Context

Social Enterprises and other not for profit organisations use the Social Audit methodology to manage and report on non financial performance. Members of Local Livelihoods first developed Social Audit in the late 1970s and have since tested and developed the methodology.

We can provide:

·   In-house support to organisations wishing to apply Social Audit and Accounting methods.

·   The Social Audit Toolkit – a 70 page manual for organisations to use in managing Social Audit and Accounting themselves.

·   Our training course 'Social Audit Training Programme' which is accredited to Level 3 OCN. It is delivered in short modules that are based on action learning techniques and is suitable for trainers, facilitators, and in-house for organisations.

·   Social Audit Facilitator software package, for Social Audit and Accounting  (in development)

Social Audit is a systematic, regular and objective accounting procedure that enables organisations to establish social values and criteria against which they can measure external and internal performance and their social plans. Local Livelihoods has developed a practical Social Audit model designed for Community Enterprises to plan, manage and evaluate non-financial activities and to create a system for communicating with stakeholders.

The Social Audit methodology provides a framework in which organisations can establish their own priorities, strategic plans and performance measurement criteria, and then monitor and make decisions about how to maintain or improve their operations. Organisations, which undertake Social Audit, should view the process as one by which they can learn more about their own organisation and manage change, if required. This clearly distinguishes the Social Audit from other types of measurement evaluations and surveys.

Social Audit aims to build a new definition of viability around a broader set of values that represent the growing concern for wider responsibility in organisations. Finance accounting is an essential part of management, but it does not include areas of responsibility that many community organisations have to consider as part of their normal operations; the costs and benefits associated with the activities of an organisation are much broader than those described in financial terms. The profit and loss account only tells half the story; Social Audit tells the other half.

The Social Audit methodology comprises four elements; these are the Statement of Purpose and Planning, the External View, the Internal View and the Monitoring and Evaluating. Each of the four elements is made up of number of practical exercises. The Social Audit is built up by undertaking the practical exercises and then bringing together the results, within the four elements, into measurable performance areas. It is not necessary to use all the exercises and where organisations already practice similar processes they are encouraged to stick with them rather than change to the Social Audit exercises. The sequence is the essential process; the exercises are there to provide the methodology in order to execute the process. Each of the four elements and the exercises are linked and together provide an integrated Social Audit methodology that further links to the Project Cycle Management (PCM) methodology within the overall Community Enterprise structure.

It is vital that the process is participative and inclusive. Social Audit must involve those stakeholders closely associated with the organisation. Involvement means actively participating in the design and realisation of the Social Audit processes; including the views of all the stakeholders; and reporting the results of the audit to all stakeholders. A Social Audit is usually undertaken by an Audit Team from within the organisation, working to a Terms of Reference. The Audit Team is composed of representatives from different stakeholder groups: this includes users of the services/facilities, members, management board members, volunteers, funders and paid staff. An independent observer might also be seconded onto the Audit Team.