Ot 25089 Socialac

Creation of Social Accountability Report
Be the change you want to see in the world –Gandhi
SECTION I
OVERVIEW
1.1 BACKGROUND
Non governmental organizations (NGOs) or Voluntary Organizations (VO’s) or not for profit
organizations (NPOs) are organization with social mission and their social impact is an
indispensable part of their performance. They are public institutions. They are established with a
clear mission to be agents of social change. These organizations are recognized for their
contribution to the social development process. They get funds from various national and
international donor agencies as well as the governments agencies.
Voluntary Organizations (VO’s) are mere custodian of the funds with the ultimate objective to
ensure that the funds reach the community / beneficiary for the purpose for which it was received
by the development organizations. The funds are used for the benefits of the community. Most of
the benefits are difficult to monetize as they do not involve a financial exchange on the market.
The financial statements do not track the benefits that the non profit organisations create.
Moreover, non profit organisations with earned revenues are organization with a social mission.
So, including their social benefits within the financial statements is important. Conventional
accounting system often misses out this integral aspect of these organizations. To date there is no
international financial reporting or auditing standards dealing directly with social, environmental
or sustainability accounting, reporting or auditing issues.
These limitations in the existing accounting system create a need for an alternative. To
brainstorm on these issues two workshops were conducted in New Delhi on social audit and
social accounting by financial management services foundation (FMSF), Noida.
The project takes its origin from these workshops conducted in November 2004. The workshops
were conducted on Social Audit (held on 03.11.2004 to 04.11.2004 at New Delhi) and
Consultation on Social Accounting (held on 18.11.2004 & 19.11.2004 at New Delhi). In the
consultation among various partner organizations it was agreed that financial management
Dr Ravi Chandra, PRM 25, IRMA 1

services foundation (FMSF), Noida develops or formulate the guidelines on reporting financial
as well as social benefits in a transparent manner .It was suggested that these may only be broad
guidelines to act as a handbook or manual. The guidelines should be adaptable and flexible so
that the organizations can use it in their own context. In this backdrop the project of social
accountability report was started.
1.2 INTRODUCTION
The Issue of Social Accountability 1
The accountability debate comes in waves, rolling across society’s sensibilities, and weaving its
way across topics, geography and institutions. The accountability of NGOs is an issue, largely
because of their increased importance .In North America and Western Europe, for example, the
‘non-profit sector’ is a major economic phenomenon, employing as much as 12 percent of the
workforce, and running an annual expenditure making up as much as 15 percent of GDP. And the
numbers of them are staggering - a recent article in World Watch, the bi-monthly magazine of the
World Watch Institute, suggested that US alone has about 2 million NGOs, 70 per cent of which
are less than 30 years old.
The situation is same in India and the debate is picking up. India has about one million grass-
roots groups. The annual turnover of NGOs in India is approximately 90000 crores which is
approximately equivalent to 3.5% of the GDP of India as per recent news reports. This sector is
an employer of millions of people. NGOism is, to say the least, a ‘big business.
Size, however, is clearly not the only relevant measure of importance. NGOs are also service
providers and have been able to create change through influence as well as empowering
community by providing control over resources. The civil society through NGOs and volunteer
agencies has brought change in a very visible manner where government and business
community have failed. The work of SEWA and Sadguru Foundation are few examples of it.
But it has to be said, much of what passes as accountability within the NGO community can not
withstand transparent rigorous scrutiny from stakeholders. Accountability to intended
1
Zadek Simon (2003)

beneficiaries (downward accountability) tends to be informal and non verifiable. Accountability

to funders (upward accountability) is often far too formalized, over bureaucratic, and generally
counterproductive.
We have a real accountability dilemma. NGOs can not claim that individualized ‘values and
commitment’ are an adequate basis for their accountability but most of the times this is the only
thing we get in the name of accountability from NGOs .The role of NGOs over the last decade
has been extraordinarily important. That does not mean that it has always delivered results but
there is sufficient evidence to support the view that the NGO Balance Sheet has been
resoundingly positive at a time when the accountability gap of governments and business has
never been greater. There are many people who raise doubt over the activity of NGOs as dubious
or illegitimate due to lack of accountability in the NGO community. The challenge is to find
means of enhancing NGO accountability without undermining their crucial roles in securing civil
regulation and catalyzing social innovation.
NGOs are reluctant to take a leadership role in arguing for greater accountability, and often
contradict their own positions vis-à-vis the business community in arguing for self-regulation
(for themselves), and soliciting the unaudited trust of funders and the public. There is no reason
why NGOs should not take a lead in showing how to establish appropriate approaches to
accountability.
The boards of the NGOs are suitably placed to take the lead in starting the process of social
accountability. NGOs need to account to our stakeholders for their activities and decisions. They
have to publish the financial accounts .There is need to produce accountability accounts and
reports regularly and need to display the report in public domain like website.
The challenge for NGOs is to show that they can put into practice the accountability principles
that they campaign for in other. Otherwise they themselves will be justifying the comments from
people who doubt about the intentions well as legitimacy and give a bad name to whole NGO
community. We need to take the question of NGO accountability seriously.

1.3 OBJECTIVE: To create a format for social accountability report
This report is supposed to include
 Social book keeping

 Social accounting report
 Social audit report
 Social balance sheet
 Financial statements
The report is supposed to provide a framework to report its financial statement and social
achievement is transparent manner which can be deciphered by common man. The framework is
supposed to be flexible so that each organization can adapt it to its own specific context. It is
meant to be an internal exercise for the organizations to bring more transparency into the
activities of the organization.
1.4 SCOPE OF THE STUDY
The study was conducted during the time period of two months from 6th June 2005- 30th July
2005. The study tries to understand the concepts of social accounting, social audit, and social
balance sheet as well as financial statements and gel them together into social accountability
report.
The concepts of financial statements are well understood and well known. The study has tried to
represent the balance sheet statement and operating statement of the organization in a more
simplified manner. Fund based accounting representation is suggested to make the financial
statement more transparent. Also pictorials representation of income statements and salary
distribution is suggested in tabular format and pie charts.
Main focus of the study is to find a practical way of reporting programme activities along with
its outcome; both social and financial as well as reporting the feed back of all stakeholders on

various activities conducted by the organization in last year. It incorporates the social accounting
process as well as audit process and financial statement to produce a social accountability report.
As a part of the study, field visit to a grass root organization Disha working in Sundergarh
district was taken. Disha works on child, women and tribal rights as well as on livelihood issues.
Main purpose of the visit was to observe the social accounting and social audit practices in the
field. The insights gained were incorporated in the format of social accountability report. A case
study on the Disha is also provided in the box no: 2 (page no: 28) .
As a part of study, visit to FMSF partner organisation like EFICOR, CNI and CASA were taken
to understand their views on social accountability by one to one discussion with respective
programme officers and chief functionaries of the organisation. The major points of the
discussions are mentioned in section IV of the report.
1.5 METHODOLOGY
The approach was to understand the existing frameworks on social accounting and audit like
AA1000, as well as concepts like Global reporting initiative sustainability reporting, triple
bottom line and expanded value added statement. These frameworks were analyzed and then
adapted to apply it on NGOs in Indian context. This was followed by field visit and visits to
partner organizations of FMSF to gain insights on social accountability practices. These inputs
also helped in formulating the social accountability report guidelines.
1.5.1. Literature review

Extensive literature review was done on the topic of social accountability. . Most of the articles
available on internet were read and reviewed on the topic of social accountability. Social
accountability reports of various organizations were studied and the patterns of reporting as well
as content of the report were understood. The international guidelines and standards like AA1000
standards for social accountability and Global Reporting Initiative sustainability reporting
guidelines were studied and relevant things were incorporated. . These frameworks were
analyzed and then adapted to apply it on NGOs in Indian context.

1.5.1.1 AA1000 Framework and Assurance Standard, (ISEA)2
AA1000 is an internationally accepted voluntary standard for the process of social accounting,
auditing, and reporting. The assurance standard is a demanding process standard for assessing,
attesting to, and strengthening the credibility and quality of an organization’s sustainability
reporting. It requires us to assess how well Accountability Report meets the three key principles
of materiality, completeness, and responsiveness.
1.5.1.2 Global Reporting Initiative (GRI) Sustainability Reporting Guidelines3

These guidelines are an international voluntary standard for reporting on a company’s economic,
social, and environmental performance. They include a sector-specific supplement on social
performance for the financial services sector (SPI-Finance).This study has tried to incorporate
the GRI guidelines wherever possible.
1.5.1.3 The Triple Bottom Line

The triple bottom line captures an expanded spectrum of values and criteria for measuring
organizational (and societal) success - economic, environmental and social. In practical terms,
"triple bottom line accounting" usually means expanding the traditional company reporting
framework to take into account not just financial outcomes but also environmental and social
performance.
1.5.2 Field visit
As a part of the study, field visit to a grass root organization DISHA working in Sundergarh
district was taken. Main purpose of the visit was to observe the social accounting and social audit
practices in the field. The insights gained were incorporated in the format of social accountability
report.
2
(www.accountability.org.uk)
3
(www.globalreporting.org)

1.5.3 Visits to Partner Organizations of FMSF
To take into account of views of partner organisation on social accountability FMSF arranged
meeting with Chief Functionaries of their partner organisation like CNI, EFICOR and CASA.
These organisation are big donor agencies providing funding to 100s of grass root NGOs. The
purposes of the meetings were to gain insights on social accountability practices being practiced
in the organizations as well as their recipient organisation. Other objective was to have
discussion with programme staff of these organizations on the concept of social accountability
and understand the practical problems that may arise due to concept of social accountability in
implementation of programmes.
1.5.4 Resource material provides by FMSF
The organization has in house developed materials on social accounting and published articles on
social accountability. These resource materials provided the basic background on which social
accountability report has been based.
1.5.5 Discussion with working professionals on social accountability
Discussion with experienced development professionals like Mr. Sanjay Patra, Executive
Director, FMSF, Mr. Sanjeev Bhanja, Mr. Manoj Fogla, and Mr. Biren Nayak who are working in
the field of social accountability provided practical insights for developing the social
accountability report. Discussion with the staff of FMSF on social accountability was also used
for developing the report.
1.6 LIMITATIONS OF THE STUDY
1.6.1 The theoretical nature of the guidelines for social accountability report
The guidelines given for social accountability report are very theoretical. Only when some study
is done on the basis of this framework and it is applied to an NGO as a whole then the actual
problems may arise. The limitation of the framework will be known only when it is applied to a
real organisation
1.6.2 No Independent verification of the social accounts and balance sheet

The study does not propose the independent verification of social accounts and social balance
sheet. This is suggested to prevent the whole organisation from becoming more bureaucratic and
counterproductive as it is now. Generally when an independent verification or audit by any
external agency is announced whole organisation gear up for that audit and many days are lost to
fulfill the requirements. The social accountability assumes that organization is committed to
transparency and accountability. It proposes that once the report is prepared, it should be given
back to community leaders who will verify the report and give their feedback. These feedbacks
should be incorporated in the final social accountability.
1.6.3 No internationally accepted norms for quantifying social benefits or liability
Till now there are no internationally accepted norms for quantifying social benefits or liability
.there are many studies done on quantifying the benefits of forest or road programmes each using
its own subjective criteria. References of these studies are provided at the end of the report. The
study also suggests the use of economic principles to quantify the benefits or loss of society due
to action of NGO. But it can be subjected to further debate to refine the concept.

SECTION II
SOCIAL ACCOUNTABILITY
2.1 UNDERSTANDING SOCIAL ACCOUNTABILITY4
Social Accountability can be defined as “the duty to provide an account or reckoning of those
actions for which one is held responsible.”
Social accountability can also be defined as the obligation for the organization to direct their
activities towards addressing the priority concerns of the community, region, and/or nation they
have a mandate to serve. The priority concerns are to be identified jointly by governments,
organizations, development and other professionals and the public or community at large.”
All organizations are, in principle, socially accountable to multiple stakeholders. Social

Accountability is thus a relational concept, a reality with multiple accountabilities, some of
which may be in tension with one another. Particularly, the development organizations need to be
socially accountable to a range of actors, including the people or the communities they work
with, governments, funding partners, their own staff, volunteers, board, other private sector and
civil society organizations.
In this context, we need to also think of “Upward”, “Downward”, “Internal” and “Horizontal”
Accountabilities. In many instances, the “Upward Accountability” from development
organizations to funding partners is reasonably well developed. However, the “Downward
Accountability” from the development organizations to the communities, from funding partners
to development organizations and the “Horizontal Accountability” between the development
organizations need more attention at this stage. This applies also to the “Internal Accountability”
from the organizational leadership to its own staff and Board. In the context of People Centered,
Participatory, Sustainable and just Development, it is definitely desirable that higher preferential
priority is attached to “Downward Accountability” (meaning to the people) and to the “Internal
Accountability” (meaning to the staff and the Board of the organization.)
4
{Source: Sanjeev Bhanja (2004) understanding social accountability}

Social Accountability begins with the shared values, vision and goals among stakeholders. Such
relationships are not simply contractual, but are based on deeper collective commitment to social
change. Social Accountability needs to be mission –focused, rather than donor-focused.
To be socially accountable requires a process or instrumentality of permanent examination of

practice against Mission and Goals. One of the key elements of accountability is to ensure
transparency in our processes and operations whereby accountability can be ensured to a large
extent. Social Accountability demonstrates transparency with information, and an explanation of
that information to stakeholders. It is not sufficient simply to provide information about the
various activities undertaken, but it is necessary to explain it and to respond to concerns from
different stakeholders. Accountability integrates the measurement of results with mission and
goals. Rather than just measuring results, it requires an honest consideration of how those results
can inform mission.
Social Accountability balances authority with responsibility. Performance measures and punitive
responses may be needed, but they must be balanced with a sense of mutual commitment among
stakeholders. These are relationships of mutual responsibility rather than simply contractual
arrangements.
Trust / Confidence are at the heart of the issue of Social Accountability.
Social Accountability starts at the very beginning of the process. If our desire is merely to
develop reports at the end of a project, then it would neglect the point of “Downward
Accountability” to the communities. They need to be genuinely (and not symbolically) involved
in planning exercises at a very early stage.
On the whole, Social Accountability is a multi-dimensional and complex concept, which cannot
be viewed only in terms of reporting from development organizations to funding partners. It is
more than the obviously important tasks of financial accounting and basic narrative reporting.
Finally, Social Accountability can be seen as a flow of information through which different
stakeholders can see what the organization is really doing vis-à-vis its Mission and Goals
(Accountability), the organization can assess its work (Effectiveness), and can make midstream
corrections (Learning).

