SOCIAL AUDIT

2.1

Introduction

is an action which involves the process of measuring, reporting, understanding

and repairing the social fabric of society.
2.2

Previous Research

2.2.1 Social Audit : Gram Sabha and Panchayati Raj (Assessment of

present status and recommendation of methods for making social audit,
a viable instrument for sustainanable programme delivery)
Getting the Terminology Right - Social Audit or Peoples Audit
In India, what we commonly mean by Social Audit is, globally known as Peoples
Audit or Public Audit. The concept of Social Audit in global perspective is derived
from the concept of Corporate Social Responsibility, whereby the companies
integrate social and environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis.
The definition of Social Audit is "Social Audit or Public Audit is a process in
which, details of the resource, both financial and non-financial, used by
public agencies for development initiatives are shared with the people,
often through a public platform. Social Audits allow people to enforce
accountability and transparency, providing the ultimate users an
opportunity to scrutinize development initiatives. Broadly, this process
of Social Audit is one step ahead of accounting audit as it covers
nonfinancial details in addition to financial details, the domain of
Financial / Accounting Audit. It involves, the following components, i.e.,
a) Availability of information / details of the resource, financial and nonfinancial, used by public agencies for development initiatives, b)
Organising the ultimate users / beneficiaries / people, c) Scrutiny of the
information by the end users.
Broadly, this process of Social Audit is one step ahead of accounting audit as it
covers nonfinancial details in addition to financial details, the domain of Financial
/ Accounting Audit.
It involves, the following components, i.e.,
a) Availability of information / details of the resource, financial and nonfinancial, used by public agencies for development initiatives,
b) Organising the ultimate users / beneficiaries / people,
c) Scrutiny of the information by the end users.
If, we note the above process, the basic input to the process is Information
availability willingness of the Government Officials to provide information and
ability of people to ask questions.
Summary Analysis
a. The SUPPLY SYSTEM is resisting the process of change being brought about,
which is natural, based on the simple saying that, Old Habits Die Hard .
b. The Supply System has sections supporting the change process towards
accountability and sections, opposing it, confirmed by the fact that the RTI Act
2005 is passed, still there are critical weaknesses retained in the act to make

it less effective in demanding accountability.

c. The DEMAND SYSTEM is weak and dis-empowered through ages of misrule by
monarchy after monarchy, leaving it with limited ability to demand its lawful
right from the Supply System, guaranteed under the Constitution. The saying,
Old Habits Die Hard , also applies here.
d. The Civil Society initiatives have greatly contributed to the process of inducing
CHANGE in the mindset of both the members of Supply System and Demand
System, in spite of road blocks, though much more ground is yet to be
covered.
e. The factors, which contributed to the success and failure of empowering the
Demand Side and weakening the Supply Side, are as under.
i. Factors contributing to success:
1. Education and awareness of public, contributing to the ability to ASK
QUESTIONS, getting out of the mindset of the RULED / SUBJECT.
2. Demand for Information through mass movement .
3. Institutional support for initiating and sustaining Mass Movement, by
committed NGOs with leadership, which has acted as an external
intervention to empower Demand Side
4. Media effectiveness in catalysing change process
5. Sections of Supply Side, who are pro accountability being empowered
through political process.
6. International pressure through
Accountability for Governments

globalisation,

creating

culture

of

ii. Factors contributing to failure:

1. Lack of legal provisions demanding accountability of Supply Side, specifically,
the PRI Accounting System
2. Lack of focus of the Supply Side to develop and strengthen the control
mechanism relating the release of funds at the grass root level, such as
compulsory Accounting Audit of PRIs through CAG, for obvious intention of
creating leakages in the development funds by vested interests in Supply
Side.
3. Lack of trained and certified manpower at Grass root level to conduct PRI
Accounting Audit and Social Audits.
4. Lack of education & awareness leading to inability of the Demand System
(Gram Sabha members in Rural India and members of RWAs, Traders
Association etc in urban areas) to demand their lawful rights.
5. Lack of focussed media attention to the issue of empowerment of the Grass
Root level institutions, like Gram Sabha, mostly due to economic
considerations.
f. From the above, it becomes clear that to support this, already initiated process
of change, to its logical conclusion, there is an obvious need to strengthen the
factors, which brought the process of accountability to this stage, stated at e
(I) above and control the factors contributing to failure.

g. Based on the above analogy, the strategic direction that emerges for
increasing the effectiveness of the Programme Delivery System is empowering
the Gram Sabha through,
i. Providing them with capacity to conduct Social Audit and
ii. Creating Institutional framework, Institutional Capacity , tools and legal
sanction to facilitate the
process of conducting Social Audit and
institutionalising it.
iii. Create an environment in the country through Media support.

By :
2.3

Vision Foundation India

Related Theory

Schedler(1999) argues that exercises of accountability which expose misdeeds

but do not impose cosequences are weak and could be regarded as acts of
window dressing rather than real restraints on power.
Thomas(2007) concludes that the application of social audit at the village level
holds tremendous potential for contributing to good local governance and
increased transparency and accountability.
Speckley(1997) defines social audit as a method for organizations non-financial
activities and to monitor both both the internal and external consequences of the
organizations social and commercial operations.
Jones et al(2000) see social audit as a tool that allows managers to analyse the
profitability and social returns of social responsible action.
Weihrich Koontz(2003) see social audit as a commitment to systematic
assessment of and reporting on some meaningful, definable domain of the
companys activities that have social impact.
Jusatd(2007) indicates that social impact can be assessed through social auditing
with the benefit of providing external communication, improving management
and internal communication structures as well as increasing democracy and
transparency.
Dongier et al.(2003) indicates that community-driven development(CDD) is
extensively implemented as it is built on the empirical experiences of numerous
countries which have shown that the approach has brought about encouraging
results in the effort to reduce poverty, specifically in broadening community
participation in decision making and program management.
Chase(2008) and the World Bank(2003) define CDD as an approach that allows
local communities to function a skey decision makers in managing development
programs.
Chebil and Haque(2002) indicates that CDD gives local populations control over
decision making processes and resource management while treating poor
communities as an asset and partner for strengthening local institutions and
resources for development
Wong(2013),Li(2011),Chase(2008),Mansuri and Rao((2004), and Dongier et
al(2003) describe that towards the end of the 1990s, donor agencies and
governments of developing countries have pushed for the application of CDD

projects
in
Southern
Asia
(Indonesia,Philippines,Thailand,Cambodia,Vietnam,Laos,Timor Leste), South Asia
(India,Bangladesh,Pakistan,Nepal),
Central
and
South
America
(Mexico,Hnduras,Brazil,Bolivia),
and
Africa(SouthAfrica,Senegal,Cameroon,Ghana,Gambia,BurkinaFaso,Morocco,Malaw
i,Zambia,Tanzania, and Sierra-Leone)