Social Audit
Contents :
  1. Meaning of Social Audit.
  2. Features of Social Audit.
  3. Objectives of Social Audit.
  4. Purpose and Steps of Social Audit.
  5. Advantages and Disadvantages of Social Audit.
  6. Rights and Duties of the Auditor in Social Audit.

What is Social Audit ?

Social Audit is a tool with which government departments can plan, manage and measure non financial activities and monitor both internal and external consequences of the department/organisations social and commercial operations.

The process of evaluating a firm's various operations procedures, code of conduct and other factors to determine its effect on a society. The goal is to identify what, if any, actions of the firm have impacted the society in some way. A social audit may be initiated by a firm that is seeking to improve its cohesiveness or improve its image within the society. If the results are positive, they may be released to the public. 
For example, if a factory is believed to have a negative impact, the company may have a social audit conducted to identify actions that actually benefit the society.

"Social audit is a process in which people work with the government to monitor the planning and implementation of the policies/programme which are intended for the beneficiaries (people)".

It is also defined as an in-depth scrutiny and analysis of the working of any public utility vis a vis (in relation to) its social relevance.

The underlying ideas of a Social Audit are directly linked to the concept of democracy and participation. In Social Audit, it examines the impact of specific governmental activities on certain sections of the society within are in contact with government agencies. It is an important tool in the Management of National Affairs.

Features of Social Audit :

The foremost principle of social audit is to achieve continuously improved performances in relation to the chosen social objectives. Eight specific key principles have been identified from social auditing practices around the world. They are as follows :

1) Multi-Perspective/Polygonal : 
Aims to reflect the views (voices) of all those people (stakeholders) involved with or affected by the organisation / department / programme.

2) Comprehensive : 
Aims to (eventually) report on all aspects of the organisation's work and performance.

3) Participatory :
Encourages participation of stakeholders and sharing of their values.

4) Multi-Directional :
Stakeholders share and give feedback on multiple aspects.

5) Regular : 
Aims to produce social accounts on a regular basis so that the concept and practice become embedded in the culture of the organisation covering all the activities.

6) Comparative :
Provides a means, whereby, the organisation can compare its own performance each year and against appropriate external norms or benchmarks and provide for comparisons with organisations doing similar work and reporting in similar fashion.

7) Verification :
Ensures that the social accounts are audited by a suitably experienced person or agency with no vested interest in the organisation.

8) Disclosure : 
Ensures that the audited accounts are disclosed to stakeholders and the wider community in the interests of accountability and transparency.

Objectives of Social Audit :

The following objectives of social audit are as follows :
  1. Assessing the physical and financial gaps between needs and resources available for local development.
  2. Creating awareness among beneficiaries and providers of local social and productive services.
  3. Increasing efficacy and effectiveness of local development programmes.
  4. Scrutiny of various policy decisions, keeping in view stakeholders interests and priorities, particularly of rural poor.
  5. Estimation of the opportunity cost for stakeholders of not getting timely access to public services.

Purpose of Social Audit :

This tool is designed to be a handy, easy to use reference that not only answers basic questions about social audit, reasons for conducting social audit, and most importantly gives easy-to-follow steps for all those interested in using social audit :
  • The purpose of conducting Social Audit is not to find fault with the individual functionaries but to assess the performance in terms of social, environmental and community goals of the organisation.
  • It is a way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to.
  • It provides an assessment of the impact of an organisations non-financial objectives through systematic and regular monitoring, based on the views of its stakeholders.

Steps of Social Audit :

The six steps of social auditing are as follows :
  1. Preparatory activities.
  2. Defining audit boundaries and identifying stakeholders.
  3. Social accounting and book-keeping.
  4. Preparing and using social accounts.
  5. Social Audit and dissemination.
  6. Feedback and institutionalisation of Social Audit.
The first two steps are critical when a department decides to incorporate social accounting, social book-keeping and social auditing. The department needs to look at its vision, goals, current practices and activities to identify those that are amenable to social auditing purposes. Small work groups (say, seven persons) are to be formed which would spend about two days each to list down the social vision, core values, social objectives and map stakeholders and their involvement. Ensure involvement of various functionaries with due representation to gender, while forming small groups. The small groups should have access to project documents, process documentation, department guidelines and policy notes.

The next activity would be to assign the task of matching the activities with the social objectives and identifying gaps. This again could be carried out by a small group drawn from the managerial cadre and execution/implementation groups at the field level. All this information would be then looked into; to develop a plan for Social Auditing, including who would be responsible in the department, monitoring and identifying the resources required. This responsibility again could be given to a small group of three individuals.

Stakeholder consultation, involving department functionaries and civil society, would be the forum for sharing the Social Audit plan. This consultation would clarify the issues important for Social Auditing, role of stakeholders, as well as commitments from them. The outcome of the consultation would be fed into the process of detailing out the indicators to be monitored; which existing records are to be used and how additional information would be collected.

The next key step is to fix responsibilities for various activities. The activities include preparing formats for social account keeping, compilation of data and reporting the same on a monthly basis (internal use). Managers of the department / programmes can use this information for monitoring as well as providing feedback for improving performance and overcoming bottlenecks.

Advantages of Social Audit :

The following advantages of social audit are :
  1. Curb on corruption.
  2. Increased effectiveness of a programme/project.
  3. A sense of belonging (personal touch with people, since people participate in the audit).
  4. Awareness to common people their rights and entitlements.
  5. Social accounting and reporting.
  6. Promotes integrity and a sense of community among people.
  7. Good local governance.
  8. Grievance redressal and follow-up of corrective actions.

Disadvantages of Social Audit :

The disadvantages of social audit might include follows :
  1. Time and organisational effort required to set-up social accounting systems.
  2. Cost of outside resources such as interviewers and social auditors.
  3. Unless embedded in organisation culture, there is a danger of it becoming a one-off paper exercise.
  4. Achieving recognition by stakeholders and others of the value of Social Audit.
  5. Identification of, and obtaining views and opinions of non-stakeholders who may be potential stakeholders.
  6. Exclusion of potential participants if the process is made complicated and confusing through involvement of professionals.
  7. Lack of standards for the Social Audit process and recognised qualifications for social auditors may damage the credibility of the process.
  8. Perception of organisation manipulating or hijacking stakeholder views.

Rights and Duties of the Auditor in Social Audit :

To be effective, the social auditor must have the right to :
  • Seek clarifications from the implementing agency about any decision-making, activity, scheme, income and expenditure incurred by the agency.
  • Consider and scrutinise existing schemes and local activities of the agency.
  • Access registers and documents relating to all development activities undertaken by the implementing agency or by any other government department. This requires transparency in the decision-making and activities of the implementing agencies. In a way, Social Audit includes measures for enhancing transparency by enforcing the right to information in the planning and implementation of local development activities.