The social accountability movement is catching steam in recent years. A lot of corporate
organizations (Nike, ITC ltd. etc) as well as member based organization Van City (Canada),
traidecraft; (UK) etc. has published their social accountability report. Among the NGOs sector in
India many organisation who have started working on social accountability and publishing social
accountability reports under various formats are International Resources for Fairer Trade (IRFT),
India, shrujan(kutch) etc. These reports are available on website of these respective organizations
as a measure of transparency. Most of the organizations follow the AA1000 standards for social
accountability and Global Reporting Initiative sustainability reporting guidelines. But such kinds
of guidelines are available for not for profit organizations and these lacunae are even starker in
Indian context.
2.2 CONCEPT OF SOCIAL ACCOUNTABILITY PROCESS

Fig 1. Social Accountability Process5
As represented in the above diagram, the social accountability process includes the reporting of
the context of the NGOs in which they are working in, the process of identifying the strategic
issues by the NGOs which will explains its relation to the mission and goals of the organization
and the process of following programmes and activities to fulfill those mission and goals. Social
accountability is the underlying theme in all the above mentioned processes. The rules for
financial reporting requirement are well defined by statutory requirements by the government
laws and regulation. There is a parallel to each financial reporting process in social
accountability process. Organizational governance feeds into each steps of the process. The
social accountability report is the tool to report social accountability concept.
Social accountability process is focused around engagement with stakeholders. Social

accountability report seeks to link the defining and embedding of an organization’s values to the
development of performance targets, thus tying social and ethical issues into the organization’s
strategic management. Organizational learning and improvement is seen as central to the
approach as is the link between organizational accountability and developing trust with
stakeholders. The advantage of the social accountability process is that it enables stakeholders, if
the organization is willing, to highlight their concerns and informs the questions asked by the
organization. These concerns might otherwise be missed by compliance based approaches where
lists of criteria are pre-determined. However in both circumstances the will of the organization
to improve, not just comply, is critical. It is a process of placing organizational learning and
change at the heart of the process.
Social accountability report is a way to report the social accountability processes at all stages of
organization activity. The organizational governance should be reflected from the social
accountability report. The social accountability report is a way to reflect the good governance
practices in the organization as it is always in the background of all the activity. Social
accountability report is an attempt to provide a broad guideline to the organizations for the
processes, method and format that an organization should follow to account and report for its
performance, not the levels of performance the organization should achieve.
5
www.socialaccountability.net

The social accountability report should involve following steps:
Social accounting – It includes social book keeping (process of internal data collection) and
social accounts which is (analysis procedures for data collected by social book keeping) resulting
in social balance sheet and social operating statements.
Social audit -An audit or verification of the results done by the organisation itself after preparing
the social accounts
Financial statements- these are statutory financial statement mandated by government regulation
like balance sheet and operating statements.
Reporting- A mechanism for disseminating the outcome more widely
2.3 SOCIAL ACCOUNTING
Social accounting as an approach began developing in the UK in the early 1970s, when the
Public Interest Research Group established Social Audit Ltd. This organization carried out, and
publicized, investigations into the operations of large public companies, without necessarily
gaining their permission or co-operation. Whilst lending support to consumer pressure, there is
an argument that this had a negative effect on accountability, as organizations sought to ensure
that sensitive information was hidden from such investigations. Globalization has brought with it
wide realizations that companies do not operate in isolation, but can have marked impacts on the
environment and people at local, national and global levels. This has led to an increasing
awareness of CSR, and the “triple bottom-line” of business success – measuring the business not
only in its financial performance, but by its social and environmental impact as well. Traidecraft
and the New Economics Foundation (NEF) pioneered a form of social accounting in the early
1990s that is voluntary in nature and rooted in engagement with stakeholders. This can assist
organizations, both commercial and NGO, in understanding and improving their social impact.
Social accounting can be defined as
“A systematic analysis of the effects of an organization on its communities of interest or stakeholders, with
stakeholder input as part of the data that is analyzed for the accounting statement”

Social accounting is a way of demonstrating the extent to which an organization is meeting its
stated social or ethical goals. Whilst independently verified, the organization itself owns the
process of data collection and analysis and the process is driven by indicators the
organization sets in consultation with stakeholders, as opposed to being based on standards or
criteria determined externally. Social accounting is concerned with the learning about the effect
an organization has on the society and about its relationship with an entire range of stakeholders
(who affect or are affected by the organization and its activity). It enables the organization to be
accountable to the stakeholders and a management tool to improve the performance of the
organizations. Social accounting serves the purpose of establishing and determining social
accountability.
To do social accounting we have to gather data or do social book keeping and then analyze the
data collected to produce social accounts
2.3.1 Social Book Keeping
It can be defined as the process of internal data collection (descriptive, quantitative and
qualitative information) in order to facilitate to produce social accounts. It builds on existing
documentation and reporting formats of the organizations. Many non government organizations
in India suffer from poor documentation. It should collect data on mission, vision, objectives and
activities as well as values which underpin the purpose and work of the organization. It should
collect data on all the stakeholders’ consultation and as well as all the programme information of
the organization. The format tries to provide the organization a way to collect all the information
of the organization needed for social accounting. The suggested formats for social book keeping
are provided in Annexure1.
2.3.2 Social Accounts
Social accounts are result of interpretation and analysis of data collected by process of social
book keeping. A full set of social accounts are likely to include
 A report of performance against the stated objectives

 an assessment of impact on the community

The methodology for reporting suggested in the social accountability report is to report
satisfaction score of the community on various parameters in percentage (%).
 the view of stakeholders on our objectives and values

 a report on environmental performance
 a report on implementing equal opportunities
 a report on compliance with statutory and voluntary standards
Social accounts make use of information which an organization already gathers, reports which
already have been prepared and consultation which are already carried out. Social accounting
tries to include what conventional accounting does not include. Conventional accounting limited to
market transactions specific to the organization and it excludes “externalities”. It is an attempt to report
the effect of an organization in a holistic manner. Social accounting includes non-monetized inputs and
outputs—for example,
 Social labour (unpaid member contributions) in voluntary agencies
 Volunteer contributions
 Environmental impacts
 Free social service
Social accounting is not about quantifying all the benefits and loss occurring due to presence of
an organization in the area. After all most of quantification is based on highly subjective and
judgmental assumption and estimates. Social accounting recognizes the dangers of increasing
quantification. Social accountability report does provide for quantification of social benefits
which should be based on sound economics principles of various types of cost like opportunity
cost, replacement cost and market value and fair value. It recognizes the dimensions of cost
which represent environmental and social benefits. It has been left to the organizations to
quantify their own social cost and benefit using the principles of economics. Social
accountability report provides broad guideline for quantifying the cost and benefits occurring due
to various activities of the NGOs. The tools for social accounting process are mentioned in
Annexure 1to 17.

2.3.3 Social Balance Sheet and Social Income Statement
The whole process of social book keeping and social accounting would lead to social balance
sheet which would summarize the social assets and liability of the organization at the given point
of time. The social balance sheet provides a format the report the performance of the
organization in the form of social assets and social liability as well as organizational liability and
organization assets. It is up to the organization to represent quantitatively or qualitatively. The
social balance sheet would facilitate the stake holders to decide for them whether to use, work
for, support or invest in the organization. Through the production of such social ac counts, the
organization can fulfill its accountability to its stakeholders. The suggested format of social
balance sheet and social operating statement is mentioned in following pages and also an
illustration from textbook is given in Annexure 22.
2.3.3.1 Social Balance Sheet
This balance sheet is supposed to include social variable into the financial balance sheet. This
balance sheet is not going to interfere into financial balance sheet. It adds two more columns of
organization assets and liability and social assets and liability. The suggested quantification
technique is mentioned above. All assumption to quantify any social or organization benefits
should be mentioned clearly before quantifying. The organization can use the tools mentioned
above for quantifying.
Social assets- are resources which promise to provide future social or economic benefits and area
social asset to the NGO valued at their present worth.
Social liabilities- are sources of future economic or social cost and are valued at their present
worth. (Put cost figures as available or monetize)
The organization can use the suggested format for reporting its social performance. The
organization can add or delete each head depending on the strategic issues they are working on.
Box 1: Suggested format of Social Balance Sheet Statement 6
Organizational Liability Organizational Assets
Organization financing Creation and development of organization
Staff wages payable Staff training
6
adapted from Blake, Frederick C. William and Myers S. Mildred. (1976) Social Auditing: Evaluating the Impact of
Corporate Programs’’. New York: Praeger Publications

Cost of research Research activity

Non cash input improvement in working relationship with
Government/DRDA/Panchayat
Community Liability Community Assets

Deficit of income over cost Excess of social income over cost
Tension among communities Environmental improvement
Dependency created among communities Health improvement
Environmental degradation Educational improvement
Community assets like school, community hall,
plantation
2.3.3.2 Social Income Statement 7

The social income statement is adding two more categories for recognizing income and
expenditure. The two categories are organization income and expenditure and social income and
expenditure. It recognizes those transactions which are not recognized by financial accountants
but society and organization loss and benefits happen.
The suggested format is
ORGANISATIONAL BENEFITS
Opportunity cost of total time worked ………………….
Chances of Career advancement ………………….
Privileges
Vacation and holidays ………………….
Health and life insurance ………………….
Sick leave ………………….
Retirement plan ………………….
Food service …………………..
Quality of work space …………………..
ORGANISATIONALCOST
Salary paid for time worked …………………
7
adapted from Blake, Frederick C. William and Myers S. Mildred. (1976) Social Auditing: Evaluating the Impact of
Corporate Programs’’. New York: Praeger Publications

Layoffs and involuntary terminations ………………….

Uncompensated losses through thefts …………………...
Net gain (loss) ………………
SOCIAL BENEFITS
Improvement in quality of life
Productivity improvement ………………..
Environmental improvements
 Quantitative ……………….
 Qualitative
Health
 Quantitative
 Qualitative ……………….
Education
 Qualitative
 Quantitative …………………
SOCIAL COST
Cost for improvement of

Quality of life ……………….
Health of society ………………..
Education of society ……………….
Environment of society ………………..
Net gain (loss) ………………..

Total gain (loss) ………………
The organization can add or delete each head depending on the strategic issues they are working
on.
2.3.3.3. Explanation of terms

Given below are the explanation of various terms mentioned above in social balance sheet and
social income statement.
Organizational liability
These are social cost which are incurred or will be incurred in running the organisation.
Organization financing
These are the cost that is incurred in securing the finance for running the organisation. It should
include the difference between the opportunity cost incurred to secure the finance and the actual
monetary cost incurred to secure the finance for running the organisation.
Staff wages payable
These are the liabilities depending upon future utilisation of staff on contract or administrative
task. The amount does not constitute a liability in the legal sense but it does show expected
future liability to pay staff as they provide future services.
Cost of research
It is the liability incurred due to research whose benefit is uncertain or can not quantify.
Non cash input
It is the input that goes into running the organisation but can not be quantified. Each organisation
can mention those inputs in points in the social balance sheet.
Organizational assets
These are the resources which promise to provide future social and economic benefits and are
valued at the present worth.
Creation and development of organization
It is an organizational asset. It can be quantified with the help of principle of replacement cost
which considers the loss that will happen to society if the organisation was not there.
Staff training investment

The training of staff is a social asset that promises to provide present and future benefits. The
value of training can be quantified by the productivity of an employee that will happen over a
period of time.
Research activity
The research activity done by the organisation is a social asset if the benefits are more than the
cost and is over a period of time .this can be quantified if the research is tangible.
Improvement in working relationship with Government/DRDA Panchayat
This is an important social asset that an organisation can accumulate. The basic principle for
quantifying the benefits is the decrease in transaction cost that happens due to improvement in
relationship. For example earlier an employee has to visit the government office ten times to do
any government work done or approved and now the same can be done over telephone. The
savings are assets which will accumulate over time.
If the relation ship worsens, than it should be placed in liability side.
Community liability
These are the sources of future social or economic cost and should be valued at present economic
worth.
Deficit of income over cost
If the net social income is less than the social cost, then it should be reported in the community
liability side.
Tension among communities
If due to organisation activity, tension is created among the communities and status quo is
disturbed, then it should be reported to liability side. Even if conflict results in positive benefits,
it should not be recorded until benefits have occurred. The social cost incurred during conflict
can be conservatively estimated as per lost wage days, loss of physical property etc and should
be mentioned in balance sheet.
Dependency created among communities
This is an important phenomenon happening in rural India due to spurt in not for profit
organisation activity. The villagers are always expecting that some NGO will come and provide
money do the work in the village like digging well or bunding or even provide daily wages and
grains. If this phenomenon is seen due to organisation activity, the loss of productivity among

rural folks can be quantified. If not quantified it should be acknowledged in points in social
balance sheet by the organisation.
Environmental degradation
This is a community liability whose cost will be incurred by the society over the period of time.
If any environmental degradation has happened to the society like damage to water source or
landslide or felling of trees, all these things should be documented and loss quantified over a
period of time and mentioned in social balance sheet on liability side.
Community assets
These are resources which promise to provide future benefits in socio economic terms and
should be valued at their present worth.
Excess of social income over cost
If the social and economic benefits due to various activities of organisation are more than the
social and economic cost, then it should be reported on asset side.
Environmental improvement
The benefits due to improvement in environment like clean air and water should be quantified by
the organisation and it should be reported by the organisation on asset side. The carbon trading
protocol and cost of purification of water can be taken as a basis to quantify the benefits.
Health improvement
If the organisation works results in improvement of health in the region, it should be quantified
taken the basis of future life productivity. for example if infant mortality rate is decreased by 20
then the productivity gain that will occur can be quantified assuming the child will be productive
from age of 18 years to 60 years and will earn anything between 50-100 rupees daily. This can
help in getting the figures on social benefits over year due to improvement in health by the
organisation activity. If the organisation is unable to quantify than it should mention its
achievement as points.
Educational improvement
It is social asset created due to improvement in education level in the region due to organisation
activity.
This improvement can be quantified by the difference in earning between educated person and
uneducated earning. Future projections can be made on this basis.

