functions, namely: (i) allocating resources for the provision of basic needs, and (ii) distributing resources to effect equity where market and private decisions (or lack of it) have not resulted in efficient allocation and service provision especially to the poor. 3. METHODOLOGY FOR ECONOMIC ANALYSIS 8. The economic analysis of the water supply investments was undertaken in accordance with the principles and procedures set out in the ADB Handbook for the Economic Analysis of Water Supply Projects (1999) and related guidelines7 as well as LWUA’s Project Operations Manual (2008). The analysis was undertaken over a 25-year period although most investments have useful economic life that extends beyond this time horizon. Costs and benefits were quantified at constant September 2009 prices and as increments to a situation “without project”. 9. The basic approach to the analysis was to determine the economic costs and benefits for each subproject over its entire life. Using domestic price numeraire, the financial costs of investments in infrastructure and in operation and maintenance (O&M) were converted to economic costs, after deducting taxes and duties, by shadow pricing their tradable and non-tradable components, including labor, using the following assumptions prescribed by NEDA-ICC8 in evaluating Philippine projects: (i) shadow exchange rate factor of 1.2, (ii) shadow wage rate factor for unskilled labor of 0.6, and (iii) shadow price factor for other non-tradables of 1.0. Economic benefits were valued using the data and assumptions presented in the following section. 10. The economic feasibility of the subprojects was determined by computing their economic internal rate of return (EIRR) and comparing the results with the assumed economic opportunity cost of capital (EOCC) of 15%9. An EIRR that exceeds EOCC indicates that the subproject is economically feasible. The robustness of the subproject’s EIRR was tested for changes in such key variables as capital costs, O&M costs, resource cost savings, value of incremental water and other benefits through sensitivity analysis. Sustainability of the investments was analyzed in terms of the cost of water production against the average tariffs. Cost recovery was computed for O&M costs, capital cost and the full economic costs that combine capital and O&M. A distributional and poverty impact analysis was also undertaken to determine how much of the net economic benefits resulting from the investments will directly benefit the poor in each area. 4. ECONOMIC VIABILITY OF THE PROJECT 4.1 Economic Benefits 11. The following economic benefits were considered in evaluating the economic viability of the proposed water supply investments: (i) resource cost savings on non-incremental water in terms of avoided costs of producing, collecting, treating and storing non-piped water to be replaced by water produced by the Project; (ii) economic value of incremental water due to increased supply; (iii) economic value of water that would have been lost due to non-

7 Includes the Guidelines for the Economic Analysis of Projects (1997) and the Framework for the Economic and Financial Appraisal of Urban Development Sector Projects (1994). 8 Investment Coordination Committee of the National Economic and Development Authority. 9 Also, per NEDA-ICC Project Evaluation Procedures and Guidelines.



technical reasons; (iv) value of time saved for not having to collect water from existing non-piped sources, (v) medical cost savings due to reduced morbidity rates for diarrhea, and (vi) avoided loss of income because of reduced incidence of waterborne diseases. 12. Resource cost savings on non-incremental water were computed by multiplying the volume of water to be consumed by those who will connect to the improved water supply systems, by the economic value of non-piped water. The current economic value of non-piped was computed based on the estimated costs of producing water from wells, fetching water from the source, treating and storing them. The basic data used to arrive at this value were gathered through the household surveys conducted in each Project area. 13. The amount of incremental water supply was computed based on the number of connections, the average per capita consumption, and the average household size. Service connections include communal standpipes in poor urban communities as proposed for Quezon Metro. The Project assumed that a single standpipe will serve a total of 20 households. The economic value of incremental piped water supply was determined by multiplying the total additional volume consumed by the economic value of water, or the willingness to pay (WTP) indicated in the surveys. 14. The value of non-technical water losses saved was computed by multiplying the amount of water that would have been lost due to non-technical reasons and the average of the supply price and WTP. 15. Avoided income loss benefit represents the economic value of time saved from not collecting water from wells and other sources by household members (usually adults) as a result of having direct connections to the piped water system. This benefit was computed by multiplying the average time spent in collecting water by the average daily economic wage rate which in turn was computed by applying the social wage rate factor (SWRF) to the prevailing financial minimum wage rate. 16. Avoided costs of medication was determined considering the incidence of diarrhea10 in the Project areas, the cost of medication, the average number of days that a patient is sick, and the expected reduction in morbidity rate due to the use of safe drinking water provided by the Project. Data used in the computations were based on health records of the DOH and the results of the socioeconomic surveys. 17. Avoided income loss/productivity savings were computed based on (i) the percentage of working adults who get sick of diarrhea, and (ii) the average daily economic wage rate in the project areas. Reduction in morbidity rates was based on previous health studies (including data from the World Health Organization (WHO)), and consultations with medical doctors. 18. The parameters used in estimating the above economic benefits of water supply are presented in Annex 1. 19. The WTP data, as gathered through the socioeconomic surveys, are also shown in Annex. 4.2 EIRR and Sensitivity Tests 20. The EIRR for the subprojects are summarized in Table 1 while details of the computations are shown in Annexes 2-6 .

10 The analysis was limited to the impact of diarrhea, among various types of waterborne diseases, for which data are available and deemed to be more accurate.



Table 1: EIRR Water Supply

Scenario EIRR (%) SI % Change SV

Metro Quezon Base case 17.9%10% increase in capital costs 16.5% 0.76 10% 131%10% increase in O&M costs 17.1% 0.45 10% 223%10% decrease in resource cost savings 16.4% -0.83 -10% -120%10% decrease in value of incremental water 17.0% -0.48 -10% -207%

Legazpi City Base case 14.0%10% decrease in capital costs 15.4% 0.94 -10% 106%10% decrease in O&M costs 15.4% 0.97 -10% 103%10% increase in resource cost savings 13.9% 0.09 10% 1075%10% increase in value of incremental water 13.2% 0.60 10% 167%

Metro La Union Base case 11.8%10% decrease in capital costs 12.8% 0.90 -10% 111%10% decrease in O&M costs 12.5% 0.59 -10% 171%10% increase in resource cost savings 12.5% -0.62 10% -161%10% increase in value of incremental water 11.8% -0.04 10% -2306%

Leyte Metro Base case 22.9%10% increase in capital costs 20.8% 0.91 10% 110%10% increase in O&M costs 22.8% 0.04 10% 2570%10% decrease in resource cost savings 22.2% -0.32 -10% -311%10% decrease in medical cost savings 21.5% -0.63 -10% -159%

Koronadal City Base case 27.1%10% increase in capital costs 25.0% 0.78 10% 128%10% increase in O&M costs 26.4% 0.26 10% 382%10% decrease in resource cost savings 24.9% -0.81 -10% -123%10% decrease in value of incremental water 26.0% -0.40 -10% -247%

Water District

SI1 = Sensitivity Indicator is the ratio of % change in EIRR to % change in the variable SV2 = Switching Value is the % change in variable required for NPV to become zero

21. The proposed investments for Quezon Metro, Leyte Metro and Koronadal City are economically viable, with EIRR exceeding the assumed EOCC of 15%. The investments remain viable even with assumed 10% increases in capital investments or O&M costs, or reductions in benefits. The EIRR for Legazpi City is slightly below the cut-off rate (14%) but increases to 15.4% with a 10% reduction in capital costs or O&M. The investments become economically viable under both conditions. In the case of Metro La Union, the EIRR for the proposed investments is 11.8% and remains below the cut-off rate even with a 10% reduction in either capital or O&M costs, or the same-rate increase in resource cost savings. 22. Sensitivity tests show that the EIRR for all subprojects are most sensitive to changes in capital costs followed by changes in O&M (Legazpi City, Metro Quezon) and resource cost savings (Metro Quezon, Koronadal City). Changes in medical cost savings have important impact on economic viability in the case of Leyte Metro.

4.3 Project Sustainability 23. Sustainability of the investments is indicated by comparing the computed average tariff with the average incremental economic cost (AIEC) of water as well as the expected levels of cost recovery. Data on these indicators are presented in Table 2 . The AIEC, based on full economic cost that includes capital investments and O&M, ranges from Php10.8/m3

(Quezon Metro) to a high of Php27/m3 (Leyte Metro). For Koronadal City, Legazpi City and Metro La Union, the marginal economic costs of producing water based on the proposed investments are Php12.9/m3, Php14.2/m3, and Php17.1/m3 respectively.



Table 2: AIEC and Cost Recovery, Water Supply

Parameters

Quezon Metro

Legazpi City

Metro L Union

Leyte Metro

Korona -dal City

AIEC (Php/m3) Eco. capital+O&M (full cost) Economic capital cost only Economic O&M only

10.8

6.4 6.6

14.2

6.9 11.2

17.1 11.1

9.1

27.0 25.8

1.3

12.9

7.9 7.4

Ave. tariff, EOCC 15% (Php/m3) Eco. subsidy, full cost (Php/m3)

11.3 -

23.8 -

27.0 -

20.0 7.1

13.6 -

Economic cost recovery (%) Capital + O&M cost Capital cost only O&M cost only

105 176 171

167 345 214

157 241 295

74 77

1557

106 171 184

24. Except for Metro Leyte, the average tariffs for the four other WDs are higher than their respective AIECs, suggesting that no economic subsidy will be required. The average tariff for Koronadal City is Php13.6/m3 as compared to an AIEC of Php12.9/m3 while Metro Quezon’s tariff of Php11.3/m3 is slightly higher than its AIEC of Php10.8/m3. For Legazpi City and Metro La Union, the differences between the tariff and AIEC are Php9.6/m3 and Php9.9/m3, respectively. With tariff of only Php20/m3 against an AIEC of Php27/m3, Metro Leyte water will require an economic subsidy of about Php7 for each cubic meter consumed. 25. Again, except for Leyte Metro, the tariff revenue for all four WDs will be able to fully recover all capital investments, O&M costs, or both. For Leyte Metro, tariff revenue will fully recover only the O&M costs but just 77% of the capital costs and 74% of the full economic costs.

4.4 Distributional Analysis and Poverty Impact 26. Distributional analysis and poverty impact assessment was prepared for each subproject. Net economic benefits were computed for each subproject as a difference between the economic benefits and financial benefits and then distributed to major stakeholders (i.e., government, water consumers, labor, and the water districts). 27. The major beneficiaries of the subprojects are the direct consumers. The labor sector will benefit from the investments through its involvement in the various rehabilitation and construction works to be done as well as in the eventual operation of the facilities. The economy, on the other hand, will lose the equivalent of the difference of the current nominal exchange rate and shadow exchange rate because of the distortion in the exchange rates. 28. The poverty impact ratios (PIRs) presented in Table 3 indicate that 25% to 38% of the net economic benefits will go to the poor.

Table 3: Poverty Impact Ratio, Water Supply

Water District PIR (%) Quezon Metro WD Legazpi City WD Metro La Union WD Leyte Metro WD Koronadal City WD

29 25 26 28 38



5. PROJECT BENEFICIARIES 29. At the end of the 25-year period assumed for the analysis, an estimated 52,115 households in all the five pilot WD areas shall have directly connected to the improved water supply systems and 320 additional households in poor communities in Quezon Metro shall have been supplied with treated water through the 16 public faucets provided by the Project. In addition, 4,293 institutional and commercial establishments shall have direct connections to the piped water supply network. Altogether, the investments will directly benefit a total of approximately 317,732 local area residents. 30. Service coverage will also increase from the current low level of 29% to a peak of 54% in Metro La Union WD, and from 80% to 94% in Metro Quezon (Table 4 ). As a result of the investments, Koronadal City WD will increase its service coverage from 44% to 77%. For Legazpi City WD and Leyte Metro WD, their respective coverages will be 58% and 36% which, taken as a proportion of their total area population, are relatively low compared to the current levels. The proposed investments for these two areas are not sufficient to cope with the projected growth in population during the period.

Table 4: Direct Project Beneficiaries Until 2035, Water Supply

Investment/Parameters

Quezon Metro

Legazpi City

Metro L. Union

Leyte Metro

Korona - dal City

Total

Incremental residential conn. Incremental public faucets Incremental non-domestic conn. Total number of connections Population served Initial service coverage (%) Peak service coverage (%)

20,723

16 1,146

21,885 128,356

80 94

7,552

0 1,636 9,188

42,394 75 58

14,017

0 370

14,387 84,724

29 54

2,064

0 241

2,305 10,706

41 36

7,759

0 900

8,659 51,552

44 77

52,115

16 4,293

56,424 317,732

54 64



Annex 1 Parameters and Values for Economic Analysis of Water Supply for 2015 and 2025, 5 Water Districts

Parameters 2015 2025 2015 2025 2015 2025 2015 2025 2015 2025

Number of residential connections 38,693 55,637 16,958 20,351 11,515 21,885 27,640 27,846 12,474 14,704 Number of non-domestic connections 6,556 7,552 3,221 4,578 553 866 3,224 3,248 1,557 2,325 Number of public faucets 160 175 0 0 0 0 0 0 0 0

Ave. economic cost of storing water (Php/m3) 7.0 7.0 4.5 4.5 8.2 8.2 8.7 8.7 3.4 3.4

Ave. economic cost of treatment (Php/m3) 7.2 7.2 7.2 7.2 7.2 7.2 7.2 7.2 7.2 7.2

Ave. economic cost of production (Php/m3) 1.1 1.1 3.1 3.1 6.7 6.7 3.0 3.0 4.8 4.8 Ave. time spent in collecting water per day (min.) 63 63 55 55 49 49 76 76 47 47 % time spent in collectin water from source by adults 57 57 74 74 57 57 55 55 57 57 Economic value of time spent in collection (Php/d) 6.7 6.7 7.7 7.7 4.8 4.8 7.9 7.9 4.7 4.7

Ave. economic wage of unskilled laborer (Php/m3) 142 142 143 143 144 144 143 143 147 147 Residential water consumption (lpcd) 136 144 155 155 105 100 119 119 104 114

Production capacity (m3/d) 86,745 86,745 32,384 32,384 22,118 22,118 39,275 39,568 21,328 21,328 Non-revenue water (%) 27 25 20 20 32 30 41 41 15 15 Non-technical losses (%) 3 3 2 2 8 8 10 10 2 2

Morbidity rate for diarrhea for under-5 (per 1,000) 17 17 11 11 10 10 29 29 5 5 Morbidity rate for diarrhea for over-5 (per 1,000) 58 58 27 27 36 36 32 32 17 17 Morbidity reduction for under-5 (%) 12 31 18 35 20 20 14 21 39 39 Morbisity reduction for over-5 (%) 4 21 7 26 6 22 13 22 12 29 Average number of days-sick 2.4 2.4 3.3 3.3 2.9 2.9 3.8 3.8 4.3 4.3 Average medical cost per diarrhea case (Php/day) 262 262 575 575 203 203 1,788 1,788 350 350

Koronadal CityQuezon Metro Legazpi City Metro La Union Leyte Metro

Willingness to Connect (WTC) and Willingness to Pay (WTP) for Water Supply

M. Quezon Legazpi City M. La Union M. Leyte Koronadal

Willingness to connect to improved water supply system (%) 45 49 45 72 73 Willingness to pay for water (Php/month) 292.0 231.0 260.6 279.9 332.7

Willingness to pay for water (Php/m3) 11.5 9.9 17.1 15.7 17.3



Annex 2

EIRR & Sensitivity Tests, Metro Quezon Water District(Values in Php million)

