For Prelims: Objectives of social audit, Problems in social audit, Various types of auditing

For Mains: Social Sector Schemes, pros and cons of social audit, and methods of social audit. 

Why in the news?

To conduct social audits of programs, the Rajasthan government recently made the first decision of its kind in the nation to create a specialized social and performance audit authority.

What do we need to know about social audit?

An organization's social and ethical performance can be measured, comprehended, reported on, and ultimately improved through the use of social audits. A social audit aids in bridging the effectiveness and efficiency gaps as well as those between the vision and reality. It is a method for comprehending, evaluating, verifying, reporting on and improving an organization's social performance.

Governmental structure is impacted by social auditing. It values the opinions of all parties, particularly those from underrepresented or underprivileged groups, whose voices are rarely heard. The goal of social auditing is to improve local governance, particularly to increase accountability and transparency in local bodies.

The main distinction between a development audit and a social audit is that the former concentrates on the often-overlooked issue of social impacts, whereas the latter has a broader focus that includes environmental and financial concerns, such as the effectiveness of a project or program.

Objectives of social audit

  1. Determining the monetary and material gaps between local development needs and available resources.
  2. Raising awareness among those who receive and deliver regional social and productive services.
  3. A rise in the efficiency and effectiveness of local development initiatives.
  4. Examining different policy options while taking stakeholder priorities and interests into consideration, especially for rural poor.
  5. The estimated opportunity cost to stakeholders of delayed access to public services.

Advantages of social audit

  • Instructs the local community in cooperative planning.
  • Promotes regional democracy.
  • Promotes involvement in the community.
  • Helps underprivileged groups.
  • Encourages sharing of duties and group decision-making.
  • Builds up social capital and human resources

In order to function properly, the social auditor must be entitled to:

  • Enquire about any decision-making, activity, scheme, income, or expense made by the implementing agency and request clarifications;
  • Examine and take into account the agency's regional plans and current initiatives; and
  • access all development-related registers and documents from the implementing agency or any other government department.

Social Audit and MGNREGA:

  • All works completed under the program must go through a social audit, according to Section 17 of the MGNREGA.
    • Each Social Audit Unit is eligible to receive money equal to 0.5% of the MNREGA expenses the State incurred the previous year.
  • The audit involves examining the MNREGA-created infrastructure for quality, looking for wage theft, and identifying any irregularities in the way things were done.
  • The Union Rural Development Ministry (MoRD) recently published a report titled "Social audit calendar vs audits completed" that highlights the fact that only 14.29% of the planned audits were finished in 2021–2022.
  • The Ministry further stated that states will face consequences, including the withholding of funds, if they fail to conduct a social audit of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
  • However, the administrative costs of these Social Audit Units are covered by the Center, and because of the excessive holdup in funding, many of these cash-strapped units are now all but paralyzed.
  • Challenges:
    • Lack of Administrative Will:
      • Social audits are not independent of the influence of implementing agencies in many parts of the country due to a lack of sufficient administrative and political will to institutionalize them as a means of preventing corruption.
      • The Center owes some states, including Kerala, Telangana, Himachal Pradesh, and Chhattisgarh, administrative funds that should have gone to their Social Audit Units. Because of this, the payment of auditors' salaries has been put off by three to 12 months.
    • Resistance and Intimidation:
      • It can be challenging for social audit units, including village social audit facilitators, to even access primary records for verification.
    • Lack of People’s Participation:
      • Due to a lack of education, awareness, and capacity building among the general populace, participation has been extremely low.
    • Absence of Independent Agency:
      • There is no independent organization to look into and take action on social audit findings.

What is the Significance of this Decision?

  • Ensure Public Accountability:
    • In addition to conducting performance evaluations of the implementing agencies, the authority will ensure public accountability, transparency, and citizen participation in the implementation of government schemes, programs, and services.
  • Assess the Quality Service Delivery:
    • The government's schemes and programs will also be evaluated by the authority for their quality of service delivery.
    • In order to evaluate the success of various initiatives, it will also conduct surveys on customer satisfaction.
  • Plan Social Audit and Performance Audit:
    • The Rajasthan state government's departments, undertakings, schemes (central and state), programs, projects, and activities will all be subject to a social audit and performance audit, which will be planned, carried out, and completed by the authorities.
      • It will determine whether public funds have been used wisely and with efficiency in the delivery of services.
  • Identify and build the capacity of civil services organizations:
    • It will offer technical support for the efficient implementation of various schemes and programs, support the finance and planning division in strengthening annual plans and outcome budgeting, and evaluate the standards of construction and infrastructure projects in both urban and rural areas.

 Way Forward

  • Citizens' organizations need to push for improved social audits and make significant strides in holding political leadership and implementing organizations accountable.
  • Each district should establish a team of social audit experts who are in charge of educating the members of the social audit committee (stakeholders).
  • It is important to develop training programs on social auditing techniques like gathering data, writing reports, and presenting findings to the Gram Sabha.
  • To establish an institutionalized framework that cannot be undermined by any vested interests, the system of social audits requires the coordinated support and encouragement of numerous authorities.

Source: TH