Community assets like school, community hall, and plantation
It is the community asset created by programme expenditure done by organisation. The social
benefits occurring due to these assets like school should be mentioned in social balance sheet and
quantified if possible.
Organizational benefits
It is the activity done for the organisation benefits and quantified at their present monetary value.
Opportunity cost of total time worked
It is a social benefit to the organisation because it represents the time given up for working in
non profit organisation. It can be quantified as the difference in income between corporate sector
and non profit sector for a person with same qualification.
Chances of Career advancement within organisation
It is social benefit to the organisation. If the chances foe career advance is more, the employee
becomes more productive and there is decrease in turnover of employee.
Privileges of the employees like Vacation and holidays, Health and life insurance, Sick leave,
Retirement plan
The presence of these privileges is very beneficial for the organisation. It is a social benefit as it
makes the organisation preferred employer from the point of attracting new recruitment as well
as it increases the satisfaction of working employees.
Benefits due to Food service
The organisation incurs cost on it. But the social benefit is the increase in employee productivity
and saving of time during lunch break. It can be quantified.
Quality of work space
Good quality of workspace leads to increased productivity of employee.
Organizational cost
It is the social or economic cost incurred to the organisation in the course of performing its work.
Salary paid for time worked
It is a social cost occurring to the organisation due to payment of salaries to the employees.
Layoffs and involuntary terminations
It’s a social cost to the organisation. The organisation gets a bad name or image. It can be
mention as a point in organisation cost side.

Inequality of opportunity
In the age of equal opportunity policies, if an organisation pursues inequality of opportunity, it is
a social cost to the organisation. It can be quantified in terms of cost to individuals of the income
loss equal to the difference between what the minority or female individual earns and what a non
minority or male individual doing the same job with same qualification works.
Social benefits
It is the benefits occurred to the community in the present year.
Improvement in quality of life
The improvement in quality of life can be reported in social income statement under following
headings.
Productivity improvement
It can be reported as social income in points like increase in no of days of employment of the
people in the area or decrease in epidemics like cholera and hence increasing productivity in the
area.
Environmental improvements
Social benefits due to environmental improvements can be reported in quantified terms or
qualitatively also as points. All the plantation details or water availability etc. can be reported.
Health improvements
Social benefits due to improvement in health in the given year should be mentioned in
quantitative terms as well as mentioned in points for qualitative improvements.
Education improvements
Social benefits due to improvement in education in the given year should be mentioned in
quantitative terms as well as mentioned in points for qualitative improvements.
Social cost
It is the social and economic cost incurred by the community in a given year.
Cost for improvement of Quality of life, Health of society, Education of society and Environment
of society
It is the social and economic cost incurred by the society to improve the quality of life in the
given year.
2.4 SOCIAL AUDIT 8

8
{Source: Sanjeev Bhanja (2004) understanding social accountability}

2.4.1 Introduction
Transparency is the medium where by information that is relevant to the people’s need is offered
to ensure their participation in civic life.
The term audit implies, as it goes lexical, an official examination of the quality, state, efficiency
etc of something to see that they are true and correct. Nevertheless, the term with the prefix
“social” looses its official/legal status. The phrase “social audit” was first used during 1950s and
early work took the form of external investigations to assess the impact of large corporations on
their work force, consumers and community. Taking a cue from the same corporate backdrop,
NGOs particularly in the late 90s took up the concept to the people to verify and evaluate the
programs implemented by them for the welfare of the people.
Social Auditing is similar in many ways to Financial Auditing except that it is about everything
else that an organisation does apart from handling money. Literature reviews suggest that social
audit need to be done by independent social auditors. In the Indian NGOs scenario the concept of
social audit itself is in infancy and there is no standard/benchmark against which the activities of
the organisation can be evaluated. The organisation has to evolve its benchmark itself. The social
audit here is meant as an internally generated process whereby the organization itself shapes the
process according to the stated objectives. It means whether all the activities of the organizations
are as per values, mission, and vision and commitment statement of the organisation. It is not
evaluation of the activities of the NGOs. Social audit is a tool to ensure transparency in the
organisation and the results are meant to be displayed in the public. All the stakeholders should
be able to verify the report in the independent manner.
2.4.2 Definitions of social audit
Social Audit is a democratic process of ensuring public accountability through a systematic

demand of information by the community in response to the work/program that have already
been implemented by the NGOs or PIA (People’s Implementing Agency) or the state or the civil
society for the change development of that particular area/community. In particular, it aims to
involve all the stakeholders in the process to measure social performance in order to achieve
improvement as well as to report accurately on what has been done.

“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.” (The New Economics
Foundation (NEF) definition)
“Social Audit is a method for organizations to plan, manage and measure non-financial activities
and to monitor both the internal and external consequences of the organization’s social and
commercial operations.”(Social Enterprise Partnership)
We are dealing with social ‘systems’ which survive in the long term only through being alive to
feedback concerning both their internal (subsystem) and external (super system) environments.
Effective and efficient organizations have a clear vision of where they are going and of how they
are going to get there. The Social Audit process helps organizations achieve that clarity of
purpose and efficiency of procedure. A Social Audit Toolkit handbook was first published in
1982 titled ‘Social Audit – a management tool for Cooperative Working’ by Freer Spreckley and
published by Beechwood College
Before a Social Audit can take place organization have to be clear about:
Objectives- what you are trying to do as an organisation– both internally and externally
Action plans-how you are going to do it
Indicators-how you will measure and record the extent to which you are doing it
Social audit builds on social bookkeeping and social accounting and tries to verify the findings
emerging due to social accounting. Feedback is most important part of social audit.
2.4.3 Objectives of social audit

* inculcates a habit, particularly among the voiceless, to question and seek to know,
* Builds up a social platform for the marginalized from where they learn to demand their rights
* Prevents corruption by displaying the accounts
* Ensures public accountability and social justice

* Strengthens grass root level democracy especially addressing its socioeconomic domain by
creating social pressure groups
* Harness social capital
The Principles of Social Audit are Multi perspective, Comprehensive, Comparative, Regular and
Disclosure.
The following case study demonstrates the way .social audit practices being practiced by a NGO.
Box 2: Case study on social audit

Observation of social audit practices of DISHA
Introduction
DISHA is a non government organisation working in 3 blocks namely Kauramunda, Nuagaon and Bisra with its head office
in Bisra block of Sundergarh district. The main focus of work is in the fields of child rights, livelihood, education, gender,
water and local governance. The organisation has got an activist image and it had many confrontations with the local
administration relating to rights of tribals, children and women .It has successfully led the agitation on minimum wage and
community in its working area get minimum wages in every work done in their region. Currently DISHA is working in 60
villages of above mentioned blocks with 40 staff.
The main strategy of DISHA is to use mass based support to tackle the issues faced by tribal community vis-à-vis livelihood
development ,access and control over natural resources which includes capacity building of lok sangathan(name for
community based organisation formed by DISHA ) ,spreading awareness about rights of tribals ,children and women and
local governance .
Social audit practices in the field
The villages of DISHA project area are mostly tribal inhabited by mundas, ooraon etc along the border of Jharkhand and
Orissa. they are one of the most poorest areas in that region with more than 50% of families living below poverty line.DISHA
was one of the first organisations to practice social audit at village level in this country. This need for social audit arose due to
minimum wage awareness campaigns in five villages of Bisra block during 1999-2000. Since they were demanding
transparency and accountability from the administration, DISHA itself felt the need to become transparent and accountable to
the community with which they are working. Otherwise, they feared facing corruption charges from the administration. This
practical compulsion led DISHA to practice few of the aspect of social audit at village level.
Practices followed by DISHA
Micro level Planning
It prepares micro level plan for each village using PRA tools. It takes almost a year with DISHA staff sitting with community
identifying resources of villages and dividing the work for community development into three parts.
The work that community can do itself
The work that DISHA will do
The work that government will do
Community also prepares future vision plans and the level of development they want to achieve. All the steps from the
resource mapping to planning to future aspirations and goals are displayed in public places like schools through pictorial
representation on white chart paper. These chart paper become the guiding framework for all the community work in the
village.
All the funds coming for development work for the village are informed to the community in village meeting.
All the utilisation of funds is discussed in village meeting after the finishing of work like school building or well repair etc.
The president, vice president and treasurer of lok sangathan of each respective village sign all the document related to fund
spent in their villages.
The details of each work are posted at the entrance of villages using metal (tin) notice boards. It carries information about
Nature of work
Amount of fund
Total duration of work
Starting date
Finishing date
Minimum wage rate

No of hours of work daily

No of male worker
No of female workers
With DISHA started reporting its work transparently, the administration has also started reporting its expenditure on various
schemes like Pradhanmantri Gram Sadak Nirman Yojna etc into the same format.
Observation Regarding Organisation DISHA
DISHA is run by Mr Abul Kalam Azad who is secretary of the organisation. The organisation board comprises of 7 members
who are all resident of Sundergarh district. I was unable to meet any one of the board members as they were busy in their work
as per Mr Azad. Also meeting at such a short notice could not be arranged. Regarding organizational governance Mr Azad
seemed to running the organisation single handed. The board comprises of development professionals, father of the local
church and community members. He informed that board meet at least once in a quarter to discuss general progress in each
field and provide guidance.
The organisation pays most of its importance on programme implementation and documentation of the work is poor. The
organisation is unable of highlight its performance in the field due to poor documentation. The accounting is followed as per
regulation and all programme related things are reported as per format provided by donor organisation. The organisation has
published its first report of any kind this year in July, 2005 as a brochure on DISHA providing summary of all the work done in
last seven years.
DISHA felt that there is need for some independent reporting format in which they can highlight their achievement in social
fields to all stakeholders. The effort of financial management services is towards the development of broad guidelines in which
the ngo can report their performance in an objective manner. The organisations like DISHA are in need for reporting
The organisation can use the tool suggested in Annexure 17 for social audit.
2.5 FINANCIAL STATEMENTS
The financial statements are not changed per as standards for financial reporting are well
establishes by statutory bodies like ICAI. In the social accountability report the emphasis is on
tabular and pictorial representation of the expenditures so that general stakeholders can
understand the statements. Fund based accounting is suggested and reporting should also be fund
wise in the balance sheet or operating statement. The financial statements are not
comprehendible to general public. Various formats are provided to report financial income and
expenditure in Annexure 20 to make it understandable to general public.
Fund accounting is a system of accounting in which separate records are kept for
 resources donated to an organisation which are restricted by donors or other outside

parties to certain specified purposes or use
 portions of an organizations unrestricted resources which the board has set aside for some
specified future use
 All other unrestricted amount.
2.5.1 Categories of fund

2.5.1.1 Current unrestricted fund
The fund contains no restricted resources and the board can use the amount in the fund as it
chooses to carry out the purposes for which the organisation exists.
2.5.1.2 Board designated fund
They are a subcategory of unrestricted fund. They are established when the board acts to transfer
or segregate part of the unrestricted funds into a fund that the board intends to use foe specific
purposes.
2.5.1.3 Current restricted fund
They are funds given to an organisation to be spent on part of normal activities but only for
certain specific purposes.
2.5.1.4 Restricted endowment fund
This title is given to the fund that contains resources donate d to the organisation with the
stipulation by the donor that only the income earned by these assets can be used while the
original gift is kept intact ,either forever or for a stated period.
2.5.1.5 Fixed asset fund
This title is given to the fund in which the cost of fixed assets (land, building etc) is recorded.
2.5.1.6 Other type of funds
Other specialized fund groupings can be done reflecting either donor restrictions or board
decision regarding the use of unrestricted resources.
The suggested format for financial balance sheet and income statements as well as
representation of various income and expenditure details to increase transparency is provided in
Annexure 19- 21.
2.6 REPORTING
Reporting of the whole process of social book keeping, social accounting and social auditing is
most important. Without reporting the whole process would lose its meaning. the whole social

accountability report need to be displayed in public domain like website and should be available
to all stakeholders as well as larger public. All the tools to do the social accounting and auditing
are given in Annexures 1-23. The framework for reporting social accountability is mentioned in
following section III.
SOCIAL ACCOUNTABILITY
REPORT
SOCIAL BOOK SOCIAL SOCIAL FINANCIAL

KEEPING ACCOUNTS AUDIT STATEMENTS
PROCESS
SOCIAL SOCIAL INCOME

BALANCE SHEET STATEMENT
Fig 2 flow chart for social accountability report

SECTION III
The Framework of Social Accountability Report
3.1 The NGO
3.1.1 History
This should talk about the situation (why and how) at the time of inception of the NGOs and
explain major events in a time line manner.
3.1.2 Location
This point should talk about the location (city) at which it is situated and correspondence
address as well as site map to reach the office.
3.1.3 Area of operation

This point should talk about the project area in which the NGOs is working. A brief description
of all the clusters/blocks will be required.
3.1.4 Organizational profile
3.1.4.1 Organization structure

This point should deal with reporting the structure of the organization basically the information
flow in the hierarchy. This point should cover various departments existing in the organizations
and describe it briefly.
3.1.4.2 Processes

