Social audit

Business Environment unit 3

1. RASHMI SINGH Business Enviornment Social audit unit 3

2. Introduction Audit : The word ' Audit ' originated from the Latin word 'audire' which means 'to hear‘. It is an unbiased examination and evaluation of a person, organization, system, process, enterprise, project or product. Can be done INTERNALLY (by employees of the organization) or EXTERNALLY (by an outside firm)

3. TYPES OF AUDITS Government or institutional audit is one that is conducted in- house or through external, professional, auditing institutions, and is ordinarily conducted without the significant involvement of the affected people and/or the intended beneficiaries. Social audit is one that is conducted jointly by the government and the people, especially by those people who are affected by, or are the intended beneficiaries of, the activity being audited. People’s/Public audit is one that is conducted by the people themselves, including those who are directly affected or are the intended beneficiaries, sometimes with the assistance of movements and NGOs.

4. TTY Differences in the various types of audits

5. History of Social Audit The audit is traditional and age old practice; however, the concept of social audit came in effect in mid 20 th century. Some of the pioneering work in this area has been done by Charles Medawar in the application of the idea in medicine policy, drug safety issues, and on the matters of corporate, governmental, and professional accountability. (5) Medawar opined that in a democracy, the decision makers account for the use of their powers, which should be used with the consent and understanding of all concerned. (6) In the last two decades, this concept has significantly been applied for social and health sector. (2–4,7)

6. History of Social Audit Emerged in the 1940’s when academic Theodore Kreps called on companies to acknowledge their responsibilities to citizens. In 1960-70’s , a fresh wave of interest in Social and Ethical Accounting, Auditing and Reporting (SEAAR ) & Concept of ‘stakeholders’ emerged. In 1980s, the social audit concept travelled from the private to the public sector in response to new emerging democratic governance trends. Lately, social media (facebook, twitter, wikileaks) are playing an important role to channel citizen’s initiatives to uncover corrupt practices and mismanagement, as well as to hold governments accountable.

7. The concept of “ Social Audit ” has been linked to “ Corporate Social Responsibility ” (CSR) CSR is essentially a concept, whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. For Example, Microsoft has created a Bill & Melinda Gates Foundation for Research & Development work on HIV / AIDS McDonald’s outlets take care of its surroundings by maintaining cleanliness and hygiene. In India, Infosys has created an NGO to work for development of society

8. DEFINITION of social audit Social audit is an on-going process by which the potential beneficiaries and other stakeholders of an activity or project are involved from the planning to the monitoring and evaluation of that activity or project. (1) This concept has amply been used in social sector and that is why the term social audit has come up. What globally is known as “People’s Audit or Public Audit” , in India we call it “Social Audit”.

9. Social auditing provides tools that companies can use to: Identify and measure their impact on stakeholders. Communicate this information internally and externally. Apply this information to make continual improvements in areas that stakeholders see as important .

10. Broadly, this process of Social Audit involves, the following components, i.e., Availability of information / details of the resource, financial and non-financial, used by public agencies for development initiatives, Organising the ultimate users / beneficiaries / people, Scrutiny of the information by the end users. Foundation of Social Audit is INFORMATION AVAILABILITY - - -- as people can ask questions only when they possess the requisite information regarding the subject

11. Our Fundamental Right Freedom of speech & expression is protected in Article 19 of the Constitution of India: All citizens shall have the right to freedom of speech and expression. In 1982, the Supreme Court of India ruled that access to government information was an essential part of the fundamental right to freedom of speech and expression.

