Social Audit also called ‘civic auditing’ is a way of measuring, acknowledging, reporting, and ultimately improving an organization’s social and ethical performance – and understanding its impact on the people, the planet, and the economy. It is a powerful tool for social transformation and government accountability. In other words, it aims to understand how well the organization’s goals or benchmarks are achieved and how it is accountable to the community.
The history of a social audit goes back to the 1950s when it was started with an intent to make businesses more liable to the community and was later pioneered by Charles Medawar in 1972 through his multiple books written on this subject. The first social audit of an organization was carried out in Sweden in 1988 for the country’s central bureaucracy.
In India, the initiative was started by TISCO (Tata Iron and Steel Company Limited) in the year 1979. Social audits were also made statutory in the 2005 Rural Employment Act with the government issuing a set of Social Audit Rules in 2022 under the MGNREGA Act.
Why should it be an indispensable exercise?
Canadian-American economist Prof. Galbraith says, “This (social audit) is a matter not of ambition…but of necessity”.
A good and healthy organization shouldn’t work only towards their profit and progress but is also obliged to be socially responsible and do something for the benefit of society. So when huge corporations and companies that have power and resources are rising, it is essential to keep in check if their actions are indifferent, irresponsible, or antisocial in any way. Because their activities not only impact society but also creates problems for the government.
When it comes to Civil Society Organization (CSO), social audits are necessary to understand and evaluate the impact of an organization’s social investments in programs and projects on its target beneficiaries and/ or society. It helps funders and companies make evidence-based decisions in implementation and identify hurdles, allowing for program continuity, scale, sustainability, efficiency, etc. It improves credibility and increases trust to secure future funding. This evidence-based methodology helps CSOs present & project their work to stakeholders which in return leads to effective and efficient management of the organization. Not just that they also improve credibility and increase trust which helps secure future funding.
- To identify what actions of the organizations have impacted the society
- To determine and eliminate the economic and social gaps
- To improve and build the organization’s business and financial independence
- To check the proper utilization of funds accordingly as per budget.
- Ensure payment of a fair and regular dividend to the shareholders.
- To create awareness among beneficiaries and providers of local social services.
On January 22, 2021, the Ministry of Corporate Affairs amended the earlier CSR Rules of 2014 and notified the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021, to make impact assessment mandatory for companies undertaking CSR activities with a CSR budget of INR 10 crore or more in any fiscal year and all projects with outlays of INR 1 crore or more.
SAN India, the Indian chapter of Social Audit Network, UK launched in 2010 certifies individuals via SAA Master class, to become independent social auditors.
Social Audits can be performed by individuals, government agencies, local communities, and non-profits. According to the 73rd Amendment of the Constitution, even Gram Sabhas have the power to conduct Social Audits apart from their other functions. A Social audit committee that conducts can also be members from among program stakeholders, teachers, or even retired functionaries of different organizations. The members of these committees and the facilitators sometimes receive training from other social audit experts.
Example of a Social Audit
An NGO in India works to help pregnant women in rural spheres receive basic nutrition and health services with the aim to fight malnutrition and increase child mortality rates. Through their various programs such as direct cash transfer to the personal accounts, monthly medical camps, and distribution of nutritional meals and products, they hope to fulfill their vision where no woman dies of lack of medical care or access to clean food.
To look at the credibility of the NGO and its work, a social audit may be conducted for ensuring transparency, proper usage of the funds, functioning of the projects, etc. The team that conducts the social audit conducts individual interviews, field surveys, data collection from beneficiaries, conduct village meetings and prepares reports that will be presented and resolutions will be passed. Periodic social action bulletins will be shared with all concerned departments and the data is also shared with the Panchayati Raj and the Women and Child Department.
We at DDII apart from providing ethical fun-raising and public engagement services are also equipped to deliver social audit services to help organizations understand the impact they are having or making in the community. We provide social accounts and audits support, CSR social impact assessment, VMVOA analysis, theory of change exercise, social Return On Investment (SROI) consulting/ reporting – social return on investment and help alignment with Sustainable Development Goals (SDGs).
If you are looking to measure the impact you have created in the community, allow us to help you out. Write to us with your organization’s details and we’ll get in touch with you.