Social audit generally refers to engagement of the stakeholders in measuring the achievement of objectives under any or all of the activities of a government organization, especially those pertaining to developmental goals. It helps to have an understanding of an activity from the perspective of the people in society for whom the institutional/administrative system is designed and to improve upon it. The whole process is intended as a means for social engagement, transparency and communication of information, leading to greater accountability of decision-makers, representatives, and managers. It can be a continuous process covering all the stages of the target activity/programme.

Importance of Social Audit

• Social Audit become crucial after greater devolution of central fund to PRIs, ULB on the recommendation of 14th Finance Commission as CAG’s audit jurisdiction over such entities is nebulous.
• The mechanism is well established in providing direct evidence for inputs, processes, financial and physical reporting, compliance, physical verification, assurance against misuse, fraud and misappropriation, and utilisation of resources and assets.
• Strengthening the democratic process: People directly observe the implementation of Government programmes in their region making the process participatory. This, in the long run, empowers the people and makes the process of development more inclusive.
• It involves scrutiny of both financial and non-financial used by public agencies for development initiatives.

Limitations of Social Audit

• The scope of social audits is intensive but highly localised and covers only certain selected aspects out of a wide range of audit concerns in the financial, compliance and performance audits.
• The monitoring through social audits is informal and unprocessed with limited follow-up action.
• The institutionalisation on the ground has been inadequate, and it has faced great resistance from the establishment due to the lack of adequate administrative and political will in institutionalising social audit to deter corruption.
• Inadequate access to data and lack of expertise are other obstacles.
• Lack of focused media attention and scrutiny to social audits.
• While formal social audit arrangements have been provided for in NREGA, other programmes like PDS, NRHM etc. have varying arrangements for grass-root level monitoring, limiting their utility.

Recommendations

Second ARC recommended for

• Mandatory social audit should be carried out for all progrmames.
• Formal Framework of Cooperation and Coordination: Operational guidelines of all schemes and citizen centric programmes should provide for a social audit mechanism.
• Constitute a Social Audit panel for examining areas of public interface with a view to recommending essential changes in procedures to make the organisation more people-friendly.
• Social audit compliments the CAG’s audits and therefore it should be mainstreamed into our processes for audit of all social sector programmes.
• Learning from the progress made by the civil society groups and Gram Sabhas in Andhra Pradesh and Rajasthan in setting up separate directorates for social audit, other states can also introduce such measures.
• Uniformity of social audit at the village level for all social sector programmes can be taken up so that arrangements for community participation are better institutionalised.
• Education and awareness of Gram Sabha should be initiated to enable them to comprehend and understand their rights better.