I advise you look into the Flint water crisis, because your understanding doesn't sound accurate. The decision to change the source from one body of water to another was a municipal decision - made by the city's Emergency Manager (indicted on felony charges) - not one made by a private company.[0]
The EPA (another governmental agency) mandates contaminate limits and testing. MDEQ (Michigan Department of Environmental Quality, another government agency) was not properly testing to federal requirements. Still, the issue was known by residents long before it was fixed, due to... private testing.[1]
What happened in Flint was criminal negligence, but it had nothing to do with water supply being privatized (it wasn't), or a lack of monitoring requirements (although it's believed testing may have been manipulated... by government workers.[2])
[0] https://www.mlive.com/news/flint/2014/04/closing_the_valve_o...
[1] https://flintwaterstudy.org/2015/09/commentary-mdeq-mistakes...
[2] https://www.nytimes.com/interactive/2016/04/21/us/flint-lead...
Edit: Here's a good place to start - https://mphdegree.usc.edu/blog/the-flint-water-crises
Edit 2: Citations added.