Compliance Score Card

Performance Contract

Introduction

Contract Compliance Score card & checklist have been designed to underpin compliance with and effectiveness of the Performance Contract

Simple and easy to use tool to assist the DWD Regulation Unit establish an effective mechanism for PC compliance

Designed to ensure effective implementation and monitoring of WA’s for compliance with specified terms and conditions PC

Purpose of Score CardIn combination, the Checklist & Scorecard form

a tool to assist WAs in exercising oversight and supervisory functions over water operators

Helps users to make concise references to requirements of the contract on a Clause by Clause basis

Enables ease of assessment of technical, commercial, financial and management performance and reporting requirements

Ensures that stakeholders to the contract fully understanding their respective mandates

The checklist also suggests the nature of inquiry to make regarding activities, documents or assets defined in the scope of the PC

Scope of ChecklistResponses to and issues arising from the

inquiry are against indicators to determine the extent of compliance to a specific contract requirement

Checklist prescribes a documentary evidence approach to verification of testimonials and documents pertaining to the oversight function by the WA/WSSB

Checklist has clustered all Clauses and Schedules of the Performance Contract into six broad contractual obligations

The Contractual Obligations1. Holding, control, management and use of assets

2. Legal and regulatory compliance

3. Compliance with technical requirements

4. Compliance with financial management requirements

5. Compliance with commercial requirement

6. Transparency, governance and reporting requirement

Holding, Control, Management & Use of AssetsSpecific area of focus;Tracking location of network assetsIdentifying & safeguarding water supply assets

and network infrastructureFollowing up implementation of asset and

network investments to increase service coverage

Developing a mechanism for monitoring policy requirements for network expansion

Tracking and accounting for conditional grant utilization for asset acquisition and extension

Legal and Regulatory compliance Regulatory requirements are broader than water

policy elements and extend to;a. Local Government Act, b. Aspects like financial reporting, procurement,

environmental issues are governed by other legislation e.g. Audit Act, PPDA and Local Governments (PPDA) Procurement Regulations, NEMA Act, Public Finance & Accountability Act, Water Act etc.

Legal and regulatory compliance is intended to check on WA’s level of compliance with relevant laws and regulations

Focuses is on availability of the relevant legal & policy documents whose level of application is checked elsewhere in the checklist.

Compliance with technical obligationsIs aimed at achieving the following objectives;

1. Management of operation & maintenance costs at optimal levels

2. Enhance efficiency & effectiveness in operations management

3. Create/develop an efficient operations management monitoring system

4. Ensure adequate water and sanitation services5. Ensure reliability and sustainability of service quality &

delivery6. Development & implementation of effective process

control & monitoring to ensure water & sewerage effluent conform to National Standards

7. Ensure efficiency in conditional grants and CAPEX buffer utilization

8. Deploymentment of appropriately qualified and trained staff

Compliance with financial management requirements

Compliance with financial management obligations is aimed at ensuring;1. That cash collections are banked intact and secure2. Compliance with meeting financial obligations

including management fees, statutory obligations and energy (UMEME) bills

3. Monitoring eligibility of payments and prompt accountability

4. Accuracy, integrity and completeness of financial reports

5. Reconciliation of accounts and financial statements 6. Proper control & prompt recognition of income due to

the Authority7. Complete and accurate staff records8. Adherence to the approved business plans

Compliance with commercial obligationsCompliance with commercial management obligations is

aimed at;

1. Enhancing timely, accurate and proper billing by Authority and to collect, maintain and update customer information

2. Increasing customers willingness to pay by strengthening the WA’s obligation in respect to correct tariff application, billing, metering,

3. Ensuring that integrity and safety of the customer billing databases at the WA is enhanced and guaranteed

4. Enhancing a system to provide services to the urban poor in line with the pro-poor policy

5. Instituting a customer complaints and feedback system to achieve efficient service delivery

6. Instituting customer care systems for enabling communication with customers in respect of service interruptions

Transparency, governance and reporting obligation

Objective of this obligation is to ensure that there is a mechanism for policy monitoring; an avenue for the Minister to review and measure the effectiveness and compliance with the terms and conditions of the Performance contract

Using the ScorecardScorecard adopts the same layout as checklist for

ease of use in assigning scoresPresentation of the six broad PC obligations along

with maximum points under each header aims to underscore the significance of the obligation

Scorecard breaks down specific contract requirements into a number of result areas

Each results area requirement is allotted a maximum possible score for full compliance

Points are scored individually for each requirement upon document or physical verification

Scores for each key result area under the six obligations are summed up for the total score against which general PC compliance is assessed

Basis of the Score

The extent of severity in the event of breach of the contract requirement to the overall goal and strategic objective of the Performance Contract

The amount of effort needed by the WA/WSSB to achieve compliance

Criteria for Determining Individual ScoreTo determine the score, the checker needs to

probe for answers from WA/WSSB, review documents submitted & evaluate testimonials of compliance against specific contract requirements under scrutiny.

Compliance is then examined & scored against a predetermined maximum point as guided by e.g.

Availability 50% Accessibility 30%

Security 10% Currency/ Accuracy 10%

Preparing for the Audit

Prior to conducting a contract compliance audit the auditor should ensure that WA/WSSB targeted are availed a copy of the Checklist and Scorecard

Ample notice is given explaining the objective and purpose of the audit

The above help in reducing the amount of effort required to bring respondents in tandem to ensure their full participation.

Conducting the Audit InquiryThe checklist is the main guide for the inquiry into

compliance

The checker needs to have a copy of the New Generic Contract and other sector documents for reference

The auditor needs to understand not only the contract but policy related issues within the Water and Sanitation sector for effective guidance to WAs in respect of PC compliance.

The auditor needs to understand scheme specific issues particularly those which may be outside the control of the WAs

FeedbackThe scorecard is designed to give instant scores for

each entryResults of an audit can be availed to the WA being

audited instantlyChecker should keep an audit register of contract

infractions for ease of compiling a trip report and for purposes of engaging the Authority in developing a compliance and remedial action programme

The officer conducting the exercise should be empowered to enjoin WAs into a time bound commitment and action plans for redressing contract infraction and shortfalls in the oversight oversight function

Question/Comments