Leaders in the design, implementation and operation of markets for electricity, gas and water. Financial Management Reporting by Utilities-Summary of Report Findings Graham Cleverly – WWRO Support project Team Leader 13 th June 2008

2 Background to Study Questionnaire discussed with several water companies in late 2007 −by Project Tariff Specialist Bernd Pessel and local specialist Vera Muhaxhiri Findings also based on experience gained in developing OFCR and preparing 2006 Performance reports Study concentrated on WWRO’s remit as economic regulator ie only tariff related and performance related financial reporting-not eg on the Quality of the Business Plans

3 Responsibility for Management of Financial Data It is each Company’s responsibility to determine how to manage its internal financial affairs including procurement and use of software and training It is not WWRO’s responsibility to tell companies how to do this! −This would amount to “micro-management” It is however WWRO’s responsibility to check the data supplied by Companies to make sure it is accurate and comment when it is poor! −WWRO began formal auditing this April for the first time −Subject of separate presentation today

4 Why is good Financial Management Important? Because: −Management needs reliable and timely information-especially financial information-to monitor and improve performance and to report to Board −It enhances accountability to other external bodies eg WWRO/ customers −It facilitates Government and external funding for investments Government, Donors and lenders need confidence their investments will be managed properly

5 Conclusions (1/2) MAIN FINDINGS Overall financial management is improving slowly Some companies still need to: −introduce missing MIS modules eg customer relations −and implement automatic transfer of data between modules Some Companies (Pristina/ Mitrovica) have all the modules but need to use them All companies need to further develop the financial statements that are generated by the accounting module in accordance with KAS Product support from software suppliers needs to be formalised Training of staff in software is also poor and needs improving

6 Conclusions (2/2) Companies should establish financial committees to: −Evaluate accounting, budgeting and performance measurement −Improve Accountability standards and principles −Implementing initiatives eg introduction of new software and procedures Companies should take responsibility for submitting accurate data to WWRO MORE SERIOUSLY −WWRO formal auditing started in April 2008 −Responsibility for data rests with Companies!

7 Report on Financial Management of Utilities Prepared earlier this year Finalised in February 2008 Available in hard and soft copies today Comments welcome

8 Recommendations Companies need to improved Financial Management Companies need to Invest in software and training and use all modules available including customer relations modules Companies need to provide more accurate and timely financial (and technical/ customer related information) information to WWRO and other relevant bodies eg Government/ donors/lenders Thank you for listening Graham Cleverly