As water becomes increasingly precious in Colorado, there’s a growing need to keep track of every drop. That means more emphasis is being put on water accounting, the process of tracking and reporting water resources like water supply, stream flows, and water use.

The Colorado Division of Water resources explains it this way: “Whether water is used simply to drink from your household tap or to irrigate hundreds of acres of cropland, everyone in Colorado benefits from the orderly distribution and management of the state’s most precious resource.” How is this orderly distribution and management achieved? Through water accounting and periodic reviews or audits.

The words “accounting” and “audit” can cause anxiety, so it helps to generally understand water right accounting. Here are some considerations:

All new water court decrees require the submittal of water accounting to Colorado’s Division of Water Resources. For example, if a city wants to establish a new reservoir, or if a land owner wants to install a pond on their ranch, they must report to the state how and to what extent this is being done lawfully and without injuring other water users. Typically, sample accounting forms are included as an exhibit to the water court decree. This requirement applies to new water rights, changes of water rights, plans for augmentation, and exchanges. Substitution Water Supply Plans also require that accounting be conducted and submitted.
There are a very few exemptions from accounting requirements, but they do exist. If, for example, an agricultural ditch is only running agricultural water with no change in the usage, water accounting is typically not required (although diversion records are often required).
Water accounting is a perpetual obligation for most water users. The frequency you have to submit water accounting reports varies widely, from daily to annually, but most accounting calculations are now conducted on a daily basis.
Accounting requirements continue to become more detailed and stringent and can result in water users having to install more measuring and recording devices and devote more staff to collecting data and making it a part of the accounting.
Many of our clients have installed SCADA (Supervisory Control and Data Acquisition) or telemetry systems to help gather and transmit data from remote locations in order to reduce the effort and manpower required to collect the required information and keep track of water operations more closely. This provides a benefit, and along with the accounting, may indicate if there is a problem in the system such as a malfunctioning pressure transducer or a water leak.
The Division of Water Resources closely monitors accounting records and operations and sometimes goes through an audit or review process on each user's accounting forms. The audit/review helps to ensure that the accounting forms are adequate and/or that the operations are being properly recorded for the State's records. The audit/review may result in required or requested changes to the accounting forms and additional measuring requirements.

The good news? You don’t have to handle water accounting alone! We have experts and technology to help simplify the water accounting process and avoid headaches. M&W staff can help by developing new accounting forms, modifying accounting for new or changed operations, conducting the actual daily accounting calculations including those for complicated systems with multiple structures and supplies, utilizing SCADA output to automate accounting operations, and help navigate the audit process with the State. Contact us to learn more.