Each organization exists to achieve some purpose. There are core processes like Monitoring,
Implementing, and Research etc. The organization gets the fund mainly for that process.
Everything else is a supporting process to achieve that purpose like administration,
documentation, research etc.
3.1.5 Vision & Mission and commitment statement (see annexure1)

State the vision and mission statement of the organization. It should also state when it was
adopted or revised.
There should be periodic revision of vision and mission statement. The basic guideline for that is
to compare the present context to the earlier context in which organization was established. If the
context has changed and there is need for revision of vision and mission statement. It should be
done with consultation with all the stakeholders.
A vision statement outlines what an organisation wants to be. It focuses on tomorrow; it is

inspirational; it provides clear decision-making criteria; and it is timeless.
A mission statement outlines what the organisation is now. It focuses on today; it identifies the
customer(s); it identifies the critical process (es); and it states the level of performance.
The statement of commitment generally means the work the organisation is going to undertake
in order to live their own purpose and values for the stakeholders.
3.1.6 Values
Value can be defined as an ideal accepted by some individual or group or organisation. State the
value statement of the organization
Each organization has some value statement which it holds very close to it. Every employee is
supposed to have those values and incorporate it within and manifest it during action.
3.1.7 Purpose 9
State the purpose of the organization
The Purpose is a simple statement of the common pursuit of a community. More than just a
conventional mission statement, it identifies that which gives meaning to participants’ lives and
binds them together.
9
http://www.chaordic.org/learn/notes/purpose.html

The first step in the design process is to define, with absolute clarity and deep conviction, the
Purpose of the community. An effective statement of Purpose will be a clear, commonly
understood statement of that which identifies and binds the community together as worthy of
pursuit. To be effective, it must reach beyond instrumental goals and speak of that which has
utmost significance both for the individuals involved and for the community. Work on Purpose is
the foundation for everything that follows. The Purpose and the Principles constitute the
fundamental body of belief on which the organization is based.
Tools to record information about vision, mission and purpose are given in annexure 1.
3.1.8 Strategic issues for the NGO

Established NGOs will have already identified the strategic issues and will be intervening on the
basis for that. Report the process of decision on strategic issue.
For newly established NGOs, stakeholder analysis needs to be done to identify strategic issues
for intervention.
Strategic issues can be health, gender, education, water, child rights, livelihood, micro credit and
many more. These broad issues can be further subdivided.
3.1.9 Stakeholder Profile and Analysis (refer annexure 2)

Each NGO does a stakeholder analysis before starting a project. The basic guidelines that need to
be followed are
 Identifying the stakeholders and creating a list
 Classification of stakeholders
 Identify their interests (overt and hidden) in relation to the problems being addressed by a
project and its objectives. Note that each stakeholder may have several interests.
 Briefly assess the likely impact of the project on each of these interests (positive,
negative, or unknown).
 Indicate the relative priority which the project should give to each stakeholder in meeting
their
 Assessing the Influence and “Importance” of Stakeholders

 Identifying assumptions and risks about stakeholders

 Identifying appropriate stakeholder participation
The organization can go through the guidelines and tools to check whether thorough stakeholder
analysis and profiling has been done or not. The participatory role of stakeholder changes as per
changes in project cycle as project moves from one phase to another. Also the interest and
priority of each stakeholder undergoes a change as the project progresses. It is advisable to the
organization to undergo fresh stakeholder analysis every year.
Tools to record above mentioned information about stakeholder analysis are given in Annexures:
2, 3 & 6.
3.2 GOVERNANCE
It deals with the process and systems by which an organization or society operate. Frequently a
government is established to administer these process and systems.
Governance describes the process of decision-making Box 3: Good Governance10

and the process by which decisions are
Good governance can be understood as a
implemented (or not implemented). set of 8 major characteristics:
Participation
Hereby, public institutions conduct public affairs, Rule of law
Transparency
manage public resources, and guarantee the Responsiveness
realization of human rights. Good governance Consensus oriented,
Equity inclusiveness
accomplishes this in a manner essentially free of Effectiveness and efficiency ,
Accountability
abuse and corruption and with due regard for the
rule of law
Good governance defines an ideal which is difficult to achieve in its totality. However, to ensure
sustainable human development, actions must be taken to work towards this ideal. Major donors
and international financial institutions, like the IMF or World Bank are increasingly basing their
aid and loans on the condition that reforms ensuring good governance are undertaken.
10
source: http://encyclopedia.thefreedictionary.com/Good%20governance

In the case of a non governmental not for profit organization, the board plays the role of
government. Most of the practices are followed in the organization like participation, rules of
law, responsiveness consensus oriented etc. But accountability for every action and transparency
in every action are the most important among the 8 characteristic shown in the box.
The objective of including governance in the social accountability report is to make the board
accountable to the community. In the Indian scenario of board governance in NGO sector, most
of the NGOs are controlled by one charismatic leader. The board members are in the organisation
for fulfilling legal requirements. So the board members need to make accountable to all the
stakeholders in real sense. There is a questionnaire format given in annexure 4 to determine the
activities and awareness of board about there own role and responsibilities.
The board has to set the standards in all fields of good governance. The starting can happen from
board being accountable for all the action of the organization and committed to transparency in
all the activities of the organization. Thus ensuring a good and transparent selection / election
procedure for board members is a must to ensue good governance in the organization.
The organization should follow the principle of good governance and disclose the following
information about the board in the social accountability report.
Box 4: the Seven Principles of Public Life11
‘The Seven Principles of Public Life’
3.2.1 Mode of election/selection A useful test for a governance system is to ask the question: to what
extent does the system of governance encourage or, at least, permit the
of board members organization’s employees or members to abide by ‘The Seven Principles
of Public Life’?
The organisation should disclose the
 Selflessness
process of election and selection of  Integrity
 Objectivity
board members in the social  Accountability
 Openness
accountability report.  Honesty
 Leadership
(UK) Nolan Committee on Standards in Public Life
3.2.2 Duration of each term

The organisation should disclose the information about duration of term of board members.
3.2.3 No. of terms

11
http://www.public-standards.gov.uk/about_us/seven_principles.htm

The organisation should disclose the information about the maximum number of terms that a
board member can have in board of the organisation. The organisation should also mention about
the number of years of each board members spent in the board.
3.2.4 Composition and background of board

The organisation should disclose the composition of board with respect to gender, ethnic
minorities, religion, and educational as well as socioeconomic status. The organisation should
have at least one or two members from the community that it claims to serve.
3.2.5 Board’s role
 establishing organization objectives,
 approving organization strategies,
 appointing and evaluating the CEO,
 Supervising the operations ensuring our operations are aligned to our values.
The chairman of the board should address a message to all stakeholders about its commitment to
social accountability as well as other achievement during the last reporting year.
3.2.6 Role and responsibilities of standing committees

The roles and responsibility as well as composition of the various committees existing in the
organization should be disclosed in the social accountability report. The expenditure incurred on
all the standing committees should be mentioned here.
3.2.7 Chief Executive Officer (CEO)
The organization should mention a brief profile of its CEO detailing his/her academic
background as well as previous work experiences and the salary being drawn by him/her.
A message from the CEO should be included in the report
3.2.8 Details of staff with designation
The organization should mention the name and designation of the entire employee in the social
accountability report.
A model questionnaire for board has been provided in Annexure 4.
3.2.9 Social Accountability Framework and Process

The process of social accountability is supposed to move the organization towards good
governance. Social accountability report is a framework which allows an organization to build on
existing documentation and reporting and develop a process whereby it can account for its social
performance, report on that performance and draw up an action plan to improve on that
performance, and through which it can understand its impact on the community and be
accountable to its key stakeholders. The social accounting and social audit lies at the heart of the
social accountability process Social accounting and audit provide the information required for
reporting in social accountability report.
The essence of social accountability is therefore:

Accounting for what we do and listening to what others have to say so that future
performance can be more effectively targeted at achieving the chosen objectives.
The social accountability framework can be effectively explained by following points.
• Statement of vision, mission ,values and commitment
It should commit the board members to oversee continuous and measurable progress living
up to the statement mentioned above and should provide the framework for doing the
community development work guiding decisions and strategies of the organizations .
• Ethical policy
The organization should have a base line ethical policies (do’s and don’t) .it should apply to
relationship with all stakeholders
• Values integration
It should be reflected in the working of the employee. All the training, recognition and
reward of performance should be consistent with the statement of values and commitment.
• Social audit process
Here we mean as an internal exercise involving staff and community as well as all
stakeholders in measuring our performance and see whether we are living up to statement of
values and commitment. The results should be reported to all stakeholders. The report should
be verifiable by all stakeholders.
• Integrated programme planning process
It means the finding of social accounting/audit should be integrated with programme
planning process for the next year. Targets and action plans to address key finding (area

where our performance is lower than we would like or declining) should be integrated in
programme planning process. They should be assigned to specific staff and included in their
annual performance plans. This integration should help the social accounting/audit process to
positively influence the decision making.
3.2.10 Feedback of community leaders

It is the feedback of community leaders when all the social accountability process is complete
and a draft report is ready. After going through the entire draft document, the community leader
will give its own opinion about the report on following parameter. This feedback must be
incorporated into the final report.
This will give the reader an idea and a kind of assurance about the report that report is true and
based on feedback
 Community leaders’ feedback
 Credibility
 Overall impression
 Completeness
 Relevance
 Adequacy of organization response to key findings
3.3 REPORT ON PERFORMANCE

3.3.1 Report Focus and Scope
3.3.2 Present reporting practices
3.3.3 Planning process
3.3.4 Overview of performance
 Highlights
 Key issues
 Targets
3.3.5 Comments of donor and government representatives
3.3.6 Action plan to improve performance

3.3.1 Report Focus and Scope

It should be the summary of the finding of the whole social accountability process and it should
have comments on the following point like how the overall performance throughout the year
.what was were the highlights of the year, special achievement of any kind, what key issues were
dealt and in which manner. What were the targets of the year and how much of it was achieved
and action plan to improve further performance. Comments of donor and government
representatives should also be incorporated briefly at this point.
3.3.2 Present reporting practices

The organization should report all the reporting practices that it used to undertake before the
social accountability process. The organization can take the help of tool “What do we already
do?” in Annexure 5.
3.3.3 Planning processes
Organization should report the present practices that the organization follows in planning a
project be it either implementing, monitoring research etc. it should clearly state which
stakeholder has the maximum influence for a project like determining objectives, sequence of
activities and allocation of funds for various activities etc. The organization can use the tool
participation matrix and participation matrix for project planning prescribed in Annexure 3 and
6 respectively.
3.3.4 Overview of Performance
The organization has already identified the objectives that would help the organization to reach
towards its purpose. It would have performed activities to achieve its objectives for the last
reporting year (April 20XX-march 20XX). The organization need to report its objectives ,
activities ,budget for each activity along with the targeted outcomes ,actual achievement and
value addition to community due to its activities. The organization can use the format for
reporting in the social accountability report suggested in Annexure 7.
Box 4: Thumb Rule
The organization would have many objectives .each objective will have many activities.

Thumb rule for differentiating between objectives
The organization need to report its achievement and activities.
objective wise. There may be confusion Money is spent on the activities which in turn help
regarding differentiating between objectives and the organization to achieve its objectives .so
activities. activities are those statements for which money is
Once the organization has tabulated its spent on the ground.
achievement for the year 20XX-20XX, it needs
to take the feedback on each objectives and activities from all the stakeholders identified through
stakeholders’ analysis .It’s a kind of 360 degree performance appraisal system on the
performance of the NGOs.
Ideally organization should report on all the following parameters
Box 6: Definition of Satisfaction
3.3.4.1 Overall performance

Satisfaction is defined as the degree of fulfillment of
The organization should ask the each mission, vision, commitments and objectives through
stakeholder regarding satisfaction on its the planned activities of the organization expressed
overall performance and whether it leads to by the stakeholders through questionnaires etc. The
achievement of purpose of the NGO. format of questionnaire used to determine
The organization should highlight any special satisfaction is given in annexure 12.
achievement and key issues it addressed during
last year in the report.
3.3.4.2 The relevance/suitability etc of the objectives

The organization should ask each stakeholder about suitability of its objectives and whether it
complies with its mission, vision and strategies.
3.3.4.3 The relevance/suitability etc of the activities (Compliance with Mission, Vision,
Strategy)
The organization should ask each stakeholder about suitability of its activities and whether it
complies with its mission, vision and strategies. It should also gather the community opinion on
the way the activities are scheduled and implemented.
3.3.4.4 Values (Compliance with Values and Ethical Policy)
The organization should ask each stakeholder about suitability of its values and whether it
complies with its mission, vision and strategies.