Res. Cost Increm. Non-Tech Time Med Cost Prod. Total Eco. Capital O&M Total Net. Eco.Year Savings Water Losses Savings Savings Savings Benefits Costs Costs Costs Benefits +10% Invst. +10% O&M -10% RCS -10% IM

2011 0.0 36.2 36.2 -36.2 -39.9 -36.2 -36.2 -36.22012 0.0 111.7 111.7 -111.7 -122.9 -111.7 -111.7 -111.72013 0.0 211.6 211.6 -211.6 -232.8 -211.7 -211.7 -211.72014 26.5 18.5 1.5 11.5 0.2 0.1 58.3 9.4 9.4 48.9 48.9 47.9 45.9 46.72015 31.5 19.5 1.9 13.6 0.4 0.1 67.2 14.6 14.6 52.6 52.6 51.1 48.9 50.12016 38.6 21.9 2.2 16.7 0.7 0.2 80.2 20.6 20.6 59.6 59.6 57.6 54.9 56.62017 45.7 24.3 2.7 19.7 0.9 0.2 93.5 27.6 27.6 65.9 65.9 63.2 60.2 62.42018 52.8 26.2 3.1 22.7 1.1 0.3 106.3 9.8 41.3 51.0 55.2 54.2 51.1 48.6 51.22019 59.9 28.7 3.6 25.8 1.3 0.4 119.5 46.2 46.2 73.3 73.3 68.7 65.6 68.82020 66.9 31.1 3.8 28.8 1.5 0.4 132.5 54.0 54.0 78.5 78.5 73.1 69.9 73.52021 73.6 32.1 4.1 31.7 1.7 0.5 143.9 59.8 59.8 84.1 84.1 78.2 74.5 78.72022 80.4 33.7 4.6 34.6 2.0 0.6 155.8 65.5 65.5 90.3 90.3 83.7 79.7 84.42023 87.1 33.7 4.9 37.5 2.2 0.6 166.1 71.1 71.1 95.0 95.0 87.9 83.5 88.82024 93.8 33.7 5.3 40.5 2.4 0.7 176.4 76.7 76.7 99.8 99.8 92.1 87.2 93.32025 100.6 33.6 5.7 43.4 2.7 0.8 186.8 76.7 76.7 110.1 110.1 102.5 96.6 103.32026 100.6 34.7 5.8 43.4 2.8 0.8 188.0 18.8 76.7 95.5 92.5 90.7 84.9 78.9 85.52027 100.6 35.7 5.9 43.4 2.8 0.8 189.2 76.7 76.7 112.6 112.6 104.9 98.9 105.42028 100.6 36.8 6.0 43.4 2.9 0.8 190.5 76.7 76.7 113.8 113.8 106.1 100.1 106.42029 100.6 37.9 6.1 43.4 2.9 0.8 191.7 76.7 76.7 115.0 115.0 107.4 101.2 107.52030 100.6 39.0 6.2 43.4 3.0 0.9 193.0 76.7 76.7 116.3 116.3 108.6 102.4 108.62031 100.6 40.1 6.3 43.4 3.0 0.9 194.2 76.7 76.7 117.6 117.6 109.9 103.6 109.72032 100.6 41.2 6.4 43.4 3.1 0.9 195.5 76.7 76.7 118.8 118.8 111.2 104.8 110.82033 100.6 42.3 6.6 43.4 3.1 0.9 196.8 76.7 76.7 120.1 120.1 112.5 106.0 111.92034 100.6 43.4 6.7 43.4 3.2 0.9 198.1 76.7 76.7 121.4 121.4 113.8 107.3 113.02035 100.6 44.5 6.8 43.4 3.2 0.9 361.8 76.7 76.7 285.2 285.1 277.5 270.9 276.5

NPV 60.0 34.0 42.4 28.0 41.3EIRR 17.9% 16.5% 17.1% 16.4% 17.0%

Sensitivity Tests



Annex 3 EIRR & Sensitivity Tests, Legaspi Water District(Values in Php million)

Res Cost Increm. Non-Tech Time Med Cost Prod. Tot. Eco. Capital O&M Total Net. Eco.Year Savings Water Losses Savings Savings Savings Benefits Costs Costs Costs Benefits -10% Invst. -10% O&M +10% RCS +10% IM

2011 14.0 14.0 -14.0 -12.6 -14.0 -14.0 -14.02012 40.7 40.7 -40.7 -36.6 -40.7 -40.7 -40.72013 38.6 38.6 -38.6 -34.8 -38.6 -38.6 -38.62014 4.0 6.9 0.1 1.9 0.3 0.0 13.2 4.2 4.2 9.0 9.0 9.4 9.1 9.42015 9.6 6.9 0.3 4.4 0.6 0.1 21.9 7.4 7.4 14.5 14.5 15.2 14.8 14.52016 11.1 6.9 0.4 5.1 0.9 0.1 24.5 10.1 10.1 14.4 14.4 15.4 14.6 14.12017 12.6 6.9 0.5 5.8 1.2 0.1 27.2 12.8 12.8 14.4 14.4 15.7 14.3 13.82018 14.1 6.9 0.6 6.5 1.5 0.2 29.8 4.6 15.4 20.0 9.8 10.3 11.4 9.5 8.82019 15.6 6.9 0.7 7.2 1.9 0.2 32.5 18.1 18.1 14.4 14.4 16.2 13.9 13.02020 16.9 6.9 0.8 7.8 2.2 0.3 35.0 20.8 20.8 14.2 14.2 16.3 13.4 12.42021 18.6 6.9 0.8 8.6 2.3 0.3 37.5 23.4 23.4 14.0 14.0 16.4 13.3 12.12022 20.0 6.9 0.9 9.2 2.4 0.3 39.7 26.1 26.1 13.6 13.6 16.2 12.9 11.62023 21.4 6.9 1.0 9.9 2.4 0.3 42.0 28.8 28.8 13.2 13.2 16.1 12.6 11.12024 22.9 6.9 1.0 10.6 2.5 0.3 44.2 31.4 31.4 12.8 12.8 15.9 12.2 10.62025 24.3 6.9 1.1 11.2 2.6 0.3 46.5 34.1 34.1 12.4 12.4 15.8 11.9 10.12026 26.3 7.6 1.2 12.1 2.6 0.3 50.2 6.9 34.1 41.0 9.2 9.9 12.6 8.9 7.02027 28.2 8.4 1.3 13.0 2.7 0.3 54.0 34.1 34.1 19.8 19.8 23.2 19.6 17.72028 30.2 9.1 1.5 13.9 2.7 0.3 57.7 34.1 34.1 23.6 23.6 27.0 23.5 21.42029 32.1 9.8 1.6 14.9 2.7 0.4 61.4 34.1 34.1 27.3 27.3 30.7 27.4 25.22030 34.1 10.5 1.7 15.8 2.8 0.4 65.2 34.1 34.1 31.1 31.1 34.5 31.4 29.02031 35.8 11.3 1.8 16.6 2.8 0.4 68.6 34.1 34.1 34.5 34.5 37.9 34.9 32.52032 35.8 12.0 1.9 16.6 2.8 0.4 69.5 34.1 34.1 35.3 35.3 38.8 35.7 33.32033 35.8 12.8 1.9 16.6 2.9 0.4 70.3 34.1 34.1 36.2 36.2 39.6 36.5 34.22034 35.8 13.5 1.9 16.6 2.9 0.4 71.1 34.1 34.1 37.0 37.0 40.4 37.3 35.12035 35.8 14.3 2.0 16.6 3.0 0.4 115.4 34.1 34.1 81.2 81.2 84.7 81.5 79.3

NPV -5.2 1.8 2.3 -5.9 -9.5EIRR 14.0% 15.4% 15.4% 13.9% 13.2%

Sensitivity Tests



Annex 4 EIRR & Sensitivity Tests, Metro La Union Water District(Values in Php million)

Res. Cost Increm. Non-Tech Time Med Cost Prod. Total Eco. Capital O&M Total Net. Eco.Year Savings Water Losses Savings Savings Savings Benefits Costs Costs Costs Benefits -10% Invst. -10% O&M +10% RCS +10% IM

2011 0.0 19.5 19.5 -19.5 -17.6 -19.5 -19.5 -19.52012 0.0 138.3 138.3 -138.3 -124.5 -138.3 -138.3 -138.32013 0.0 132.4 132.4 -132.4 -119.1 -132.4 -132.4 -132.42014 7.4 3.3 1.1 1.9 0.1 0.0 13.9 8.8 8.8 5.1 5.1 6.0 5.7 5.32015 17.7 11.4 3.7 4.7 0.2 0.1 37.7 17.3 17.3 20.4 20.4 22.2 21.9 21.32016 22.6 11.7 4.3 5.9 0.3 0.1 45.0 19.3 19.3 25.7 25.7 27.6 27.5 26.42017 27.4 11.8 5.1 7.2 0.5 0.1 52.1 24.1 24.1 28.0 28.0 30.4 30.1 28.62018 32.3 11.9 5.6 8.5 0.6 0.1 58.9 4.4 28.6 33.1 25.9 26.3 28.7 28.4 26.32019 37.2 11.9 6.4 9.8 0.7 0.2 66.1 33.5 33.5 32.6 32.6 36.0 35.5 32.92020 42.0 12.0 7.2 11.0 0.9 0.2 73.3 38.3 38.3 35.0 35.0 38.8 38.1 35.12021 46.9 12.0 8.0 12.3 1.0 0.3 80.5 38.3 38.3 42.2 42.2 46.0 45.6 42.22022 51.8 12.1 8.8 13.6 1.0 0.3 87.6 38.3 38.3 49.3 49.3 53.1 53.2 49.22023 56.8 12.2 9.6 14.9 1.0 0.3 94.7 38.3 38.3 56.4 56.4 60.2 60.8 56.32024 61.6 9.8 9.6 16.2 1.0 0.3 98.5 38.3 38.3 60.2 60.2 64.0 65.0 59.92025 66.6 9.9 10.4 17.5 1.1 0.3 105.6 38.3 38.3 67.4 67.4 71.2 72.7 67.02026 67.5 10.2 10.6 17.7 1.1 0.3 107.5 12.4 38.3 50.7 56.8 58.0 60.6 62.2 56.52027 68.0 10.6 10.8 17.9 1.1 0.3 108.7 38.3 38.3 70.5 70.5 74.3 75.9 70.12028 68.0 11.0 11.0 17.9 1.1 0.3 109.3 38.3 38.3 71.0 71.0 74.8 76.4 70.72029 68.0 11.4 11.1 17.9 1.1 0.3 109.8 38.3 38.3 71.6 71.6 75.4 76.9 71.32030 68.0 11.8 11.2 17.9 1.1 0.3 110.4 38.3 38.3 72.1 72.1 75.9 77.5 71.92031 68.0 12.2 11.4 17.9 1.1 0.3 110.9 38.3 38.3 72.7 72.7 76.5 78.0 72.42032 68.0 12.6 11.5 17.9 1.2 0.3 111.5 38.3 38.3 73.2 73.2 77.1 78.6 73.02033 68.0 13.1 11.7 17.9 1.2 0.3 112.1 38.3 38.3 73.8 73.8 77.6 79.1 73.62034 68.0 13.5 11.8 17.9 1.2 0.3 112.7 38.3 38.3 74.4 74.4 78.2 79.7 74.22035 68.0 13.9 11.9 17.9 1.2 0.3 257.3 38.3 38.3 219.0 219.0 222.8 224.3 218.9

NPV -56.1 -34.9 -44.6 -44.1 -55.0EIRR 11.8% 12.8% 12.5% 12.5% 11.8%

Sensitivity Tests



Annex 5

EIRR & Sensitivity Tests, Metro Leyte Water District(Values in Php million)

Res. Cost Non-Tech Time Med Cost Prod. Total Eco Capital O&M Total Net. Eco.Year Savings Losses Savings Savings Savings Benefits Costs Costs Costs Benefits +10% Invst +10% O&M -10% RCS -10% MC

2011 0.0 26.5 0.0 26.5 -26.5 -29.1 -26.5 -26.5 -26.52012 1.9 0.2 0.8 2.7 0.1 5.7 19.2 0.8 20.0 -14.3 -16.2 -14.4 -14.5 -14.62013 3.8 0.1 1.7 5.2 0.2 11.0 25.1 0.8 25.9 -14.9 -17.4 -15.0 -15.3 -15.52014 5.6 0.0 2.5 7.9 0.3 16.4 19.2 0.9 20.2 -3.8 -5.7 -3.8 -4.3 -4.52015 7.5 0.0 3.4 10.7 0.4 22.0 19.2 0.8 20.0 2.0 0.0 1.9 1.2 0.92016 8.4 0.2 3.8 13.7 0.5 26.7 9.6 0.8 10.4 16.3 15.3 16.2 15.4 14.92017 8.4 0.2 3.8 17.0 0.7 30.1 0.8 0.8 29.3 29.3 29.2 28.4 27.62018 8.4 0.2 3.8 20.0 0.8 33.2 41.6 0.8 42.4 -9.1 -13.3 -9.2 -10.0 -11.12019 8.4 0.2 3.8 20.7 0.8 34.0 0.8 0.8 33.2 33.2 33.1 32.3 31.12020 8.4 0.2 3.8 21.5 0.8 34.8 0.8 0.8 34.0 34.0 33.9 33.1 31.82021 8.4 0.2 3.8 22.3 0.9 35.6 0.8 0.8 34.8 34.8 34.7 34.0 32.62022 8.4 0.2 3.8 23.2 0.9 36.6 0.8 0.8 35.7 35.7 35.7 34.9 33.42023 8.4 0.2 3.8 24.1 0.9 37.5 0.8 0.8 36.7 36.7 36.6 35.9 34.32024 8.4 0.2 3.8 25.1 1.0 38.6 0.8 0.8 37.8 37.8 37.7 36.9 35.32025 8.4 0.2 3.8 26.2 1.0 39.7 0.8 0.8 38.9 38.9 38.8 38.1 36.32026 8.4 0.2 3.8 26.9 1.1 40.4 0.0 0.8 0.8 39.6 39.6 39.5 38.8 36.92027 8.4 0.2 3.8 27.6 1.1 41.1 0.8 0.8 40.3 40.3 40.2 39.5 37.52028 8.4 0.2 3.8 28.3 1.1 41.8 0.8 0.8 41.0 41.0 40.9 40.2 38.22029 8.4 0.2 3.8 29.0 1.1 42.6 0.8 0.8 41.8 41.8 41.7 40.9 38.92030 8.4 0.2 3.8 29.7 1.2 43.3 0.8 0.8 42.5 42.5 42.4 41.7 39.52031 8.4 0.2 3.8 30.4 1.2 44.1 0.8 0.8 43.3 43.3 43.2 42.4 40.22032 8.4 0.2 3.8 31.2 1.2 44.9 0.8 0.8 44.1 44.1 44.0 43.2 41.02033 8.4 0.2 3.8 32.0 1.3 45.7 0.8 0.8 44.9 44.9 44.8 44.0 41.72034 8.4 0.2 3.8 32.8 1.3 46.5 0.8 0.8 45.7 45.7 45.6 44.9 42.42035 8.4 0.2 3.8 33.6 1.3 96.4 0.8 0.8 95.5 46.6 46.5 45.7 43.2

