Insights into Editorial: Making every citizen an auditor
“A good auditor is a good listener” said President Ram Nath Kovind during his recent speech at the 29th Accountants General Conference.
You will not only see the accounts in their books, but also listen to their accounts.
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.
What is an Social Audit:
Social audit is the process of reviewing official records. It is with a view to look at whether the State reported expenditures reflect actual money spent on the ground.
- Civil Society Organisations, Non-Governmental Organisations, political representatives can participate in the social audits.
- 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.
- The Comptroller and Auditor General in 2016 laid down auditing standards for social audit.
- CAG also says that this is the first ever such exercise for the formulation of standards for social audit in the World.
- 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.
- The National Institute of Rural Development and Panchayati Raj recently conducted a study comparing ground realities with the specified standards, and identified key issues that need to be addressed.
Importance of Social Audit in every Department:
Social Audit is considered as a mechanism to foster transparency and improve the delivery of public programmes. It holds public officials accountable.
It empowers beneficiaries to scrutinise expenditures and keep track of delivery. They are considered as low cost and powerful participatory tools.
Individuals and communities get empowered and they experience the practical potential of participatory democracy. It is often a dramatic process of redistribution of power based on evidence and fact.
It is only when this conception is accepted that audits will return to their democratic roots, and social audits in India will get the space and attention they deserve in becoming an integral and robust part of the formal audit process.
Shortcoming in the social audits programme:
- The governing bodies of most social audit units (SAUs) are not independent.
- Some SAUs have to obtain sanction from the implementation agency before spending funds.
- More than half the States have not followed the open process specified in the standards for the appointment of the SAU’s director.
- Some States have conducted very few audits and a few have not conducted any.
- Several states do not have adequate staff to cover all the panchayats even once a year.
- The action taken by the State governments in response to the social audit findings has been extremely poor.
- Adequate disciplinary action against people responsible for the irregularities are not being taken.
The way forward:
Social audits of the NFSA have failed to take off due to lack of funds.
Like the Rural Development Ministry, the Ministry of Consumer Affairs, Food and Public Distribution should give funds to the SAUs and ask them to facilitate the social audits of the NFSA.
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.
Also, 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.
Social audit processes need mentoring and support as they expand into newer programmes.
As the President said “The social audit to account whether the money was spent properly, and made the intended difference, is mostly conducted by the scheme beneficiaries.
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.”