Advances in Economics, Business and Management Research, volume 127
Annual International Conference on Accounting Research (AICAR 2019)
The Operational Water Audit on Distribution
Function PDAM Tirta Bhagasasi Tambun Branch
Muhammad Hasbi Saleh*, Viki Faradila
Department of Accounting
Sekolah Tinggi Ilmu Ekonomi Indonesia
Jakarta, Indonesia
*m.hasbi_saleh@stei.ac.id
Abstract—This research aims to study whether the water
distribution function of PDAM Tirta Bhagasasi Bekasi Branch
has been effective based on service claims and complaints from
the customers. The research also aims to determine whether the
PDAM has implemented a water audits and comply with the level
of water loss PDAM according to water standard. This research
uses a descriptive research type of qualitative approach, which is
compiled by the data analysis method in the form of a
preliminary examination, review and testing on the management
control system, detailed audit, and audit report which yield
recommendation to the company. The unit of analysis of this
research is the Distribution Division of PDAM Tirta Bhagasasi
Bekasi Tambun Branch. The data used in this research are
primary and secondary data. Data collection techniques used
library
research
methods,
observation,
interviews,
questionnaires, and documentation. The result of the research
proved that the company has an organizational structure with
clear division of tasks, and the company policies regarding the
distribution process so that the implementation of water
distribution at PDAM Tirta Bhagasasi Bekasi Branch Tambun is
efficient, but not fully effective, because there were still some
deviations may result in a loss to the company. Besides, PDAM
has not implemented water audit and water loss rates according
to the water audit exceeding 10%, which according to the
American Water Work Association (AWWA) should be complied
with to reduce the rate of water loss.
Keywords: operational audit, water audit, distribution function
I. INTRODUCTION
Water is essential for the living creatures. One can sustain
its life without food for several days but cannot survive
without water. Water is used in everyday activity like
brushing, cooking, drinking, faucets, farms, big industries etc.
Its importance can be known from the past that ancient cities
were established on the bank of the river where water was
available easily which was useful for transportation and other
activities. As water is available for free, all have lost its
importance in life and are using it chaotically. PDAM Tirta
Bhagasasi is one of 398 PDAMs that are spread throughout
the archipelago. PDAM Tirta Bhagasasi serves water needs for
Bekasi District and parts of Bekasi City. Out of the total
number of 200,913 customers, only 86.3% (173,421) were
active customers. However, in running its business, the
company experienced several major problems, namely service
coverage that has not been able to meet the target for the past
few years so that the allocation of PDAM water in Bekasi has
not been evenly distributed, due to the high level of water
leakage, so that many residents lost clean water and occurred
losses to many parties, namely consumers and the PDAM
Tirta Bhagasasi itself. The level of water leakage was around
36.3 percent from a total of 3.4 million cubic meters of
drainage. The cause of water leakage at the company is due to
old pipelines, also due to inaccurate meter readings as well as
the presence of leakage on the gauge or water meter. But one
other cause is the occurrence of water washing or illegal
connections by the general public, including non-active
customers. The purpose of this study is to find out whether the
distribution function carried out by PDAM Tirta Bhagasasi
Bekasi Tambun Branch has been running effectively, and what
is the level of water loss in accord to the water audit?
II. LITERATURE REVIEW
A. Previous Research
Previous research is very important as a basis for
developing this research. Its purpose is to find out the results
that have been done by previous researchers. Research related
to operational audit and water audit 8 articles was chosen.
Overall the research concluded that the production function
starting from the master production schedule, assessment of
inventory levels, maintenance schedule, productivity and value
added, equipment and production facilities, quality control and
finished goods control has generally been well implemented. In
general, the activities of the production function have been
effective, but there are some problems in distribution, so the
company needs to correct the deficiencies so that in the future
the operational production can be effective. From the water
audit, water counted in meter, clear water, stolen water,
countless water, leakage can be identified. The quality of water
supply is also known. Through the analysis of water use during
water audits, wasteful and excess water usage is found. Steps
that can be taken to optimize water loss are studied and it is
found that the water meter in each house has not changed and
is needed to raise awareness among the community for
conservative water use.
Copyright © 2020 The Authors. Published by Atlantis Press SARL.
This is an open access article distributed under the CC BY-NC 4.0 license -http://creativecommons.org/licenses/by-nc/4.0/.
