By hand in a large mixing bowl or with an electric mixer combine the sifted confectioners sugar with the salt, vanilla extract & then the water, starting with just about half the amount of water.
Mix to a paste then add more water as needed. *Using liquid food colors you will not need nearly as much water since those are primarily water.
Divide the icing into as many smaller bowls are you are making colors & add the food color to each, mix well then cover each small bowl with plastic wrap to prevent drying as you pipe each color.
I use parchment paper cones to pipe each color since you are working with such small portions at a time it just makes more sense than using large piping bags. It is also cleaner & easier to handle small cones rather than large pastry bags, not to mention the canvas or plastic pastry bags we use for other projects may have residual grease in them which can break down this icing which in turn will ensure it never dries
Pipe the colors out in long strings onto parchment paper lined sheet pans. *It's ok if the strings break as you pipe, they are going to get broken up later anyway.
Let the icing dry for at least 4 hours in a cool, dry (not humid!) spot preferably overnight to make sure they are completely dry
Once dried all the way, roll up the parchment paper & let the sprinkles pour out into a bowl!
Notes
Store in a clean dry airtight container (preferably glass) for up to 1 year