Module-c community Based Financial Management

– training support, technical assistance, institutional 
strengthening, monitoring and evaluation 
 Future investment costs - Major overhauls (rehabilitation), 
replacement, and extension 
 Other costs 
– transport, services paid to a private contractor, 
unaccounted for water due to leakage, bad administration and 
vandalism 

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Ministry of Water, Irrigation and Electricity 
 Operation and Maintenance Management Manual 
Training Module - D 
Community Based Financial 
Management 
 
DEMEWOZ CONSULTANCY 
20
MODULE 
– D:
 
COMMUNITY BASED FINANCIAL MANAGEMENT FOR RURAL 
WATER SUPPLY SCHEMES 
(1) Running Cost 
Running cost, which is also called as operation cost, can be defined as cost 
required for day-to-day operation of a water scheme. Such operation cost 
includes in general the following items. 
 Personnel expenses (salary for a pump attendant or guard) 
 Overhead cost (travelling cost, communication, per-diem etc.) 
 Office expenses (stationeries, etc.) 
Box 2: Example of Running Cost for Hand Pump Scheme 
 
 
(2) Maintenance Cost 
 Maintenance cost is concerned about any cost required for continuity of 
operation of a water scheme without any breaks including spare parts 
cost, repair cost, technical service fee, and so on. 
 With regard to the regular replacement of spare parts for Afridev hand 
pump, it is recommended to follow a schedule below. Some parts (U-seal 
and bearings) need to be replaced every 6 months, others once a year, 
and others once a two years. 
 Normally a community would put aside enough money to cover the FAST 
WEARING PARTS - parts that need to be replaced frequently. In 
addition, WASHCO should buy a few long wearing parts 
– e.g. rod) - as a 
way of investing the money and guarding against inflation. 
Example: 
A WASHCO in XXXX Kebele employs one pump guard. Monthly running costs of 
XXXX WASHCO are as follows: