Social Audit


To prepare for GOVERNANCE for any competitive exam, aspirants have to know about Social Audit. It gives an idea of all the important topics for the IAS Exam and the Governance syllabus (GS-II.). Social Audit terms are important from Governance perspectives in the UPSC exam. IAS aspirants should thoroughly understand their meaning and application, as questions can be asked from this static portion of the IAS Syllabus in both the UPSC Prelims and the UPSC Mains exams. Even these topics are also highly linked with current affairs. Almost every question asked from them is related to current events. So, apart from standard textbooks, you should rely on newspapers and news analyses as well for these sections.


Meaning of Social Audit?

  • 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 involved vis-à-vis its social relevance.


Types of Audit:

Financial Audit Operational Audit Social Audit
Directed towards recording, processing, summarising and reporting of financial data. Establishing standards of operation, measuring performance against standards, examining and analysing deviations, taking corrective actions and reappraising standards based on experience are the main focus. Social Audit provides an assessment of the impact of a department’s non-financial objectives through systematic and regular monitoring on the basis of the views of its stakeholders.


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 serves as an instrument for the measurement of social accountability of an organization. It gained significance after the 73rd amendment of the constitution relating to Panchayat Raj institutions.
  • The approach paper to the 9thFYP (2002-07) emphasised 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.


Principles of Social Audit:

Eight specific key principles have been identified from Social Auditing practices around the world:

  • Multi-Perspective/Polyvocal: Reflect the views of all the stakeholders.
  • Comprehensive: Report on all aspects of the organisation’s work and performance.
  • Participatory: Encourage participation of stakeholders and sharing of their values.
  • Multidirectional: Stakeholders share and give feedback on multiple aspects.
  • Regular: Produce social accounts on a regular basis so that the concept and the practice become embedded in the culture of the organisation covering all the activities.
  • Comparative: Provide a means whereby the organisation can compare its performance against benchmarks and other organisations’ performance.
  • Verified: Social accounts are audited by a suitably experienced person or agency with no vested interest in the organisation.
  • Disclosed: Audited accounts are disclosed to stakeholders and the wider community in the interests of accountability and transparency.


Social Audit Cycle:

  1. Identify Indicators of Performance
  2. Collect Data – Both Quantitative and Qualitative
  3. Evaluate Data – Internal and External Comparision
  4. Publish Social Audits Reports
  5. Define Values and Objectives of the organisation


Significance 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.


  • RTI
  • Public Hearing
  • Social Audit


Need for Social Audit:

  • Collective Platform
  • Curbs Corruption
  • Generates Demand
  • Professionalism
  • Accountability and Transparency
  • Strengthens Gram Sabha
  • Monitoring and Feedback
  • Participative & Democratic


Limitations of Social Audit:

  • The scope of social audits is highly localised and covers only certain selected aspects.
  • Social audits are often sporadic and ad hoc.
  • Monitoring is informal and unprocessed.
  • The findings of social audit cannot be generalised over the entire population.
  • Individual programs present their own unique challenges. For example literacy
  • program for adults require data on migration.
  • Several problems require a package of programme to be implemented simultaneously. For example, rural health requires convergence between water supply, education, sanitation, nutrition etc. Social audit may therefore need a more holistic approach.
  • Absence of trained auditors.
  • Lack of action on audit reports and findings.


Way Forward:

  • For empowerment of the Demand System, investment in education and awareness of Public/ Gram Sabha members is required.
  • Institutional capacity need be increased at PRI, Block, and DRDA level, in terms of information Storage and distribution mechanism
  • Support may be provided to committed and competent NGOs to play the catalytic role including conducting Social Audit.
  • Media need be more Rural and Development focussed
  • Recognise and Reward the members who have contributed to the process of strengthening Demand System and improved service delivery
  • Develop an Institutional Framework for, organising PRI Accounting Audit and Social Audits and putting them on the Internet.
  • Promoting proactive disclosure of information to facilitate social audits.


Social Audit – Indian Scenario:

  • In India, the initiative of conducting social audits was taken by Tata Steel or 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 9thFYP (2002-07) emphasised 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 organisation, Social Audit Unit (SAU), at the state level, to facilitate conduct of social audit by Gram Sabhas.


Social Audit and MGNREGA: 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 institutionalised: Government has not mandated institutionalisation 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.
  • 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.
  • 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.


Social Audit – Way Forward:

  • 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: A resource 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 sanction and 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.
  • 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.
  • 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.


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 minimisation of leakage and wastage of public funds.

· Public 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.


Social Audit Law:

  • Meghalaya became the first state in India to operationalise a social audit law – ‘The Meghalaya Community Participation and Public Services Social Audit Act, 2017’.
  • Important Features of the Act:
  • A Social Audit Facilitator will be appointed to conduct the audit directly with the people who will present findings to the Gram Sabha, which will further add inputs and the result will finally go to the auditors.
  • A Social Audit Council (SAC) has been established as a panel to review government programmes during the course of their implementation.
  • The Act provides a list of programmes, schemes and projects to be audited.



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