NPV 46.8 37.6 46.4 41.8 37.1EIRR 22.9% 20.8% 22.8% 22.2% 21.5%

Sensitivity Tests



Annex 6 EIRR & Sensitivity Tests, Koronadal City Water District(Values in Php million)

Res. Cost Increm. Non-Tech Time Med Cost Prod. Total Eco. Capital O&M Total Net. Eco.Year Savings Water Losses Savings Savings Savings Benefits Costs Costs Costs Benefits +10% Invst. +10% O&M -10% RCS -10% IM

2011 8.7 0.0 8.7 -8.7 -9.5 -8.7 -8.7 -8.72012 53.0 0.4 53.4 -53.4 -58.7 -53.4 -53.4 -53.42013 80.6 0.4 81.0 -81.0 -89.1 -81.1 -81.0 -81.02014 27.3 12.3 0.5 7.4 0.2 0.0 47.81 8.5 8.5 39.3 39.3 38.5 36.3 37.82015 32.7 12.5 0.7 8.9 0.4 0.1 55.21 12.0 12.0 43.3 43.3 42.1 39.5 41.52016 33.3 12.8 0.7 9.1 0.6 0.1 56.50 12.6 12.6 43.9 43.9 42.6 39.9 41.92017 34.0 13.0 0.7 9.3 0.7 0.1 57.92 13.3 13.3 44.6 44.6 43.2 40.3 42.42018 34.8 13.3 0.8 9.5 0.9 0.2 59.44 1.9 14.1 16.0 43.4 43.2 42.0 38.9 41.02019 35.7 13.5 0.8 9.7 0.9 0.2 60.88 15.0 15.0 45.9 45.9 44.4 41.2 43.52020 36.7 14.3 0.9 10.0 1.0 0.2 62.96 15.9 15.9 47.1 47.1 45.5 42.2 44.52021 37.7 14.5 0.9 10.3 1.0 0.2 64.66 16.8 16.8 47.8 47.8 46.1 42.9 45.22022 38.9 14.8 1.0 10.6 1.0 0.2 66.45 17.8 17.8 48.6 48.6 46.8 43.5 45.92023 40.1 15.1 1.0 10.9 1.0 0.2 68.35 18.9 18.9 49.4 49.4 47.6 44.2 46.72024 41.3 15.3 1.1 11.3 1.1 0.2 70.31 20.1 20.1 50.2 50.2 48.2 44.8 47.42025 42.7 15.6 1.1 11.7 1.1 0.2 72.41 21.2 21.2 51.2 51.2 49.0 45.5 48.32026 43.8 15.9 1.2 12.0 1.1 0.2 74.18 8.8 21.2 30.0 44.2 43.3 42.1 38.4 41.22027 44.7 16.2 1.2 12.2 1.2 0.2 75.66 21.2 21.2 54.4 54.4 52.3 48.5 51.42028 45.5 16.4 1.2 12.4 1.2 0.2 77.00 21.2 21.2 55.8 55.8 53.6 49.8 52.72029 46.2 16.7 1.3 12.6 1.2 0.2 78.19 21.2 21.2 56.9 56.9 54.8 50.9 53.82030 46.7 17.0 1.3 12.8 1.2 0.2 79.25 21.2 21.2 58.0 58.0 55.9 51.9 54.82031 47.2 17.3 1.3 12.9 1.2 0.3 80.16 21.2 21.2 58.9 58.9 56.8 52.7 55.72032 47.6 17.6 1.4 13.0 1.3 0.3 81.07 21.2 21.2 59.8 59.8 57.7 53.5 56.62033 48.1 17.9 1.4 13.1 1.3 0.3 81.98 21.2 21.2 60.7 60.7 58.6 54.4 57.42034 48.5 18.2 1.4 13.2 1.3 0.3 82.90 21.2 21.2 61.7 61.7 59.5 55.2 58.32035 49.0 18.5 1.4 13.4 1.3 0.3 150.66 21.2 21.2 129.4 129.4 127.3 122.9 126.0

NPV 94.5 84.2 88.1 75.5 84.8EIRR 27.1% 25.0% 26.4% 24.9% 26.0%

Sensitivity Tests

1 Supplementary Appendix P


INSTITUTIONAL STRENGTHENING AND CAPACITY BUILDING

A. Objective 1 B. Framework for Institutional strengthening and Capacity Building 1 C. Institutional Strengthening 2 1. Phase 1 2 2. Phase 2 4 D. Capacity Building Program 5 1. Training Needs assessment 5 2. Capacity Building Interventions 6 Attachment: Training Needs Assessment Questionnaires 9

A. Objective

1. Institutional strengthening (IS) and capacity building (CB) are critical activities to support the sustainability of the project outcomes. It is proposed that IS and CB activities should be focused on the Local Water Utilities Administration (LWUA), the water districts (WD), local government units (LGU), non-government organizations (NGO) and communities.

B. Framework for Institutional Strengthening and Capacity Building

2. The Institutional and Financial Assessment of LWUA Report (Volume 2) identified significant issues and recommendations in regard to emerging changes in the governance framework for LWUA:

o LWUA should pursue an increase in its capitalization.

o LWUA should reinforce its role as a specialized lending institution and establish a system of maintaining a revolving fund from loan principal collections and limit the utilization of such funds only for loan assistance to water districts and debt servicing requirements.

o LWUA should consult with NWRB and harmonize its tariff review and other economic regulatory processes with it.

o LWUA should take steps to clarify with DOF and even with the Office of the President on the problems that it is or will encounter if its implementation policies will strictly be in accord with Executive Order (EO) 279. The consultation process should necessarily involve the LWUA Board.

o LWUA should adopt a stronger business planning approach and strive to be proactive as a capital manager rather than reactive. This primarily means moving from the current environment where LWUA effectively rations available capital to the WD works requirements to one where forward requirements are planned and then managed by sourcing the required capital as a true merchant bank.

3. Other recommendations were pertinent to management information system (MIS) development and training:

o LWUA should take the proper steps to have the application systems covered by its Information Systems Strategic Plan (ISSP) fully operational and to improve



“front end” access via implementing a web portal. It should budget what it still needs for this endeavor.

o LWUA should continue to take steps to improve its capability in engineering technology, sanitation, regulatory practices and strengthening of advisory services.

4. The changes are arising out of implementation of EO 279 at LWUA and what is seen as problems that it is already encountering and will encounter if LWUA’s ongoing development is to be in accord with EO 279. These issues are still being addressed through interaction between the LWUA board and the appropriate central government agencies

5. To address the governance issues as well as the development of LWUA and the WDs (particularly in areas of MIS and training) it is proposed that a Technical Assistance consultancy be provided as implementation support to the main project. Draft Terms of Reference for the TA are presented in Supplementary Appendix R.

6. The IS assistance will be undertaken in two phases, where the first phase focuses on reviewing current governance structures and their underlying legislation for both LWUA and the WDs, developing planning and performance management frameworks for them into the Corporate Plan for LWUA, its corresponding Business Plan as well as a generic Business Plan for the WDs. A particular strategic focus will be on sanitation services, generally through septage management.

7. In order to provide a robust tool for later strategy and policy formulation, monitoring and evaluation, Phase 1 will also include the development of a comprehensive business planning model for LWUA.

8. The second phase of IS will be to assist (to the extent of the available budget) in execution of the LWUA Corporate Plan and to implement the generic business plan for the pilot WDs. Phase 2 will also address training.

C. Institutional Strengthening

1. Phase 1

9. Phase 1 of the IS TA is expected to run for one year. It should review the Institutional and Financial Assessment of LWUA Report (Volume 2) and update it in relation to the organizational development which has been undertaken in relation to implementing EO 279. It should also review the financial impact of the recommendations of the assessment (such as organizational changes, increases in capitalization and changes to the lending mandate for LWUA).

10. Using the LWUA Financial Assessment as a basis and considering data gathered on the project pilot WDs, in relation to affordability credit worthiness, financial viability etc., pilot tariff analyses should be undertaken for the WDs and consider tariff options, their relevant features, pros and cons and make proposals in relation to tariff reform for the WDs. A corporate mission and a charter will be agreed and documented with LWUA management and the Department of Health (DOH). The charter will allow corporate objectives to be agreed in areas such as cost reduction, profitability and corporate performance. The charter will also clearly confirm LWUA’s mandate in terms of its varying roles.

11. A Corporate Plan can then be prepared by LWUA management and the TA Consultant. The plan will address objectives identified in the charter and will identify intermediate (e.g. annual ) goals, the success factors which impact on achievement such as



performance of specific departments and personnel, and any recognized constraints on performance.

12. The Plan will document agreed strategies to be followed in areas relevant to the plan including:

� financial management; � regulatory monitoring and reporting; � sanitation development; � asset management; � operations and maintenance management and control; � MIS Development � environmental management; � Human resource development and training.

13. The Corporate Plan will be submitted to the LWUA Board of Trustees for approval after discussion with central government agencies. The concordance of the central agencies must be clearly documented.

14. In respect to the WDs, it is desirable to encourage a stronger business planning focus in their management so that it reinforces the relationship with LWUA in a financial context (i.e. the client/banker dimension) and in a sustainable service context (to support the strategic social goals of LWUA).

15. In Phase 1 the TA will develop a model/ pro forma business plan which can be applied to the WDs on an individual basis. It will be developed to be synergistic with the LWUA Corporate and Business Plans and with LWUA’s strategic reporting obligations. It should also have particular priority given to long term financial viability of the WD, improving credit worthiness and financial power and funding and executing sanitation services.

16. The LWUA corporate plan and business plan, the proforma WD business plan and the preliminary training needs assessment conducted during project preparation will used as a base for a comprehensive TNA and development of a comprehensive training program for LWUA and the WDs.

17. Phase 1 will also develop a financial business planning model of LWUA and WD capital and operational environment, with the following primary objectives:

(i) to inform stakeholders of the status of the accomplishment of LWUA’s mandate as a specialized lender, particularly to smaller, less creditworthy WDs, as well as waterless municipalities attached to WDs;

(ii) to provide LWUA, government financing institutions, donor agencies, and the private sector a tool for identifying viable technical, financial, and institutional interventions to improve the delivery and quality of WD products and services;

(iii) to determine WDs’ demand for financing, and the extent to which LWUA could respond to this demand given the total programmed investment; and

(iv) to gauge LWUA’s financial performance, particularly its profitability, liquidity, and ability to service debts, in the medium and long terms.

18. The model development will build on modeling undertaken during this PPTA, and consist of three invariably linked components; these are:

(i) WD Investment Model which will comprise 5-year investment plans of each WD (in accordance with the business plan pro forma prescribed in Para. 15) and the consequent indications of the need for LWUA financing.



(ii) LWUA Investment Model which consolidates the WD investment plans and indicates the impact of capital sourcing strategies for the investment program impact sector service coverage and the levels of service provided.

(iii) LWUA Financial Model, which shows the impact of the investment program on the financial performance of LWUA. The outputs of the WD Investment Model are consolidated into the LWUA Investment Model, results of which provide inputs to the Financial Model.

19. The model development will also include:

• an interface between the WD Investment Model and WD Business Plans developed remotely;

• a user interface to allow planning parameters/ variables to be changed for scenario analysis;

• user specified graphical and other outputs.

20. The Business Planning Model is further described in Volume 2, Appendix 13.

21. Phase 2 Planning. Planning for Phase 2 of the IS should be undertaken during Phase 1. The planning should identify and document:

• The strategies agreed to in the corporate plan for LWUA as they relate to project resources including consulting staff and necessary procurement.

� Mobilisation plans for consulting staff.

� Cost Estimates.

� Disbursements program.

� Proposals for counterpart contributions (in kind and otherwise).

22. Phase 2 should be planned to run for up to three years. The Phase 2 plan must be reviewed and approved by LWUA and WD management before commencement.

23. To maintain project momentum it is suggested that a Bridging Activities Plan be developed as a supplement to the Phase 2 plan and which define activities to be undertaken while waiting for agreement on commencement of Phase 2.

24. The Bridging Activities should generally include continuation of the training program (to the extent that funding and training resources are available) and development of a kit for community outreach in regard to sanitation, it can also include para-training activities such as job swaps and secondments.

25. The PIP and the BAP will be submitted to the PMU and the Coordinating Committee for approval prior to commencement.

2. Phase 2

26. Specific outputs/ deliverables in relation to Phase 2 will be:

� Preparation of a Community Information Kit in respect to sanitation services to be provided by the water districts.

� A model Environmental Management System for the Water Districts which will be based upon the ISO 14000 framework.



It is recognised that the initial EMS will be relatively simple to allow immediate effective implementation across the range of WDs; however, it should clearly address sanitation (septage management) responsibility and in accordance with ISO14000, a specification and implementation plan for continual improvement of the EMS over a five year time frame will also be formulated.

• A model Trade Waste policy which can be implemented by the water districts to protect their septage management assets as well as reducing the cost and effectiveness of desludging. The trade waste policy should be based on source collection (i.e. non discharge) of greases, heavy metals and other non domestic strength wastes.

• An MIS Strategy generally for LWUA and the WDs and a corresponding software development and systems procurement. The strategy should address:

� The Strategic Drivers for MIS Development within the LWUA//WD framework. � Strategic Vision for MIS in the framework. � Assessment of current and planned information systems and technology

architectures and economic evaluation assumptions and analyses. � Recommended Strategy. � User specifications for key systems/ applications (e.g. Customer Care, Billing

and Revenue Collection System) which can be developed and apply at low cost in the WDs to improve financial performance and consequent credit worthiness.

� Documentation for core procurement of servers, etc., for the pilot WDs.

♦ Consolidation of the business plan model developed in Phase 1 as a major management tool for LWUA.

D. Capacity Building Program

1. Training Needs Assessment

27. A training needs assessment was made through:

1. Preparation of questionnaires for LWUA and WD staff. 2. Analysis of responses. 3. Discussions with LWUA and WD management.

28. Two questionnaires were prepared, one for technical staff and one for financial staff (see Attachment ). The questionnaires were distributed to a sample of 70 personnel in LWUA and the WDs, and 42 responses were received.

29. LWUA’s technical capability had been previously assessed as a major strength in an IBRD-financed survey of stakeholders (2008). However the training needs analysis indicates that there are still many areas of need both in terms of direct knowledge and in practical experience. WD officials are similarly noting there are new developments or technologies that the WDs are already employing but which the LWUA engineers are not familiar with. The recent global financial issues are also indicating that financial staff have significant learning needs in financial management, particularly in relation to financial modeling, client risk analysis and prudential bank management practices. These needs are emphasized in the potential effects of EO 279 where there would be greater presence of less credit worthy WDs in the LWUA loan portfolio and further if LWUA progresses to direct partial or full ownership of a merchant bank.

30. The general focuses for capacity building through training which were identified through the needs assessment are:



o Technology � General technological development such as spatial databases (GIS) and

communications (e.g. SCADA using cell phone technologies). � Engineering: new construction techniques and systems (e.g. GPS based survey

data collection. � Water Supply and Sanitation: water treatment, septage treatment.

o Management � Institutional: e.g. Out sourcing, contract management. � Customer/ Client communication. � Corporate and Strategic Planning. � Project Control and Management.

o Financial � Banking Principles � Project Evaluation including Financial Modelling � Financial Control

2. Capacity Building Interventions

a. Formal Classroom (Face to Face)

31. Formal classroom-based training is available and facilitated by LWUA in the Balara complex. This type of training provides a quiet location away from the frequent distractions and interruptions of the workplace. Usually the training is delivered to small groups (of, say, up to 17 persons). It is useful for training in topics involving theories and concepts, for it provides opportunity for discussion and practice in a “risk-free” environment.