3.3.4.5 Financial planning and control

The organization should gather opinion of each stakeholder regarding its satisfaction over
financial planning and control of the NGOs. Financial planning means the way budget is made
and whether the stakeholders have a say in it or not. Who has the control over the budget? These
answers can be answered through tools in Annexure 8, 9, 10,11and 16.
3.3.4.6 Regards any other issues asked of stakeholders or raised by them
The organization should report any issues raised by the stakeholders by going through the
comments and state the steps taken to address those issues.
Feedback on above parameters reflected by the stakeholders can be expressed by the % of
stakeholders of expressing satisfaction regarding the parameters.
Format to collect the feedback as well as format for reporting the feedback in the social
accountability report are given in annexure 16.
3.3.5 Comments of partner organizations, government and donor representatives

Most of these questions can be asked in comfortable manner to the staff, board as well as
community but donor representative or government representative may not have time or
inclination to answer such elaborate questionnaire. So semi structured questionnaires has been
designed for them and their comments should be incorporated in performance report
3.3.6 Action plan to improve performance

After reporting the performance as well as satisfaction level and comments of all stakeholders
.the organization should reports the measure that the organization need to take in case of
declining performance or low satisfaction scores of any of the stakeholder.
The organisation can use tools given in Annexures 7 to 17 for gathering and reporting
information in social accountability report.
3.4 VALUE ADDITION TO COMMUNITY
Value added is a measure of wealth that an organization creates by ‘adding value’ to external
goods and services through the use of labour and capital. In contrast to profit created only for
owners or shareholders in the private sector, the value added represents the wealth created for a

larger group of stakeholders: employees, society (including the public sector), volunteers,
creditors, and the organization itself.
An organization faces problem whenever it wants to quantify the value addition to the
community .there are various method of quantifying the value addition. One way to quantify is to
have baseline data and collect current data and quantify the difference as shown below. The
criteria for quantification can be taken from various definition of cost from economics.
 Have a baseline data as per objectives of the NGO

 Collect current status data on same parameters as base line data
 Value addition=current status-baseline status
3.4.1 Methods of quantification for value addition
3.4.1.1 Fair value

A valuation, in accordance with standard methodology, that is reasonable to all parties involved
in a transaction in light of all pre-existing conditions and circumstances.
3.4.1.2 Fair Market value
Fair Market Value is a term in both law and accounting to describe an appraisal based on an
estimate of what a buyer would pay a seller for any piece of property, assuming neither the seller
nor the buyer is under any compulsion to complete such a transaction, and that the buyer has no
special interest in the property. It is a common way of evaluating the value of property when
assessing damages to be awarded for the loss of or damage to the property, generally in a claim
under contract.
3.4.1.3 Opportunity cost
Opportunity cost is a term used in economics, to mean the cost of something in terms of an
opportunity foregone (and the benefits that could be received from that opportunity), or the most
valuable foregone alternative. For example, if a city decides to build a hospital on vacant land
that it owns, the opportunity cost is some other thing that might have been done with the land
and construction funds instead. In building the hospital, the city has forgone the opportunity to
build a sports complex.

3.4.1.4 Replacement cost

The price that will have to be paid to replace an existing asset with a similar asset or the cost of
replacing property with property of like kind and equal quality or effectiveness. This is relevant
because the replacement cost will most likely be different than fair market value or net
realization. The broad guidelines to quantify the social benefits are illustrated as an example in
the box
BOX 7: Illustration of Use of Cost Principles to Quantify Social Benefit
For example due to NGO activity the Water level has increased and there is availability of water in different surface
water sources like ponds ,well in the month of April, may and June .
Base line information- there were no water in the month of April, may June in ponds or well in the area.
Current information- water is available in the month of April, may and June in ponds and well in the area.
Market value- {depth of water * surface area of water structure 1+ depth of water * surface area of water structure 2
+………………………………+ depth of water * surface area of water structure N}* price of a liter of aquafina
bottle
Fair value- the value of water that the community puts on a liter of water* depth of water * surface area of water
structure
Opportunity cost- quantity of time required to fetch the same quantity of water by women* labour rate in that area
per hour
Replacement cost – cost that may be incurred to bring the same quantity of water by tankers to that area
3.4.2 The Expanded Value Added Statement (EVAS)12

In the book What Counts: Social Accounting for Nonprofits and Cooperatives, Prentice Hall,
2003 the authors Laurey Mook and Jack Quarter have provided another method for quantifying
value addition due to activities of non profit organization called The Expanded Value Added
Statement.
The Expanded Value Added Statement (EVA) includes both monetary and non-financial inputs
and outputs and looks for “surrogates” in the market in order to assign comparative market value
to non-financial inputs and outputs. In this model the organization needs its financial information
to which value addition is added to get combined balance sheet. The combined balance sheet
format can be used by organization that use volunteers contribution for community development.
12
source: Laurey Mook and Jack Quarter2003What Counts: Social Accounting for Nonprofits and Cooperatives

3.4.2.1 Estimate volunteer contributions
a. Volunteer Hours
The first step in determining your volunteer value added is to calculate the number of volunteer
hours contributed to your organization for your fiscal year (the year covered by your financial
statements).If you have not kept records in the past and would like to do so, once you complete
this first estimate, it will be easier to update information each year - particularly if those who
work directly with the volunteers prepare monthly reports
b. Out-of-pocket expenses
Many volunteers pay directly for expenses that are not reimbursed by their org. Examples of
these types of expenses include:
• Meals
• Travel
• Uniforms
• Internet connection
3.4.2.2. Estimate benefits received by volunteers
Volunteers also receive benefits from volunteering. Some of these may include:
 Experience in order to get a job

 Skills training
 Health benefits
3.4.2.3 Putting together your expanded value added statement
For this step you will need the estimates you completed in steps 1 and 2, and information from
your financial accounts. Organisation can use the tool mentioned in Annexure 18 to arrive at
expanded value added statement.

3.5 SOCIAL BALANCE SHEET & SOCIAL INCOME STATEMENT

The basic concept of social balance sheet has been explained in section .readers are requested to
see section for the explanations and formats. Refer to page 17 to 25 for explanations.
3.6 FINANCIAL BALANCE SHEET

The balance sheet summarizes the assets, liability and reserves or corpus, endowment the
organization has at the moment in time usually at the end of the year. The format suggested here
is of fund based accounting from price water coopers publication of financial and accounting
guide for not for profit organization.
The organisation can use the suggested format in Annexure 19.
3.7 FINANCIAL OPERATING STATEMENT

It summarizes the revenues and expenses of the firm of a particular period of time usually a year.
Again fund based reporting of income and expenditure is suggested. Kindly see annexure 20 for
suggested format.
The organisation can use the following formats mentioned as a measure for better transparency
and accountability.
The organization can represent its expenditure into few major heads and show it in tabular form
or pie charts for better transparency. Refer Annexure 20
Also organization can show salary distribution among its employee in the form of Tables or pie
charts. Refer Annexure 20
The organisation can represent its grants from different funder in a suggested format in the
Annexure 20
The organisation can represent expenditure done on community in the suggested format in the
Annexure 20
3.8 FUTURE REVENUE AND EXPENDITURE STATEMENT

If an organization shows its future revenue and expenditure, it would be ensure more trust among
stakeholders for the organization. It’s about reporting more than expected. Refer annexure 21.
3.9 CONCLUSION

The organization should conclude its social accountability report based on the finding during the
whole exercise.
3.10 FUTURE VISION
The organization should share its future vision with all of its stake holders for better transparency
and accountability.
SECTION IV
DISCUSSION AND CONCLUSION

4.1 DISCUSSION
Following points emerge out after going through all literature review, field visit and discussion
with resource persons on social accountability.
 Social accountability is a necessity for any non governmental organisation doing
community development work in any manner.
 There is need for greater transparency and accountability by the Ngo to all the
stakeholders especially to the community.
 Social accountability report fulfills the need of uniform reporting format about the
practices that an Ngo follows while working as there is a lack or reporting format in
Indian scenario.
 The discussed tools for recording community opinion can be implemented successfully if
translated in local language. Focus group discussion may be appropriate method for
gathering information and opinion from the community. The success of this method will
depend on the skills of moderator of the session. A guideline of how to conduct focus
group discussion is given in ANNEXURE.

 The questionnaires format may seem lengthy but it can be modified by the organisation
as per the situation existing in their organisation.
 The organisation which does Logical Framework Analysis will be better able to report the
findings in this format.
 The framework requires the gathering of information to be done round the year and the
organisation have to really commit themselves to face the public scrutiny to apply the
framework.
 One thing clearly emerged out of discussion is that top level of the board clearly views
social accountability as a necessity which should be implemented as soon as possible.
They are more open to the idea of sharing information to the community. The downward
accountability is emphasized much more in discussion with the CEOs.
 The CEOs feel that there is need for imparting education about social accountability to
the programme staff to decrease resistance to the concept of social accountability.
 But there is great opposition about disclosing financial information to the community at
the early stage. Most of the programme officer feels that the communities are not ready to
handle this kind of information so early. The community should be told of finance
information at the end of planning stages. The financial information may create problem
in implementing the project. It will increase the vulnerability of the project implementing
staff. Basic attitude of programme staff is of resistance .They do not require one more
boss (read community) to whom they have to be accountable. One boss is enough.
4.2 CONCLUSION
The format can be a useful and practical tool to report the activities of any NGO. It encourages
the organisation to introspect seriously and work towards greater accountability and
transparency. The framework is about making one’s organisation vulnerable to public scrutiny. If
this framework makes you feel vulnerable, then it means that it’s a step in right direction. The
framework if implemented will bring more accountability and transparency in the world of non
governmental organisations.

REFERENCES
Bhanja Sanjeev K, “Social Audit” India Today News December 18, 1998
(http://www.eastdevon.net/ceu/ Social-Audit.htm)
Blake, Frederick C. William and Myers S. Mildred. Social Auditing: Evaluating the Impact of
Corporate Programs. New York: Praeger Publications (1976)
Bourgeois Kelly. “Nonprofit Financial Statements”A Master’s Capstone Paper Presented to the
Arts and Administration Program of the University of Oregon in partial fulfillment of the
requirements for the degree of Master of Science in Arts and Administration June 2003
( aad.uoregon.edu/icas/project_thesis_pdf/bourgeois_k.pdf)
Chris Pay. “Social Accounting: A Method for Assessing the Impact of Enterprise Development
Activities?” Traidcraft Exchange (www.enterprise-impact.org.uk/ word-
files/SocialAccounting.doc)
Gross J. Malverin, Larkin Richard F. Jr. and McCarthy John H. Financial And Accounting Guide
for Not For Profit Organisations, PriceWaterHouseCoopers, sixth edition, New York: John Wiley
& Sons, Inc. (2000)
Interface: Vol. IV, Issue III, October 2004, March 2005
International Federation Of Red cross And Red crescent Societies (2002), Handbook For
Monitoring And Evaluation, 1st Edition
ITC sustainability report 2004

(http://www.itcportal.com/sustainablity_report/default.html)
Mook Laurie, Richmond Betty Jane and Quarter Jack .What Counts: Social Accounting for
Nonprofits and Cooperatives, Upper Saddle River, NJ: Prentice Hall, 2003.
Nike Corporate Responsibility Report FY 04
(http://www.nike.com/nikebiz/nikebiz.jhtml)
Pearce John .Social Accounting and Audit for Community Organisation the Manual, Liverpool,
UK: Social Enterprise Network (2001)
Pushpangadan K. and G. Murugan, on “Social costs of not providing sanitation in coastal
Kerala”, the International Technology Development Group (ITDG), U.K. (2000)
Saint Agnes Medical Center .Community Benefits and Social accountability Report” for Fiscal
Year Ending June 30, 2003
(www.samc.com/UMAP/UserPageObjects/ CommunityBenefitsReport2003.PDF)
Social Audit book keeping System - Community Enterprise Unit Ltd
(http://www.ceultd.co.uk/social_accounts/book%20keeping%20plan%20-%20App%201.pdf)
Spreckley Freer (2000) Social Audit Toolkit”, Third Edition, England: Social Enterprise
Partnership Ltd
Spreckley Freer .Project Cycle Management Toolkit, 3rd Edition, England, Local Livelihood
Limited (2005)
Task Force on Reforming Forest Taxation. “Quantifying Public Benefits on Private Forestland in
Massachusetts”. The Massachusetts Forest Stewardship Program’s, January, 2000
(http://www.massforesters.org/public.htm)
Van City Accountability Report, 2002-2003
(www.vancity.com)
Zadek Simon. “In Defence of Non-Profit Accountability”, Ethical Corporation Magazine,
September 2003
(www.ethical.corp.com)
INTERNET REFERNCES
http://www.accountability.org.uk.
www.accountability.org.uk/uploadstore/cms/docs/GovernanceAndAccountability.pdf

http://www.archive.official-documents.co.uk/document/parlment/nolan/nolan.htm
en.wikipedia.org/wiki/Fair_market_value
http://www.chaordic.org/learn/notes/purpose.html
http://encyclopedia.thefreedictionary.com/Good%20governance
en.wikipedia.org/wiki/Opportunity_cost
http://www.globalreporting.org/
http://home.oise.utoronto.ca/~volunteer
http://www.investorwords.com/1880/fair_value.html
http://www.irft.org/
http://www.socialaccountability.net/
www.shrujan.org
strategis.ic.gc.ca/epic/internet/instco-levc.nsf/en/h_qw00037e.html
strategis.ic.gc.ca/epic/internet/instco-levc.nsf/en/h_qw00037e.html
www.traidecraft.co.uk
http://www.unescap.org/huset/gg/governance.htm
wordnet.princeton.edu/perl/webwn

ANNEXURE 1
Social book keeping13
“Capturing” the Information for social accountability report
Dates
(Revised: to keep track of the different editions….)
Vision:
to be inserted
Mission:
to be inserted
Values:
• to be inserted
• to be inserted
• to be inserted
•
13
adapted from Spreckley Freer (2000) “Social Audit Toolkit”

Statement of purpose
• to be inserted
• to be inserted
• to be inserted
•
Statement of commitment
• to be inserted
• to be inserted
• to be inserted
Tabular format for social book keeping

Organisation should try to gather the information by stating the objectives first and then
specifying the activities to achieve the objectives. This format would help the organization to
objectify its requirement of the information for social book keeping. The method to gather the
information and responsibility to collect the information needs to be identified with a priority
Table 1 Tabular format for social book keeping
Activity Information required Possible method of gathering who When

quantitative Qualitative
Objective 1
Activity 1
Activity 2
Activity 3
Objective 2
Activity 1
Activity 2
Activity 3
Objective 3
Activity 1
Activity 2
Activity 3

ANNEXURE 2
Stakeholder Analysis
(List all the stakeholders according to categories. List all the key ones in the first column and all the
others in the other column. This sheet in total should include ALL your stakeholders)
Box 1: Checklist for identifying stakeholders

• Have all primary and secondary stakeholders been listed?
• Have all potential supporters and opponents of the project been identified?
• Has gender analysis been used to identify different types of female stakeholders (at both primary
and secondary levels)?
• Have primary stakeholders been divided into user/occupational groups, or income groups?
• Have the interests of vulnerable groups (especially the poor) been identified?
• are there any new primary or secondary stakeholders that are likely to emerge as a result of the
project
Possible Stakeholder categories:

• Clients, customers, beneficiaries etc.
• Partners
• Suppliers
• Staff: paid, voluntary
• Board, management committee, trustees
• Financial
• Public sector
• Regulatory
• Local community
• Wider community
• Classify stakeholders into following two categories
Table 1 Classification of Stakeholders

Key Stakeholders Other Stakeholders

Key Stakeholders Consultation Summary

(List all the Key Stakeholders - taken from the previous sheet and write down the suggested
method you want to use to consult with them. You might also want to include under Possible
Consultation method the topics you want to consult them about)
A classification of stakeholders and method of consultation from implementer point of view
(suggested only) organisation can modify this Table as per its own context
Table 2 Key Stake holder’s Consultation Summary
Name of Role of Status of Possible Consultation Method (and topics

stakeholder stakeholder stakeholder you want to ask about)
Community Beneficiaries Key Focus group discussion ,questionnaire
Government Regulatory Other semi structured -Structured interview
employee Implementer Key Structured interview thru questionnaire
Donor Donor Key One to one semi structured interview
Board Guiding the Other semi structured -Structured interview
organization
Partner Training and Other One to one semi structured interview
organization support
Larger community Observatory Other focused group discussion
Box 2: Checklist for drawing out interests

Interests of all types of stakeholders may be difficult to define, especially if they are “hidden”, or in
contradiction with the openly stated aims of the organizations or groups involved. A rule of thumb is to
relate each stakeholder to either the problems which the project is seeking to address (if at an early stage of
the project), or the established objectives of the project (if the project is already under way). Interests may
be drawn out by asking:
• What are the stakeholders’ expectations of the project?

