Social Audit

What is meant by Social Audit? Why is it required for Good Governace? Who can conduct Social Audit? Read further to know more.

Social Audit is defined as an evaluation of a plan of action that is conducted jointly by the public and the government.

It is an effective method for encouraging transparency, accountability, and involvement in programmes that are intended for people.

An in-depth investigation and study of a public entity’s operations in light of its social relevance is what it entails.

Also read: Comptroller and Auditor-General of India: CAG (Articles 148-151)

What is Social Audit?

A social audit is an evaluation of a policy or scheme carried out jointly by the government and the public, with an emphasis on people who will be affected by or benefit from the policy.

It aids in measuring, assessing, and improving an organization’s performance.

Additionally, it makes the organization socially accountable. The effectiveness of an organization can be improved with the use of social audits.

It encourages effective leadership and strengthens supervision and accountability.

This can help you bridge the gap between your ideal situation and the actual situation, as well as between effectiveness and efficiency.
It gives us the ability to evaluate, confirm, document, and improve the social effects of any government effort or organisation.

A social audit and a development audit are not the same things. A social audit focuses on the frequently ignored subject of social consequences, whereas a development audit has a broader focus that includes environmental and economic issues, such as the effectiveness of a project or programme.

Origin of Social Audit in India

The first organisation in India to conduct social audits was Tata Iron and Steel Company Ltd. (TISCO), Jamshedpur, in 1979.

It gained significance with the 73rd amendment to the constitution, which addressed Panchayat Raj institutions.

The 9th FYP (2002-07) approach paper laid a strong focus on social audit for the efficient operation of Panchayat Raj institutions and gave grama sabhas the authority to perform Social Audits in addition to their other duties.

The National Rural Employment Guarantee Act of 2005 stipulates that “Social Audits” must be conducted on a regular basis to maintain the program’s accountability and openness.

Objectives of Social Audit

• Prevents the misuse of both funds and authority.
• Moreover, it strengthens an organization’s social performance.
• Proper financial management in accordance with the budget.
• To make the development programme more successful and efficient.
• To promote both organisational and public participation in social programmes.

Principles of Social Audit

From social auditing methods used all across the world, some distinct basic principles have been found, these are as follows:

• Transparency: Complete openness in the administration and decision-making processes, with a duty on the part of the government to proactively provide the public with unrestricted access to all pertinent information.
• Accountability: Immediate and open accountability of elected officials and other government employees to all parties involved and impacted by their relevant actions or inactions.
• Participation: the right-based participation in the process of decision-making and validation of all the affected individuals, not just their representatives.
• Representative Participation: The right of the affected parties to provide informed consent as a group or an individual, as appropriate, in situations when options are predetermined out of necessity.
• Comprehensive Report: Report in detail on every facet of the organization’s performance and activities.
• Regular-based: Create social accounts on a regular basis to ensure that the idea and the practise are ingrained throughout the entire organization’s culture.
• Comparative: Provide a way for the organisation to compare its performance to industry benchmarks and the performance of other organisations.
• Verified: Social accounts are audited by a qualified individual or organisation that has no financial stake in the organisation.

Also read: Indian Companies Act 2013: Salient Features

Significance of Social Audit

• Discover Malpractices: It keeps a careful eye on government activities and reveals anomalies and malpractices in the public sector, eradicating leaks and corruption.
• Monitoring and Feedback: It evaluates a company’s social and ethical impact and offers proper feedback on its operations.
• Accountability and Transparency: It fills the trust gap between residents and local governments by ensuring that local government bodies are accountable and transparent in their operations.
• Participatory: It stimulates and increases their openness to social participation in the development of programmes. Social Audit gives more voice to Gram Sabha, the cornerstone of rural administration.
• Designing Policies: Establishing demands in a socially responsible and accountable manner by identifying real issues serves as the basis for designing policies.
• Enhances Professionalism: By mandating Panchayats to maintain sufficient records and reports of expenditures made with financing from the government and other sources, It enhances the professionalism of the public sector.