32. This training needs to be carried out within a clear framework in which trainee selection, training content and training objectives are clearly described. Of particular interest are the “Specific Objectives” which describe in behavioral terms what a trainee will be able to do by the end of the training, which can be observed directly. These are important for a variety of reasons:

• For the trainer, they set his/her targets in measurable form. • For the trainee’s manager, they define clearly what training is being offered. • For the trainee, they give him/her a means of measuring his/her progress.

33. However, other interventions that should be considered, particularly given the participation of WD employees who will have to be accommodated, are: on-the-job training, out-sourced training, and study tours.

b. On-the-job Training

34. This is training conducted at the employee’s workplace, and has historically been undertaken on a one-to-one basis or in very small groups in a master/student environment.

35. It is practical, “hands on” training and is especially useful for transferring manual skills such as equipment operation and maintenance. This form of training is therefore often employed by equipment suppliers.

36. An alternative form of on the job training is via computer based instruction/ self-paced instruction (CBI/SPI). This was indicated by many of the respondents to the TNA as a preferred form of delivery.

37. The advantage of CDI/SPI in the LWUA/WD environment is that it allows the



participant to study at a pace that doesn’t distract from work obligations or carry complications resulting from the remoteness of the WDs.

38. The disadvantage is that, in order to make CBI/SPI effective, it must be extremely well prepared and have a heuristic systems base so as to be responsive to student requirements. Progress must also be monitored by supervisors to ensure effectiveness. These disadvantages must be addressed by course designers and generally mean that there is significant overhead experienced.

c. Out-sourced Training

39. This is similar to in-house, off-the-job training but is undertaken by third parties, usually in their own training facilities. This form is particularly useful when training of long-duration is contemplated, especially if the number of trainees is quite small. Such training is suitable where it is likely to be difficult to organize and implement with project resources (it may require special training equipment etc.) and it is usually more practicable for trainees to follow established courses offered by external institutions (for example, in accounting or electrician skills). One disadvantage is that the employer or project may have less control over the content of the training, unless the outside provider will mount a course specially tailored to project needs.

d. Study Tours

40. Study tours can be useful elements of a capacity building program as they provide a range of learning opportunities through observation, investigation and discussion. They are also valuable for team building in the project context and thus should be programmed early in the project so that maximum value is realized of the association.

41. Study tours are expensive and need to be well-planned and organized and have clear focus and objectives. There must be strict and transparent selection criteria:

• Learning objectives for every participant should be prepared in advance. • The recipient organisation must be aware of the learning objectives. • On return from the tour, participants should make a presentation to colleagues,

including feedback on their learning objectives.

42. Study tours can also result in longer-term relationships being established between participating organizations, which can bring additional future benefits such as exchange of information and assistance.

43. As information on training needs becomes more complete, training programs are prepared based on these various types of training. For each training event the duration of training, number of trainees, location, trainer and costs are identified.

e. Training Content

44. Final design of the training and other capacity building content will be undertaken under the proposed IS/CB TA. Training needs that have been identified at the current time include the following:

• Organizational development and planning.

• Financial management and Information systems (FMIS) and processes.

• Human resources development strategy and related training.



• Facility operations and maintenance of septage management systems (including contracting out).

• Facility planning and asset management.

• Development of an integrated MIS, including GIS.

• Public relations and improved public awareness.

• Environmental monitoring management and resolving environmental problems particularly in the context of sanitation.

• Outsourcing contract management, asset procurement and tendering.

45. Some of the training needs will be met through provisions in contracts with equipment suppliers, others will be met through staff working alongside and participating in training provided by the Design and Construction supervision consultants. However, the consultant will need to ensure a comprehensive program of training is prepared and delivered in a coordinated fashion. The consultant will therefore be expected to liaise with the other consultants and relevant suppliers to ensure this is achieved.



ATTACHMENT: TRAINING NEEDS ASSESSMENT QUESTIONNAIRES

1. TRAINING NEED ASSESSMENT QUESTIONNAIRE - TECHNICAL -------------------------

The Water District Development Sector Project is conducting a training needs assessment for designing a LWUA Capability Development Program. The information collected will be used to prepare a training plan for LWUAs operational staff. Your input is vital for ensuring the success of this initiative. Instruction: This questionnaire will take approximately 20 minutes to complete. Please be candid when responding to the questions. General questions:

1. What are the five main responsibilities of your job? List the approximate percent of time you spend on each job responsibility. ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

2. What competencies do you require to be successful in your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

3. What are the critical success factors for effective performance in your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

4. What are the main barriers to your success? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

5. What are the most difficult aspects of your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

6. What should the training priorities for your job function be? ____________________________________________________________________________________________________________________________________________________________________________________________________________ ____________________________________________________________________

7. What are prior courses that you have received that have helped you in your job? ____________________________________________________________________



____________________________________________________________________________________________________________________________________________________________________________________________________________

8. What are your preferred learning style (computer based, classroom, self pace)? Describe any others. ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

Knowledge/skills assessment:

9. Please complete the following self assessment by showing what skills and knowledge you have, using the following scale:

1 = Very poor 2 = Poor 3= Average 4= Good, 5= Excellent. N.A. = Not applicable.

a. Knowledge of utility customer service requirements 1 2 3 4 5 N.A. b. Knowledge of LEVEL III Planning and Design methodologies 1 2 3 4 5 N.A. c. Knowledge of Level I and II Planning and Design 1 2 3 4 5 N.A. d. Knowledge of Construction methodology/standards 1 2 3 4 5 N.A. e. Knowledge of Financial Processes (including feasibility analysis) 1 2 3 4 5 N.A. f. Knowledge of economic regulatory concepts 1 2 3 4 5 N.A. g. Knowledge of LWUA’s responsibilities, goals. 1 2 3 4 5 N.A. h. Knowledge of performance and productivity concepts

(KRAs,KPIs, stds) 1 2 3 4 5 N.A.

i. Knowledge of asset management 1 2 3 4 5 N.A. j. Knowledge of Social and Environmental management 1 2 3 4 5 N.A. k. Knowledge of IT in operations management 1 2 3 4 5 N.A. l. Knowledge of GIS 1 2 3 4 5 N.A. m. Knowledge of utility O&M principles and practices. 1 2 3 4 5 N.A. n. Ability to determine the best/optimum pump type for a specific

situation 1 2 3 4 5 N.A.

o. Ability to manage GIS 1 2 3 4 5 N.A. p. Ability to take water samples for bacti-analysis 1 2 3 4 5 N.A. q. Ability to do network modeling 1 2 3 4 5 N.A. r. Ability to make inspection processes/plans for infrastructure

components (water storages and tanks, water pumping stations, wastewater and drainage systems . WWTP etc.)

1 2 3 4 5 N.A.

s. Ability to analyze and test deepwells for deficiencies 1 2 3 4 5 N.A. t. Knowledge of Treatment Plant design and operations 1 2 3 4 5 N.A. u. Knowledge of Septage management 1 2 3 4 5 N.A. v. Communication skills (report writing, presentation) 1 2 3 4 5 N.A. w. Formulation of Business Plans 1 2 3 4 5 N.A. x. Familiarity with MS-word, excel 1 2 3 4 5 N.A. y. Managing people y. Other skills that you need for your job success

• ……………… 1 2 3 4 5 N.A. • ……………… 1 2 3 4 5 N.A.

Name: _____________________________________ Date:____________________ Position/Title:_______________________________



2. TRAINING NEED ASSESSMENT QUESTIONNAIRE – COMMERCIAL/FINANCIAL -------------------------

The Water District Development Sector Project is conducting a training needs assessment for designing a LWUA Capability Development Program. The information collected will be used to prepare a training plan for LWUAs operational staff. Your input is vital for ensuring the success of this initiative. Instruction: This questionnaire will take approximately 20 minutes to complete. Please be candid when responding to the questions. General questions:

1. What are the five main responsibilities of your job? List the approximate percent of time you spend on each job responsibility. ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

2. What competencies do you require to be successful in your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

3. What are the critical success factors for effective performance in your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

4. What are the main barriers to your success? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

5. What are the most difficult aspects of your job? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

6. What should the training priorities for your job function be? ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

7. What are prior courses that you have received that have helped you in your job?

____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________



8. What are your preferred learning style (computer based, classroom, self pace)?

Describe any others. ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________

Knowledge/skills assessment:

10. Please complete the following self assessment by showing what skills and knowledge you have, using the following scale:

1 = Very poor 2 = Poor 3= Average 4= Good, 5= Excellent. N.A. = Not applicable.

a) Knowledge of Financial concepts as applied to utilities 1 2 3 4 5 N.A. b) Knowledge of Capital Planning Management 1 2 3 4 5 N.A. c) Knowledge of Treasury Management 1 2 3 4 5 N.A. d) Knowledge of Financial Assessment through ratio analysis 1 2 3 4 5 N.A. e) Knowledge of Economic Evaluation (e.g. ERR analysis) 1 2 3 4 5 N.A. f) Knowledge of Asset Valuation and Present Value analysis 1 2 3 4 5 N.A. g) Knowledge of Water And Wastewater Engineering Concepts 1 2 3 4 5 N.A. h) Knowledge of economic regulatory concepts 1 2 3 4 5 N.A.

i) Knowledge of LWUA’s responsibilities, goals. 1 2 3 4 5 N.A. j) Knowledge of performance and productivity concepts (KRAs,KPIs, stds

1 2 3 4 5 N.A.

k) Knowledge of asset management 1 2 3 4 5 N.A. l) Knowledge of Social and Environmental management 1 2 3 4 5 N.A. m) Knowledge of GIS 1 2 3 4 5 N.A. n) Communication skills (report writing, presentation) 1 2 3 4 5 N.A. o) Formulation of Business Plans 1 2 3 4 5 N.A. p) Familiarity with MS-word, excel 1 2 3 4 5 N.A. q) Managing people 1 2 3 4 5 N.A. r) Other skills that you need for your job success 1 2 3 4 5 N.A.

• ……………… 1 2 3 4 5 N.A. • ……………… 1 2 3 4 5 N.A.

Name: _____________________________________ Date:____________________ Position/Title:_______________________________

Supplementary Appendix Q


INDICATORS FOR MEASURING DEVELOPMENT OBJECTIVES AND PERFORMANCE

Contents

Page

A. Introduction 1

B. Project Objectives and Scope 2

C. Stakeholders 2

D. PPMS Activities undertaken by the PPTA 3

E. PPMS Approach 3

F. PPMS Implementation 3 1. Timeframe 3 2. Objectives 4 3. Components 4 4. Design and Monitoring Framework 4 5. Key Performance Targets and Indicators 4 6. Data Sources, Analysis, Reporting 4 7. Annual PPMS Reports and Other Evaluations 7 8. Sequence of Activities 7 9. Institutional Structure for PPMS 8 10. PPMS Survey Costs 9

Figures

1 Monitoring and Evaluation Flowchart 6 2 PPMS Activities 8 Tables

1 Monitoring and Evaluation Team 9 Attachment – Performance Indicator Tables

a Key Performance Indicators – LWUA 12 b Key Performance Indicators – Water Districts 13



1

A. Introduction

1. The terms of reference (TOR) for the PPTA state in Clause 5 (xxiv): “Prepare an effective project performance monitoring system that includes monitoring of the Project’s performance, benefits and impact on poverty reduction. Identify the training needed to strengthen capacity for project performance monitoring.”

2. The Water District Development Sector Project (WDDSP) is an investment project planned for the urban water supply sector in the Republic of the Philippines. It does not, however, include the Manila/ National Capital Region. The scope of the initial phase of the sector project addresses development of water supply and sanitation services for a short-list of five pilot water districts (WD), and a long-list of WDs identified for implementation under subsequent phases. The participating WDs have been selected on the basis of relevant criteria and indicators such as (a) demand for improved water supply and sanitation, (b) fiscal capacity, financial management, commitment to reform, and governance, (c) focus on serving low-income communities, (d) well-defined investment needs, and (e) project preparedness. Subproject appraisal reports (SPAR) have been prepared for the five pilot WDs during the PPTA.

3. The expected outputs are: (i) improved financial and operational performance from the target water districts, and (ii) increased water supply continuity and coverage, and improved quality.

4. The Project Performance Monitoring System (PPMS) allows the Project to determine the effectiveness and cost of various implementation approaches and identify those with the greatest impact and use for improving water services in participating WDs. The PPMS will provide data, information and reports for management use to all involved stakeholders at national (LWUA), city (LGU) and water district levels. The Project will be implemented with the co-operation from government agencies involved.

5. The design and monitoring framework of the Project contains performance indicators for measuring progress towards the intended outputs, outcomes and impacts. During Year 1 of the Project, the Project Management Unit (PMU) which will operate within the Local Water Utilities Administration (LWUA), will implement the system with the assistance of Project Management Consultants (PMC) for monitoring project performance in each of the participating water districts. The PMC will operate the system.

6. The PPMS will monitor WDDSP outputs, outcomes and impacts. The Project will consist of two main components:

1. Water supply development and improvement of performance. 2. Capacity building and project implementation support.

7. The Project will be implemented in two batches of WDs. The first batch consists of the five pilot WDs studied during the PPTA. Subsequent batches will be dependent on the availability of residual funds from the ADB loan budget, and will be drawn from a long-list of priority WDs which already have feasibility studies completed under World Bank and KfW programs.

8. Implementation of the Project is expected to occur over six years, from 2011 to 2016.

9. The scope of the water supply component will include the following activities:

� preparation/ implementation of simple contracts for system improvement (e.g. bulk and customer meter replacement, pressure management infrastructure, GIS, modelling software, leak detection equipment, mains replacement);



2

� groundwater source confirmation (test drilling), where needed; � detailed engineering design (DED), preparation of bid documents; � procurement of contractors, contract awards; � rehabilitation and new construction/installation works.

10. The scope of the capacity building program will include institutional strengthening, implementation support, training, and human resources development activities.

B. Project Objectives and Scope

11. The Project will be located in LWUA, five pilot water districts, and four additional water districts from the long-list. Initially the Project will be located in the following six areas:

a. Metro Manila in respect to activities at LWUA. b. Metro La Union Water District, La Union Province, Luzon. c. Quezon Metro Water District, Quezon Province, Luzon. d. Legazpi City Water District, Albay Province, Luzon. e. Leyte Metro Water District, Leyte Province, Visayas. f. City of Koronadal Water District, South Cotobato Province, Mindanao.

12. Each water district forms a subproject of the overall Project, and the PPTA has prepared a subproject appraisal report (SPAR) for each of the pilot WDs in accordance with ADB and LWUA criteria.

