SOCIAL AUDITING OF NATURAL RESOURCE MANAGEMENT FOR DEVELOPMENT PROJECTS

"Role of Community Institutions and Civil

Societies in Combating Disasters and Climate

Change“

10-07-2012 to 12-07-2012

10th July 2012Dr. N. Sai Bhaskar Reddysaibhaskarnakka@gmail.com

Center for Climate Change and Environmental Advisory (CCCEA)DR. MCR HRD Institute Campus,

Hyderabad

Social auditing

Social auditing is a process that enables an organisation to assess and demonstrate its social, economic, and environmental benefits and limitations. It is a way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to.

Social Audit

ensure transparency and accountability in the system of Governance to promote people’s participation.

It is not a fault finding tool but a system to understand, measure and assess the implementation of the schemes and plans to improve the effectiveness of the local governance.

It has been used as a process to empower people to question the systems, processes and authorities in order to assert their rights.

This course will give an outline of the different approaches to social accountability and will also give relevance to the term ‘accountability from below’ in the present context.

Historical Roots

1960-70’s – a fresh wave of interest in social and ethical accounting, auditing and reporting (SEAAR).

Concept of ‘stakeholders’ emerges

While most of the early theorizing about Social Auditing came from the US, most of the practical experimentation took place in Europe.

Basis of social audit

The main reason for the push for social audit is the huge disconnect between what the people need, what the government thinks it needs, and what is actually done. This lack of communication is represented by the following diagram in figure . Figure 2 explains the situation with social audit.

It is a process and not an event

Thus, Social Audit is nothing but understanding, measuring, reporting, and most importantly improving the efficiency and effectiveness of the local governance.

Objectives of social audit

1. Assessing the physical and

financial gaps between needs and resources available

for local development.

2. Creating awareness among beneficiaries and providers of local

social and productive services.

3. Increasing efficacy and

effectiveness of local development programmes.

4. Scrutiny of various policy

decisions, keeping in view stakeholder

interests and priorities,

particularly of rural poor.

5. Estimation of the opportunity cost for stakeholders of not

getting timely access to public

services.

Advantages of social audit

Trains the community on participatory

local planning.

Encourages local

democracy.

Encourages community

participation.

Benefits disadvantaged

groups.

Promotes collective decision

making and sharing

responsibilities.

Develops human

resources and social capital

Social auditing provides an assessment of the impact of an organisation's non-financial objectives through systematically and regularly monitoring its performance and the views of its stakeholders.

Social auditing requires the involvement of stakeholders. This may include employees, clients, volunteers, funders, contractors, suppliers and local residents interested in the organisation.

Stakeholders are defined as those persons or organisations who have an interest in, or who have invested resources in, the organisation.

Social audits are generated by the organisation themselves and those directly involved. A person or panel of people external to the organisation undertakes verification of the social audit's accuracy and objectivity.

What does Social Auditing Involve?

The social auditing process requires an intermittent but clear time commitment from a key person within the organisation. This social auditor liases with others in the organisation and designs, co-ordinates, analyses and documents the information collected during the process.

Social auditing information is collected through research methods that include social bookkeeping, surveys and case studies. The objectives of the organisation are the starting point from which indicators of impact are determined, stakeholders identified and research tools designed in detail.

The collection of information is an on-going process, often done in 12-month cycles and resulting in the organisation establishing social bookkeeping and the preparation of an annual social audit document/report.

MNREGA’s mandated use of social audits by the village assembly (gram sabha) goes beyond the right to information and serves to ensure accountability and corrective measures. Partnerships between government and civil society, the training of local resource persons, social mobilisations around the social audit forum and gram sabhas and the use of community-based organisations are just some ways in which social audits are sought to be made more effective

- Amita Sharma, Joint Secretary, Ministry of Rural Development

Abstract of social auditing

Decisions taken report

Social Audit ppt

Social audits like the hugely successful model in Andhra Pradesh, which has set up an independent and autonomous Society for Social Audit, Accountability and Transparency (SSAAT) to help ensure proper working of the MNREGA, have excited people in various countries, especially Africa.

