Social Audit

Social Audit

 

Introduction

Social audit means an evaluation of a programme of action carried out jointly by the people and the government. It is a useful strategy for promoting transparency, accountability, and participation in the programmes that are meant for people. Social Audit comprises a thorough examination and analysis of how a public entity functions in relation to its social significance.

 

What is Social Audit?

  • It is a process through which an organization or government accounts for its social performance to its stakeholders and strives to enhance its future social performance is known as social audits.
  • Charles Medawar was the first to propose this idea in 1972.
  • A social audit can assist close the gap between your vision/goal and reality, as well as between efficiency and effectiveness.
  • It enables us to assess, verify, report on, and enhance any government initiative or organization's social performance.
  • A social audit is not the same as a development audit. The main distinction between a development audit and a social audit is that a social audit concentrates on the often overlooked topic of social repercussions, whereas a development audit has a broader focus that includes environmental and economic issues, such as a project's or program's efficiency.

 

Origin and Evolution of social audit in India:

  • In India, the initiative of conducting social audits was taken by Tata Iron and Steel Company Limited (TISCO), Jamshedpur in the year 1979.
  • It serves as an instrument for the measurement of social accountability of an organization. It gained significance after the 73rd amendment of the constitution relating to Panchayat Raj institutions.
  • The approach paper to the 9thFYP (2002-07) emphasized upon social audit for effective functioning of Panchayat Raj institutions (PRIs) and empowered gram sabhas to conduct SAs in addition to its other functions.
  • National Rural Employment Guarantee Act, 2005 provides for regular “Social Audits” so as to ensure transparency and accountability in the scheme.

 

Types of Audit:

  • Financial Audit:Directed towards recording, processing, summarizing and reporting of financial data.
  • Operational Audit:Establishing standards of operation, measuring performance against standards, examining and analyzing deviations, taking corrective actions and reappraising standards based on experience are the main focus.
  • Social Audit:Social Audit provides an assessment of the impact of a department’s non-financial objectives through systematic and regular monitoring on the basis of the views of its stakeholders.

 

Principles Of Social Audit

  • Complete transparency in the process of administration and decision making, with an obligation on the government to proactively give the people full access to all relevant information.
  •  A right based entitlement of all the affected persons and not just their representatives to participate in the process of decision making and validation.
  •  In those cases where options are predetermined out of necessity, the right of the affected persons to give informed consent, as a group or as individuals, as appropriate
  •  Immediate and public answerability of elected representatives and government functionaries, to all the concerned and affected people, on relevant actions or inactions.

 

Significance of social auditing:

  •  It promotes transparency and accountability in the functioning of organizations, particularly those engaged in social and development activities. The Rajasthan government has established a Social and Performance Audit Authority (SPAA) for the first time to enhance accountability in the performance of government projects and programmes.
  • The people of Dungarpur district of Rajasthan and Anantapur district of Andhra Pradesh have collectively organized social audits to prevent mass corruption under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  •  It involves the participation of various stakeholders and provides an opportunity for their voices to be heard and considered in decision-making processes.
  •  Through social auditing, organizations can assess and measure their impact on different social, economic, and environmental parameters. It helps in determining whether the intended outcomes are being achieved and facilitates evidence-based decision-making for future interventions.
  •  By voluntarily undergoing social audits, organizations demonstrate their commitment to transparency, accountability, and social responsibility, thereby fostering public trust and confidence in their operations.
  • It generates valuable data and insights about social issues, challenges, and successes. This information can be utilized to advocate for policy changes, reforms, and improvements in various sectors, including education, healthcare, environment, and poverty alleviation.
  •  It encourages organizations to reflect on their practices, learn from past experiences, and continuously improve their performance. It provides a platform for internal and external stakeholders to exchange knowledge and best practices, leading to enhanced effectiveness and efficiency.
  •  It promotes inclusive development by ensuring that the needs and concerns of marginalized and vulnerable communities are addressed.

 

Challenges:

  •  In several states, Gram Panchayats are not required to provide Social Audit Units with records pertaining to work completion and expenditures, and Gram Sabhas are not provided with social audit reports in their native languages.
  •  Many governments do not adhere to the transparent selection procedure for the director of the Social Audit Units as specified in the requirements. Several Social Audit Units do not have enough personnel to cover all of the panchayats even once a year.
  • Auditors are subject to implementing agencies that face resistance and intimidation and struggle to even get access to original data for verification because the government has not regulated the institutionalization of Social Audit.
  • Little or no incentives to participate in Social audit programmes for individuals.
  • Lack of Standardization - Unlike financial reporting, there is no universal standard for social audits.
  • Lack of Awareness and Education - Some organizations and stakeholders might not fully understand the concept of social audits and their benefits. This lack of awareness can hinder the successful implementation of the audit.

 

Social Audit in India:

  • National Rural Employment Guarantee Act, 2005 provides for regular “Social Audits” so as to ensure transparency and accountability in the scheme.
  •  Meghalaya was the first state in India to implement the Meghalaya Community Participation and Public Services Social Audit Act, 2017. Thus, they made Social Audit mandatory by law.
  •  Andhra Pradesh - In Andhra Pradesh, the Society for Social Audit, Accountability and Transparency was established as an independent organization free from intervention from the government. In terms of implementing SA, the state of Andhra Pradesh has emerged as a model for all other states.

 

Way to forward:

  • The establishment of citizens’ groups is crucial for holding the political administration and implementing agencies accountable. These groups should advocate for the enhancement of social auditing.
  •  A team of social audit experts should be formed to guide the members of the social audit committee.
  • The development of training programmes on social auditing practices, such as conducting and writing reports and presenting at Gram Sabha, is essential.
  • Encourage individuals, including university students, to participate as Village Resource Persons. For instance, Jharkhand has established a formal system by inviting prominent members of civil society to join the Social Audit panel.
  •  To make the system of social audits an institutionalized structure that cannot be challenged by vested interests, it requires widespread support and encouragement from various authorities.
  •  Rules should be established that mandate implementing agencies to participate in the social audit process and act swiftly on the findings.
  • State governments should establish specific rules to ensure that social audit results are legally sanctioned.
  •  Utilizing MIS can streamline the planning, implementation, and feedback phases of a program’s life cycle by tracking specifics of schemes at all levels.
  •  The state government should take swift action to identify the responsible parties and to punish defective SAU employees as well as other ground-level auditors.
  • The Ministry of Rural Development should observe the implementing agency’s response to the social audit findings. A quarterly meeting between SAU, the implementing agencies, and MoRD officials should be convened to monitor the action-taken reports.
  • Each Gram Panchayat should conduct it once every six months.
  •  The media should aim to reach rural communities and raise awareness through specially crafted programmes that focus on matters of rural concern, particularly Gram Sabhas and their capacity for social audit.