C. Stakeholders

13. In implementing the PPMS concerned stakeholders at three levels will be addressed and referenced; these are:

a. National Level ♦ DOH (Department of Health) ♦ LWUA (Local Water Utilities Administration) ♦ DENR (Department of Environment and Natural Resources) ♦ NRWB (National Water Resources Board)

b. Pilot Water Districts • Metro La Union Water District. • Quezon Metro Water District. • Legazpi City Water District. • Leyte Metro Water District. • City of Koronadal Water District.

c. Additional Water Districts • Cabuyao (Laguna, Luzon) • Laguna (Laguna, Luzon) • Camarines Norte (Camarines Norte, Luzon) • Sorsogon (Sorsogon, Luzon).

d. City/LGU level • San Fernando City; Bacnotan, San Gabriel, San Juan and Bauang

municipalities - La Union Province, Luzon. • Lucena City; Tayabas and Pagbilao municipalities - Quezon Province, Luzon. • Legazpi City - Albay Province, Luzon. • Tacloban City; Dagami, Santa Fe, Tanauan, Tolosa, Tabon-tabon, Palo and

Pastrana municipalities; - Leyte Province, Visayas. • City of Koronadal - South Cotobato Province, Mindanao.



3

• Cabuyao (Laguna, Luzon) • Laguna (Laguna, Luzon) • Camarines Norte (Camarines Norte, Luzon) • Sorsogon (Sorsogon, Luzon).

e. NGOs

f. CBOs

D. PPMS Activities undertaken by the PPTA

14. The PPTA team carried out the following activities: (i) identification of key stakeholders; (ii) meetings and workshops during SPAR preparation in the pilot WDs, during which some issues related to the PPMS were discussed; (iii) focus group discussions; (iv) socio-economic surveys of households; (v) water supply and sanitation11 technical assessments; and (vi) disclosure consultations on the draft resettlement framework and initial environmental examinations.

E. PPMS Approach

15. The conceptual approach is to design a system that is integrated, participative and as easy as possible to implement. Ideally, the suggested methodology will be tested in a pilot area, and adjustments will then be made prior to the application of the system throughout the project area. This will fit the implementation schedule for the Project, which foresees a phased approach.

16. The PPMS will incorporate: (i) stakeholder consultation; (ii) a bottom-up, community-driven participatory approach; (iii) self-assessment techniques at the WD level, which will be used as a complement to secondary data sources and formal surveys to stimulate from the outset a sense of process ownership among the identified WDs; (iv) the organization structure of the Project; (v) the availability, quality and timeliness of secondary data; (vi) the need to establish indicators, data sources, data processing and report production responsibilities for each of the two components in the Project; (vii) the establishment of linkages between inputs and outputs for each of the subprojects component and the Project as a whole; (viii) appropriate methodology for data collection, processing, analysis and reporting (information dissemination) at national (LWUA), WD and community levels; (ix) PPMS resource requirements (staff, equipment, costs); and (x) simplicity.

17. At each level, consideration will need to be given to what level of managerial, technical and PPMS support will be required to provide sufficient backing to the project teams that will work directly with water districts, government agencies and participating communities (and their respective committees) to develop improved water supply and sanitation facilities. The EA’s existing institutional capacity to implement PPMS, including available MIS to track selected indicators, will be reviewed.

F. PPMS Implementation

1. Timeframe

18. The PPMS will operate throughout the life of the Project, until the impact evaluation stage, which is up to 10 years after the start of the Project.

11 The sanitation component was subsequently dropped from the project scope due to changed grant funding priorities.



4

2. Objectives

19. The PPMS defines indicators and reporting systems to enable the Government, ADB, and all stakeholders to evaluate the progress and impact of each subproject component, and the Project as a whole, of the project interventions. Monitoring the impact of improved access to drinking water facilities in will be the main focus of the PPMS system.

3. Components

20. The Project will be monitored under its two components—(i) Water supply development and improvement of performance, and (ii) Capacity building and project implementation support—and within the specific areas of focus (LWUA and the WDs).

4. Design and Monitoring Framework

21. The Design and Monitoring Framework (Project Logical Framework) is shown in RRP Appendix 1. The system will be designed to monitor and evaluate the project objectives and the output of each of the main activities of the three components.

5. Key Performance Targets and Indicators

22. Formats of tables showing key performance indicators (PI) for LWUA and the pilot water districts are shown in the Attachment .

6. Data Sources, Analysis, Reporting

23. There are three main stages in the PPMS: (i) establishing the benchmark status of institutions, infrastructure and beneficiaries; (ii) periodic monitoring to show the progress of implementation, and the effectiveness, impact and sustainability of interventions; and (iii) end-of-project surveys to assess the final impact and sustainability of the Project.

a. Benchmark Stage Status of Government Agencies

24. The status of relevant government agencies at national and relevant provincial level and in the participating water districts will be established in terms of: (i) resources (manpower, skills, finance, equipment and facilities); (ii) MIS; and (iii) management attitudes. The agencies and water districts will collect and analyze the data themselves, assisted by M&E staff and experts appointed for the Project. Report production will be undertaken by the water districts and LWUA assisted by the consultants, raising issues, drawing conclusions and verifying interventions, indicators and data sources to be used for monitoring.

Benchmark Survey

25. It is anticipated that a benchmark survey will be undertaken in the early stages of the Project to assess performance of the water (and where appropriate) sanitation systems in the pilot subproject areas. On the basis of the survey outcomes the performance indicator targets and potentially the PIs themselves to be applied within the PPMS will be reviewed and recalibrated.

b. Implementation Stage 26. This is the most important aspect of project impact and sustainability monitoring during implementation. The M&E team at national level (in conjunction with government



5

agencies and other M&E staff) will prepare report formats to be completed by water districts, assisted by facilitators and, in the case of sanitation and hygiene interventions, by staff at barangay level for each monthly of implementation.

27. Each data/text sheet will be one half to one page long and completed in association with monthly data sheets.

28. During implementation the M&E staff at all levels will discuss requirements for special studies to be carried out by consultants on specific topics. These will include water quality and improved water supply and sanitation and consequent health impact studies.

29. The work flow of the M&E System is shown in Figure 1 .



6

Figure 2: Monitoring and Evaluation Flowchart

Report Tasks Data Sources

1 National

1 PMU within LWUA aggregates

data/information from each Pilot WD and reports

1. WD reports 2. Survey data

2 PMU compiles consolidated project reports

3 PMU distributes reports4 Necessary follow-up action is

taken by LWUA and concernedagencies

3 Water Districts

1 City Co-Ord Office Aggregates Data From Each Sub-District

Water District Reports

2 Cuty Co-Ord Office Compiles Consolidated Report

3 Reports Distributed4 Necessary follow-up action is

taken by concerned agencies

4 Local government Unit

1 Sanitation Facilitator Aggregates Data

Sanitation Facilitator Reports

2 Sanitation Facilitator compiles Consolidated Reports

5 1 Community/NGO Prepares Report 1. Communities NGOs 2 Community Reports Checked

By Facilitator Teams2.

3 Reports Discussed By

Barangay Council

= DATA/ INFORMATION/ REPORT FLOW PPMS Level

Barangay/ NGO

Dept. of Health

LWUA Administrator

Project Leader

Project Management Unit

Steering

Committee

Steering Committee

District Protect Implementation Units (PIUs)

LWUA as Implementing Agency

Mayor‘s office

Project Team

Sanitation Facilitator

Barangay Council

Barangay Captain

NGOs/ Stakeholders



7

c. End of Project Stage

30. During the last year of the project it is anticipated that the benchmark survey (as above) will be repeated to assess and quantify project outcomes which will be reported through the PPMS and through the Project Completion Report.

7. Annual PPMS Reports and Other Evaluations

31. Annual PPMS reports and other evaluations are:

• Borrower Monitoring and Evaluation (at executing and implementing agency levels): The reports from the PPMS will be used to show progress of financial and physical aspects of the Project and will include audit reports.

• Project Performance Report (PPR); Project Completion Report (PCR); Project Performance Audit Report (PPAR); Impact Evaluation Studies: The PPMA will supply data and reports for (i) the project performance report, which will be compiled in accordance with existing procedures and the latest standardized content; (ii) the PCR which will be completed at the end of the project period; (iii) the PPAR; and (iv) bi-annual project reviews and the mid-term and end-of-project evaluations.

8. Sequence of Activities

32. The sequence of events is shown on Figure 2 .



8

Figure 2: PPMS Activities

No. Item 2010 2011 2012 2013 2014 2015 2016

Mobilisation

1 Mobilize M&E Consultants 2 Finalize Overall M&E System and Program 3 Confirm and Train M&E Facilitators in LWUA/WDs

BenchmarkingBenchmarking

4 Household Surveys in 5 WDs a Prepare Terms of Referenceb Mobilise Survey contractorc Finalise Survey Questionaired Field Surveye Data entry f Analysis and Reporting

5 Confirm Survey Results to Project Outcome a. Endorsement by LWUA and WDsb Commitment of M&E Resources

Implementation

6 Monthly Financial and Construction Reportsa Water Districtsb LWUA

7 Quarterly Performance and Servicce Delivery Impact Reportsa Water Districts b LWUA

8 Quarterly Institutional Strengthening Reportsa LWUA

AusAID 9 AusAID (Donor) Technical Assesment Review

TBA

10 Semi Annual RoP, ADB Evaluations

11 Annual Project Progress Reporting

12 Mid Term Review

13 End of Project Household Surveya Prepare Terms of Referenceb Mobilise Survey contractorc Finalise Survey Questionaired Field Surveye Data entry f Analysis and Reporting

14 Project Completion Report

Source: PPTA.

9. Institutional Structure for PPMS

a. LWUA Level

33. To implement the PPMS, the PMU within LWUA will have a small M&E section with an MIS capability. The M&E section will be supported by an MIS/M&E specialist, who will establish the section, determine methodology and define procedures. The M&E section will be responsible for: (i) overall design of the system; (ii) supervision of M&E staff at WD and



9

community level, with a focus on ensuring participatory monitoring; (iii) aggregation and analysis of M&E data; (iv) preparation of reports to show the progress of the subprojects by component (financial, physical, impact and sustainability); (v) raising issues and suggesting adjustments to design and implementation; (vi) dissemination of reports; (vii) planning a schedule of meetings of stakeholders at local level to discuss progress and issues; (viii) preparing information for bi-annual project review missions and reviewing evaluation reports; (ix) periodic internal evaluations; and (x) ensuring that the system meets the M&E requirements of the government and ADB.

34. Other MIS/M&E staff at WD level will include a financial management expert who will establish and maintain the necessary financial management/accounting systems and procedures, and design the forms and reports that will record, classify, summarize and report on project financial transactions.

b. Water District Level

35. At least one of the subproject staff will act as facilitator in implementing the PPMS in respect to the financial and physical progress and impact and sustainability of the subprojects. The facilitator will take primary responsibility for all data collection and analysis related to the status of project activities at WD level. In particular, the facilitator will ensure that data collection, processing and report production at WD and community level meets quality requirements and timelines and that data and reports from the WD are transmitted to LWUA. Facilitators will pay particular attention to beneficiary self-assessment monitoring, report production, raising of issues, and the resolution of problems at WD level. Care will be taken to publicize results and ensure complete transparency. He/she will liaise with community organizations, government personnel and the other facilitators in the design, implementation and use of the PPMS. Efforts will be made to ensure that women, children and marginalized groups are included in the system

36. .The team for monitoring is summarized in Table 1 .

Table 1: Monitoring and Evaluation Team

Consultant Position/ level Number Government or

Consultant

Total Person Months

LWUA Level M&E Implementation specialist 1 Consultant 5 Financial/field data collection expert 1 Consultant 5 Water District Level M&E Facilitators1 To be

determined Consultant and Project Personnel

1 Facilitators will have other duties

10. PPMS Survey Costs

37. The cost of the PPMS includes direct costs of the appointed M&E consultants, and surveys and indirect costs which will be borne by the LWUA and WD participants. Direct costs are estimated as:

Consultants (including travel etc) USD 50,000 Baseline Survey 30,000 Completion Survey 30,000 Total USD 110,000



10

38. Note that this estimate assumes that implementation activities for the PPMS will be undertaken and costed as part of the overall commissioning of the Project.



11

ATTACHMENT – PERFORMANCE INDICATOR TABLES

a. Key Performance Indicators – LWUA

b. Key Performance Indicators – Water Districts



12

a. Key Performance Indicators – LWUA Performance indicators - LWUA No. Item Unit

Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual1 Inputs

Project Implementation No.Formation of PMU No.Appointment of PMC, CMC, CBC No.

2 OutputsTraining Courses Student daysDevelopment Plan DateMIS Strategy DatePIP Date

MIS Procurement AmountProforma EMS Development for WDs Date

3 OutcomesCritical Success Factors from Development Plan TBA

4 Impacts Population Served (increase) No.Investment Outlay (Loan Book) Amount

5 SustainabilityCollection efficiency PercentageCost Recovery Percentage

Yr 4 Yr 5 Yr 6Yr 1 Yr 2 Yr 3



13

b. Key Performance Indicators – Water Districts No. Item Unit

Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual1 Inputs

Project Implementation DateFormation of Subproject Team DateFormation of Subproject Sanitation Committee DateCooperation agreement signed DateIEC Program implemented

2 Outputs

Training undertaken Person coursesTariff review Date Implementation of EMS Date Treatment Plant NumberExisting Source Augmented lpsNew Wells Developed NumberWells Refurbished Number

3 Outcomes - Water Supply

NRW Reduction %

Treatment Plant - additional capacity m3/day

Existing Source Augmented m3/dayAdditional service connections No of ConnectionsImproved Water Supply - Continuity Ave Hours per dayImproved Water Supply - Adequacy LpcdImproved Water Supply - Quality Ave annual FC Count

4 Sustainability

Cost Recovery %geLoan Service Obligations Met %geCredit Worthiness Rating Rating

Yr 4 Yr 5 Yr 6Yr 1 Yr 2 Yr 3

Supplementary Appendix R


TERMS OF REFERENCE FOR CONSULTANTS (PROJECT IMPLEMENTATION SUPPORT SERVICES)

I. Introduction 1 II. Terms of Reference for Project Management Adviso ry and Related Services………………………………………………………………………………………. 3

A. Objectives of the Consulting Services 3 B. Scope of Works 3 C. Management of the Services 6 D. Inputs to be Provided by the Government 6 E. Inputs to be Provided by the Consultant 6

III. Terms of Reference for Institutional Developmen t and Capacity Building Services………………………………………………………………………………………. 10

A. Objectives of the Consulting Services 10 B. Scope of Works 10 C. Management of the Services 12 D. Inputs to be Provided by the Government 12 E. Inputs to be Provided by the Consultant 13

Tables 1 Proposed Consultant Inputs 2 2 Project Management Advisory and Related Services – Required Personnel Inputs 7 3 Project Management Advisory and Related Services – Required Deliverables 9 4 Capacity Building Advisory Services – Required Personnel Inputs 13 5 Capacity Building Advisory Services – Required Deliverables 15 Attachment: Project Data Sheet 16 Figure 1: Organization of WDDSP 17



1

I. INTRODUCTION

1. The consulting services will support the Project and build institutional capacity in LWUA, the project management unit (PMU), water districts (WD), local government units, communities and non-governmental organizations (NGO).

2. The proposed consulting services will comprise two consultant contract packages:

(i) Project management advisory services, including detailed engineering designs (DED), preparation of contract documents, support to WDs with construction supervision and quality control, and the preparation of any resettlement plans (RP).

(ii) Institutional development and capacity building. 3. All terms of reference refer to a project data sheet, which is attached to this supplementary appendix.

