The Mahatma Gandhi National Rural Employment Guarantee Act provides for a central role to ‘Social Audits’ as a means of continuous public vigilance. The objective of Social Audit is to ensure public accountability in the implementation of projects, laws and policies. Social Audits are periodic assemblies convened by Gram Sabhas where all the details of a project are scrutinized; it is a continuous process of public vigilance and serves as a forum for ensuring transparency in the process of administration and decision making, accountability of PRI representatives and officials and also serves the purpose of grievance redressal.

            The Government of India notified new provisions of social audit in Schedule - I of the Act through its notification dated 31^st December 2008. The Government of India through its order dated 19^th June 2009 instructed the States for enforcement of provisions of social audit under the act. The order provided for conducting of social audits immediately and in a campaign mode. It required the States to direct the District Programme Coordinators to complete the social audits of all the works undertaken in the G.Ps of the districts as per the new provisions of social audit as notified in Schedule - I of the act and enter the information related to the social audits in the prescribed formats in NREGA MIS. The GoI also instructed the States to ensure that the districts prepare for conducting of social audits in advance put up their social audit calendar on the NREGA website.

             Social audit is the extreme end of the spectrum of audit functions. Over the centuries, audit functions have grown and evolved starting from the most ancient kind which may be called vigilance audit which was concerned mainly with the detection of frauds. Out of various audits, in more or less chronological order are regularity audit, propriety audit, value for money audit, performance audit and lastly social audit. We may regard the last three of these audit functions as representing economy, efficiency and effectiveness audit. Social Audit also examines the impact of specific governmental activities on certain sections of the society.

• ‘Social Audits’ are a means of continuous public vigilance and to ensure public accountability in the implementation of projects, laws and policies.
• Social Audits are periodic assemblies convened through Gram Sabhas where
  5. All the details of a project are scrutinized;
  5. Are a continuous process of public vigilance
  5. Serve as a forum for ensuring transparency in the process of administration and decision making
  5. Ensure accountability of PRI representatives and officials

And Serve the purpose of grievance redressal.

              The MGNREGA gives a central role to social audits as means of continuous public vigilance; the primary objective is to ensure public accountability in the implementation of the projects, laws and policies.  Effective conduct of Social Audit implies adequate attention to the publicity and preparation before the Social Audit, following organizational and procedural aspects as per the Act and free and open discussion on the mandatory agenda for the Social Audit.  

             The success of Social Audit process depends upon the open and fearless participation of all people of all the villagers and particularly the wage labourers.  It is necessary that adequate publicity about the date, time, agenda, importance and sanctity of the Social Audit process is being done and everyone is informed in advance about this.  The Government of India instructions have also given a lot of importance on adequate and timely publicity of the Social Audits dates etc.

An innovative feature of the Mahatma Gandhi NREGA is that it has institutionalized ‘Social Audit’ as a means of continuous public vigilance (Mahatma Gandhi NREGA, Section 17). Social Audit has the following dimensions:

1. As a continuous and ongoing process, involving public vigilance and verification of quantity and quality of works at different stages of implementation; and
2. A process is to be conducted in every Gram Panchayat (GP) at least once in six months, involving a mandatory review of all aspects.

             Rule 4 of Audit of Schemes Rules, 2011 stipulates that each State Government shall identify or establish an independent organization, “Social Audit Unit” (SAU) to facilitate conduct of the Social Audit of MGNREGS works. This Social Audit Unit may be either a Society or a Directorate, independent of the implementing departments/agencies. The Director/chief executive officer of the society/directorate shall be a person who has worked in the social sector for the rights of the people for at least 15 years. The work may also be outsourced to an outside agency preferably an NGO which is not involved in the planning and implementation of the Scheme but possesses adequate experience of having worked in rights and entitlement based programmes.