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Advances in Economics, Business and Management Research, volume 127
B. Theoretical Basis
Management audit, also called operational audit, functional
audit, audit system, is an examination of a company's
operational activities, including accounting policies and
operational policies that have been determined by management,
to find out whether the operational activities have been carried
out effectively, efficiently and economically [1].
Operational audit is a systematic examination that aims to
start and report related resources and funds that are used
effectively, efficiently, and economically and assess programs,
functions and objectives that have been well planned [2].
Operational auditing is a systematic process for evaluating
an organization's effectiveness, efficiency and economic
operations under control and management reporting to the
person who precisely results from the evaluation together with
recommendations for improvement [3].
From the definitions above, it can be concluded that the
notion of operational audit is a process of evaluating the
operations of an entity to achieve its objectives in accordance
with standards and regulations effectively, efficiently and
economically.
There are 4 stages in an operational audit [4], namely:
Preliminary Survey, is intended to get an overview of
the company's business conducted through question and
answer with the company's management and staff and
the use of questionnaires.
Review and Testing of Management Control Systems,
is to evaluate and test the effectiveness and control of
management through questionnaires, flowcharts and
narrative explanations are used and several transactions
are tested.
Detailed Examination, is checking the company's
transactions to find out if the process is in accordance
with policies set by management. In this case the
auditor must use observations on the activities of the
functions contained in the company.
Report Development, in preparing the audit report, the
auditor does not give an opinion on the reasonableness
of the company's financial statements but the reports
made are similar to management letters, because they
contain audit findings regarding inefficiencies,
inefficiencies and inefficiencies and weaknesses in the
management control system found in the company.
Water audit was a picture in the late 80s to overcome
problems related to drought, shortages, leakages, and losses
[5]. Some of the total water use is leakage, some is caused by
inaccurate measurements, some of which may be unauthorized
use, and part of that is water sent to customers [6]. The water
audit determines where the water ends and how much gets
there. Water audits improve knowledge and documentation of
distribution systems, problems and risk areas and a better
understanding of what happens to water after leaving the point
source [7]. A leak detection program helps minimize leakage
and overcome small problems before they become big
problems.
Water auditing is an accounting procedure for finding
water loss in a system [8]. From that, countless water uses,
unauthorized supplies, etc., are known. Whereas according to
Gandhi et al states that water audit is a process to calculate the
water used that is treated so that the exact water usage is
known and through analysis during domestic water audits the
water usage is known [9]. Audits were chosen to ensure the
validity and reliability of information, as well as to assess the
system's internal controls [10]. Water auditing is the most
effective tool for water management. The purpose of the Water
audit is to provide a rational scientific framework that
categorizes all water uses in the system. This is a tool to
overcome deficiencies, leaks and other water losses.
Water audit helps to know what is happening after the
water leaves from a treatment plant, if there are losses
occurring, where the losses are occurring etc. is known,
according to that the leakage detection program and other
program to reduce loss takes place. These programs have
outcomes as follows: Optimization of water losses, Financial
Improvement, Knowledge distribution system, increases
reliability of supply system, improve public relations,
improving service system etc.
The distribution is an organizational tool that is
interdependent in providing a product to be used or consumed
by consumers / users [11]. Meanwhile, distribution is an
activity carried out by companies that make products available
to target customers [12]. The clean water distribution system is
the distribution or distribution of water through a pipeline
system from the building (reservoir) to the service area
(consumers). In planning the water distribution system, several
factors that must be considered include the service area and the
number of population to be served, water needs, topographic
location of the service area, type of system connection,
distribution pipe, drainage type, network pattern, clean water
distribution system equipment, leak detection [13]. The clean
water distribution system is the distribution or distribution of
water through a pipeline system from the building (reservoir)
to the service area (consumers) [13]. In planning the water
distribution system, several factors that must be considered
include the service area and the number of populations to be
served, water needs, topographic location of the service area,
type of system connection, distribution pipe, drainage type,
network pattern, clean water distribution system equipment,
detected.
III. METHODS
The research strategy used in this study is a descriptive
method with a qualitative approach. Descriptive method is a
method that serves to describe or give a picture of the object
under study through data that has been collected as it is,
without analysing and making conclusions that are applicable
to the public [14]. This research was conducted on the
distribution function in the Regional Water Supply Company
(PDAM) of Tirta Bhagasasi Bekasi.