4. Consultant inputs are summarized in Table 1. Consultant (especially international consultant) time is front-loaded to help the Project to get quickly moving in its early years by developing and institutionalizing its procedures (e.g., contracting and procurement) and to establish the project management framework. Follow-up visits are designed to assess the extent to which component approaches and administrative procedures have worked thus far, and refine them based on project experience to that point. Later in the Project, the need for international consultants typically diminishes significantly. If additional or extended consultant needs are identified later in the Project, funds can be reprogrammed accordingly.

5. There are both international and national consultants attached to the PMU. International consultants bring management and technical experience and proven methods from projects in other countries to complement and build upon local consultants’ extensive experience and knowledge of project experience in the Philippines. Given the considerably higher cost of international consultants, their utilization is proposed judiciously, amounting to 15% of the total consultant person-months for the project management advisory services (international inputs for capacity building would be higher because of the nature of the services).

6. Beyond having extensive project experience in other countries, using international consultants in certain selected positions (e.g., team leadership and institutional capacity strengthening) can significantly affect the Project’s ability to deal directly with senior government and ADB officials. This can have a significant positive impact on project operations. Being able to meet directly with senior decision-makers and frankly discuss problems delaying project planning or implementation can help eliminate roadblocks that might otherwise delay implementation, budget approval, policy change, or funds disbursement.



2

Table 1: Proposed Consultant Inputs No. 2011 2012 2013 2014 2015 2016 Total

(I - international; N - national)

1

a) Project Mangement Advisory1.1 Water Specialist (Team Leader) I 9 11 10 9 2 3 441.2 Water Engineer (Deputy Team Leader) N 9 11 11 11 11 7 601.3 Financial Specialist N 5 6 2 2 0 3 181.4 Project Management Specialist N 9 7 6 6 6 6 40

Subtotal a) I 9 11 10 9 2 3 44N 23 24 19 19 17 16 118T 32 35 29 28 19 19 162

b) Detailed Engineering Design (DED)1.5 Senior Water Supply Design Engineer I 2 4 2 0 0 0 81.6 Water Supply Design Engineers (3 posts) N 12 45 24 0 0 0 811.7 Electro-mechanical Engineer N 2 6 4 0 0 0 121.8 Water Treatment Specialist N 2 4 2 0 0 0 81.9 Hydrogeologist (2 posts) N 6 24 12 0 0 0 421.10 Hydrologist N 3 6 3 0 0 0 121.11 CAD operators (2 posts) N 6 24 12 0 0 0 42

Subtotal b) I 2 4 2 0 0 0 8N 31 109 57 0 0 0 197T 33 113 59 0 0 0 205

c) Preparation of Contract Documents and Assistance in Bidding Procedures1.12 Procurement Specialist (Team Leader) I 2 2 0 0 0 0 41.13 Water Supply Engineer (Deputy Team Leader) N 6 6 2 0 0 0 141.14 Quantity Surveyor N 1 1 0 0 0 0 21.15 Contract Document/ Legal Specialist N 1 1 0 0 0 0 2

Subtotal b) I 2 2 0 0 0 0 4N 8 8 2 0 0 0 18T 10 10 2 0 0 0 22

d) Construction Supervision and Quality Control1.16 Construction Engineer (Team Leader) I 0 8 6 6 6 4 301.17 Construction Engineer (4 posts) N 0 32 36 36 36 10 1501.18 Water Supply Engineer N 0 8 6 6 6 4 301.19 Quantity Surveyor N 0 1 1 1 1 1 51.20 Contract Specialist/ Legal Specialist N 0 1 1 1 1 1 5

Subtotal c) I 0 8 6 6 6 4 30N 0 42 44 44 44 16 190T 0 50 50 50 50 20 220

e) Resettlement Plan Preparation1.21 Resettlement Specialist I 2 2 2 0 0 0 61.22 Social Development and Resettlement Specialist N 4 4 4 4 2 0 18

Subtotal d) I 2 2 2 0 0 0 6N 4 4 4 4 2 0 18T 6 6 6 4 2 0 24

Total 1 I 15 27 20 15 8 7 92N 66 187 126 67 63 32 541T 81 214 146 82 71 39 633

2 Institutional Strengthening and Capacity Building (Phase 1: 2011; Phase 2: 2012-2014)2.1 Institutional Development Expert (Team Leader) I 9 6 6 4 0 0 252.2 Training Specialist I 3 1 0 1 0 0 52.3 Finance Management Specialist I 2 2 2 0 0 0 62.4 Economist I 2 0 0 0 0 0 22.5 Environment Specialist I 0 2 0 0 0 0 22.6 Information technology Specialist I 0 3 1 0 0 0 42.7 Training Specialist N 6 3 3 0 0 0 122.8 Financial Management Specialist N 4 3 3 1 0 0 112.9 Environment Specialist N 0 6 0 0 0 0 62.10 Management Information System (MIS) Specialist N 0 6 3 3 0 0 12

Total 2 I 16 14 9 5 0 0 44N 10 18 9 4 - - 41 T 26 32 18 9 0 0 85

Grand Total I 31 41 29 20 8 7 136N 76 205 135 71 63 32 582T 107 246 164 91 71 39 718

Source: PPTA Consultant

Post

Project Management Advisory Services, Detailed Engineering Design, Preparation of Contract Documents, Assistance in Bidding Procedures, Support for Construction Supervision, and Preparation of Resettlement Plans



3

II. TERMS OF REFERENCE FOR PROJECT MANAGEMENT ADVISORY AND RELATED SERVICES

A. Objectives of the Consulting Services

7. The Government of Philippines (GOP) intends to procure the services of a reputable consultant ("the Consultant") to provide management advisory and related services for the implementation of the ADB-funded Water District Development Sector Project (WDDSP). The project includes support to the Local Water Utilities Administration (LWUA), water districts and, for sanitation, local government units (LGU), for contract document preparation, construction supervision and (where required) with the preparation of resettlement plans (RP). The services will be provided to the staff of a Project Management Unit (PMU) to be established in LWUA, and to the implementing agencies (participating water districts and, for sanitation, LGUs).

8. The purpose of the PMU is to manage, coordinate and monitor Project activities. Refer to the attached Project Data Sheet for an overview of institutional arrangements.

B. Scope of Works 9. Project management advisory services. These include the following:

(i) maintain a master schedule of all Project activities and monitor performance against progress, identifying problem areas and working with PMU and implementing agencies to solve these problems,

(ii) assist the PMU in financial management of the Project including oversight of project accounting, monitoring financial performance of the Project and preparation of reports as necessary,

(iii) ensure compliance with quality and best practices of consultancy services and physical works carried out by contractors (this work would include design review and checking responsibilities),

(v) advise on procurement related matters, (vi) coordinate activities of consultants working for WDDSP to ensure optimal and

effective utilization of resources, (vii) review specific reports, with special regard to environmental and social

development activities, and forward a copy to ADB, (viii) ensure compliance with all relevant ADB policies and guidelines, (ix) monitor compliance with loan covenants using the Project Performance

Monitoring System (PPMS), and (x) prepare periodic reports, such as progress and audited financial reports, to

PMU and ADB as required.

10. The Consultant will assist the PMU with the design and implementation of a PPMS based on indicators included in the WDDSP loan agreement. These indicators and associated targets will be disseminated to the participating water districts and LGUs (where relevant) and used to guide the preparation of implementation action plans, and financial improvement plans. The plans will include the development and operation of an information system to collect and analyze information required for inclusion in the PPMS. Baseline data should be available at the end of the first full year of project implementation and a complete set of indicator results for each subproject by the end of the second year.



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11. Detailed engineering design services. For the water supply component, these include:

(i) construction of test wells where needed to confirm groundwater potential;

(ii) topographic surveys of proposed water treatment plants, transmission and distribution pipeline routes, well sites, and other facilities;

(iii) line and profile survey of proposed transmission pipe routes;

(iv) flow measurements of surface water sources and hydrological analysis;

(v) hydraulic analysis of water supply systems to determine optimum and cost efficient designs;

(vi) design of production wells;

(vii) installation and running of software for geographic information systems (GIS)/ management information systems (MIS) as appropriate.

(viii) preparation of Engineer’s Estimates.

12. Preparation of contract documents. These include the preparation of:

(i) pre-qualification documents and guidelines on short-listing of contractors,

(ii) outline designs and general arrangement drawings for proposed works,

(iii) schedules of quantities based on outline designs; these schedules need to be arranged to support the selection of the winning bidder during the bid evaluation process, and the execution of the contract on a schedule-of-rates basis,

(iv) schedules of quantities to include for: (a) construction of the facilities, (b) operation and maintenance of treatment plants and distribution systems for a six-month period, (c) training of staff in the operation and maintenance of the system, (d) a house connection marketing campaign, and (e) house connection installation costs for a contracted number of customers,

(v) performance-based specifications for the works with salient criteria including: (a) the service area, (b) the minimum number of connections to be added to the system, (c) water quality, (d) service levels, and (e) water throughput, and

(vi) bid documents, including: (a) definition of the service area including (definition of boundary, description of sites proposed for use in the Project, and details of any existing facilities), (b) outline of the scope of works to be executed, (c) performance criteria to be achieved, (d) general arrangement drawings, (e) schedules of quantities and rates, and (f) technical standards to be observed in the construction of the works.

13. Contract documents will include pre-qualification and formal bid documents, in accordance with prevailing GOP and ADB regulations. The services will be delivered to LWUA.

14. Assistance in Bidding Procedures. Bidding procedures for construction and other services will be formally undertaken by the PMU in accordance with ADB guidelines, and all contracts will be awarded by the PMU. The Consultant will provide material assistance to the PMU in bidding procedures. The assistance will include but not be limited to:

(i) Providing technical information to potential bidders as required and in accordance with ADB and LWUA guidelines for bidding.



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(ii) Providing technical advice in respect to bid assessment including participating as a member of relevant assessment committees.

(iii) Providing technical advice as appropriate and in required during contract negotiations.

15. Construction supervision. The Consultant’s tasks include, but are not limited, to:

(i) examine and approve the contractor’s facilities, to ensure that these facilities conform to the agreed contract documents;

(ii) examine and approve the contractor’s proposed work methods including but not limited to examining and approving occupational health and safety procedures;

(iii) assess the adequacy of materials, equipment and labor provided by the con-tractors, the contractor’s methods of work, and rate of progress and (where required) recommend appropriate action to the water district general manager (GM) to expedite progress;

(iv) examine and approve the contractor’s plans defining the location of the crushing and aggregate processing plants and the like;

(v) examine and approve all implementation plans and working drawings prepared by the contractor;

(vi) issue all necessary instructions to the contractor, and examine and control the work to ensure that these are carried out according to the contract documents;

(vii) provide general guidance to the contractor as may be necessary to ensure that the works are carried out according to schedule and within the terms of contract;

(viii) inspect all working areas and installations during the execution of the works;

(ix) compute quantities of works and materials, which have been accepted and approved, and examine and certify contractor’s payment requests;

(x) report monthly on the progress of the works, the contractors’ performance, quality of works, and the subproject’s financial status and projections;

(xi) ascertain and agree with the contractor all work measurements and review, and recommend payment claims and certify these to the WD GM as being correct and within the terms of the contract;

(xii) record the results of measurements carried out for quantities to be paid for the provisional and final accounting, on forms normally used in the Philippines or previously agreed with the GM;

(xiii) advise the client on any environmental recommendations to overcome possible problems encountered;

(xiv) review the following contractor’s documents and recommend appropriate action to the GM, as necessary: periodic progress reports, quality-testing results, requests for variation, contractor’s claims, and contractor’s invoices;

(xv) alert the GM to any problems that arise in connection with the contractor and make recommendations for solving them;

(xvi) assist the GM in any dispute that may arise with the contractor and give a firm opinion on any claim the contractor may put forward, by drawing up a report which includes all the elements on which the judgment is based;

(xvii) carry out an inspection upon completion of works and recommend on maintenance during defect liability period; and

(xviii) ensure that ‘as-built’ drawings are prepared for all works as construction



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progresses.

16. Preparation of Resettlement Plans. The Consultant will assist the participating WDs and LGUs with the preparation of RPs in accordance with prevailing GOP and ADB regulations. These documents will be submitted within six months from WDDSP loan effectiveness.

C. Management of the Services

17. LWUA is the Executing Agency (EA) for WDDSP. The Project Management Unit (PMU) is responsible for the management and supervision of these technical services.

D. Inputs to be Provided by the Government

18. LWUA, the participating WDs and, where relevant, LGUs, will make all relevant data and operational records available to the Consultant, including (but not limited to) SPARs, documents defining proposed piped service areas, contract documents, information on existing facilities, field survey data and external audits.

19. Each participating WD will assign one full-time counterpart staff to facilitate conduct of the services. Specialist staff will be available to brief the Consultant at short notice, while senior staff of the government will be available for consultation within two working days of a request for such a consultation.

E. Inputs to be Provided by the Consultant

20. A total of 633 professional staff months are anticipated to support LWUA during the implementation period, of which 92 staff months of personnel with international experience (Table 2). The Consultant's team will be based in Metro Manila, with field offices established to assist with construction supervision and the preparation of RPs. The cost of the services is estimated at US$6.54 million; this amount includes the cost of travel, office accommodation and support staff in Metro Manila, and other out-of-pocket expenses, all of which will be borne by the Consultant.

21. Office accommodation and support staff in the participating WDs will be provided by the WDs.

22. It is anticipated that WDDSP will be implemented over a 6-year period from 2010 to 2016. It is expected that the assignment will take place from 2011 to 2016 (60 months). Project management advisory services will be provided during the full period. DED, contract document preparation and assistance with bid evaluation will take place from 2011 to 2013. Construction supervision will take place from 2012 to 2015. RP preparation is expected to be completed during 2011-2012. Refer to Table 3 for an overview of required deliverables.



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Table 2: Project Management Advisory and Related Services - Required Personnel Inputs

Position Person Months a

Qualifications Required

Project Management Advisory Water Specialist (team leader)

44 (I) At least 15 years post-graduate experience, of which at least 10 years in pro-ject management consulting for ADB WB or similarly financed projects in water supply, sanitation, or other urban infrastructure in Philippines. Familiar with current best practices in design-build or turnkey contracts. Recognizable leadership skills and multi-disciplinary team leadership experience.

Water Engineer (deputy team leader)

60 (N) At least 15 years post-graduate experience, of which at least 10 years in project management consulting for ADB, WB or similarly financed projects in water supply, sanitation, or other urban infrastructure. Will have recognizable leadership skills and at least 10 years of multi-disciplinary team leadership experience.

Financial Specialist 18 (N) At least 10 years experience since acquiring a degree in finance or commerce. Minimum five years previous experience working on ADB or WB projects and good understanding of financial reporting for effective management of projects.

Project Management Specialist

40 (N) A water supply/ sanitary engineer or urban planner, with at least 15 years experience in water supply, sanitation, SWM or other urban infrastructure, at least 10 years of which should have been in the preparation of investment plans, including local institutional development action plans. Policy and capacity analysis, development and implementation and planning favorably considered.

Subtotal 162

Detailed Engineering Design Senior Water Design Specialist

8 (I) At least 15 years post-graduate experience, of which at least 10 years in design consulting for ADB, WB or similarly financed projects in water supply, sanitation, or other urban infrastructure in Philippines or SE Asia. Familiar with current best practices in water supply and sanitation (septage management) design.

Water Supply Design Engineers (3 posts)

81 (N) At least 15 years post-graduate experience, of which at least 10 years in design consulting for ADB, WB or similarly financed projects in water supply infrastructure in Philippines. Familiar with current best practices in water supply design.