Challenges Associated with Social Audit

• Rules not followed: 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 tongues.
• Lack of Independency: 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.
• Not Institutionalised: 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 institutionalisation of Social Audit.
•  Lack of Stringent Penalty: Because there are no fines or legal repercussions for breaking rules and guidelines, Social Audit is a pointless endeavour.
• Inadequate Knowledge: Due to unawareness, members of the Gram Sabha are unaware of their legal entitlement to social audits.
• Lack of an Intelligent Information System: Government agencies rely on an ambiguous and imprecise system of referencing government accounts and government reporting methods to track the progress of a plan, making it challenging for auditors to take stock, accelerate, decelerate, or implement corrective actions.
• No Incentive to Participate: The lack of participation in village activities is a result of people’s worries about their livelihood.

Steps  To Be Taken

• Creating Citizens Groups: The political administration and implementing agencies must be held to account by citizens’ groups, who must fight for the improvement of social auditing.
• Establishing an Expert Group: A group of social audit specialists should be established to instruct the social audit committee members.
• Conduct Training Programmes: It is important to create training programmes on social auditing practises like conducting and writing reports, as well as presenting at Gram Sabha.
• Participation in Civil Society: It should be promoted that individuals, including students from various universities, take part as Village Resource Persons. As an illustration, Jharkhand established a formal system by inviting well-known members of civil society to join the Social Audit panel.
• System Institutionalising: For the system of social audits to become an institutionalised structure that cannot be challenged by vested interests, it needs widespread support and encouragement from several authorities.
• Support for Implementing Agencies: Rules that mandate implementing agencies to participate in the social audit process and act fast on the findings must be established.
•  Legally Sanctioned Results: State governments should set up specific rules to make sure that social audit results are legally sanctioned.
• Utilizing  Management Information System: The planning, implementation, and feedback phases of a program’s life cycle are streamlined by using MIS to track specifics of schemes at all levels.
• Punitive Action for Non-compliance: 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.
• Monitoring : The implementing agency’s response to the social audit findings, or lack thereof, should be observed by the Ministry of Rural Development. A quarterly meeting between SAU, the implementing agencies, and MoRD officials should be convened to monitor the action-taken reports.
• Increasing the Frequency: It must be conducted by each Gram Panchayat once every six months.
• Role of Media: The media’s role is to reach rural communities and raise awareness through specially crafted programmes that concentrate on matters of rural concern, particularly Gram Sabhas and their capacity for social audit.

Social Audit Law

Meghalaya was the first state in India to implement the Meghalaya Community Participation and Public Services Social Audit Act, 2017.

Elements of the Act:

• A social audit facilitator will be recruited to carry out the audit directly with the people who will submit findings to the Gram Sabha, which will then add inputs and ultimately send the outcome to the auditors.
• The Social Audit Council (SAC), a council, has been established to assess government projects as they are implemented.
• The Act includes a list of the projects, programmes, and schemes that need to be audited.

Best Practises for Social Audit

Some of the best practices include the following

Andhra Pradesh

In Andhra Pradesh, the Society for Social Audit, Accountability and Transparency was established as an independent organisation 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.

Its main objective is to uphold the idea of the populace’s constant vigilance, which is made easier by the collaboration of social activists and the government.

It seeks to both prevent leakage and waste of public funds while empowering rural residents who are beneficiaries of social programmes like MGNREGA.

Public vigilance, verification of various implementation stages, and “Social Audit Forums-Public Hearings” are all parts of the SSAAT’s social audit process.

Jharkhand

Juries made up of representatives from CSOs and Panjayathi raj institutions hear public hearings.

A recommendation for action to be made in response to specific anomalies has been developed for the jury members’ input.

Hearings are held at the panchayat, block, district, and state levels.

There are specialised audits and tests conducted.

For IEC activities, a cultural workshop was held, and songs in eight different languages were composed.

Chattisgarh

The Gram Sabha’s Sachiv and Sarpanch receive complaints from the social audit team regarding matters other than MGNREGA and deliver them to them.

To guarantee active community engagement in the social audit process, muster rolls, bills, and measuring books are written on the wall.

Conclusion

The need for a social audit is essential. Due to its wider breadth and similarity to financial and operational audits, this is a useful tool for giving society and stakeholders assurance.

Global experience with Social Audits is encouraging despite its shortcomings. The Andhra Pradesh Government’s endeavour is a milestone in this field.

Such inspections and comments are very helpful in identifying the gap between what people need and what they get through social programmes.

Article written by: Aryadevi E S