• What benefits are there likely to be for the stakeholders?
• What resources will the stakeholder wish to commit (or avoid committing) to the project?
• What other interests does the stakeholder have which may conflict with the project?
• How does the stakeholder regard others in the list?
Information on secondary stakeholders should be available from institutional appraisals; information

on primary stakeholders should be available from social analyses. Especially in the case of primary
stakeholders, many of the interests will have to be defined by the persons with the best “on-the-
ground” experience. Double check the interests being ascribed to primary groups, to confirm that they
are plausible.
Table: 3 Variables affecting stakeholders’ relative power and influence

Within and between formal For informal interest groups and

organizations primary stakeholders
Legal hierarchy (command and control,
Social, economic and political status
budget holders)
Authority of leadership (formal and
Degree of organization, consensus and
informal, charisma, political, familial or
leadership in the group
cadre connections)
Control of strategic resources for the
Degree of control of strategic resources
project (e.g. suppliers of hardware or other
significant for the project
inputs)
Possession of specialist knowledge (e.g. Informal influence through links with other
engineering staff) stakeholders
Degree of dependence on other
Negotiating position (strength in relation to
stakeholders Assessing importance to
other stakeholders in the project)
project success
Box 3: Checklist for assessing which stakeholders are important for project success
when assessing importance to project success, use these “checklist” questions, the answers to which may
already be suggested by the information existing in stakeholder Tables:
• Which problems, affecting which stakeholders, does the project seek to address or alleviate?
• For which stakeholders does the project place a priority on meeting their needs, interests and
expectations?
• which stakeholder interests converge most closely with policy and project object
Box 4: Checklist for drawing out assumptions about (and risks deriving from) stakeholders
• What is the role or response of the key stakeholder that must be assumed if the project is to be
successful?
• Are these roles plausible and realistic?
• Are there negative responses which can be expected, given the interests of the stakeholder?
• If such response occurs what impact would they have on the project?
• How probable are these negative responses, and are they major risks?
• In summary, which plausible assumptions about stakeholders support or threaten the project?
Conversely, key stakeholders with high influence, but with low importance to project success may be
“managed” by being consulted or informed. The Islamic clergy are shown in example 3 as one such key
stakeholder group

ANNEXURE 3
Participation matrix
This matrix recognizes that the participation role of stakeholders changes as per changes in
stages of project cycle.
The organization can fill all the columns with one or more stakeholders. But as a thumb rule
none of the columns need to be filled with all stakeholders in all the stage because it is not
practically possible.
One indicative example to fill the column is shown to guide your organization. (Suggested only)
Organisation can modify this Table as per its own context to depict the real situation existing in
the organization.
Participation Matrix
Type of
participation
Inform Consult Partnership Control
Stage in cycle
Government Community Partner Employee
Identification organization,
Donor
Donor ,board Community Partner Employee
Planning organization,
community
Donor ,board, Community Community Employee
Implementation
government
Monitoring Community Donor ,staff Donor ,staff Donor, external
& Evaluation auditor

ANNEXURE 414
Board Questions
1 About the Objectives and Activities (Aim and Objectives)
This section would be the Key Objectives Questions which invites people to score performance
against each activity of each Objective and to prioritize the Objectives. See the questionnaire for
employee as well as community in Annexure 8and 9.
2 About our Values
This section would invite people to score how far they thought you live up to your values. See
the example of the Values questionnaire in Annexure 8 and 9.
3 About the Purpose of the BOARD
Please indicate how important each of the following six potential roles of the Committee is. (1) is
not important at all; (2) is not really important; (3) means you feel it is neither important nor not
important; (4) means you think it is important; and (5) means you feel it is very important; DK
means you do not know.
Responsible for day to day management 1 2 3 4 5 DK
Deciding policy issues and strategic direction 1 2 3 4 5 DK
Acting as advisors to the organization 1 2 3 4 5 DK
Giving support to staff of the organization 1 2 3 4 5 DK
Having ultimate legal responsibility for the organization 1 2 3 4 5 DK
Having ultimate responsibility for the financial good 1 2 3 4 5 DK
management of the organization.
In the following questions (1) means you completely disagree; (2) you disagree; (3)
you neither agree nor disagree with the statement; (4) with the statement and (5) mean
you completely agree. DK means you do not know.
The remit of the board is clear 1 2 3 4 5 DK
Comments:
4 About the way the BOARD works
I receive enough information about the organization to 1 2 3 4 5 DK

fulfill my duties as a board member.
The papers for meetings are always circulated in good 1 2 3 4 5 DK
time (7 days before).
The minutes of meetings are circulated promptly after the 1 2 3 4 5 DK
meeting (within 10 days).
The meetings are well run. 1 2 3 4 5 DK
14

I find it easy to participate in the discussion at meetings. 1 2 3 4 5 DK

The board meets sufficiently often to discharge its duties. 1 2 3 4 5 DK
Comments:
5 About the membership of the BOARD
The membership of the board is well balanced as

regards:
local and non-local people 1 2 3 4 5 DK
gender 1 2 3 4 5 DK
professionals and non-professionals 1 2 3 4 5 DK
age 1 2 3 4 5 DK
The size of the board is just right. 1 2 3 4 5 DK
Comments: In the Comments section, please also give suggestions about other people
whom you would like to see become members of the Committee
(Note: you may wish to include something about the constitutional structure of the organization
in either 3 or 5)
ANNEXURE 5

What do we already do?15
Tick Comments
1. Documentation and Record-keeping
a. accurate records of work done/services provided

b. feedback/evaluation forms from trainees, clients
etc
c. one off project or service evaluations
d. detailed employee/volunteer records
e. record of training for employees/volunteers
f. regular employee reviews/appraisals
g. employee time-sheets
h. anecdotal evidence recorded in writing
Other……?
2. Stakeholder Consultation Tick Comments
a. annual questionnaire to:

i. employees
ii. volunteers
iii. customers/clients/trainees/beneficiaries
iv. community groups/community members
v. board/management committee members
vi. funders
vii. partner organizations
viii. wider community/general public
b. face to face consultation with: Tick Comments

i. employees
ii. volunteers
iii. customers/clients/trainees/beneficiaries
iv. funders
v. partner organizations
vi. community groups/community members
vii. wider community/general public
Other……..?
3. Compliance with External Standards Tick Comments
a. Government regulations
b. FCRA regulations
c. equal opportunities policy and procedures
Other……..?
4. Reporting on Social and Environmental Tick Comments
15

Performance
a. publish report on social and/or environmental

performance
b. include a section in the annual report
c. give a verbal report at the AGM
d. circulate a newsletter with details to the
community or to stakeholders
e. write and publish relevant case-studies
f. write internal reports on social and/or
environmental performance
g. set annual targets for social and/or
environmental performance
Other……?
5. Discussion about Social and Environmental Tick Comments

performance
a. regular agenda item at Board/Management

Committee
b. regular discussion by Management team
c. regular discussion by/with employees/volunteers
d. regular discussion/focus groups with:
i.customer/clients/trainees/other beneficiaries
ii. funders
iii. partner organizations
iv. community groups
v. wider community/general public
Other…….?

ANNEXURE 6
Participation Matrix for Project Planning

This matrix is developed basically to represent the practical influencing or determining power of
a stakeholder inside or outside of your organization in a project planning stage.
One indicative example to fill the column is shown to guide your organization. (Suggested only)
Organisation can modify this Table as per its own context to depict the real situation existing in
the organization. Y stands for yes and N stands for no.
Table 1 Participation Matrix for Project Planning

Programme finance community Board Donor Govern Others
staff staff -ment
Who decides the Y N N N N N N
programme plan?
Who decides which Y N N N N N N

activity gets how
much?
Who decides the Y N Sometimes N N N N

importance of
activities
Who decides the Y N Sometimes N N N N
sequence of activity?
Who gets the more Most less More N N N N

weightage?
ANNEXURE 7

Assessment and evaluation of the objective in terms of achievement of yearly goals

Various activities undertaken as per objectives (details of activity in 1 page with quantitative
figures)
The Tables are a tool to combine financial figures with programme objectives. If reported
objectively, this Table can help the organisation to compare its actual achievement with the
planned achievements at the end of the year.
Suggested Tabular format
Table 1 Activities performed during year 20XX-20XX

Activity wise Budgeted Actual Variances Reasons Means of
verification
No Finance No Finance No Finance
Total
Table 2 Outcomes achieved during year 20XX-20XX

Targeted Actual Baseline status Value addition Means of
outcomes outcomes verification
Qualitative Quantitative
Total
ANNEXURE 816
Sample Employee Questionnaire
1 Background Information
16

Please circle the most appropriate response; or make a mark or tick in the box provided; or write
a figure.
Are you…. male female
What was your age last birthday? …….years
What is you wage/salary per year? Rs………..
How long have you worked for………..

0-6 m 7-12 ms 1-2 yrs 2-3 yrs 3+ yrs
2 Working for ……………..

The following questions ask you about your feelings about your job, your terms and conditions
and about training. Please indicate how far you agree or disagree with each statement.
Please circle one number: 1 means you strongly disagree; 2 that you disagree; 3 that you
neither agree nor disagree; 4 that you agree; and 5 means you strongly agree. If you have
no opinion, please circle DK for “don’t know”.
Please use the comments section to add any other comments explaining or expanding on the
score you have given.
General:
I enjoy the work I do 1 2 3 4 5 DK
My job is interesting 1 2 3 4 5 DK
I have a clear sense of my responsibilities 1 2 3 4 5 DK
My health and well-being at work is taken seriously 1 2 3 4 5 DK
Comments:
Support:
I feel part of a supportive team 1 2 3 4 5 DK
My manager gives me honest feedback on my 1 2 3 4 5 DK
performance
I get good support from the other staff 1 2 3 4 5 DK
Comments:
Conditions:
I am satisfied with the hours I work 1 2 3 4 5 DK
I feel I am not under too much work pressure 1 2 3 4 5 DK
I am satisfied with the pay I receive 1 2 3 4 5 DK
I am satisfied with my other benefits (e.g. holidays, etc) 1 2 3 4 5 DK
Comments:

Communications:
Communications within the organization are good 1 2 3 4 5 DK

I feel I understand well the work of other sections in the 1 2 3 4 5 DK
organization
My ideas and suggestions are taken seriously 1 2 3 4 5 DK
I am satisfied with my involvement in decisions which 1 2 3 4 5 DK
affect my work
I feel able to influence the decision-making of the 1 2 3 4 5 DK
organization
I am proud to work for….. 1 2 3 4 5 DK
I speak highly of …….to my friends 1 2 3 4 5 DK
Morale amongst the staff at …. is generally high 1 2 3 4 5 DK
Comments:
Training:
In the past year I have received the following amount of training…

0.5 days 1 day 2-5 days more than 5 days
Since joining…. I have received the training I need to do 1 2 3 4 5 DK
my job effectively
The training I have received was worthwhile 1 2 3 4 5 DK
The staff appraisal system is good 1 2 3 4 5 DK
Comments:
Volunteers:
Staff in …. invest enough time in helping volunteers 1 2 3 4 5 DK
Our volunteers are managed satisfactorily 1 2 3 4 5 DK
Volunteers play a key role in our organization 1 2 3 4 5 DK
Comments:
Values
Employees should be given the chance, as other stakeholders are, to consider how far the
organization lives up to its values and how well it performs with regard to all its objectives.
Please place a circle on the following scales which reflects your feelings about each value
statement: Please circle one number: 1 means you strongly disagree; 2 that you disagree; 3

that you neither agree nor disagree; 4 that you agree; and 5 means you strongly agree. If
you have no opinion, please circle DK for “don’t know”.
These are indicative examples of value statements. These can be replaced with the values of
your organization. Each statement can be rated in the same manner as illustrated below.
(Name of organization) works very well with the local community
1 2 3 4 5 DK
completely agree agree disagree completely disagree don’t know
Some of the likely value statements are

• (Name of organization) very well along co-operative principles
• (Name of organization) is accountable to stakeholders.
• (Name of organization) communicates about financial information related to community
in a transparent manner
• (Name of organization) provides a very friendly and accessible service
Objectives:
Please score each specific activity under the five objectives on the 1-2-3-4-5 scale according to
how you think the organization has performed during the past year. Please circle one number: 3
means OK - neither particularly successful, nor especially successful; 1 means very
unsuccessful; and 5 means very successful. If you do not know, please circle DK
Please use the comments section to add any other comments explaining or expanding on the
score you have given.
Please circle the most appropriate response among the six columns to each one of these
statements
1. (convert the text for Objective 1 into a suitably positive statement and insert it in here)
Activity 1 1 2 3 4 5 DK
Comments
Comments:

Comments:
Comments:
5. (Convert the text for Objective 5 into a suitably positive statement and insert it in here)
Comments:
Additional Comments
Please add any further suggestions you may wish to make about other objectives you should be
tackling; operational practices; or anything else which might help us to improve our social
benefit performance.
Comments:
Thank you very much for your help with the social audit
ANNEXURE 917
Sample Community Questionnaire

(This could be used in a street or house to house survey)
17

Hello! We are asking residents in (name area) to comment on their feelings and
awareness of the (name of organization).
We would be very grateful if you could spare about 10 minutes of your time to answer
a number of questions. Your answers to the questions will help us greatly in finding
out if (name of organization) is matching your needs.
Your answers to the questions are given in confidence.
Please circle the most appropriate response…..
1 Are you
Male female
2 Age
under 18 18-25 26-40 41-60 over 60
3 How long have you lived in ………………?
Less than 1 year 1-3 years 3-10 years 10-20 years over 20 yrs
4 How many people live with you?
1 2 3 4 5 6
The ……… is located in …….. It aims to………………..

