A water audit identifies how much water is lost and which is the cost of this loss. The main concept behind a water audit is the water balance i.e. an accounting of all the inputs and outputs in the system under examination. The difference between supply and consumption is attributed to many reasons, whose understanding provides direction on way forward to reduce Non Revenue Water and achieve substantial cost savings.
Sometimes water is used for authorised purposes but is not billed (e.g. municipal garden irrigation, fountains, firefighting): such consumption is termed as unbilled authorised consumption. In other cases there might be water losses due to leakages, service reservoirs overflows or illegal withdrawals.
The water audit thus classifies the difference between system input volume and the volume that gets paid for. This brings out the system flaws which can be corrected to improve the overall efficiency and reduce the unit cost of water. This is beneficial to citizens as they get a better service at a lower cost. However this essentially requires the knowledge of the system input volume and of the quantities received by consumers, which is possible only if we meter our supplies and consumptions.
Water audits should be performed annually to help managers adjust priorities, monitor progress, define rehabilitation and replacement works, identify new areas of system losses, and establish new maintenance goals. Updating a water audit is usually cheaper than the original audit.