Academic journal article Political Economy Journal of India

Social Audit-Evolution and Challenges Ahead

Academic journal article Political Economy Journal of India

Social Audit-Evolution and Challenges Ahead

Article excerpt

Introduction

In a democratic country, the government has twin role -one, regulatory powers to implement rules and schemes, second-socio economic development with delivery of services to its citizens. The execution and implementation of programmes are always on radar of local community for accountability. To ensure the accountability, participation of stakeholders and transparency in the working of the implementing agency is the mechanism required for effective implementation scheme or programme. Citizen centric administration, the space for common man, service guarantee acts brought in by different states, the governance with electronic tools; all have been the tested instruments of downward accountability. One such tool of accountability is "Social Audit". People assume it to be a financial audit by the society, whereas, it is an audit by the stakeholders--the members of the society to monitor and evaluate the social results, benefits or outcomes incident upon them from the programmes or schemes implemented for their benefits.

Short History of Social Audit

In the mid-1970s in the UK and Europe, the term Social Audit emerged to describe evaluations that focused on the likely impact on jobs, the community and the environment if a particular enterprise or industry were to close or relocate. These evaluations used the term Social Audit to clearly make the point that they were concerned with the 'social' and not the 'economic' consequence of a particular action.

The first recorded example of Social Audit was developed in 1978 at Beechwood College, an independent worker co-operative training centre in the England. In 1981, a manual called "Social Audit--A Management Tool for Co-operative Working" by "Freer Spreckley" was published. It contained an organisational method for democratic organisations to use in measuring their own social performance with four main elements Social Purpose, External View, Internal View and Social Accounting. One of the first recorded social reports was in Switzerland where the Migros Co-operative, a large multi-functional organization, first published a social report in 1978. During the late 1980s, there was an explosion of interest in the ideas of Social Audit as a number of business schools started looking at social responsibility in industry. New Economic Foundation (NEF) in London, established in 1984, published the Social Audit Workbook in 1997. The NEF established the Institute of Social and Ethical Accountability that drafted a set of standards for monitoring the application of Social Audit. During the late 1990s, many organisations continued to develop and practice Social Audit. In 1997, Social Enterprise Partnership developed the first European Social Audit programme involving groups from Ireland, Spain, Finland, Sweden, Denmark and England. This programme used the Social Audit Toolkit model and it was translated in a number of European languages. Social Enterprise Partnership had run and been involved with three transnational Social Audit programmes that also included France, Belgium and Italy.

Concept of Social Audit

Social audit is considered an important tool to ensure accountability and transparency in the system of governance. The word 'Audit' came from the Latin word audire, which means "to hear". The primary objective of an audit is to reveal defects or irregularities in any of the functions or activities examined and to indicate possible improvements so that organizational efficiency and effectiveness may improve. John Pearce (2005) defined "Social Auditing is the process whereby an organization can account for its social performance. It assesses the social impact and ethical behaviour of an organization in relation to its aims and those of its stakeholders." Parthasarthy (1988) observed: Social audit may be regarded as being at the extreme end of the spectrum of audit functions. Over the centuries, audit function have grown and evolved, starting from the most ancient kind which may be called vigilance audit as it was concerned mainly with the detection of frauds. …

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