12. SOCIAL AUDIT & RIGHT TO INFORMATION ACT 2005 Allows any one to access information regarding the functioning of a scheme or project, by filing a specific request. Made people aware that the right is legally enforceable Universal access Suo moto disclosures Guarantees the people that they can conduct a social audit of any scheme or programme that they think needs their scrutiny, even if the concerned public authority has not organised a social audit. (suo motu describes an act of authority taken without formal prompting from another party )

13. SOCIAL AUDIT & RIGHT TO INFORMATION ACT 2005 PROCESS OF ACCESS : Public authority must appoint a Public Information Officer (PIO), who accepts requisitions and provides information. The PIO must ordinarily respond to a requisition within 30 days Information relating to the life or liberty of a person must, nevertheless, be provided in 48 hours. PENALTIES are prescribed for illegitimate delay or refusal For unreasonable delay-- Rs. 250 per day For destruction of information, knowingly giving false information etc., with an upper limit of Rs. 25,000 There has been increasing interest about the use of this technique in health sector in the developed and developing world, in the last decade. (2) There are well-reported examples of beneficial effect of social audit in increasing program performance in health sector. (3,4)

14. NEED OF SOCIAL AUDIT The investment of thousands of crores of rupees made by the Government of India and various national and international agencies, since independence in social development programmes, has not been justified by the impact it has made. Huge gap between the desired impact and the actual impact takes anyone within the Govt. or otherwise to think deeply about the failures.

15. THE MISSING LINKS PROGRAMME PLANNER & IMPLEMEN T ERS SOCIAL AUDIT For flow of information (THE MISSING LINK) BENEFICIARIES D E M A N D S U P P L Y Flow of infor m ati o n (THE MISSING LINK) Supply of de v elopment inputs WEAK S T RONG

16. SCOPE OF SOCIAL AUDIT Assessing the physical and financial gaps between needs and resources available for local development. Creating awareness among beneficiaries and providers of local, social and productive services. Increasing efficacy and effectiveness of local development programmes. Scrutiny of various policy decisions, keeping in view stakeholder interests and priorities, particularly of rural poor. Estimation of the opportunity cost for stakeholders

17. SCOPE OF SOCIAL AUDIT Allow people to enforce transparency & accountability . Promote dialogue and deliberation to promote public-private partnership. Increase public participation at all stages of public policy & budget cycle. Identify, control and report irregularities & prevent abuse of funds and power. Measure the impact of policies/programs. Enable citizens to exercise their rights .

18. PRINCIPLES OF SOCIAL AUDIT & UNIVERSAL VALUES PRINCIPLES OF SOCIAL AUDIT & UNIVERSAL VALUES

19. Principles of social audit Social audit is an evolving area and there are a number of basic principles outlined for social audit. Different groups of people outline different principles and below is the summary of these principles. These help in the formation or actual planning of the social audit. (1,8,9) These principles are described as following: Multi perspective/Polyvocal : Aim to reflect the views (voices) of all those people (stakeholders) involved with or affected by the organization/department/program.

20. Comprehensive : Aims to (eventually) report on all aspects of the organizations, work and performance. Participatory : Encourages participation of stakeholders and sharing of their values. Transparency: Complete transparency in the process of administration and decision-making, with an obligation on the government to suo moto (voluntary disclosure of information) give the people full access to all relevant information.

21. Multidirectiona l : Stakeholders share and give feedback on multiple aspects. Regular : Aims to produce social accounts on a regular basis so that the concept and the practice become embedded in the culture of the organization covering all the activities. Comparative : Provides a means whereby the organization can compare its own performance each year and against appropriate external norms or benchmarks and provide for comparisons to be made between organizations doing similar work and reporting in similar fashion.

22. Verified : Ensures that the social accounts are audited by a suitably experienced person or agency with no vested interest in the organization. Disclosed: Ensures that the audited accounts are disclosed to stakeholders and the wider community in the interests of accountability and transparency. Accountability: Immediate and public answerability of elected representatives and government functionaries, to all the concerned and affected people, on relevant actions or inactions.

23. Components of social audit Social auditing implies doing a few things and analysis of selected components. (1,8,9) Economic components : The social auditor may analyze economic indicators and should be able to describe the economic or material characteristics of the community. Political components : Measures of political setting provide a better idea in tracking the problems and in finding some solutions. Environmental components : The researcher can look into aspects like air quality, noise, visual pollution, water availability, and recreational facilities, which affect the quality of life in the area under study.

24. Health and education components: Health and education indicators such as availability of health care, educational facilities, and educational attainment can provide useful measures in conducting social Audit. These indicators can also be correlated with better functioning of social systems and higher standards of health and education. Social components : Social component measures the social relationships and provides an understanding of the general living conditions, including the availability of telephones, transport facilities, housing, sanitation, and opportunities available for individuals for self expression and empowerment.

