National Water Accounting

1. National Water Accounting How this may affect us??

3. Water Accounting • Its been around for many years • It was a water resource management activity • Based on a physical water balance • Range of historical uses including: • Water Resource Assessments • River Operations • River Analysis • Modelling • In NSW its also an Operating License requirement for SWC and SCA

4. National Water Accounting is Different • Came from various attempts at producing national water audits from the early 1990’s • These attempts lead COAG in 2004 to recognise the need for a national standard for water accounting • The Stocktake Report of 2006 recommended • disciplinary approach using a financial accounting analogy • national level report based aggregation of reports from ‘accounting entities’

5. National Water Accounting Development Project 2007 - 2010 Water Accounting Development Committee • Undertake a User Requirements Study, • Develop a Water Accounting Conceptual Framework • Propose a process for developing the Australian Water Accounting Standards • Draft those Standards, and • Propose future institutional arrangements for the water accounting discipline

6. National Water InitiativeClause 82 All states have agreed to develop and implement • accounting system standards; • standardised reporting formats; • annual water resource accounts reconciled and aggregated annually to a national water balance, including: • water balance covering all significant water use; • integration of groundwater and surface water; • consideration of land use change, climate change and other externalities as elements of the water balance.

7. Water Act 2007 Gave BOM powers to: • issue standards • collect and share water information And gave BOM an obligation to: • produce a National Water Account by 2010 (and thence annually)

8. Stage 1 Pilot Water Accounts To test data availability, data delivery processes, hydrologic analysis methods, water accounting concepts and standards, governance arrangements and an approach to publication. • River Murray (MDBA) • Lower River Murray (SA DWLBC) • Goulburn-Broken Catchment (VIC Office of Water, DSE) • Regulated Murrumbidgee Valley (NSW DWE) • Pioneer Valley (QLD DERM) • Lower Gascoyne and Carabooda (WA DW) • Minerals Council of Australia

9. Examplefor aSimpleSample System

10. 1st Step: Create a Chart of Accounts You’ll note that some of these would be difficult to account for accurately

11. 2nd Step: Book Keeping • Using double entry book keeping • Errors easily identified • More rigorous trail of movement • “Credit the giver, Debit the receiver”

12. Booking an Allocation Announcement Liability - Water Liability • On announcement • DEBIT against the associated expense account (increases the expense) • CREDIT against a liability account linked to this expense (increase the liability). • When the water is actually delivered • DEBIT to the liability account • as the corresponding liability has decreased • CREDIT the asset account. • the water asset has decreased (water has been physically removed from the system)

13. 3rd Step: Produce Reports Seven key elements: 1. Statement of Changes in Water Assets and Water Liabilities • changes in the volumes and nature of net water assets 2. Statement of Water Assets and Water Liabilities • nature and volumes and present obligations of water resources 3. Statement of Physical Flows • nature and volumes of physical water flows

14. General Purpose Water Accounts 4. Note Disclosures • statements about accounts being prepared on accrual basis of water accounting • summary of the significant water accounting policies used in their preparation. • information required that is not presented elsewhere • any additional information not explicitly required that is relevant to an understanding of the reporting entity and the management of the water resource.

15. General Purpose Water Accounts 5. Contextual Statement • understanding of the physical and administrative aspects 6. Accountability Statement • assessment of compliance with external imposed management requirements and best practice in water resource management. 7. Assurance Statement • explicit statement of whether the general purpose water accounting report is presented fairly in accordance with the Standard. • These reports are not yet well understood….

16. Sample Output Statement Statement of Physical Flows

17. Murrumbidgee Pilot Account • Regulated Murrumbidgee • 2004/2005 water year • 126 elements in Chart of accounts • About 450 transaction lines • Done on a trial version of the Quickbooks accounting package Burrinjuck Dam

18. Now on Stage 2 Pilots • First cut by BOM at producing a national water account (methods pilot) • In NSW we are examining: • Full Murrumbidgee River • Full valley including groundwater and unreg • Namoi River • Continuous Account, storages in series • If we can handle these 2 rivers we feel we can apply this to any other river in NSW

19. Current Status • Currently ~ 90% complete and Namoi ~ 80% • Two staff working full time on this with help • It’s a big job • For the Murrumbidgee there are some 141 elements to the Chart of Accounts • 31 assets • 19 current and 8 long term liability elements • 23 Income elements • 59 Expense elements • 1 Equity element

20. What’s in the accounts? • Major Storages – Opening Balances, Inflows, Outflows, Net Evaporation, Closing Balances • On River Storages and Channel Storage – Opening and Closing Balances • Surface water inflows and outflows (Tribs, End of System etc) • Groundwater recharge and discharge • Trading – Internal and External (To Murray, VIC, S.A), and other dealings • Available Water Determinations (Allocation) – current and future • Usage (including Supplementary and Uncontrolled) • Carryover (including irrigator debt) • Account water forfeited • Evapotranspiration • Unmet environmental requirements • And much more…………….(General Ledger)

21. Where did the information come from? • DWE Licence Administration System • DWE WATER REGISTERS • WATERINFO - DWE Web Site • CAIRO - State Water Corp river operators program • DWE HYDSTRA • DWE Groundwater Data System • State Water Corp Water Accounting System • IQQM – DWE model • DWE Water Sharing Plans • MODFLOW – DWE Groundwater Model • Spreadsheets with manual calculations • Expert Opinions - guestimates

22. General Issues • Its still very new and will take several years to bed down • The terminology is still fluid (pardon the pun) • There is a lack of quality data outside of Regulated Systems • There is a lack of real data in the Unreg and GW areas • Eg data for water cycle info such as evapotranspiration, interception, groundwater flows, doesn’t exist • Date of accounts being 30 June not very meaningful as opposed to say using the 1st July.

23. General Issues • Problems with data gathering • many processes are still manual and much data is not available until September (or later) • Getting acceptance and understanding of new “accounting” terms • Getting acceptance and understanding of new reports • Current clients not yet interested in the new reports • NSW thinks it will need an additional Summary Report

24. Challenges – Hydrometric Industry • Where will all this accounting data be stored? • Who will manage and collect it? • Short term and long term? • How much of this information can be sourced from within our current databases? • What can be measured • What has to be inferred (and how) • How much of this data is ideally located in Hydstra?

25. Challenges – Hydrometric Industry • What systems may need to be developed or enhanced to meet the agencies and BOM requirements? • How much human intervention will be required in this area? • How can we automate some/all of these elements • Where do we put our efforts to get the most benefit?

26. Water Accounting BOM Bids • DWE put in 3 bids for 2009/10 • Water Accounting System Reporting Tool • Water Accounting Support (Staffing) • Groundwater Modelling Enhancement • What opportunity exists for collaborative approaches for future developments • DWE would be keen to participate

27. Questions? ?