Electro-mechanical Engineer

12 (N) At least 15 years post-graduate experience, of which at least 10 years in design consulting for ADB, WB or similarly financed projects in water supply, sanitation, or other urban infrastructure in Philippines or SE Asia. Familiar with current best practices in electr-mechanical installations for water supply and sanitation facilities.

Water Treatment Specialist

8 (N) At least 15 years post-graduate experience, of which at least 10 years in design consulting for ADB, WB or similarly financed projects in water supply infrastructure in Philippines or SE Asia. Familiar with current best practices in water treatment design.

Hydrogeologists (2 posts)

42 (N) At least 10 years experience in hydrogeological investigations, test well drilling and analysis, and well design. Minimum five years previous experience working on ADB or WB projects in Philippines.

Hydrologist 12 (N) At least 10 years experience in hydrological investigations, river flow measurements, hydrological analysis. Minimum five years previous experience working on ADB or WB projects in Philippines.

CAD Operators (2 posts)

42(N) At least 10 years experience in computer aided design for water supply and sanitation projects. Minimum five years previous experience working on ADB or WB projects in Philippines.

Subtotal 205



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Position Person Months a

Qualifications Required

Preparation of Contract Documents and Assistance with Bid Evaluation

Procurement Specialist (team leader)

4(I) At least 15 years post-graduate experience, of which at least 10 years in the design, documentation and bidding in water and sanitation infrastructure and the management of multi-disciplinary teams. International experience with designing and implementing turnkey and design-build contracts. Experience in Philippines or South East Asia. Familiar with current best practices in contracting of sewerage systems and treatment plants.

Water Supply Engineer (deputy team leader)

14 (N) At least 15 years post-graduate experience in all aspects of design, construction, operation and maintenance of water supply and sanitation systems for utilities. Preferably experienced in designing and implementing water supply sewerage systems.

Quantity Surveyor 2 (N) At least 10 years post-graduate experience in preparation of contract documents for international bidding.

Contract Document / Legal Specialist

2 (N) At least 5 years post-graduate experience in preparation and execution of contract documents used for international bidding for infrastructure works.

Total 22

Construction Supervision Construction Engineer (Team Leader)

30(I) At least 15 years post-graduate experience, of which at least 10 years in contracting, construction and site supervision for water supply, sanitation, or other urban infrastructure.

Construction Engineer (4 positions)

150(N) At least 15 years post-graduate experience, of which at least 10 years in contracting, construction and site supervision on water supply, sanitation or other urban infrastructure. Will have recognizable leadership skills.

Water Supply Engineer

30(N) At least 15 years post-graduate experience in all aspects of design, construction, operation and maintenance of sanitation systems.

Quantity Surveyor 5(N) At least 10 years post-graduate experience in construction supervision.

Contract Document / Legal Specialist

5(N) At least 5 years post-graduate experience in preparation and execution of contract documents used for international bidding for infrastructure works.

Subtotal 220

Resettlement Plan Preparation Resettlement Specialist

6(I) International expert with post-graduate qualification in social sciences. At least 10 years of experience with social assessments for development projects. Familiar with ADB and GOP environmental regulations.

Social Development and Resettlement Specialist

18(N) Post graduate qualification in social sciences and at least 10 years experience with social development. At least 5 years experience of preparing LARAPs for water supply or sanitation or projects.

Subtotal 24

TOTAL 633 a I = international, N = national.



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Table 3: Project Management Advisory and Related Services - Required Deliverables

Deliverable Month of Delivery a

Number of Copies

Summary of Contents

Project Management Advisory

Inception Report #2 20 Initial findings, detailed approach and methodology, detailed work plan.

Monthly Report #2, #3,.., #59 10 Monthly progress, detailed by sub-project location.

Quarterly Report b #3 ,#6, …, #58 20 Quarterly progress.

Annual Report b #12 ,#24, #36, #48

20 Annual progress.

Special reports (as requested by PMU)

Tbd Per special report: 20

DBO contract management, handover of facilities, confirmation of operations.

Final Report c #60 20 Inputs provided, outputs produced, evaluation of achievements, strengths and weaknesses of the approach, used suggested follow-up actions, assessment of impacts of the services from the Consultant’s perspective.

Detailed Engineering Design Water supply design documents

As required 10

Test well drilling results

As required 10

Hydrological survey results

As required 10

Preparation of Contract Documents and Bid Evaluations

Generic bid documents

#4 10 Single generic set of bid documents, clearly defining the format and proposed contents of the DBO bid documents.

Draft bid documents

#6 10 One complete set of bid documents for one of the proposed locations.

Final bid documents

#7 10 Three complete sets of bid documents in hard copy, digital and portable document format (PDF).

Bid evaluation reports

Tbd 10 One complete set of bid evaluation reports for each contract.

Construction Supervision

Monthly Report d (as above) (as above) (as above)

Quarterly Report d (as above) (as above) (as above)

Annual Report d (as above) (as above) (as above)

Final Report d (as above) (as above) (as above)

Resettlement Plan Preparation

RP for xx WD #9 10 RP in ADB format

RP for xx WD, etc #9 10 RP in ADB format a Month of delivery (#1 is the first month of the assignment). b In accordance with ADB guidelines on progress reports. c Will contain last monthly, quarterly and annual report. d Construction supervision reports to be incorporated in management reports of project management advisors.



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III. TERMS OF REFERENCE FOR INSTITUTIONAL DEVELOPMENT AND CAPACITY BUILDING SERVICES

A. Objectives of the Consulting Services

23. The Government of Philippines (GOP) intends to procure the services of a reputable consultant ("the Consultant") to provide institutional development and capacity building services to the Local Water Utilities Administration (LWUA), water districts (WD), local government units (LGU), NGOs and communities, to support the implementation of the ADB-funded Water District Development Sector Project (WDDSP). The services will be managed and supervised by LWUA. For details on WDDSP, refer to the attached Project Data Sheet.

B. Scope of works 24. The assistance will be undertaken in two phases:

(i) The first phase focuses on reviewing current governance structures and their underlying legislation for both LWUA and the WDs, developing planning and performance management frameworks for them into the Corporate Plan for LWUA, its corresponding Business Plan as well as a generic Business Plan for the WDs. A particular strategic focus will be on sanitation services, generally through septage management.

(ii) The second phase will be to assist (to the extent of the available budget) in execution of the LWUA Corporate Plan and to implement the generic business plan for the pilot WDs.

Phase 1 25. Review the LWUA Institutional Assessment report prepared in 2009 and updating it in relation to subsequent organizational development, particularly in relation to implementing Executive Order 279.

26. Review the LWUA Financial Assessment report prepared in 2009 and updating it in relation to post assessment events (such as organizational changes noted in Institutional Assessment and changes to the lending mandate for LWUA) and their impact on LWUA’s financial stability.

27. Use the LWUA Financial Assessment as a basis and—considering data gathered on the project pilot WDs, in relation to affordability credit worthiness, financial viability etc.— undertake pilot tariff analyses for the WDs and consider tariff options, their relevant features, pros and cons and make proposals in relation to tariff reform for the WDs.

28. From the baseline, a corporate mission and a charter will be agreed and documented with LWUA management and DOH. The charter will allow corporate objectives to be agreed in areas such as cost reduction, profitability and corporate performance. The charter will also clearly confirm LWUA’s mandate in terms of its varying roles.

29. Develop an updated Corporate Plan for LWUA which will be implemented over the following five (5) years. The Plan will be jointly produced by LWUA and the Consultant. The plan will address objectives identified in the charter and will then identify intermediate (e.g. annual) goals, the success factors which impact on achievement such as performance of specific departments and personnel, and any recognized constraints.

30. The Plan will document agreed strategies to be followed in areas including, but not



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limited, to:

� financial management; � regulatory monitoring and reporting; � sanitation development; � asset management; � operations and maintenance management and control; � MIS development; � environmental management; and � human resource development and training.

31. The Corporate Plan will be submitted to the LWUA Board of Trustees for approval.

32. The LWUA corporate plan and business plan and the preliminary training needs assessment conducted during project preparation will be used as a basis for the development of a comprehensive training program for both LWUA and the WDs. Training needs that can be anticipated include the following:

• organizational development and planning;

• financial management and information systems (FMIS) and processes;

• human resources development strategy and related training;

• facility operations and maintenance of septage management systems (including contracting out);

• facility planning and asset management;

• development of an integrated MIS, including GIS;

• public relations and improved public awareness;

• environmental monitoring management and resolving environmental problems particularly in the context of sanitation; and

• outsourcing contract management, asset procurement and tendering. 33. Some of the training needs will be met through provisions in contracts with equipment suppliers, others will be met through staff working alongside and participating in training provided by the design and construction supervision consultants. However, the consultant will need to ensure a comprehensive program of training is prepared and delivered in a coordinated fashion. The consultant will therefore be expected to liaise with the other consultants and relevant suppliers to ensure this is achieved.

34. Prepare a Phase 2 Implementation Plan (PIP). The plan will document:

� Proposals for implementation of the strategies agreed to in the corporate plan for LWUA as they relate to project resources, including consulting staff and project funded procurement.

� Mobilization plans for consulting staff.

� Cost estimates.

� Disbursements program.

� Proposals for counterpart contributions (in kind and otherwise).

35. Prepare a Bridging Activities Plan (BAP) which defines activities to be undertaken while waiting for agreement on commencement of Phase 2.

36. The Bridging Activities should be focused on the training program, community information in relation to sanitation services and on parallel training activities such as job



12

swaps and secondments.

37. The PIP and the BAP will be submitted to the PMU and the Coordinating Committee for approval prior to commencement.

Phase 2

38. Phase 2 will consist of full implementation of the PIP.

39. Specific outputs/ deliverables in relation to Phase 2 will be:

� Preparation of a Community Information/ Outreach Kit in respect to sanitation services to be provided by the water districts;

� A model Environmental Management System (EMS) for the water districts which will be based upon the ISO 14000 framework.

It is recognised that the initial EMS will be relatively simple to allow immediate effective implementation across the range of WDs; however, it should clearly address sanitation (septage management) responsibility and in accordance with ISO14000, a specification and implementation plan for continual improvement of the EMS over a five-year time frame will also be formulated.

• A model Trade Waste policy which can be implemented by the water districts to protect their septage management assets as well as reducing the cost and effectiveness of desludging. The trade waste policy should be based on source collection (i.e. non discharge) of greases, heavy metals and other non domestic strength wastes.

• An MIS strategy generally for LWUA and the WDs, and a corresponding software development and systems procurement. The strategy should address:

� The Strategic Drivers for MIS Development within the LWUA//WD framework.

� Strategic Vision for MIS in the framework. � Assessment of current and planned information systems and technology

architectures and economic evaluation assumptions and analyses. � Recommended Strategy. � User specifications for key systems/ applications (e.g. Customer Care,

Billing and Revenue Collection System) which can be developed and apply at low cost in the WDs to improve financial performance and consequent credit worthiness.

� Documentation for core procurement of servers etc. for the pilot WDs.

C. Management of the Services

40. LWUA is the Executing Agency for WDDSP. It is also responsible for the management and supervision of these technical services. At the water district level, the Consultant will work in close consultation with the water district boards, and general managers and their staff.

D. Inputs to be Provided by the Government

41. LWUA, the participating water districts and relevant local government units (LGUs) will make all relevant data and operational records available to the Consultant, including (but not limited to) SPARs, data on water sources, documents defining proposed water supply



13

service areas, information on existing facilities, field survey data and external audits.

42. Each participating water district will assign one full-time counterpart staff to facilitate conduct of the services. Specialist staff will be available to brief the Consultant at short notice, while senior staff of the government will be available for consultation within two working days of a request for such a consultation.

E. Inputs to be Provided by the Consultant

43. A total of 85 professional staff months are anticipated to support LWUA and the WDs during the implementation period, of which 44 staff months of personnel with international experience (Table 4). The WDs will provide office space for consultants in the field. The total cost of the services is estimated at US$2.3 million; this amount includes the cost of travel, workshops, support staff, and other out-of-pocket expenses, all of which will be borne by the Consultant. It is expected that the assignment will take place from 2011 to 2014 (48 months). Refer to Table 5 for an overview of required deliverables.

44. The Consultant is encouraged to initiate a series of participative planning workshops during the first year of Project implementation, to ensure that plans will be developed in close consultation with key stakeholders. A summary of results of each workshop will be circulated within two weeks of the workshop being held and a record included in the progress reports.

Table 4: Capacity Building Advisory Services - Required Personnel Inputs

Position Qualifications Phase 1 Phase 2 Year

1 Year

2 Year

3 Year

4 International Institutional Development Expert (Team Leader)

At least 20 years work experience and preferably a postgraduate degree in engineering, public administration, business studies, marketing, organizational development or human resources management. At least 5 years post graduate experience in either design and analysis of public enterprises, human resources management and industrial relations or marketing, or 10 years in senior positions in government. Able to facilitate a dialogue within local government on change and restructuring of the water and sanitation sector.

9 6 6 4

Training Specialist Relevant graduate degree. At least 15 years experience in water supply, sanitation, SWM or urban infrastructure sector, at least 10 years of which should have been in the organisational development and training focus. Able to communicate with the highest local level is essential.

3 1 1

Finance Management Specialist

A business or accounting graduate with at least five years of experience in economic and financial management in government environments. Able to assess financial management capacity, specify system requirements specify training programs and assist implementing agencies to meet operational and reporting requirements.

2 2 2

Economist At least 10 years experience since acquiring a degree in economics or commerce. Experienced in financial modelling and tariff analysis; preferable experience includes micro economic and market analysis in public service delivery, economic regulation.

2



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Position Qualifications Phase 1 Phase 2

Year 1

Year 2

Year 3 Year 4

Environment Specialist Post graduate qualification in environmental engineering or environmental science and at least 10 years experience in environmental management in sanitation or solid waste. Strong knowledge of ISO14000 requirements and EMS development, implementation and monitoring. Knowledge of trade waste policy and regulation relevant to sanitation systems.

2

Information Technology Specialist

A graduate degree in information systems with experience in developing management information systems in a distributed network for both the private and public sector.

3 1

Total International 16 14 9 5 National

Training Specialist Graduate degree in engineering. At least 10 years experience in water supply and sanitation sector which should have had a substantial organisational development and training focus. Able to communicate with the highest local level is essential.

6 3 3

Financial Management Specialist

Business or accounting graduate with at least five years of experience in financial management and reporting in government environments. Knowledge of statutory reporting requirements for Philippine government utilities. Able to specify system requirements specify training programs and assist implementing agencies to meet operational and reporting requirements.

4 3 3 1

Environment Specialist Graduate qualification in environmental engineering or environmental science and at least 5 years experience of preparing EIAs for water supply or sanitation or SWM projects and or implementing Environmental Management systems.

6

MIS Specialist A graduate degree in information systems with experience in developing management information systems in a distributed network for both the private and public sector.

6 3 3

Total National 10 18 9 4 a I = international, N = national.



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Table 5: Capacity Building Advisory Services - Required Deliverables

Deliverable Month of Delivery a

Number of Copies

Summary of Contents

Inception Report #2 20 Initial findings, detailed approach and methodology, detailed work plan.

