Gaps in provision of adequate water supply to rapidly growing urban population in developing country are increasing dramatically. As a result, demand for additional water sources and infrastructure is growing. In this study, an attempt is made to evaluate both the water supply coverage and the water loss. This study envisionedto evaluate the town distribution coverage of the water supply and evaluating the total water loss at the town level.The water consumption as aggregated from individual customer meter readings was used to evaluate the total water loss at town level. The total water loss derived from the water balance at town was compared using different performance indicators. Identifying pressure in distribution system was done by using WaterCADV8.0 software. Finally, a methodology was suggested to identify the loss and remedial actions to be taken by the water authority to reduce water loss were recommended. According to the analysis average per capita consumption was 24l/per/day, connection per family was 23% and the total water losses in the system were 25.24%.From the analysis, water demand and supply of the town was not balanced and the present water supply network services of the town isinsufficient for all residents, some part of the system contains  pressures above and below the maximum and minimum limit that were adapted in the distribution system and it needs adjustment. Also the annual water loss of Town in terms of percentage was greater than the acceptable level which is 10% that cannot be removed.The infrastructure leakage index value was obtained to be 0.87 and less than an ideal value of 1 that indicates the real loss in the system close to unavoidable.

Key words: Performance indicators, WolaiytaSoddo, water supply, water losses, water audit software.