ICSI SAS – 13 Social Audit Standard on promotion of financial inclusion

Applicability and Scope

This Social Audit Standard (‘the Standard’) is applicable to the Social Auditor as defined under sub-Regulation (f) of Regulation 292A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 conducting the Social Audit of the Social Enterprise as defined under sub-Regulation (h) of Regulation 292A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. This Standard deals with procedures, responsibilities and duties of the Auditor with respect to the Social Audit being conducted by him/ her of the Social Enterprises engaged in the activities prescribed under sub-regulation 2(a)(xiii) of Regulation 292E of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Objective

ICSI Social Audit Standard – 13 (ICSI SAS-13) aims to aid the Social Auditors with necessary instructions or guidelines for the effective Social Audit of Social Enterprises engaged in the field of “promotion of financial inclusion”. Social Auditors shall follow the minimum criteria as specified in this proposed Social Audit standard issued by the ICSI.

Effective Date

This Social Audit Standard will be in force with effect from –/–/20–.

Social Audit Process and Documentation

Social Auditor shall conduct the Social Audit in accordance with the procedures/ mandates established and notified by the ICSI from time to time. Social Auditors shall perform their functions that provide sufficient and adequate evidence to support Social Audit. Social Auditor can acquire evidence for the effectiveness of Social Audit through inspection, observation, inquiry, consultation, interview, questionnaire, analytical

procedures and/or other research techniques or any other acceptable methods as he/she deems fit. The procedures to be followed are as under:

I. Define Social Audit objectives and planning Social Audit;

II. Intimation to the Management of the Social Enterprise about the Audit Plan;

III. Identification of Stakeholders and consultation;

IV. Visit to/inspection of the area where project/activity was implemented;

V. Collection of data, Analysis and assessment;

VI. Reporting.

I. Define Social Audit objectives and planning Social Audit

The Social Auditor shall define the object and scope of the Social Audit prior to conducting Social Audit. It is always better to have a proper plan prior to Social Audit and it includes nature, timing and extent of the procedures and standards to be followed while conducting Social Audit. The Social Auditor should also analyse the report, recommendations of the previous Social Audit, if any, and review the corrective actions taken by the Social Enterprise with respect to the recommendations suggested in the previous Social Audit Report. This is the first stage of Social Audit process.

II. Intimation to the Management of the Social Enterprise about the Audit Plan

It is expected that the Social Auditor should intimate the audit plan to the Management of the Social Enterprise so that they can have the necessary documents and materials ready and available for the Auditor.

III. Identification of Stakeholders and Consultation

The key stakeholders who can be involved in the Social Audit process include project beneficiaries, their families, officials of the local bodies, Civil Society Organizations (CSOs), media, financial institutions, banks, their employees, training providers etc. The consultation must be done with the stakeholders to extract accurate and needed information.

IV. Visit to / inspection of the area where project / activity was implemented

The Social Auditor must make it a point to visit / inspect the location and this will also give him / her better opportunities both for collection of data and consultation with the stakeholders.

V. Collection of data, analysis and assessment

This activity involves identifying key issues that need to be cross checked in the Social Audit as well as how information and data pertaining to the activity undertaken by the Social Enterprise will be collected. Moreover, in Social Audit process, two types of data are crucial. Primary data collected from stakeholders and community members, followed by Secondary data collected from various other sources. Gathering secondary information is very important in the process of Social Audit. Secondary data are inevitable for making Social Audit Reports. Information required for preparing Social Audit Reports may not be available in single point but may be in different records in different forms.

Social Auditor shall collect the relevant information through any of the following methods:

  • Documents and records
  • Enrolment data for training programmes
  • Contracts / Agreements entered
  • Progress Report
  • Questionnaires and surveys
  • Interviews
  • Observations
  • Published data from authorized sources

Evaluation should be based on certain criteria and suggestive list of such criteria is provided hereinafter. However, the list is inclusive and not exhaustive and the Social Auditor must exercise his own discretion and judgement on case to case basis. Also, the feedback from stakeholders should be considered while preparing the Social Audit Report.

