Authors: C. Dheeraja and Karuna M.

(Practice Question –
Social audits in India have not received the space and attention they deserve in becoming an integral and robust part of the formal audit process. Do you agree? Give your suggestions to make the social audit process more democratic. – 250 words)

There is a need for social audits to return to their democratic roots.

Social audits show how people’s participation in the planning, execution and monitoring of public programmes leads to better outcomes. They have strengthened the role of the gram sabha.

Social audits were first mandated by law in 2005 under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Subsequently, Parliament, the Supreme Court and many Central ministries mandated them in other areas as well. As efforts are being made to extend social audits to new areas, it is important to look at how well they are actually implemented based on parameters specified in the auditing standards jointly pioneered by the Comptroller and Auditor General (CAG) and the Ministry of Rural Development.

Key issues that need to be addressed with respect to social audits:

• Independence of auditing agency – Social audit units (SAUs) have been established in 26 States (Rajasthan, Haryana and Goa are yet to establish them). More than 5,000 full-time staff have been appointed. A 30-day rigorous training programme has been designed, and more than 4,200 people have been trained. However, the governing bodies of most SAUs are not independent. Some SAUs have to obtain sanction from the implementation agency before spending funds.
• Lack of funds – In 2017, the Supreme Court mandated social audits under the National Food Security Act (NFSA) to be conducted using the machinery that facilitates the social audits of MGNREGA. Social audits of the NFSA have failed to take off due to lack of funds.
• Appointment of directors – More than half the States have not followed the open process specified in the standards for the appointment of the SAU’s director.
• Few/no audits conducted – Some States have conducted very few audits and a few have not conducted any.
• Inadequacy of staff – Several states do not have adequate staff to cover all the panchayats even once a year.
• No post-audit action – For the period 2016-17 and 2017-18 (till November), only 13 SAUs registered grievances and/or detected irregularities. These have identified a significant misappropriation amount of Rs. 281 crore. However, the action taken by the State governments in response to the social audit findings has been extremely poor: only 7% of the money has been recovered and only 14% of the grievances have been redressed. Adequate disciplinary action against people responsible for the irregularities has also not been taken.

The way forward –

• Adequate funding – Adequate funds must be provided to SAUs thus facilitating the social audits of government schemes.
• Independent governing body – Social audit units should have an independent governing body and adequate staff. 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.
• Regular monitoring – A real time management information system should track the calendar, the social audit findings and the action taken, and reports on these should be made publicly available.
• Mentoring, support and capacity building – Social audit processes need mentoring and support as they expand into newer programmes. the CAG as an institution could partner with local citizens and state audit societies to train them, build capacities and issue advisories on framing of guidelines, developing criteria, methodology and reporting for audit.

Quote – worthy –
“A good auditor is a good listener. You will not only see the accounts in their books, but also listen to their accounts”. – President Ram Nath Kovind.

Read the full article at The Hindu.