What is Social Auditing ?

SA is a management tool and accountability mechanism which can enhance an organization’s capacity to:

Evaluate their impact on stakeholders Determine how well they are living up to the

values they espouse. Improve their strategic planning process by

identifying potential problems before they come up; and

Increase their accountability to the groups they serve and depend on.

6 Elements of Social Audit

Multi-perspective Comparative Comprehensive Regular Verification Disclosure

8 Steps in conducting SA

Assemble organization and secure agreement and commitment.

Define and prioritize the organization’s objectives and establish the action it intends to perform to meet them.

Identify the organization’s “stakeholders” Agree upon indicators, information, benchmarks

and targets. Data gathering systems put in place. Collating, analyzing and interpreting results External verification process Disclosure and act on results

Why Social Audits ?

To permit the enterprise to effectively monitor performance.

To permit the “stakeholders” in the enterprise affect its behaviour.

To allow enterprise to report on its achievements based on verified evidence rather than on anecdote and unsubstantiated claims.

Permits those who invest in the enterprise and its stakeholders to judge if it is achieving the values which it set out to achieve.

- Pearce (1996)

6 Reasons to conduct a SA

Know what is happening Understand what people think and

want Tell people what you are achieving Strengthen loyalty / commitment Enhance decision-making Improve overall performance

- Zadek (1998)

Potential Issues

SA has excellent promise as a management tool but some potential problems remain:

Reporting organization can deliberately limit audit scope in order to avoid controversies.

Process can be managed internally to the disadvantage of some external stakeholders.

Some significant stakeholders may be omitted. Organization may use arbitrary or inappropriate indicators to

evaluate outcomes. The standards, independence and honesty of the auditor may

be open to question.

Therefore the need for Generally Accepted Assurance Standard (AA1000)

Social Audits

Social auditing is “a process of measuring and reporting, in order to understand and ultimately improve, an organization’s social performance”.

Mission Related

Managerial Issues Accountability Issues

Benefits

India being a welfare state, several programs and policies are implemented for the benefit of people. Politicians and executives are usually the ones who control and implement these policies.  Some policies are common to all and some are special that are meant to benefit the weaker sections of the society.  To implement all such policies, funds are drawn from the state exchequer. The social control over withdrawal and usage of this fund is called Social Audit.

Environmental accounting, which is a subset of social accounting, focuses on the cost structure and environmental performance of a company. It principally describes the preparation, presentation, and communication of information related to an organisation’s interaction with the natural environment. Although environmental accounting is most commonly undertaken as voluntary self-reporting by companies, third-party reports by government agencies, NGOs and other bodies posit to pressure for environmental accountability.

Accounting for impacts on the environment may occur within a company’s financial statements, relating to liabilities, commitments and contingencies for the remediation of contaminated lands or other financial concerns arising from pollution. Such reporting essentially expresses financial issues arising from environmental legislation. More typically, environmental accounting describes the reporting of quantitative and detailed environmental data within the non-financial sections of the annual report or in separate (including online) environmental reports. Such reports may account for pollution emissions, resources used, or wildlife habitat damaged or re-established.

In their reports, large companies commonly place primary emphasis on eco-efficiency, referring to the reduction of resource and energy use and waste production per unit of product or service. A complete picture which accounts for all inputs, outputs and wastes of the organisation, must not necessarily emerge. Whilst companies can often demonstrate great success in eco-efficiency, their ecological footprint, that is an estimate of total environmental impact, may move independently following changes in output.

Legislation for compulsory environmental reporting exists in some form e.g. in Denmark, Netherlands, Australia and Korea. The United Nations has been highly involved in the adoption of environmental accounting practices, most notably in the United Nations Division for Sustainable Development publication Environmental Management Accounting Procedures and Principles (2002)

Appropriate institutional level for social audit

The most appropriate institutional level for social audit is the Gram Sabha, which has been given 'watchdog' powers and responsibilities by the Panchayati Raj Acts in most States to supervise and monitor the functioning of panchayat elected representatives and government functionaries, and examine the annual statement of accounts and audit reports. These are implied powers indirectly empowering Gram Sabhas to carry out social audits in addition to other functions. Members of the Gram Sabha and the village panchayat, intermediatepanchayat and district panchayat through their representatives, can raise issues of social concern and public interest and demand an explanation

Right to information for Gram Sabha members

Some States have already passed Right to Information Acts. Notwithstanding some weaknesses, the Acts have opened the way for transparency in administration from the State to the panchayat level.

