INTRODUCTION:

Government everywhere is facing an ever increasing demand to become more accountable and socially responsible and the community is becoming assertive about its right to be informed and to influence the decision-making process of government. Faced with these raising demands, the executive and the legislative bodies are looking for new ways to evaluate their performance. Social Audit plays a role here as a tool with the help of which government departments can plan, execute and measure the performance of non-financial activities, monitor both internal and external consequences of the social and commercial operations. It gives an understanding of the administrative system from the perspective of the vast majority of people in the society for whom the administrative system is being promoted and legitimised. Organisations belonging to civil societies are also undertaking "Social Audits" for monitoring and verifying the social performance claims made by the organizations and institutions.

Social Auditing: Evaluation of Social Performance

Social audit as a term was used far back in 1950s. The term social audit means different to different people. To some it means revealing a company’s social performance in front of all, for some it is an internal assessment of how well a company has discharged it social obligations and to some others it is a systematic and comprehensive evaluation of an organization’s social performance as distinguished from its economic performance.

Social audit is a systematic study and evaluation of an organisation’s social performance. It is concerned with the possible influence on the social quality of life instead of the economic quality of life. Social audit produces a report on the social performance of a business unit.

Social Auditing is a systematic and objective procedure by which an organisation can measure and validate the social, community and environmental impact of its activities to its stakeholders.

A social audit is a way of measuring, understanding, reporting and ultimately improving an organization’s social and ethical performance. A social audit helps to narrow the gap between vision and reality, between efficiency and effectiveness. It is a technique to understand, measure, verify, report on and to improve the social performance of the organization.

Social auditing creates an impact upon governance. It values the voice of stakeholders, including the voices of those who are rarely heard. Social auditing is taken up for the purpose of enhancing local governance, particularly for strengthening accountability and transparency in local bodies.

According to The Social Economy Network: “Social Auditing is a process which enables organizations and agencies to assess and demonstrate their social, community and environmental benefits and limitations. It is a way to measure the extent to which an organization lives up to the shared values and objectives it has committed itself to promote.”

Social Audit is referred not only as a tool for evaluation of social cost and social benefit, but also as an evaluation of every action which is done for society.

Uses and Functions of Social Audit

Social Auditing can be used as a tool to provide critical inputs and to correctly assess the impact of government activities on the social well-being of the citizens, assess the social costs and measure the social benefits as an outcome of implementation of any programme. The performance of government departments is monitored through various mechanisms, in different states in India. However, these practices do not capture adequately the broader social, community and environmental benefits.

Social Audit can be used for the following purposes:

• To monitor social and ethical impact and performance of the organisation;

• To provide a basis for shaping management strategy in a socially responsible and

accountable way

• To facilitate organisational learning on how to improve social performance

• To facilitate the strategic management of institutions (including concern for their influence

and social impact on organisations and communities)

• To inform the community, public, other organisations and institutions about the allocation

of their resources.

Social Audit in India

Tata Iron and Steel Company (TISCO), Jamshedpur, implemented Social Audit in 1979 and is the first company in India to do so. Social Audit gained significance after the 73rd Amendment of the Constitution relating to Panchayat Raj institutions. The Ninth Five Year Plan (1997-2002) emphasized on Social Audit as a tool for effective functioning of the Panchayat Raj institutions and for achieving the goal of decentralisation in India. In Kerala, the state government has taken a decision to introduce Social Audit for local bodies.

Social audit is coming up as a tool to fight against corruption, giving hope to corruption fighters in India. It is emerging to plug the leaks in public expenditure, a grievance-redressing mechanism that gives the poor an opportunity to seek justice.

Social Accounting and Audit was first used in India in 2003. Centre for Social Initiative and Management (CSIM) offered to take up the Social accounting and Audit in India in the year 2008. CSIM, an established institution for promoting social entrepreneurship felt that the framework is appropriate for Indian organizations and soon became the knowledge partner of Social Audit Network (SAN) in India.

The Social Audit Network (SAN) was started in UK informally about 10 years ago, and was formalized into a non-profit company which has dispersed membership across the UK, Australia, New Zealand, Canada and Germany.It has defined the broad approach to SAA and is actively engaged in positioning it as the framework of choice for development sector, social enterprise and community organizations. It also certifies social auditors who can then become part of social audit panels.

Former Prime Minister late Shri Rajiv Gandhi had once famously said that only 16 Paise out of one Rupee sanctioned by government reach poor. In an article in 19th December 2004 edition of Times of India, Aiyar Swaminathan had commented that “Likelihood of money reaching the poor would be higher if we simply drop the money by helicopter or gas balloon into rural areas than route it through employment programmes”. The situation with respect to our government schemes has not changed much since then. Even today a crisis of credibility, confidence and trust persists with respect to government projects, programmes and schemes. High economic growth is threatened by corruption at all levels. Leakage of funds in public programmes and misuse of shareholders and stakeholders resources is a common scenario.

There has always been a growing tendency of depriving the poor-needy people in the name of development. Scarcity of Resources with its inequitable allocation is a common concern in the country. This background calls for the culture of social audits to take roots in the country, in both private and public sector.