5 How aware are you of ……….?
Very aware
Know something about it
Know a little bit about it
Don’t know anything about it
6 Have you ever used the services provided by ………?

Yes no
7 If so, in what way? …………………………………………………
8 What did you think of the service you received?
Very pleased pleased satisfied not happy
9 Do you know anyone (anyone-else) that has used it?
Yes no
Values
This section would invite people to score how far they thought you live up to your values. See
the example of the Values questionnaire in Annexure 8 and 9.
Community should be given the chance, as other stakeholders are, to consider how far the
organization lives up to its values and how well it performs with regard to all its objectives
Please place a circle on the following scales which reflects your feelings about each value
statement:
These are indicative examples of value statements. These can be replaced with the values of your
organization.
(Name of organization) works very well with the local community

1 2 3 4 5 DK
Completely agree Agree Disagree Completely disagree don’t know
Some of the likely value statements are
• (Name of organization) very well along co-operative principles

• (Name of organization) is accountable to stakeholders especially to community.
• (Name of organization) provides a very friendly and accessible service
• (Name of organization) communicates clearly
About the Objectives and Activities (Aim and Objectives)
This section would be the Key Objectives Questions which invites people to score performance
against each activity of each Objective and to prioritize the Objectives. See the questionnaire for
employee in Annexure 8

Comments:
Comments:
Additional Comments
Please add any further suggestions you may wish to make about other objectives you should be
tackling; operational practices; or anything else which might help us to improve our social
benefit performance.
Comments:
Thank you very much for your help with the social audit
ANNEXURE 1018
Values added Questions
18

This is an example of a questionnaire on the “added value” of an organization. These questions

will help the organization to measure the social benefits which can not be quantified easily.
The organization can add to these questions as per its goals. Please convert it to ask about your
“added value”.
Please place a circle over the number that reflects your agreement with the following statements.
If you don’t know circle DK.
(Name of organization) tries to assist and empower community and voluntary groups with
regard to ……………………………………..
1 2 3 4 5 DK
completely agree agree disagree completely disagree don’t know
Some value added statement for illustration purpose. Organisation can adapt it for its own
purpose.
• (Name of organization) works very effectively with community to strengthen their
capacity and enable them to take forward their projects and so contribute to improving
the quality of life for their communities
• (Name of organization) contributes greatly to the personal and social development of
individuals involved in the management and development of community buildings and
land
• (Name of organization) really encourages community groups to fully participate in all
decisions affecting their projects and so be in control of their projects
• (Name of organization) provides excellent general development advice
• (Name of organization) offers good advice on sources of funding related to the built
environment
Please comment on any of the above statements
ANNEXURE 1119
Format for gathering data on satisfaction of various stakeholders
19
Spreckley Freer (2000) “Social Audit Toolkit”

Please read the objective in the first column and the various levels of achievement. Place a large
tick in the level of achievement box that reflects your view on the degree that objective has been
achieved during the last reporting year.
Table 1 Format for gathering data on satisfaction of various stakeholders
Objectives Level of Achievement

1 2 3 4
(insert the (insert a statement that (insert a statement that (insert a statement that (insert a statement that
text of reflects a low level of reflects a fair level of reflects a good level of reflects a excellent low
Objective 1) achievement) achievement) achievement) level of achievement)
ANNEXURE 1220
Format questionnaire for providing services to community and other partner organizations
20

The following are the services provided by the (name of organization) - you have to substitute
your own services.
Please tick in Q1 which of these services you have used during the past year.
Please rate in order of importance the services you have ticked in question one. Please number,
starting from first one in the second row Q2 of tick boxes on the pages.
Table 1 Format questionnaire for providing services

Activities Q1(tick mark the services Q2( rate the services as
you have used per importance to you)
informing about mission, vision & objectives
informing about values and commitments\

informing about funds available for community development
preparing /assisting project plans with community
arranging legal registration for organization s
provision of training courses
organising seminars/workshops/conferences
making links with other organization s
making links with government officials
writing reports ,applications
provision of administrative services
provision of committee training and support
Providing work for community development
Are there other services or help which you would have expected to get from the ….. But which
they have not been able to provide? (Please circle appropriate response)
Yes No
If yes, please detail below:
a. …………………………………………………………………….
b. …………………………………………………………………….
c. …………………………………………………………………….
d. …………………………………………………………………….
e. …………………………………………………………………….
The (name of organization) aims to provide a high quality service which is responsive to the
needs of the community.
Please say how much you agree with the following statements. Please circle one of (1) to (5)
where (1) means that you disagree very much, (2) means you disagree; (3) means you are
neutral; (4) means you agree; and (5) means that you agree very much. Circle DK if you do not
know or have no opinion.
The work of the …. is always thorough 1 2 3 4 5 DK

The staff of the … are approachable and friendly 1 2 3 4 5 DK
The staff of the …. are good listeners 1 2 3 4 5 DK
The …. are always prompt to do what they undertake 1 2 3 4 5 DK
The ….really understands our needs 1 2 3 4 5 DK

The work of the …..is always technically competent 1 2 3 4 5 DK

The staff of the …. can always be relied upon 1 2 3 4 5 DK
The …. is always efficient in its work 1 2 3 4 5 DK
The …. has high standards of professionalism in its work 1 2 3 4 5 DK
Comments (Please add any comments you may have about the range or the qualities
of the service offered by the …….):
ANNEXURE 1321
Semi-structured Interview - Funders
Introduction
Name:
Title:
General:
21
Spreckley Freer (2000) “Social Audit Toolkit”

Describe your role with respect to ………

How is the project/organization going in your opinion? How effective has it been?
What are its major achievements?
What have been the problems?
What are the obstacles ahead?
Do you think the current structures are the best? Can they be improved?
(Any other pertinent questions relevant to this organization /project)?
Objectives:
Objectives - What do you feel about each of these objectives? Show each one
1 To ……..
2 To ……..
3 To ……..
etc.
Funding Specific:
Is the programme worth the money being spent on or could it be more effectively used in another
way?
Other comments:
ANNEXURE 1422
Semi-structured Interview – Partner Organization s
Introduction
Name:
Title:
General:
Describe your role with respect to …….
22

How is the project going in your opinion? How effective has it been?
Objectives:
1 To ……..
2 To ……..
3 To ……..
etc.
Partner Specific:
Do you feel that (name of organization) has collaborated well with your organization?
Other comments:
ANNEXURE 1523
Semi-structured Interview – Government representatives
Introduction
Name:
Title:
General:
Describe your role with respect to …….
How is the project going in your opinion? How effective has it been?
23


Objectives:
4 To ……..
5 To ……..
6 To ……..
etc.
Partner Specific:
Do you feel that (name of organization) has collaborated well with your organization?
Other comments:
ANNEXURE16
Reporting the satisfaction of various stakeholders on parameters
Table 1 Overall achievements

Satisfaction Level of achievement of objectives.
level of Overall performance
stakeholders (in low level of fair level of good level of excellent level
%) achievement achievement achievement of achievement
Community
Board
Staff
Table 2 the relevance/suitability of the objectives


level of The relevance/suitability of the objectives
stakeholders (in
%) low level of fair level of good level of excellent level
achievement achievement achievement of achievement
Community
Board
Staff
Table 3 the relevance/suitability etc of the activities (Compliance with Mission, Vision,
Strategy)

level of The relevance/suitability etc of the activities (Compliance with
stakeholders (in Mission, Vision, Strategy)
%)
low level of fair level of good level of excellent level
Community
Board
Staff
Table 4 Values (Compliance with Values and Ethical Policy)

level of Values (Compliance with Values and Ethical Policy)
stakeholders (in
Community
Board
Staff
Table 5 Financial planning and control

level of Financial planning and control
stakeholders (in
Community
Board
Staff

ANNEXURE 1724 Social Audit Checklist
Table 1 Scope and Completeness of the Social Accounts

1 Comprehensive Y N Comment
1.1 Are the objectives clearly stated?
1.2 Are the values clearly stated?
1.3 Do the social accounts report adequately on
performance against each activity of all
objectives?
1.4 Are the reasons for any omissions clearly

explained?
2 Multi-perspective
2.1 Has a full stakeholder analysis been undertaken?
2.2 Have any important stakeholder groups been
omitted?
2.3 Have all key stakeholders been consulted…
…about performance and impact
…about relevance of objectives
…about living up to the values stated?
2.4 Is the process for selecting key stakeholder

groups properly explained?
3 Environmental
3.1 Do the social accounts include information on
environmental impact/performance?
4 Compliance
4.1 Are the statutory and voluntary standards
complied with reported in the social accounts?
4.2 Do the social accounts show how equal
opportunities and social inclusion are promoted?
24

5 Comparisons
5.1 Are internal, year on year, targets set?
5.2 Are relevant external comparisons (benchmarks)
used?
Table 2 Process of social audit

6 Regular Y N Comment
6.1 Are social accounts prepared (intended to be
prepared) on a regular basis?
6.2 Is the understanding and practice of social
accounting embedded in the organization?
7 Social Audit Trail
7.1 Has a sample of items been satisfactorily
examined/traced to source?
7.2 Were the social book-keeping records fully
available and accessible to the Panel?
7.3 Are the records (qualitative and quantitative)
stored systematically?
7.4 Are on-going social book-keeping systems in
place?
8 Disclosure and Dialogue
8.1 Do the social accounts report on the follow-up
of issues raised in an earlier social audit?
8.2 Are the social accounts organized in a clear
and comprehensive format?
8.3 Are there clear plans to disseminate the
findings of the social accounts to stakeholders
and to others?
8.3 Is it planned that the stakeholders will be
included in discussion of the issues arising
from the social accounts and the social audit
process?
9 Methodology and Resources
9.1 What lessons of methodology have been * *
learned from this social audit cycle? * *
* *
9.2 What problems have been encountered in * *
carrying through the process (e.g.: resources * *
etc)? * *

ANNEXURE 18
Expanded Value Added Statement25,26

This has been taken to demonstrate as a method for quantification of shramdaan (volunteer
labour contribution) by community either in community based organisation like self help groups,
JFM committee, or krishak manch etc.
Given below is the adaptation of excel sheet from the above mentioned website for Indian NGOs
and formulas are explicitly mentioned in the column.
This can help us to quantify shramdaan (volunteer labour contribution) by community either in
community based organisation like self help groups, JFM committee, or krishak manch etc.
Volunteer Contributions Worksheet

This worksheet is included to assist you in calculating the hours contributed and overall rate/hour
for your volunteer contributions. Be sure to include the number of hours volunteers/members
spend preparing for volunteer activities (e.g., reading documents, preparing reports), and the
number of hours volunteers/members spend traveling during volunteer activities.
Table 1 Volunteer Contributions Worksheet
VOLUNTEER CONTRIBUTIONS WORKSHEET
A B C D E F
25
source : What Counts: Social Accounting for Nonprofits and Cooperatives,( 2003)
26
http://home.oise.utoronto.ca/~volunteer).

Tasks performed by volunteer Number of Average Total number of Estimated Total

volunteers number of hours for this rate/hour (D*E) column
who hours each task wise
performed volunteer (B*C)column
this task in contributed wise
the last fiscal to this task in
year the last fiscal
year
Board of Directors 0 0 0 0.00 0

Office Volunteers 0 0 0 0.00 0
Program Volunteers 0 0 0 0.00 0
<Other Program Volunteers> 0 0
<Other Program Volunteers>
TOTALS* 0 0** 0**
Average rate Divide sum of F column of D column
*The total of column B may be different from the total number of volunteers as people may
volunteer in more than one area.
**Transfer these figures to the ‘Data Entry’ worksheet.
Table 2 Volunteer out of pocket expenses

VOLUNTEER OUT-OF-POCKET EXPENSES (NOT REIMBURSED)
A B C D
Program Number of % with Amount per Totals(B*C*D)column wise

volunteers expenses volunteer with
expenses
Program 1 0 0% 0 0
Program 2 0 0% 0 0
Program 3 0 0% 0 0
0 0**
**Transfer this amount to ‘Data Entry’ worksheet.