The Right to Information Acts specify the modalities for obtaining information and provide penalties or failing to furnish or supplying false information. The Acts facilitate social legislation such as on minimum wages and gender rights and, more importantly, pave the way for public debate on government development projects.

However, none of the Acts have defined the right to information to include inspection of works and documents, and the taking of notes and extracts. This is needed to make the social audit by the Gram Sabha more effective.

Empowerment of people

Social audit is most effective when the actual beneficiaries of an activity are involved in it.  However, people can only get involved in the process when they are given appropriate authority and rights.  To this end, the 73rd amendment of the constitution has empowered the Gram Sabha to conduct social audit.  This is relevant only in the villages. In the cities, the Right to Information Act empowers the people to inspect public records.

Proper Documentation

Every thing right from the requirement gathering to planning to  implementation must be properly documented. Some of the documents that should be made mandatory are:Applications, tenders, and proposals

Financial statements, income - expense statements.

Registers of workers Inspection reports.

Accessibility of DocumentsMerely generating documents is useless if

they are not easily accessible. In this information age, all the documents must be put on line.

Punitive Action

The final and most important provision, about which nothing is being done yet, is to have punitive actions for non-conformance of the process of social audit. Unless there is legal punishment, there will be no incentive for the people in authority to implement the processes in a fair manner.

Generic Steps for Social Audit

Clarity of purpose and goal of the local elected body. Identify stakeholders with a focus on their specific roles and duties. Social auditing

aims to ensure a say for all stakeholders. It is particularly important that marginalized social groups, which are normally excluded, have a say on local development issues and activities and have their views on the actual performance of local elected bodies.

Definition of performance indicators which must be understood and accepted by all. Indicator data must be collected by stakeholders on a regular basis.

Regular meetings to review and discuss data/information on performance indicators.

Follow-up of social audit meeting with the panchayat body reviewing stakeholders’ actions, activities and viewpoints, making commitments on changes and agreeing on future action as recommended by the stakeholders.

Establishment of a group of trusted local people including elderly people, teachers and others who are committed and independent, to be involved in the verification and to judge if the decisions based upon social audit have been implemented.

The findings of the social audit should be shared with all local stakeholders. This encourages transparency and accountability. A report of the social audit meeting should be distributed for Gram Panchayat auditing. In addition, key decisions should be written on walls and boards and communicated orally.

Hindrances in Social Audit

 Mindset of people. Even after 50 yrs of independence people do not understand the concept of govt. for the people, of the people, and by the people. Most of the people still think themselves as being ruled by the politicians, while politicians think that they are the rulers. Due to this reason, common people do not get involved in the developmental activities.

Lack of any legal proceedings for not following social audit principles. Unless there is a stringent penalty on authorities for not implementing social audit, they will not give up control because it reduces their kickbacks and authority.

Lack of education among the common masses. Since common people are not that educated, they do not know their rights, let alone get them enforced.

Benefits of Social Audit

Involvement of people in developmental activities ensures that money is spent where is it actually needed.

Reduction of wastages. Reduction in corruption. Awareness among people. Promotes integrity and a sense of

community among people. Improves the standard of governance.

Social Audit and Action taken report NREGA http://nrega.nic.in/circular/so_audit_Ajmer.p

df

References

http://hanumant.com/SocialAudit.html http://

www.fao.org/docrep/006/ad346e/ad346e09.htm

http://www.caledonia.org.uk/socialland/social.htm

http://www.indianexpress.com/news/indias-social-audit-of-schemes-draws-world-attention/705883/0