Social audit is one of the audit functions with focus on monitoring various programmes. In India, it is used in the context of the effectiveness of the schemes or programmes run by the Government of India. Social Audit in India is usually targeted at the public works by the government and usually with a methodology of involving public through physical verification of works, records assessment, public hearing and mass mobilisation, etc. Social Audit is used for exposing corrupt practices of public administration or enforcement of rights. Companies engaging in Corporate Social Responsibility (CSR) do not generally produce a social audit report regarding their organisations. Social audit reports can be used to gauge their social performance and put a check on responsiveness.

These audits were first made statutory in a 2005 by the enactment of National Rural Employment Act. Most Indian states have delayed conducting social audits, despite these being in place since 2006. They are held back by a lack of political will and strong rooted vested interests. However, one state, Andhra Pradesh, has taken a lead in this front. The state has set up the Society for Social Audit, Accountability and Transparency, an autonomous body insulated from government interference. This has resulted into elimination of contractors and middle men to some extent.

Today, digital governance is the key phrase everywhere around us, but sticking to realities is always beneficial. Soumya Kidambi, Director of the society for Social Audit, Accountability and transparency, carries out social audits for the governments of Telangana and Andhra Pradesh, trains around 3000-5000 people in a month on audit process. One of her key idea behind it is to keep oneself well equipped to carry audits. This makes people stronger and strengthen them to fight against corruption.

The Andhra Pradesh model is undoubtedly a success, with more than 3,200 social audits and more than 38,000 disciplinary cases brought against officials involved with the jobs scheme. Hundreds have been suspended or punished. In the past three years, the team has been able to recover almost a quarter of the irregularities detected.

The dissemination of information is proving instrumental in checking corruption. For the first time, officials can use real-time information generated from social audits to redesign delivery of public goods. Hiran Sammeta, an entrepreneur who founded Inputo Technology Solutions, provides "programme intelligence" for social audits in Andhra Pradesh.

His team is trying to bridge the gap between policymakers and those affected. Their work has involved mining about 250,000 documents in the state over the last few years and using the extracted data to predict fraud. He calls this data mining and investigation "predictive analytics". "We need to know how fraud works in order to track corruption," he says.

The social audit process was also endorsed by Mr. Vinod Rai, the former Comptroller and Auditor General of India. He highlighted that all over the world, there is a growing perception among the supreme audit institutions that they have to get into partnership with civil society to improve delivery of services and public accountability. He also promoted the model PPP model ie Public, Private, Parternship.

Legislative Support Available to Social Audit in India

The 73rd Amendment of the Indian Constitution: Social Audit gained significance especially after the 73rd Amendment of the Constitution relating to Panchayat Raj Institutions. It has empowered the gram sabhas to conduct Social Audits in addition to its other functions, and it was by far the only legislative reference to the concept of Social Audit.

Right to information Act, 2005: This is also a key pillar of support for Social Audit system in India. This was enacted by Parliament of India to provide for setting out the practical regime of the right to information for citizens. The Act applies to all states and union territories of India, except the state of Jammu and Kashmir. This Act also requires every public authority to computerize records for wide dissemination and to proactively publish certain categories of information so that the citizens need minimum resources to request for information formally. This is again a support for Social Audit system in India.

National Rural Employment Guarantee Act, 2005 (NREGA): Section 17 of this Act provides for regular “Social Audits” so as to ensure transparency and accountability in the scheme. It is the responsibility of the state government to conduct the Social Audit. The state government will conduct the Social Audit according to the pre-designed “Schedule of Social Audit”. The state government has to ensure that the agencies for conducting Social Audit are well equipped and trained.

The Draft “NREGA Transparency and Public Accountability Rules” lay down detailed guidance for conducting Social Audit. The government has been instrumental in establishing an independent Social Audit Society for carrying out the Social Auditing of NREGA in the state. This society is called “Society for Social Audit” Other social sector programmes also laid down provisions and procedure for “Social Audit”. For example: The ministry of Housing and Urban Poverty alleviation has laid down Social Audit methodology and operational guidelines for various schemes.

CONCLUSION:

Social audit is a strong tool to check, monitor, evaluate and report the social performance of programmes and projects led by the government and business organizations. In India, it is specifically being used for the evaluation of the social performance of government schemes and programmes. It could effectively be used in private sector also to monitor the performance of the private organizations. In India, it is being implemented since many years as a tool to eradicate corruption with a due support from legislations. It is based on the principle that democratic local governance should be carried out, as far as possible, with the consent and understanding of all concerned. Although facilitated and duly supported by government agencies and officials, social audits, as a process still needs to be strengthened- A Long Way to Go Ahead.

REFERENCES:

1. Cordos, Dragu, Oprisor and Tudor, “Defining a Methodology for Social Audit Based on the Social Responsibility Level of Corporations”, Research Gate, Jan.’15

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12. Indian Constitution, www.indianconstitution.in/2017/09/73rd-amendment-in-constitution-of-india.

Received on 15.03.2018 Modified on 12.04.2018

Int. J. Ad. Social Sciences. 2018; 6(2):96-99.

DOI: 10.5958/2454-2679.2018.00009.9