Wednesday, April 4, 2012

What is Social Audit or Accounting?

Social accounting or auditing is a way of measuring and reporting social and ethical performance of an organization, or a programme or scheme. Social audit is a planning and evaluation method which makes it possible to obtain an overview of internal and external factors that are not included in financial audit of an organization or an activity. It attempts to structure the organization of work in order to achieve the designated goals. In other words, social audit is a systematic and objective procedure by engaging the members in identifying needs and solutions, plan activities, monitor progress and measure its social performance in a comprehensive and participatory manner. The existence of formal mechanisms of accountability does not guarantee actual accountability on the ground. Social audit provides the venue to demand transparency and accountability in all the initiatives from the public system which was otherwise closed to the citizens.

According to Wikipedia, social accounting (also known as social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting, or sustainability accounting) is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large. Social accounting is commonly used in the context of business, or corporate social responsibility (CSR), although any organization, including NGOs, charities, and government agencies may engage in social accounting. Social accounting emphasizes the notion of corporate accountability. D. Crowther defines social accounting in this sense as "an approach to reporting a firm’s activities which stresses the need for the identification of socially relevant behaviour, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques".

As a part of social accountability in MGNREGA, social audit has been made mandatory, since its introduction in 2005. There is no literature showing solid definition of ‘social audit’, the terms ‘social audit’ and ‘social accountability’ or ‘social accounting’ are interchangeably used. However, social audit can be understood as a means of continuous public vigilance. The basic objective of which is to ensure public accountability in the implementation of projects, laws and policies. One simple form of social audit is a public assembly where all the details of a project are scrutinized. It is a process in which details of the financial and non-financial resources used by public agencies for development initiatives, how effectively the target population benefit from the scheme and how the benefits are shared with the people are evaluated, often through a public platform like social audit forum. Social Accountability allows people to enforce downward accountability and transparency, providing the ultimate users an opportunity to scrutinize development initiatives. To avoid confusion, the term ‘Social Audit Forum’ will be used in this study to refer to the periodic assemblies convened by the Gram Sabha or any other grassroots level institutions as part of the process of social audit. In this perspective, a social audit is an ongoing process through which the potential beneficiaries and other stakeholders of an activity or project are involved at every stage: from the planning to the implementation, monitoring and evaluation. This process helps in ensuring that the activity or project is designed and implemented in a manner that is most suited to the prevailing (local) conditions, appropriately reflects the priorities and preferences of those affected by it, and most effectively serves public interest.

Thus, social audits can be seen as a means of promoting some basic norms in public matters:

1. Transparency: Complete transparency in the process of administration and decision making, with an obligation on the government to suo moto give people full access to all relevant information. The information about works should be displayed in the local language at the worksite and in at a prominent place in Gram Panchayat.
2. Participation: An entitlement for all the affected persons (and not just their representatives) to participate in the process of decision making and validation.
3. Consultation and Consent: In 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.
4. Accountability: The responsibility of elected representatives and government functionaries to answer questions and provide explanations about relevant action and inaction to concerned and affected people.
5. Redressal: A set of norms through which the findings of social audits and other public investigations receive official sanction, have necessary outcomes, and are reported back to the people, along with information on action taken in response to complaints.

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