25. METHODOLOGY

26. A social audit is conducted over the life span of a scheme or programme, and not just in one go or at one stage. Audits planning, implementation, monitoring and evaluation.

27. ILLUSTRATIVE STEP BY STEP PROCESS OF SOCIAL AUDITS

28. For instance, in the case of National Rural Employment Guarantee Scheme (NREGS), social audit was taken up at: To ensure that quality of work is in tune with quantity and estimated cost After the completion of work To ensure that wages are paid rightly, properly and to right people Implementation stage To ensure that estimates are proper and are in tune with the approved quantum of work Pre p aration stage To ensure that the Gram Panchayat Plan is need-based covering productive/ investments and drawn up in consultation with community serving the poor and the disadvantaged Planning stage

29. Steps for Social Auditing in detail: There are well defined and outlined six steps in social auditing, which have been summarized as : (1,8,9 )

30. Step 1: Defining boundaries of social audit identify the institution or program or activity, which is to be audited and understand why it is selected. understand the organization , the focus and context of social audit and then by framing the objectives for social audit. The objectives of social audit should be relevant to the strategy, realistic about what can be achieved , and recognized by existing routine activity. look into the process of implementing the project, assess the quality of the infrastructure created ; assess the basic services provided; and the satisfaction of the beneficiaries on the benefits provided.

31. Step 2: Stakeholder identification and consultation identify the stakeholders to be consulted in the audit and determining how often these stakeholders could be included in the “dialogue” process . The selection of representatives for consultation is to be unambiguous and transparent and should cover maximum stakeholder groups. The consultation should be planned with the stakeholders to extract accurate and needed information . These consultations should be objective, unbiased with informal dialogue and help in building rapport trust and confidence in the community.

32. Step 3: Identifying key issues and data collection identify key issues that need to be cross checked in the social audit as well as how information and data pertaining to the schemes will be collected. Each issue should lead toward an answer on a particular piece of outputs or results. When identifying the issues it is important to see clearly what is the use of information that is going to be collected. Information is to be gathered which can be used to explain facts or certain issues, influence policy, reflect the tangible outcomes, and more importantly, they should be measurable.

33. Moreover, in social audit process, two types of data are crucial. Secondary data collected from government documents and reports, primary data collected from stakeholders and community members. Gathering secondary information is very important in the process of social audit & it is inevitable for making social audit reports. Information required for preparing social audit reports may not be available in single point but may be in different records in different forms.

34. Step 4: Social audit findings and verification The information is useful when it is classified into clusters based on relevance & consolidated for dissemination The physical verification of the work by a visit to the worksite to verify whether whatever mentioned in the social account has actually happened in the way mentioned. care should be taken in recording the findings as a small mistake could leave the processes of the audit in disarray.

35. Step 5: Public meetings The main purpose of public meeting is to obtain public testimony or comment. The key findings of the audit will be discussed in the public meeting and the concerned government officials will respond to the key issues raised in such a meeting. A public meeting for social audit is a special meeting for a specific purpose, with no other matters addressed other than a particular issue of focus.

36. Step 6: Institutionalization of social audit Social audit is sure to instigate some backlash from the vested interest. Therefore, the effective mechanism to address the issue is to introduce continuous consultations with key stakeholders and by institutionalizing social audit through legal provisions. impact is the greatest and most sustainable when social audit process is systematically implemented by a civil society, state or by any other organizations. The social audit process is more effective when it is institutionalized. The replication of social audit on regular basis is one such process, which will force the state to incorporate this as an integral part of the government.

