Cost Accounting for Water Utilities

Abstract

ANYONE who is not an accountant, accounting usually means an involved accounting procedure by which the of a piece of machinery, such as an automobile, is calculated. It is true that such a determination of manufacturing costs is a complicated matter, but it should be pointed out that the cost if such it may be called, applicable to water utilities is a very simple matter. For the most part, water works reports call for little more in the way of basic information than a running record of units of work performed within a given time, and some assembly of costs shown by records covering expenditures. After these have been obtained, unit costs are merely simple division. Any series of reports, even though it may be simple, does provide data for the control, by management, of business operations. An intelligent interpretation of reports which are adequate and timely will disclose the efficiency with which resources are employed, and will fix the responsibility for inefficiencies. That such reports are not more extensively used in the water utility field is probably due to two reasons: (1) the lack of uniformity in general accounting, which precludes comparisons between utilities; and (2) some lack of understanding regarding the conclusions which may be drawn from reports as well as of the simplicity of the reports and the ease with which the basic data from which they are prepared may be obtained. Privately owned water utilities in California, all of which are subject to regulation by the State Railroad Commission must follow a code of accounts promulgated by the commission. Although several attempts have been made to bring municipally owned water and other utilities under the jurisdiction of this commission, all such efforts to date have been unsuccessful. In most cases, publicly owned utilities do endeavor to keep their accounts and set forth the results of their operations in a manner