Monthly Report #2, #3,.., #40

10 Monthly progress and records of workshops, training, procurement etc. detailed by WD.

Quarterly Reportb #4 ,#7, …, #40

20 Quarterly progress.

Annual Reportc #13 ,#25, #37

20 Annual progress.

Baseline Report 3 20 Update on previous LWUA assessments. Charter and Objectives relevant to Corporate Plan and Business Plan

Revenue Analysis and Strategy for WDs

4 20 As specified in TOR

Draft Corporate Plan for LWUA

5 20 As specified in TOR

Training Plan 5 20 Including Estimates

Phase 2 Implementation Plan

7 20 Including budget update and proposed bridging activities

Model EMS for WDs 15 20

Trade Waste Policy 17 20 Cross referenced to business plan

WD MIS Strategy inc procurement and implementation plan

17

Other reports (as requested by PMU and agreed by consultant)

Tbd Per special

report: 20

Final Report #54 20 Inputs provided, outputs produced, evaluation of achievements, strengths and weaknesses of the approach, used suggested follow-up actions, assessment of impacts of the services from the Consultant’s perspective.

a Month of delivery (#1 is the first month of the assignment). B In accordance with ADB guidelines on progress reports. C To be prepared with LWUA and WD staff, and updated in #24, #36 and #48.



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ATTACHMENT: PROJECT DATA SHEET A. Overview 1. The Water District Development Sector Project (WDDSP) will provide improved water supply in five pilot water districts, and additional water districts from the long-list.12 The Project will respond to the environmental needs of urban communities, including low-income households, by optimizing existing assets, expanding coverage, improving governance and building local institutional capacity. The Project will provide an estimated 317,700 additional people with access to piped water services. B. Institutional Arrangements 2. Coordination. A National Inter-Agency Coordination Committee consisting of representatives of the Department of Health (DOH), LWUA, Department of Finance (DOF), National Economic Development Authority (NEDA), Department of Public Works and Highways (DPWH), Department of Environment and Natural Resources (DENR), and National Water Resources Board (NWRB) will supervise and monitor Project implementation (see Figure 1 overleaf).

3. Implementation – national level. A Project Management Unit (PMU) located within LWUA, which is the executing agency (EA), will manage the Project at the central level. LWUA will oversee the sub-projects in close consultation with the participating water districts. 4. Implementation – water district level. Water district implementation units (WDIU) will supervise and monitor the implementation of the proposed subprojects.

12 Residual funds in the loan will be used for improvements in priority WD(s) from the long-list (scope to be determined).



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Figure 1: Organization of WDDSP

Direction, reporting, supervisionCoordinationCapacity building

Source: PPTA Consultant

National Level Steering

Committee

Local Water Utilities Administration

(Executing Agency)

Project Management Unit

(PMU)Project Management and Advisory Consultants:- Project management- Detailed engineering design and supervision

- Preparation of contract documents

- Assistance with bidding procedures

- Construction supervision- Preparation of resettlement plans

Contractors for Water Supply Component

Ministry of Health

Asian Development Bank (ADB)

Institutional Development and Capacity Building

Consultants

Water District Implementation Units

(WDIUs)

Supplementary Appendix S


PROFILES OF PRIORITY WATER DISTRICTS FROM LONG-LIST

♦ CABUYAO WATER DISTRICT

♦ CAMARINES NORTE WATER DISTRICT

♦ LAGUNA WATER DISTRICT

♦ SORSOGON WATER DISTRICT



1

CABUYAO WATER DISTRICT Project Profile

STUDY AREA

Locatio n The Municipality is located in the Province of Laguna on the shore of the Laguna Bay, Region IV

Total land area Socio economic situation 2004 (NSO) 2005 (Projectedd) 2021 (Projected) Total Population 142,702 152,978 358,957 Number of households 29,730 31,871 74,804 Population growth (NSO) 7.20%

Number of barangays Total Presently served Expansion target 18 2 12

THE WATER DISTRICT’S EXISTING OPERATIONS

Tariffs Cost (PHP) % of first quintile income Basic First 10 cum) 50.00 1% Average (cost per cum) 5.56 Connection fee 1,250 exclusive of installation cost of PHP 750 Operational Facilities Water sources Type Yield Deep Wells 1 deep well 82 lps Other Water right to 100 lps from the Matungtubig Spring Booster stations Storage facilities Elevated steel tank, 150 cum Pipe lines (lm) Transmission Distribution 0 2,500

PROPOSED SUBPROJECT

Basic design parameters Basic water consumption (lpcd) 150lpcp Year 2005 2015 2021 Average Daily Demand (lps) 2.3 148.9 283.4 Max. Daily Demand (lps, factor 1.25) 2.9 186.1 354.2 Peak Hour Demand (lps, factor 2) 4.7 297.8 566.7 Population growth up to 2010 After 2010 7.20% 4.70% UFW 20% No. of connections per employee 220 Performanc e Indicators 2006 2021 Increase Service Area 2 Bgys 14 Bgys 12 Bgys Nbr HH existing service area 289 434 145 Nbr HH in expansion area 11,999 21,844 9,845 Nbr HH in Mabuhay City 6,200 8,000 1,800 Total HH in future service area 18,488 28,478 9,990 Nbr of residential connection 273 24,301 24028 Nbr of government connections 244 244 Nbr of commercial connections 1,945 1945 Total nbr of connections 273 26,490 26217 Unaccounted for water % 20% 20% 0% Total annual water demand 86,609 8,936,102 8,849,493 Proposed Measures and net construction cost Pipe supply and Laying LM or NO. PHP Transmission lines 13,823 79,703,229 Distribution System 59,451 81,647,812



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Subtotal 73,274 160,351,041 Pavement Demolition/Reinstatement Cost - 31,887,345 Valves, Assemblies & other Appurtenances - 12,908,083 Ground Reservoir for the Matubig Spring 2500 cum 33,234,364 Elevated steel tank in the service area 450 cum 21,000,000 New Deep Wells 4nos 20,877,332 Service Connections 5,500 6,330,500 Land Acquisition - 7,750,000 Total - 295,538,664

Total subproject cost (1 Euro = Php64.00) % Total Total (PHP) Total (EURO) Engineering Cost 67% 274.881 4.295 Non-engineering cost 2% 12.908 0.202 Basic construction cost (excl. VAT) 68% 287.789 4.497 Feasibility studies 0% - - Detailed design 4% 15.764 0.246 Construction supervision 3% 12.611 0.197 Physical contingency 7% 28.133 0.440 Taxes 8% 34.535 0.540 Land acquisition 3% 7.750 0.121 Total construction cost 93% 386.582 6.040 Price contingency 7% 61.816 0.966 Total project cost 100% 448.398 7.006 Less: WD equity 10% 44.840 0.701 Loan disbursement/additions 90% 403.558 6.306 Capitalized interest - - Total subproject loan to the WD 403.558 6.306 Less: LWUA loan 15% 67.260 1.051 KfW external financing 75% 336.299 5.255

Cost Indicators PHP EUR 2008 2009 Tariff increases From 5.56 to 15.58 49.19 Tariff affordability Minimum charge 0.8% to 6.9% of the 1st quintile average Willingness to connect 63% at present connection fee+installation cost, 80% with a

total connection cost of PHP 1500 Willingness to pay 75% for basic tariff of PHP 200 or less

Financial/ Economic analysis Base case Investment+20% Revenues-20% FIRR 30.12% 25.8% 24.7% IERR 19.6% 15.7% 10.8% Benefit cost ratio 1.1 1.02 0.91 Discount rate 5% 0%



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CAMARINES NORTE WATER DISTRICT Project Profile

STUDY AREA

Location The province is located in Region V, in the northwestern part of the Bicol Peninsula.

Total land area 220,012 hectares Socio economic situation 2004 (NSO) 2007 (Projected) 2021 (Projected) Total Population 458,840 513,785 637,871 Number of households Population growth (NSO) 1.63%

Number of municipalities Total Presently served Expansion target 12 7 1


Tariffs Cost (PHP) Basic First 10 cum) Php 146.00 Effective water rate Php 19.66.cum Operational facilities Water sources Type Yield Deep Wells 5 5,748,765 cum/year Other (Spring) 5 72 lps Booster stations Storage facilities 6 6,500 cum Pipe lines (lm) Transmission Transmission 109 kms. Distribution 225 kms.

PROPOSED SUBPROJECT

Basic design parameters Year 2008 2020 Average Daily Demand (lps) 16,393 31,646 Max. Daily Demand (lps, factor 1.25) 20,491 39,558 Peak Hour Demand (lps, factor 2) 31,146 60,127 No. of connections per employee 226 Performance indicators Year 2008 2020 Total LGU Population 353,972 430,549 Total Service Area Population 277,467 394,246 Total Served Population 110,486 194,959 Number of Connections Residential 18,997 37,268 Institutional 346 516 Commercial 1,137 1,509 Total number of connections 20,480 39,293 Unaccounted for water % 25% 20% Total water demand (cumd)

Estimated Project Cost Php’000 Source Development 750,000 Water Treatment Plant 144,168,972 Pumping Station Transmission Facilities 239,578,155 Storage/Reservoir 55,709,520 Distribution Facilities 43,952,359



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Service Connections 5,000,000 Fire Protection Facilities 930,050 Pressure Reducing Valves NRW Reduction 3,000,000 Zone Meters 3,000,000 Internal Network Stored Materials 3,000,000 Sub-Total 499,089,056

Land Acquisition 1,050,000 Physical Contingency 49,908,906 Price Contingency 38,427,767 Construction supervision 22,958,097 Engineering Studies Total project cost 611,433,825 Capitalized interest 96,515,948 Total Development Cost 707,949,773 Total subproject loan to the WD 646,806,391 WD Equity 61,143,383

Cost Indicators Year 2011 2012 2013 Tariff increases 40% 25% 20% Tariff affordability

(% of Minimum Charge to Family Income) 3.07% 3.66% 4.18%

Financial/ Economic analysis Base case Investment +20%

Revenues -20%

FIRR 17% 15% 13% EIRR 23% 20% 18% Benefit cost ratio 1.50 1.31 1.20 WACC 8.6% Discount rate 15%



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LAGUNA WATER DISTRICT

Project Profile

STUDY AREA Location The province is located in Region IV-A, also known as

CALABARZON Total land area 20,523 hectares (total for municipalities of Los Banos, Bay,

Calauan, and Victoria) Socio economic situation 2000 (NSO) 2007 (Projected) Total Population 198,733 Number of households 41,170 Population growth (NSO) 2.73% - 3.37% 2.14% - 3.28%

Coverage Area Total Presently served Expansion target Number of municipalities 3 1 Number of barangays 36 9


Tariffs Cost (PHP) Basic First 10 cum) Php 174.00 Effective water rate Php 22.99/cum Operational facilities Water sources Type Yield Deep Wells 16 450.3 lps Other (Surface/Spring) 2 39.73 lps Booster stations Storage facilities 6 Pipe lines (lm) Transmission Transmission/Distribution 126 kms.

PROPOSED SUBPROJECT

Basic design parameters Year 2008 2020 Average Daily Demand (lps) 23,149.3 46,654.5 Max. Daily Demand (lps, factor 1.25) 29,201,1 58,857.5 Peak Hour Demand (lps, factor 2) 46,298.6 93,308.6 No. of connections per employee 155 Performance indicators Year 2008 2020 Total LGU Population 244,353 330,164 Total Service Area Population 138,548 272,994 Total Served Population 90,449 178,066 Number of Connections Residential 21,740 40,409 Institutional 109 157 Commercial 791 1,047 Total number of connections 22,640 41,613 Unaccounted for water % 30% 22% Total water demand (cumd) 16,146 31,048

Estimated Project Cost Php’000 Source Development 5,280,000 Water Treatment Plant Pumping Station 7,763,601 Transmission Facilities 2,961,503



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Storage/Reservoir 12,240,000 Distribution Facilities 30,300,748 Service Connections 3,317,500 Fire Protection Facilities 520,828 Pressure Reducing Valves NRW Reduction 40,943,348 Zone Meters Internal Network Stored Materials 907,835 Sub-Total 104,235,363

Land Acquisition 2,887,500 Physical Contingency 10,423,536 Price Contingency 8,804,902 Construction supervision Engineering Studies 4,794,827 Total project cost 131,146,128 Capitalized interest 19,913,369 Total Development Cost 151,059,496 Total subproject loan to the WD 137,944,883 WD Equity 13,114,613



Financial/ Economic analysis Base case Investment (plus 20%)

Revenues (less 20%)

FIRR 25% 22% 20% EIRR 24% 20% 18% Benefit cost ratio 1.39 1.22 1.11 WACC 8.6% Discount rate 15%



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SORSOGON WATER DISTRICT Project Profile

STUDY AREA

Location The City, the Provincial Capital, is located in the province of Sorsogon in the Bicol Region

Total land area 338 sq.km. Socio economic situation 2004 (NSO) 2007 (Projected) 2020 (Projected) Total Population 134,678 151,454 Number of households 17,911 Population growth (NSO) 2.06% 1.69%

Number of barangays Total Presently served Expansion target 64 26 – Sorsogon

4 - Bacon


Tariffs Cost (PHP) Basic First 10 cum) Php173.00 Effective Water Rate Php 25.34/cum Operational facilities Water sources Type Yield Deep Wells 11 147,096 cu.m./month Other 7 96,750 cu.m./month Booster stations Storage facilities RCGR (2); RCET (1) Pipe lines (lm) Transmission Transmission 8,998 m Distribution 124,152 m

PROPOSED SUBPROJECT

Basic design parameters Year 2008 2020 Average Daily Demand (lps) 85.8 161.9 Max. Daily Demand (lps, factor 1.25) 107.2 202.4 Peak Hour Demand (lps, factor 2) 171.5 323.8 No. of connections per employee 119 Perfor mance indicators Year 2008 2020 Total LGU Population 154,588 197,165 Total Service Area Population 80,433 124,021 Total Served Population 43,876 94,000 Number of Connections Residential 7,713 16,349 Institutional 135 281 Commercial 608 834 Total number of connections 8,256 17,464 Unaccounted for water % 36% 25% Total water demand (cumd) 4,715 11,192

Estimated Project Cost Php’000 Source Development 3,900,000 Water Treatment Plant Pumping Station 4,056,900



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Transmission Facilities 5,240,190 Storage/Reservoir 15,500,000 Distribution Facilities 73,041,180 Service Connections 2,500,000 Fire Protection Facilities 744,040 Pressure Reducing Valves 1,000000 NRW Reduction 2,000,000 Zone Meters 2,000,000 Internal Network 6,000,000 Stored Materials 2,000,000 Sub-Total 117,982,310

Land Acquisition 525,000 Physical Contingency 11,798,231 Price Contingency 9,056,189 Construction supervision 5,427,186 Engineering Studies Total project cost 144,788,916 Capitalized interest 22,893,058 Total Development Cost 167,681,974 Total subproject loan to the WD 153,203,082 WD Equity 14,478,892



Financial/ Economic analysis Base case Investment +20%

Revenues -20%

FIRR 19% 16% 13% IERR 34% 30% 27% Benefit cost ratio 2.01 1.81 1.60 WACC 8.6% Discount rate 15%

Asian Development Bank · Asian Development Bank LOCAL WATER UTILITIES ADMINISTRATION WATER...

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Transcript of Asian Development Bank · Asian Development Bank LOCAL WATER UTILITIES ADMINISTRATION WATER...