Sl.
No.
Particulars
A. Promotion of financial inclusion
1 Number of Workshops/ Awareness Programs conducted by the Social Enterprise for financial inclusion of low-income individuals and businesses with limited resources.
2 Steps taken by the Social Enterprise to create awareness about the Financial Inclusion Schemes already present in the Country like Pradhan Mantri Jan Dhan Yojana, Atal Pension Yojana, Pradhan Mantri Mudra Yojna, Sukanya Samriddhi Yojna, etc.
3 Targeted population intended to be covered and population actually covered by the Social Enterprise and reason(s) for deviations, if any.
4 Initiatives taken to encourage people in the target area to open bank accounts, bank accounts opened by them and number of deposits
transactions done by them.
5 Initiatives taken by the Social Enterprise to promote financial literacy and education among the targeted population and ensure women inclusion in the same.
6 Initiatives taken to ensure that low-income individuals have access to emergency loans, consumer loans, housing loans and business loans at affordable rates.
7 Details of source of funds for undertaking the activities under the head of financial inclusion and programme wise fund utilisation details.
8 Impact of the awareness programs conducted by the Social Enterprise and has it improved the standards of lives of the poor and the disadvantaged.
9 Has the Social Enterprise taken appropriate actions like advertisement policy to ensure Diversity and Equity in Financial Inclusion?
10 Initiatives taken to make people aware of the benefits of retirement plans and insurance policies and provide them with affordable retirement plans that will give them good returns post retirement.
11 Initiatives taken to provide tailor-made and custom-made financial solutions to poor people as per their individual financial conditions, household needs, preferences and income levels.
12 Initiatives taken to open common service centres in the rural areas to offer electronic business services as well as e-governance to people living there.
13 Initiatives taken to help people to receive government approved documents like PAN Card, Aadhar No., Voter ID etc. so that they can avail subsidies and other services offered by the Government that they are actually entitled to.
14 Initiatives taken to provide women with exposure to multiple affordable saving instruments, various forms of credits available in the market to help them start a new small business venture or to take up a training course to apply for a new occupation.

Reporting

The Social Audit Report shall include information about the objective set out at the beginning of the Social Audit, methodologies adopted, observations, findings and recommendations if any. The Social Auditor shall also identify the challenges faced in implementation of the projects / activities and suggest areas for improvement based on observation, interview and feedback received from stakeholders. The Social Auditor shall also list out the limitations of the audit process which might include inability to identify all stakeholders, non-availability of proper response from stakeholders, and so on and point out the extent to which such limitations impact the Audit Report. The Report of Social Audit shall be as per the format notified by the ICSI from time to time.

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To Read Related post Social Audit Standard

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No.
Draft Social Audit Standards
1 Draft Social Audit Standard on eradicating hunger, poverty, malnutrition and inequality (ICSI SAS-01)
2 Draft Social Audit Standard on promoting health care including mental healthcare, sanitation and making available safe drinking water (ICSI SAS-02)
3 Draft Social Audit Standard on promoting education, employability and livelihoods (ICSI SAS-03)
4 Draft Social Audit Standard on promoting gender equality, empowerment of women and LGBTQIA+ communities (ICSI SAS-04)
5 Draft Social Audit Standard on ensuring environmental sustainability, addressing climate change including mitigation and adaptation, forest and wildlife conservation (ICSI SAS-05)
6 Draft Social Audit Standard on protection of national heritage, art and culture (ICSI SAS-06)
7 Draft Social Audit Standard on training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports (ICSI SAS-07)
8 Draft Social Audit Standard on supporting incubators of Social Enterprises (ICSI SAS-08)
9 Draft Social Audit Standard on supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building (ICSI SAS-09)
10 Draft Social Audit Standard on promoting livelihoods for rural and urban poor including enhancing income of small and marginal farmers and workers in the non-farm sector (ICSI SAS-10)
11 Draft Social Audit Standard on slum area development, affordable housing and other interventions to build sustainable and resilient cities (ICSI SAS-11)
12 Draft Social Audit Standard on disaster management, including relief, rehabilitation and reconstruction activities (ICSI SAS-12)
13 Draft Social Audit Standard on promotion of financial inclusion (ICSI SAS- 13)
14 Draft Social Audit Standard on facilitating access to land and property assets for disadvantaged communities (ICSI SAS-14)
15 Draft Social Audit Standard on bridging the digital divide in internet and mobile phone access, addressing issues of misinformation and data protection (ICSI SAS-15)
16 Draft Social Audit Standard on promoting welfare of migrants and displaced persons (ICSI SAS-16)

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