Social Audit: An Analysis

‘Social Audit’ is “a public assembly where all the details of a project are scrutinized”. It is “a way of measuring, understanding, reporting and ultimately improving an organization’s/programme’s social and ethical performance”.

Social Audit (SA):

  • Social Audit is a process in which details of the resources, both financial and non-financial, is used by public agencies for development initiatives and is shared with the people often through public platforms.
  • It includes in-depth scrutiny and analysis of the working of an entity in which the public is involvedvis-à-vis. its social relevance.

Origin of social audit in India:

  • In India, the initiative of conducting social audits was taken by Tata Iron and Steel Company Limited (TISCO), Jamshedpur in the year 1979.
  • Social audit gained significance after the 73rd amendment. The approach paper to the 9th FYP (2002-07) emphasized upon social audit for effective functioning of Panchayat Raj institutions (PRIs) and empowered gram sabhas to conduct SAs in addition to its other functions.
  • National Rural Employment Guarantee Act, 2005 provides for regular “Social Audits” so as to ensure transparency and accountability in the scheme.
  • The State Government shall identify or establish, under the NREGS, an independent organization, Social Audit Unit (SAU), at the state level, to facilitate conduct of social audit by Gram Sabhas.



Need of Social Audit:

The main reason for the push for social audit is the huge disconnect between what people want and what people get. As soon as social audit kicks in, it exercises its control over the policy developers and implementers in the following manner:

  • Reduces corruption:SA uncovers irregularities and malpractices in the public sector and maintains oversight on government functioning, thus reducing leakages and corruption.
  • Monitoring and feedback: It monitors social and ethical impact of an organisation’s performance and provides feedback on the work.
  • Accountability and transparency:SA ensures accountability and transparency in working of local government bodies and reduces trust gap between people and local governments.
  • Participative and democratic: SA promotes participation of people in implementation of programmes and makes people more forthcoming for social development activities.
  • Strengthens the Gram Sabha:SA gives voice and influencing power to the Gram Sabha, the lynchpin of rural governance structure.
  • Generates demand:Serves as the basis for framing the management’s policies by raising demands in a socially responsible and accountable manner by highlighting the real problems.
  • Improves professionalism: SA boosts professionalism in public bodies by forcing Panchayats to keep proper records and accounts of the spending made against the grants received from the government and other sources.
  • Collective platform:SA provides a collective platform such as a social audit Gram Sabha, for people to express their common needs, resulting into social cohesion.

Social audit Vs Other Audits:

Social AuditOther audits (financial etc.)
Beneficiaries are auditorsEmploys external auditors.
Audit is concerned with matching real outcomes with intended outcomes and ensures social accountability.Audit focuses on financial records, checks if rules have been adhered toand uses accounting principles and ensures organizational accountability.
Broad scope i.e. measuring, understanding and improving the social performance of an activity of an organisation.Limited scope i.e. limited to finance or operations of an organization.
Includes many stakeholders i.e. people, government officials, civil society and experts.Includes professional auditors and organization employees only.
Almost any issue and parameter relating to the programme can be discussed.Fixed parameters are evaluated and checked in professional audit.

Issues/challenges with social audits:

  • Rules not followed: In many states Social Audit Units (SAUs) don’t seek record from Gram Panchayats regarding execution of works and expenditure (CAG report), social audit reports are either not prepared or not made available to gram sabha in local languages.
  • Not institutionalized: Government has not mandated institutionalization of SA thus making auditors vulnerable to implementing agencies, who face resistance and intimidation and find it difficult to even access primary records for verification.
  • Apathy of implementing agency:The implementing agency requests for postponement of social audit, fails to provide documents on time, does not send independent observers for the Gram Sabha, and fails to take action on the findings of the social audit.
  • SAUs lack independence:
  • Some SAUs have to obtain sanction from the project implementation agency before spending funds.
  • Many states don’t follow the open process specified in the standards for the appointment of the SAU’s director.
  • Several SAUs do not have adequate staff to cover all the panchayats even once a year.
  • Lack of stringent penalty:Flouting of SA principles and norms does not attract any penalty or legal proceeding which makes SA a toothless exercise.
  • Lack of awareness: Lack of awareness among Gram Sabha members and their rights on social audit
  • Absence of a well-conceived information system: Government agencies rely on hazy and incomplete system of referring to government accounts and government methods of reporting to track progress of scheme due to which it becomes difficult for auditor to take stock, speed up, slow down or apply corrective measures.
  • No incentive to participate:Lack of interest in people about the village activities due to their livelihood reasons.