Table 3 Data Entry Worksheet

DATA ENTRY WORKSHEET Data Source
What is the name of your organization? NP Organization
What is your fiscal period (the period of time covered by your Month Date, 200x
financial statements)? to Month Date,
200x from accounting records
Please note: All questions below relate to the fiscal period

above.
EMPLOYEES
How many full-time staff do you have? 0 from human resources
What is the FTE of your part-time staff? 0.0 from human resources
FTE conversion factor (normal hours worked in one year for a
full-time employee)
VOLUNTEERS
How many volunteers do you have? 0 from volunteer records
What is the total number of hours contributed by your from volunteer records or
volunteers in the fiscal period? 0 volunteer contributions worksheet
What is the average hourly rate you estimate for the value of from volunteer records or
activities performed by your volunteers? 0.00 volunteer contributions worksheet
What is the total estimated un-reimbursed out-of-pocket from out-of-pocket expenses
expense incurred by your volunteers in the fiscal period? 0 worksheet
OTHER OUTPUTS
What is the estimated value of secondary outputs? (Indirect
impact on clients) 0 from internal records
What is the estimated value of tertiary outputs? (Impact on
those other than clients) 0 from internal records
FINANCIAL STATEMENTS
What were your total expenses for the fiscal period? 0 from accounting records
What was your total expense for wages and benefits paid in
the fiscal period? 0 from accounting records
What was your total expense for taxes to government paid in
the fiscal period? 0 from accounting records
What was your total expense for interest paid on long-term
debt paid in the fiscal period? 0 from accounting records
What was your total depreciation expense in the fiscal period? 0 from accounting records
END
Table 4 Expanded Value Added Statement

Non Profit Organization

Expanded Value Added Statement (Partial)*
Month Date, 200x to Month Date, 200x
Financial Social Combined

Outputs Primary
Secondary
Tertiary
Less external goods and services
Total Value Added
Ratio of value added to external purchases
Wages &
Employees Benefits
Government Taxes
Investors Interest
Volunteer
Society contributions
Recipients of secondary outputs
Recipients of tertiary outputs
Organization Depreciation
Total Value Added Distributed
* The Expanded Value Added Statement shown here is partial in that it focuses only on the value added
from volunteer contributions of hours, not the value of all impacts of the organization.
ANNEXURE 19
Financial Balance Sheet 27

27
Adapted from Financial And Accounting Guide for Not For Profit Organisations,
(2000),PriceWaterHouseCoopers,

Table 1 Example of a fund based balance sheet

fund based balance sheet
asset liability
current unrestricted fund
cash 10 accounts payable 5

pledges receivable 10 due to other fund 5
net assets 10
subtotal 20 20
current restricted fund
cash 10 accounts payable 10

due from current un restricted fund 10 net assets 10
subtotal 20 20
fixed asset fund
due from current restricted fund 10 net assets 20

equipment 10
subtotal 20 20
endowment fund
cash 10 net assets 30

due from current un restricted fund 10
investments 10
subtotal 30 30
total after eliminations
assets 90 liabilities 20
net assets 70
grand total 90 90
Table 2 Format of a Fund Based Balance Sheet 28

fund 1 fund 2 total
year year Year year
assets 20XX 20XX 20XX 20XX
28

Short Term Assets

Cash and equivalents
Receivable
investment income
pledge net
for investment sold
Prepaid Expenses
Long Term Assets
Investments
deferred charges
Fixed Assets net
total assets
Liabilities and Net Assets
Liabilities
Short-term Liabilities
Accounts Payable
Grants Payable
Refundable Advances
payable for investment purchased
deferred income
Long-term Liabilities
Long Term Debt
Total Liabilities
Net Assets
Unrestricted
designated for
long term investment
special projects
undesignated for
Available for general expenses
total unrestricted
Temporarily Restricted
for specified purposes
until specified periods
Permanently Restricted
Total Net Assets
Total Liabilities And Net Assets

ANNEXURE 20 Financial Operating Statement
Table 1 Example of an Operating Statement:29
Changes in Unrestricted Net Assets: temporarily permanently

unrestricted restricted restricted total
Revenues and Gains:

membership
Public Contributions (net):
Program Service Revenue:
29

gain on sale of investment

Investment Income:
contribution and other income
Net Assets Released from Restrictions:
Total Revenues, Gains, Other Support:
Expenses:
Program Services:
General Administration:
Fundraising:
property repair and maintenance
depreciation
other
Total Expenses and Losses:
excess of income over expenses
transfer between funds
change in Net Assets:
Net Assets as Beginning of Year:
Net Assets as End of Year:
Table 2 Representation of expenditure under various heads (can be represented as pie

charts also)
Expenditure head % value Total amount
Development programme
Programme management
Human resources development
Research and documentation
Organization overheads
Table 3 Distribution of salaries (can be represented as pie charts also)

Salary bracket(Rs per month ) No of employees
Less than 5000
5000-10000
10000-15000
15000-20000
20000-25000
More than 25000
Table 4 Details of grants received from funding agencies (upward accountability)
(can be represented as pie charts also)
Name of the Quantum of fund Purpose of Nature of fund Duration

donor funding
Table 5 Details of expenditures done on Beneficiaries (downward accountability)
(can be represented as pie charts also)

Community (village wise Fund spent Purpose of expenditure
/cluster wise)
30
ANNEXURE 21 Future Revenue and Expenditure Statement
Table 1 Format to report Projected Revenues

Estimated Revenues Annual Total
Foundation Grants*
XXXX Foundation
XXXX Grant
XXXX grants
XXXX grants
TOTAL FOUNDATION
Government Grants**
ICDS
DRDA
TOTAL GOVT GRANTS
In-kind contributions
TOTAL IN-KIND
Fundraising Events
EVENT 1
EVENT 2
EVENT 3
TOTAL FUNDRAISING
Revenues
30
community benefit report (2003)

Consulting charges
workshops
sales
TOTAL REVENUES
Membership
Scheme 1
Scheme 2
Scheme 3
total membership
interest income
total income
TOTAL ESTIMATED INCOME
Table 2 Format to report Projected Expenses

Budgeted Expenses Annual Total
PROGRAM SERVICES
workshops
salary
Travel
Telephone
Supplies
TOTAL PROGRAM
SUPPORT SERVICES
Administrative salaries
Computers
Custodial services
Payroll fringe benefits
Travel
Legal
Telephone
Marketing
Occupancy
Misc. expenses
TOTAL SUPPORT
FUNDRAISING
Special Events
Printing
Postage
TOTAL FUNDRAISING
Building
Structure
Furniture/display materials
TOTAL BUILDING
COLLECTIONS
Care/Maintenance
Purchases
Collection/loan insurance
Security
TOTAL COLLECTIONS
TOTAL EXPENSES BEFORE DEPRECIATION

DEPRECIATION
TOTAL EXPENSES
ANNEXURE 22 ABT ASSOCIATION INC.SOCIAL AND FINANCIAL BALANCE

SHEET 31
ASSETS 1974(in $) 1973(in $)

staff
staff available within one year 7555000 6384000
staff available after one year 14895000 15261000
training investment 2986000 2051000
25436000 23696000
less accumulated training
obloscence 1422000 503000
total 24014000 23193000
organisation
creation and development of organisation research 554000 437000
child care development 25000 7000
social audit development 46000 32000
total 625000 476000
general public and community
public services paid for through taxes (net of consumption) 839000 365000
total 839000 365000
stockholder
cash 27000 91000
accounts receivable less allowance for doubt full accounts 1567000 2083000
unbilled contract cost and fees 1886000 1789000
other current and financial assets 169000 42000
other long term financial assets 6000 39000
total 3655000 4044000
physical assets
recreation center 106000 0
land and improvement 467000 310000
31
Blake , “Social Auditing: Evaluating the Impact of Corporate Programs.” (1976)

equipment, furniture and fixtures 3649000 2157000

total fixed assets
less accumulated depreciation 4652000 2709000
total fixed assets 336000 204000
total 4316000 2505000
TOTAL 33449000 30583000
LIABILITIES
staff
staff wages payable 24014000 23193000
total 24014000 23193000
organisation
organizational financing requirement 1056000 563000
total 1056000 563000
general public and community
incremental resources used through pollution
paper 18000 11000
electricity 113000 76000
commuting 58000 37000
total 189000 124000
stockholders
notes payable 406000 514000
accounts payable and accrues expenses 788000 1081000
accrued expenses 1059000 875000
federal income taxes 24000 109000
deferred federal income taxes 98000 52000
notes payable(long term) 1300000 1092000
leasehold interest in property 130000 128000
total 4805000 3851000
total 30064000 2731000
equity
staff stockholder equity

common stock 95000 95000
additional paid in capital 480000 480000
retained earning 444000 249000
total 1019000 824000
non staff holder equity
common statement 200000 200000
additional paid in capital 1011000 1011000
retained earning 936000 618000
total 2147000 1829000
TOTAL 3385000 2807000

ANNEXURE 23
Suggested guidelines for Focus Group Interviews
Introduction
Time period: (to be inserted)
What I intend to do:

1 Get an overview of what you think of the project
2 Work on each objective on how you think things have gone
3 Identify the main issues
4 A quick review
Warm up exercise:
Aim is to get the feel of all of the staff. Draw a vertical line on a flip chart. Write a “roaring
success” at one end and a “big disappointment” at the other. Get people to place colour dots on
how effective the (name of organization) has been - a roaring success or a big disappointment.
They should all do this in a crowd and you should not look at where people place their dots. Ask
the group in general why they put their dots there and get a general discussion going….
Objectives:
Work on each objective with a flip chart sheet divided into quadrants. Get the group to chart
main points in the boxes.
Table 1 Format for Working on Objective during Social Audit Process
Objective 1: To……..
Achievements (or plans) Failures - things not achieved
Problems faced for that objective Any recommended changes
Main Issues:

Hand out 5 cards. Each person writes down five main issues - one on each card. No more than 7
words to explain each issue. Collect all the cards, shuffle them and take each at a time, read it
out and ask group to position each one in relation to the previous ones. This will cluster the
cards spatially. Get the group to write down the issues for each cluster. Decide the most
important either by consensus or by voting with coloured dots.
Wind up:
Review of what has happened in the group interview.
The Dos and Don’ts while conducting the program:
•Community will not own the process unless social audit tool is integrated with the planning
•It’s a no-cost program and hence should not be reflected in the budget
•Give women and destitute more chance to question and clarify
•Display formats need to be simplified for the understanding of all category particularly illiterate
women and uncared aged. Sometimes reading out aloud the charts also does not help the
participants to understand and ask.
•It often leads to chaos and tip off along political party line division rather than having a
disciplinary question-answer session.
•Program should be conducted in open air and places where poor and marginalized would feel
comfortable; for example temple is obviously not a choice for Dalits.
•It’s been observed that in many social audits though the presence of women participants is 60%,
male folks steal the questions silencing the women.
•Presence of powerful or influential people like Sarpanchs and ward members often makes
people reluctant to question the sensitive issues like probability of corruption
•Time and venue is an important factor; for instance if it starts late in the afternoon the women
participation hampers as many leaves for their houses.
•Objective of social audit on not being properly internalized draws halfhearted response.
Sometimes we have shared the objectives then and there before we go in for deliberation.
•Do not make it a hastily planned social audit (often dictated by the NGO) as it will give little
time to the community/ the govt. officials to prepare.
•Carry original/photocopies of all the program and finance documents on which you expect
questions and clarifications. Documentary evidence clarifies the doubts then and there.

•Social Audit often looses its focus as the scenario becomes noisy and prompts smaller group
discussion (rather argument). Neither the display could be done properly, nor the read out was
audible. Consequently, discussion became polarized in small groups. Hence facilitation of social
audit is an important factor and moreover the facilitator should be acceptable to all the
stakeholders.

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Creation of Social Accountability Report

Be the change you want to see in the world –Gandhi

Dr Ravi Chandra, PRM 25, IRMA 1

The Issue of Social Accountability 1

Dr Ravi Chandra, PRM 25, IRMA 2

beneficiaries (downward accountability) tends to be informal and non verifiable. Accountability

Dr Ravi Chandra, PRM 25, IRMA 3

1.3 OBJECTIVE: To create a format for social accountability report

This report is supposed to include

 Social book keeping

1.4 SCOPE OF THE STUDY

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1.5.1. Literature review

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1.5.1.1 AA1000 Framework and Assurance Standard, (ISEA)2

1.5.1.2 Global Reporting Initiative (GRI) Sustainability Reporting Guidelines3

1.5.1.3 The Triple Bottom Line

1.5.2 Field visit

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1.5.3 Visits to Partner Organizations of FMSF

1.5.4 Resource material provides by FMSF

1.5.5 Discussion with working professionals on social accountability

1.6 LIMITATIONS OF THE STUDY

1.6.2 No Independent verification of the social accounts and balance sheet

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1.6.3 No internationally accepted norms for quantifying social benefits or liability

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2.1 UNDERSTANDING SOCIAL ACCOUNTABILITY4

All organizations are, in principle, socially accountable to multiple stakeholders. Social

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To be socially accountable requires a process or instrumentality of permanent examination of

Trust / Confidence are at the heart of the issue of Social Accountability.

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2.2 CONCEPT OF SOCIAL ACCOUNTABILITY PROCESS

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Fig 1. Social Accountability Process5

Social accountability process is focused around engagement with stakeholders. Social

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The social accountability report should involve following steps:

Reporting- A mechanism for disseminating the outcome more widely

2.3 SOCIAL ACCOUNTING

Social accounting can be defined as

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2.3.1 Social Book Keeping

2.3.2 Social Accounts

 A report of performance against the stated objectives

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 the view of stakeholders on our objectives and values

 Social labour (unpaid member contributions) in voluntary agencies

 Free social service

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2.3.3 Social Balance Sheet and Social Income Statement

2.3.3.1 Social Balance Sheet

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Cost of research Research activity

Community Liability Community Assets

2.3.3.2 Social Income Statement 7

The suggested format is

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Layoffs and involuntary terminations ………………….

Net gain (loss) ………………

Cost for improvement of