The social audit process is the act of reviewing the official records of a company or a state. This is done for the purpose of determining whether the expenditures reported by a company or a state match with the actual amounts spent by the same on the ground.
This also relates to implementing various acts by a company or a state to meet the social responsibility goals. The review is conducted on the social impact of these acts as well as the expenditures incurred on the same.
In this article, we shall discuss at length the objectives, types and meaning of social audit, important from the perspective of the upcoming UPSC Exam.
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What is Social Audit?
A formal review conducted on the procedures, endeavours, and code of conduct of a company or a state in relation to its social responsibility is known as a social audit. This process brings out the impact of a company or a state on society with a clarified status of its endeavours. There is always a question of balance between the overall profitability and the social responsibility of a company or a state. This is where companies and states get reviewed in relation to their practices by the social audit process.
The social audit UPSC syllabus demands deeper research on the definition of the concept. The process facilitates an internal examination of whether a company’s or a state’s objectives are being fulfilled. For this purpose, established benchmarks and measurable targets are utilised. The process goes on to determine the public image of a company or a state with relation to the actions implemented by the same. This is where the review of the expenditures provides clarity on the practices.
The UPSC Notes will cover both the facets of the definition stated above, relating to the social impact and the expenditures incurred. You must read the definition mentioned above with much attention.
Types of Social Audit
The types of Social Audit include two major divisions.
- The first one conducts a review of the actual expenditures incurred by a company or a state, while matching those with the reports prepared by that company or the state.
- The second one reviews the actions and implementations of a company or a state in relation to the social impact of the same.
As a part of the IAS Preparation, this topic will be of immense significance. You are required to go through the details thoroughly as a part of your preparation.
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Objectives of Social Audit
The objectives mentioned below are important for the UPSC 2022 and demand much attention from you:
- Assessment of the various financial and physical gaps that come up between the requirements and the resources available
- Making the providers and the beneficiaries aware of the various social as well as productive services
- Reviewing the policy decisions in relation to the priorities and the interests of the stakeholders, with a focus on the poverty-stricken areas
- Increasing the effectiveness and the efficiency of the programmes meant for local development.
Benefits of Social Audit
The following are the benefits of a social audit covered in the UPSC Syllabus:
- Reduction in the chances of corruption
- Making the common people aware of their entitlements and rights
- Increasing the effectiveness and efficiency of a particular project
- Reporting and social accounting
- Effective local governance
- Promoting integrity and unity among the people
- Addressing the grievances and implementing corrective actions
Social Audit in India
In India, this process involves public meetings that facilitate a critical analysis of the law and various government policies and programmes. This also includes an assessment of the actions and implementations of private entities. As a part of the Social Audit Rules 2011, the Government of India identified ten states having operationalised units for conducting social audits. These ten states are Tamil Nadu, Uttar Pradesh, Tripura, Mizoram, Telangana, Chhattisgarh, Andhra Pradesh, Gujarat, Sikkim, and Karnataka.
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Frequently Asked Questions on Social Audit
When was the first social audit conducted?
The first social audit was conducted by Ulla Ressner and John Fry in Sweden. This was done between 1985 and 1988.
How does MGNREGA prevent corruption in India?
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) acts as a base for the social audits conducted in Andhra Pradesh and Rajasthan. These social audits are meant to curb the mass corruption in these states.
What are some of the disadvantages of a social audit?
Some of the disadvantages of social audit are stated below:
- This can be a time-consuming procedure, often becoming complicated.
- There is no such transparent methodology for conducting a social audit.
- There are chances of organisation manipulation and hijacking the stakeholders’ views.
- Higher cost of external resources.
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