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Social Audit process can be made more robust through:

  • Providing more finances to SAUs:In 2012, MoRD had recommended 1 per cent of the expenses under MGNREGS for SA, which got reduced to 0.5 per cent later.
  • Director and staff selection:The selection of Directors of SAUs should be free of political control and the selection process should be strictly followed.
  • Resource Hub on Social Audit: Aresource hub should be constituted under the National Institute of Rural Development and Panchayati Raj (NIRD&PR) to provide assistance to State Governments and SAUs on parameters like training support, monitoring and evaluation, action research, documentation and certification of trainers etc.
  • Support of implementing agencies:Rules must be framed so that implementation agencies are mandated to play a supportive role in the social audit process and take prompt action on the findings.
  • Legally sanctioned outcomes: Outcomes of social audit must have legal sanctionand state governments should enact specific rules for this.
  • Increased frequency: Social audits must be conducted in every Gram Panchayat once in every 6 months.
  • Using Management Information System (MIS): Usage of MIS to track details of schemes at all levels to streamline the life-cycle of programme planning, implementation and feedback.
  • Punitive action against non-compliance: State Government should promptly fix responsibility as well as take action against errant officials in SAUs and other ground level auditors.
  • Refurbishing social audit process by:
  • Convening the Gram Sabha at a neutral place and not in the village of the head of the panchayat.
  • Meeting to be chaired by an elderly member who is not a part of Panchayat.
  • Putting the resolutions and decisions to voting.
  • Video recording of the meeting and uploading the Social Audit Reports (SAUs) on government website in local languages.
  • Monitoring of SA: MoRD should monitor the response (or the lack of it) by the implementing agency to the social audit findings; a quarterly meeting should be held between SAU, implementing agencies and MoRD officials to monitor the action-taken reports.
  • Displaying Information of Notice Board: Gram Sabha should demand from the Panchayat, display of all the information, on Panchayat notice board from time to time, about the works being carried out or planned in near future.
  • Knowledge dissemination through regular meetings: Meetings of gram sabha should be held regularly and members/villagers must be educated about their role in social audit process through these meetings by Programme Officers.
  • Civil society participation: People including students from different universities should be encouraged to participate as Village Resource Persons.Example, Jharkhand has instituted a formal mechanism by inviting prominent civil society representatives to be part of the SA panel.
  • Role of media: Media should also take responsibility to reach to the rural areas and spread the awareness through their designed programmes focusing on the issues of the rural concerns especially Gram Sabhas and their powers of social audit.

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 Best practices:

Andhra Pradesh:

    • Society for Social Audit, Accountability and Transparency, an autonomous body insulated from government interference, was set up in Andhra Pradesh.The state of Andhra Pradesh has become a role model for all the other states as far as implementation of SA is concerned.
    • The main aim of the SSAAT is to uphold the concept of eternal vigilance by the people, facilitated by social activists and Government acting in conjunction.
    • It aims at empowerment of the rural population covered by welfare schemes such as MGNREGS and minimization of leakage and wastage of public funds.
    • oPublic vigilance, verification of the various stages of implementation and ‘Social Audit Forums-Public Hearings’ are important components of the social audit process followed by SSAAT.


    • Public hearings are heard by juries with PRI and CSO members.
    • An advisory for action to be taken on specific irregularities has been formulated for the guidance of the jury members.
    • Hearings are held at the panchayat, block, district and State levels.
    • Special and test audits are done
    • A cultural workshop for IEC activities was conducted and songs in eight different languages have been prepared.


  • Apart from MGNREGS, social audit team also collects complaints regarding other issues and hands it over to the Sarpanch and Sachiv in the Gram Sabha.
  • Wall writing of muster rolls, bills and measurement books is carried out to ensure active involvement of the community in the social audit process
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