Lorna Turner, CEU Ltd

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Lorna Turner, CEU Ltd Board member of Social
Audit Network Ltd
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What is Social Accounting and Audit?
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• Enables an organisation
• to measure its social, environmental economic
  impact to report on its performance (triple
  bottom line) and to provide the information
  essential for planning future action and
  improving performance.
• To prove the value of the organisations work
• and improve their performance

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What is Social Accounting and Audit?
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• A cyclical process to be embedded as part of an
  organisations planning
• Analysing qualitative and quantitative
  information not all impacts have financial value
• Through dialogue with stakeholders
• With external verification
• A framework allows flexibility for the
  organisation eg scope of work, tools used within

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Benefits
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• Accurately report on achievements evidence for
  internal external use for funders, contractors,
  investors
• Assess social, environmental, economic, (and
  cultural) added-value against mission and
  objectives
• Improved planning
• Better resource allocation
• And accountability

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Social Accounting and Audit the Principles
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• Multi-perspective
• Comprehensive
• Regular
• Comparative
• Verified
• Disclosed
• Embedded

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Social Audit Network, Research Project

• Funded by Northern Rock Foundation,
• Communities Scotland and SEN Merseyside
• To develop better collective intelligence about
  which tools work best for whom and in what
  circumstances
• To contribute towards developing shared reporting
  standards from funders and regulators

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Objectives

• To identify the extent to which social accounting
  and audit has been/is being used by social
  economy organisations. (North East, Cumbria
  Merseyside)
• To understand the factors deterring take-up or
  continuation
• To explore to what extent social accounting meets
  the needs of the organisations themselves
• To explore to what extent social accounting and
  audit does (or could) meet the requirements of
  funders, sponsors, investors and contractors

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Overview

• Steering Group meets 3-4 times
• Survey of organisations with experience of SAA
  and case studies
• Seminar for organisations and practitioners 25/04
• Interviews with funders, investors and
  contractors
• Seminar for funders, investors, etc. 28/03
• Meeting with SROI people 17-18/04
• Write and publish report
• Launch of report 25/06
• Conference to consider findings in Scotland 07/11

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Main statistics and Findings

• Over 115 organisations contacted - 80 completed
  initial questionnaire - 61 the detailed
  questionnaire
• 70 organisations had kept SA - 52 got them
  audited
• 17/52 organisations kept SA and had them audited
  more than once (significant drop!)
• 14/17 practice SAA regularly (3 not part of a
  training programme)

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More Findings

• No obvious correlation between use of SAA and
  size
• The older more established organisations tended
  to keep SA more regularly
• Most organisations (65) practised SAA as part
  of a supportive training programme
• Being part of a training programme does not mean
  the process becomes embedded
• Main reasons for a drop off in SAA are lack
  of funds, other priorities
• Stress on getting buy-in from the whole
  organisation

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Ease / difficulty of the process

• Most difficult elements of the process
• Setting up new systems to collect data
• Carrying out consultation with stakeholders
• Analysing the data
• Writing the social accounts
• Easiest..
• Clarifying the mission, objectives, etc.
• Working through the audit process
• Also.
• Assistance from outsiders very helpful
• Some reported second time round less onerous

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Benefits

• Most beneficial to organisation
• Identifying issues that need addressed
• Understanding how the organisation performed and
  the impact
• Improving services
• Very few (8) referred to winning contracts or
  competitive advantage (a reflection of current
  market but not future?)
• Most beneficial to individual
• Over-arching understanding of the organisation
• Learning about new consultation methods

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Snags and problems

• Biggest problem
• Time it takes to do the work and having to do it
  on top of everything else (by far!)
• Followed by
• Managing the SAA material and writing the social
  accountsand
• Formulating the questions for consultation
• Also a significant number (23) reported a lack
  of interest from their Board

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Recommendations for improvements

• Most popular
• Acceptance of SAA by funders, investors, etc.
  instead of separate reports to each
• Funding packages to fund SAA
• Nation-wide training for practitioners and social
  auditors
• But not keen on
• Making SAA compulsory
• Having a more rigid and prescriptive framework
• Some support for
• System of levels within SAA

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Interviews with funders

• 28 interviewees (18 investors/funders 5 public
  sector 5 other agencies)
• Geographically (NE England 8 Cumbria 2
  Merseyside 6 Scotland 5 England/Wales 3 UK 4)

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Understanding of SAA

• All interviewees reported some understanding of
  SAA funders/investors generally lower
• 39 had received social accounts
• 75 had seen/read social accounts
• 36 had attended a SAA event
• 5 (or a colleague) had attended a Social Audit
  Panel meeting

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Social Audit Process

• 50 did not know about the process
• 57 thought it sufficiently rigorous
• 2 strongly did not advocated use of financial
  auditors
• Use of Panel favoured but credibility issues
• Should stakeholders (beneficiaries) be on the
  panel?

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Current reporting mechanisms

• 14 have either standard framework or agree one
• 3 require some form of Social Report
• Information received (economic data
  quantitative detail) - sometimes hard to get
  information
• Meets basic reporting requirements - but does not
  give anything deeper (impact not just
  performance)

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Future reporting mechanisms

• 75 thought SAA might be the basis but -
• 10 (36) emphasised it would take a long time
  before it became accepted
• Further suggestions for reporting mechanisms
• Include full financial information
• Blend SAA and SROI
• Include section on governance
• Set clear social outputs KPIs

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Should SAA be required?

• 93 (26) said Yes
• 3 suggested it will become mandatory
• But
• Concerns expressed about capacity
• How can the process be made easier?
• How can it be proportionate to size and capacity?

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• Proposals and
• Recommendations
• (key points)

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About the Social Accounting process

• SAA should continue to develop links with SROI as
  a complementary process build on shared key
  principles and develop a common verification
  process
• There should be a distinction between
  Organisational Objectives how an organisation
  affects the people and the planet and Key
  Aspects how an organisation is managed (eg.
  governance, financial sustainability)

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About the Social Accounting process

• Consideration should be given to developing
  social accounting kits for organisations with
  similar objectives
• More consideration should be given to analysing
  stakeholders and the relationships that an
  organisation has with them
• Social accounting and audit should eventually
  become compulsory for those organisations in
  receipt of funding provided that resources for
  this are made available

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About the Social Audit

• There should be three different cost levels of
  verification determined by the degree of
  investigation requested
• Organisations whose social accounts have been
  audited should receive a SAN charter-mark
• All audited social accounts should be placed on
  the SAN website and be publicly available
• All SAN approved Social Auditors should go
  through accredited training
• SAN has to ensure the quality standards of the
  Social Auditors through peer review and
  continuing professional development

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Future work

• A Working Party should be formed with SAN and
  funders, investors and contractors to develop a
  Common Reporting Framework to be piloted
• To continue the initial work with SROI in terms
  of building on common principles and developing a
  common verification process

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• For a copy of the report, please go to
• www.socialauditnetwork.org.uk
• Really Telling Accounts

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Additional information resources

• Nef Prove and Improve, 2005
• Social Accounting and Audit Manual
• Social Audit Network wallchart (free copies
  available)
• For more information on Social Accounting and
  Audit, email info_at_socialauditnetwork.org.uk