37. The second mechanism is by internalizing within the Government. The social audit brings in transparency and accountability only if it is internalized in the government system. (1) The third step in this direction is the involvement of civil society organizations, which play a crucial role in institutionalizing the process of social audit. These organizations help in creating the awareness and motivating the civil society viz. Action aid India is also playing a vital role in conducting the Jan Sunvais in Orissa and other parts of the country. (12)

38. OTHER TOOLS FOR SOCIAL AUDIT INITIATIVES Integrity Pacts : an anticorruption tool developed by Transparency International to prevent corruption in public procurement. The “pact” entails an agreement between government procurement officials and bidders to ensure that the bidding process abides by internationally recognized procurement standards of fairness, transparency, and efficiency. Social Media Initiatives : Zabatak is a free website directed to Egyptians ( http://www.zabatak.com/?l=en_US ). The website is started and managed by a group of young civil Egyptians with the purpose of creating a “bribery-free and safe” Egypt.

39. OTHER TOOLS FOR SOCIAL AUDIT INITIATIVES Service Delivery Surveys Household Surveys for Social Audit Community Based Monitoring

40. Risks of Social Auditing May result in serious problems being uncovered that the company would prefer not to disclose. May result in stakeholder criticism and dissatisfaction. Imposes a burden on recordkeeping and costs. Provides no guarantee that the firm will not face challenges related to its citizenship efforts. Is a relatively new process with few common standards.

41. USES Monitors the social and ethical impact and performance of the organization Provides a basis for shaping management strategy in a socially responsible and accountable way Identify potential problems before they arise. Facilitates organizational learning on how to improve social performance. Informs the community, public, and other organizations about the allocation of their resources (time and money) Increases the organization’s accountability to the groups it serves and on which it depends.

42. ADVANTAGES Organization gains an improved understanding of community needs , esp. marginalized groups, and the extent of satisfaction of those needs Enables the organization to get a clearer idea of people’s ‘perceptions ’ and levels of satisfaction on services Trains the community on participatory planning of programmes with a development organization Community / clients become closely involved in organizational planning and review processes leading to greater trust Promotes collective decision making and sharing responsibilities Develops human resources and social capital Encourages local democracy

43. SOME AUDIT STORIES

44. HAMARA PAISA, HAMARA HISAAB: RAJASTHAN:1994 Initiated by Mazdoor Kisaan Shakti Sangathan (MKSS) People had difficulty getting paid the minimum wages MKSS brought people together and simply read out official documents procured either through surreptitious means or from officials who had no idea of their import Records... contained false information. E.g., transport bills of over 6 km when the real distance was only 1 km, or people listed on the muster rolls who lived in other cities or were dead. Proved that corrupt officials and others were siphoning money and minimum wages were being paid only on paper idea of a Jan Sunwai or ‘public hearing’ was introduced RESULTS: Brought people together People found their own platform Change in panchayat ac National movement led by Ms Aruna Roy… RTI Act 2005

45. SOCIAL AUDIT in Delhi by PARIVARTAN: 2000 Parivartan, a voluntary organisation, started as people’s movement in June 2000, to provide relief to taxpayers from corruption in the income tax department The organisation began to use the Delhi Right to Information Act 2001 to resolve public grievances RESULTS: Social audit conducted by Parivartan, along with local residents of Sundernagri and New Seemapuri - for development works undertaken by the Engineering Department of the Municipal Corporation of Delhi (MCD). Ration shopkeepers won't divulge their records, Food Department officials won’t file complaints, and the police won’t act on their own or accept complaints from the public. After the initiatives of Parivartan, a number of people from different parts of Delhi filed applications under the Delhi Right to Information Act and sought the records of their ration shopkeepers.

46. Social Audit of the Mid Day Meal Scheme in Andhra Pradesh: 2008 Initiated by the state government & facilitated by M.V.Foundation In Adilabad and Kurnool districts; in 111 schools RESULTS: While about 70-80 children attend school everyday, attendance was marked for about 100 children and bills for mid day meal are presented accordingly Only in 45 out of 111 schools the rice was stored in the school kitchen shed; 21 out of 111 schools the cooking was done in the kitchen shed Cooking agency is with the Sarpanch’s family and the ration dealer is also related to them. The rice is stored with them and they cook in their own house In some schools the quality of the meal was so poor that many children did not eat Any kind of overt caste discrimination in the serving of mid day meals in less than 10% of the schools

47. TRUTH is the greatest national possession. A state, people and a system that suppresses truth or fears to publish it, deserves to COLLAPSE" "Kurt Eisner“

48. THANK YOU