Briefing Paper 8a
Social Auditing

"Social Audit is a method for organisations to plan, manage and measure non-financial activities and to monitor both the internal and external consequences of the organisation's social and commercial operations." SEP

"Social Auditing is a process which enables organisations and agencies to assess and demonstrate their social, community and environmental benefits and limitations. It is a way to measure the extent to which an organisation lives up to the shared values and objectives it has committed itself to promote." NICDA

"Social auditing is the process whereby an organisation can account for its social performance, report on and improve that performance. It assesses the social impact and ethical behaviour of an organisation in relation to its aims and those of its stakeholders." NEF

What is social auditing?
Financial Auditing occurs in most organisations as an official and measured statement which reports on how effectively the group is managing their budgets. "Social Auditing" is similar, but focuses on monitoring the work the community organisation aims to achieve with its clients or users.

Social Auditing developed as existing monitoring processes, created by private sector (profit motive) companies, were found to be unsuitable to community organisations. Social auditing replaced the business plan and associated methods used as the main organisational and management method. Social Auditing built on the business plan approach, but placed a greater importance on engaging client groups in establishing their own needs and working up appropriate action plans for achieving sustainable flows of benefits. Effective organisations have a clear vision of where they are going and of how they are going to get there. The social audit process helps organisations achieve that clarity of purpose and efficiency of procedure.

Before a social audit can take place you have to be clear about:

When these are in place, it is easy to design simple procedures to log what is going on from day to day (social bookkeeping), to tally up the indicators every now and again (social accounting) and make sure that you are on target - or to do something about it if you are not!

Who carries out Social Audits?
An experienced Social Auditor may help an organisation clarify its objectives, indicators, actions plans, and recording and accounting procedures.
The Social Auditor is a 'critical friend' (ideally an outsider) who periodically checks 'the books' and asks probing questions to help the enterprise reflect systematically on the effectiveness of its internal operations as well as on its wider external impact. Once in place, the enterprise will need to develop the skills required for evolving the system.

Where can community enterprises receive training?
At present at least four systems of Social Auditing have been developed in the UK, but until recently it has not been possible to officially 'certify' people as effective Social Auditors. These systems are listed below…

The National Centre for Business & Sustainability (NCBS)
NCBS, in partnership with the Manchester Business School, offers high quality professional qualification in Social and Ethical Accounting, Auditing and Reporting (ISEA-approved SEAAR course).
Contact: Rob Lawson, National Centre for Business & Sustainability, The Peel Building, University of Salford, Greater Manchester, M5 4WT, 0161 295 5276, www.tncbs.org

Social Enterprise Partnership
The SEP in Birmingham now offers the National NVQ Course in Social Auditing. Social Enterprise Partnership: West Midlands House, Gypsy Lane, Willenhall, WV13 2HA, 0121 6097190 Cliff Southcombe, Falconhurst, Mount Pleasant South, Robin Hoods Bay, N.Yorkshire YO22 4RQ, 01947 881016, cliff@socialenterprise.co.uk, www.socialenterprise.co.uk

The New Economics Foundation (NEF)
NEF's social auditing pilot programme (Social Auditing for Voluntary Organisations - SAVO) involved 12 community and voluntary sector bodies. Community Business Scotland (CBS) Network is also working with NEF on a social audit initiative aimed at encouraging the spread of social auditing as the accepted way in which community enterprises can report regularly and competently on their performance. Peter Raynard: NEF, Cinnamon House, 6-8 Cole Street, London, SE1 4HY, 0207 1407 7447, info@neweconomics.org, www.neweconomics.org

The Institute of Social and Ethical AccountAbility (ISEA)
ISEA was established in 1996 as a professional body committed to strengthening the social responsibility and ethical behaviour of the business community and non-profit organisations. It has developed a set of objectives and training materials aimed at: 1. fostering the international study of social accountability 2. aiding in the design and development of standards and measures of performance in the practice of social and ethical accounting, auditing and reporting (SEARR) 3. encouraging the convergence of SEAAR standards with sustainability accounting, and designing and offering a professional qualification for social and ethical accountants and auditors that leads to an association of international chapters The Institute of Social and Ethical AccountAbility, Unit A, 137 Shepherdess Walk, London, N1 7RQ 0207 7549 0400, secretariat@accountability.org.uk, www.accountability.org.uk

Other Training & Certification Initiatives:

In the City of Liverpool a second group of community-based economic development organisations is about to introduce social accounting and social auditing. Each organisation will nominate a social accountant who will undertake a new training programme which has been recently recognised as an accredited course by the Merseyside Open Learning Network. The Community Based Economic Development Unit of the City Council which is sponsoring the new course hopes to see social auditing accepted as the norm for reporting by community enterprises.
Contact: CBED Unit, 0151 233 5428/0151 233 5333

In Devon the Community Enterprise Unit, in association with CoActive and the Community Council of Devon, have developed an NVQ programme in Business Planning suitable for people establishing social enterprises. Unit seven of the programme, Evaluate and Develop Own Practice, makes use of the Social Audit model.
Contact: CEU, 013392 666 281

Contacts

The Institute of Social and Ethical AccountAbility (ISEA): www.accountability.org.uk
The National Centre for Business & Sustainability (NCBS): www.thencbs.org
Social Enterprise Partnership (SEP): www.socialenterprise.co.uk
New Economics Foundation: www.neweconomics.org
Centre for Social and Environmental Research: www.dundee.ac.uk/accountancy/csear/aboutus.htm
Jargon busting in the social audit arena: www.crisp.org.uk/jargon.htm
Co-active Ltd, 25 Wolseley Close, Plymouth PL2 3BY: www.co-active.org.uk

Further Reading

The Social Audit Resource Pack: Alana Albee and T Justad
Social Audit Training Manual: C Whitehorn and A Albee
Social Audit Toolkit: Freer Spreckley (ISBN: 0-9538674-0-4)
Social Auditing for Small Organisations: a workbook for trainers and practitioners: J. Pearce, P. Raymond, S. Zadek (ISBN 1-89940-704-9)
Measuring Social Wealth - a study of social audit practice for community & co-operative enterprises John Pearce Social Audit Training Pack: NICDA

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