Water has to be placed at the same place as the drills and just before the brass tunnels.
Lava has to be placed a block above the hoppers and a block below the flint funnel at the base of the iron farm.

To extend the farm, repeating last vertical layer of drills, millstones, hoppers... and elongating the belt will suffice, adding fans like shown in the pictures allows the farms to run faster without constraining gravel throughput too much.