Inefficient revenue generation

Insufficient billing and collection systems and outdated customer databases endanger utilities’ generation of revenues.

Risk type: Consequence

Risk driver: Internal

DESCRIPTION

A lot of utilities struggle to generate enough revenues to cover the costs of their operation, maintenance, and development of water provision services. Hence, it is crucial that utilities receive payments for all services that they provide, i.e. that they efficiently generate revenues.¹ Inefficient revenue generation is commonly related to insufficient billing and collection systems and outdated customer databases.²

If the utility lacks sufficient billing and collection systems, utility staff may artificially lower or delay bills in exchange for bribes . If customer databases are not kept up to date, water bills will not be adequate (not received by the customers, not showing the right amounts, etc.), fee collection will be inefficient, loopholes will emerge for field staff to pocket a share of the payment when acting as ‘payment agents’, and illegal connections will be hard to track.²

RED FLAGS

• High levels of non-revenue water
• A lot of bills ‘returned to sender’ by the postal service or disputed by customers
• High number of unpaid bills
• Bills sent out unregularly or with delay
• Customer complaints about long waiting hours for paying bills
• Outdated customer database²
• Lack of electronic system to keep database up to date²

KEY GUIDING DOCUMENTS

Dajan, H., 2013, Nigeria: Consumer Count Aims to Improve Utility Revenue, SUWASA News Issue 10

STRATEGIC, 2009, Corruption Practices and the Available Complaint, Feedback and Redress Tool(s) and Anti-corruption Tool(s) in Water and Sanitation Sector – Bondo District, Strategic Public Relations and Research Limited, Draft prepared for Kenya Water for Health Organization (KWAHO) and United Nations Development Programme (UNDP)

TARGETED EXAMPLES

Confusion in revenue collection¹

Target group: Utilities

Location: Kenya

It becomes difficult for consumers to know who to deal with even in revenue collection, as staff do not have a clear system of identification. They say it is not unusual to get one official presenting himself as a ministry official in one month and a SIBO [the local utility] staff member the next. Such confusion creates loopholes that allow corruption to thrive as it makes follow-up difficult.

Illegal connections and outdated customer databases²

Target group: Utilities

Location: Bauchi, Nigeria

The exercise has revealed that there are more customers for the Water Board than was contained in the official database. For example, in Bauchi town with a population of over 600,000 almost 40,000 customers were enumerated, as against 17,000 in the utility’s records. The number of illegal connections is far much more than the registered ones and so BSWB is not collecting payments for the service it delivers to most consumers.

FULL REFERENCES

1. STRATEGIC, 2009, Corruption Practices and the Available Complaint, Feedback and Redress Tool(s) and Anti-corruption Tool(s) in Water and Sanitation Sector – Bondo District, Strategic Public Relations and Research Limited, Draft prepared for Kenya Water for Health Organization (KWAHO) and United Nations Development Programme (UNDP)
2. Dajan, H., 2013, Nigeria: Consumer Count Aims to Improve Utility Revenue, SUWASA News Issue 10