Data was collected from primary and secondary sources,
primary data obtained are data relating to the distribution
function carried out by the company of the parties concerned
and direct observation of the object under study. Secondary
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Advances in Economics, Business and Management Research, volume 127
data is data obtained from the company in the form of company
history, organizational structure and company data (research
objects) relating to the operational audit of the distribution
function.
The method used to analyse the data in this study is a
qualitative descriptive analysis, which is an analysis based on a
state statement and a measure of quality. Qualitative analysis is
given in the form of a description of qualitative data that is
associated with other data to get clarity on a truth or obtain a
new picture, reinforce an existing picture or vice versa.
An Illegal network that is not detected by the company, (c)
Abnormal customer water meters. (d) Delay in the distribution
of parts in resolving leaks, (e) Map of pipelines that are not
clearly drawn, (f) There are many complaints of turbid water,
dead water, smelly water and the small volume of water that
flows from customers but is not quickly handled, (g)
Replacement of water meters that have exceeded their technical
age are not structured, (h) Minutes of new installations made
by the distribution are late so that the customer's account does
not appear, (i) Revocation of delinquent customers often results
in delays, (j) Lack of coordination between distribution and
customer relations regarding customer complaints.
IV. RESULTS AND DISCUSSION
A. Preliminary Examination
After conducting the observations with some parts related
to water distribution management in PDAM Tirta Bhagasasi
Bekasi, we have found several tentative audit finding, namely:
the occurrence of leakage of pipes that are not detected, there is
an illegal network that is not detected, delay in the distribution
of parts in detecting leaks, the network map is not clearly
drawn, many complaints of turbid water, dead water, smelly
water and small water volume flowing, lack of coordination
between parties and the customer relationship regarding
customer complaints.
B. Review and Testing of Management Control Systems
Researchers conducted interviews and made questionnaires
to be filled out by informants according to the sections related
to distribution. The following are the conclusions of the results
of interviews and questionnaire answered that have been
distributed and filled out by the production, distribution, and
customer relations departments: (a) distribution planning has
been going well, only there are still shortcomings in planning
the transmission and distribution pipeline inspection. Even
though the inspection should have been carried out
continuously in order to reduce the level of leakage. (b) The
distribution has fulfilled the procedures carried out in
accordance with the guidelines. need further attention in the
implementation of distribution is the distribution of water that
sometimes cannot meet customer needs, it will have an impact
on customer satisfaction, in addition the company also needs to
pay attention to the availability of distribution pipeline maps in
order to facilitate the resolution of leaks and improve
supervision in connection installation supervision new
subscription. (c) Evaluation of distribution has been going well,
this can be seen from the answers of dominant informants who
agree. But there are still shortcomings in the timeliness in
resolving leaks, it can affect the company's operational costs
that will increase and need to be considered again regarding the
evaluation of the customer's water meter so that the recording
of consumer water usage does not occur error.
C. Detailed Examination
Doing in-depth audit try to find the supporting evidence
from tentative audit findings, the detailed audit stage
summarizes and groups each audit findings support by
conditions, criteria, causes, and consequences. The definitive
audit findings namely: (a) Pipes leakage that is not detected, (b)
D. Report Development
From the findings, researchers found constraints and
weaknesses in the management control system that applies to
companies in managing the distribution function at PDAM
Tirta Bhagasasi Bekasi Tambun Branch in the stages of
distribution planning, distribution implementation, and
evaluation of distribution. This results in delays in the
distribution operations and the customer's water requirements
so that it can cause losses for the company. Based on the results
of the audit it can be concluded that the distribution activities
carried out by the company are still not running effectively.
This can be seen from how much the influence of irregularities
or weaknesses on the company's revenue and the impact caused
by these irregularities or weaknesses. As for other factors
outside the effectiveness that cause the unfulfilled distribution
objectives are also influenced by other factors such as natural
factors.
The content of the official report, the first part is the
opinion of auditor, then follow by executive summary and
detail of examination.
V. CONCLUSION
The company already has a Standard Operating Procedure
with clear segregation of duties, authority and responsibilities,
as well as good distribution implementation policies, so that the
implementation and control of the distribution function at the
PDAM Tirta Bhagasasi Tambun Branch is efficient but less
effective, due to the distribution officers still not carrying out
their duties optimally.
The level of water loss at PDAM Tirta Bhagasasi Tambun
Branch exceeds 10% which according to the International
Water Association (IWA) of the American Water Work
Association (AWWA) must be followed up to reduce the level
of water loss.
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