Social Audit of MGNREGA Scheme | 04 Oct 2023

Source: TH

Why in News?

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a fundamental component of India's social welfare initiatives, has been marred by persistent concerns regarding a high incidence of corruption.

• Although the program incorporates mechanisms, such as social audit units, recent statistics reveal disappointing outcomes in terms of fund recovery and overall effectiveness.

What does Recent Statistics Suggest?

• In the ongoing financial year (2023-24), social audit units flagged misappropriation amounting to ₹27.5 crore under MGNREGA.
  • After taking corrective actions, this amount reduced to ₹9.5 crore, but only a meager ₹1.31 crore (13.8% of the total) has been recovered.
  • The recovery rates in previous financial years show a similar trend of inefficiency:
    • In 2022-23, the recoverable amount was ₹86.2 crore, but only ₹18 crore (20.8% of the total) was recovered.
    • In 2021-22, ₹171 crore was flagged, yet a mere ₹26 crore (15% of the total) was recovered.
• These consistently low recovery rates raise significant concerns about the scheme's effectiveness in combating corruption.
  • The low recovery rate also jeopardizes the credibility of the entire audit process. This threatens to undermine public trust in MGNREGA's integrity and purpose.

What is Social Audit Mechanism?

• About:
  • Social Audit is the examination and assessment of a programme/scheme conducted with the active involvement of people and comparing official records with actual ground realities.
    • It is a powerful tool for social transformation, community participation and government accountability.
  • It is different from Financial Audit. The financial audits scrutinize financial records to assess an organization's financial health, social audits concentrate on evaluating a program's effectiveness in achieving its social goals by involving stakeholders.
• Social Audit Mechanism under MGNREGA:
  • Provision:
    • Section 17 of the MGNREGA has mandated Social audit of all works executed under the MGNREGA.
    • The Audit of Scheme Rules, 2011, also known as the Mahatma Gandhi National Rural Employment Guarantee Audit of Schemes Rules, 2011, were developed by the Ministry of Rural Development in collaboration with the Comptroller and Auditor General (CAG) of India.
      • These rules outline the procedures for social audits and the duties of various entities, including the Social Audit Unit (SAU), state government, and field workers of MGNREGA, to be followed nationwide.
  • Related Issues:
    • Fund-Starved Units: Social audit units are grappling with insufficient funding, hindering their ability to function effectively.
      • The Union government provides funds to social audit units to ensure their independence from states.
      • However, issues with timely fund allocation have left units in states like Karnataka and Bihar without funds for nearly two years.
    • Lack of Training: Inadequate training and resources further hinder their effectiveness in identifying malpractice.
    • Personnel Shortage: Insufficient staffing makes it difficult for social audit units to carry out their duties effectively.
    • Low Recovery Rate: Several states, including Gujarat, Goa, Meghalaya, Puducherry, and Ladakh, have consistently reported "zero cases" and "zero recoveries" over the last three years. This raises questions about the effectiveness of monitoring in these regions.
      • States like Telangana, despite having active social audit units, struggle with low recovery rates.

Way Forward

• Stakeholder Engagement: Involve all stakeholders, including beneficiaries, civil society organizations, government officials, and auditors, in the evaluation and redesign of the social audit process.
  • Also, there is a need to Invest in training and capacity-building programs for auditors responsible for conducting social audits.
• Whistleblower Protection: Establish a robust mechanism for protecting whistleblowers who report irregularities or corruption in MGNREGA projects. Encourage individuals to come forward without fear of reprisal.
• Community Participation: Promote active participation of local communities in the audit process. Empower them to monitor and report on project progress and fund utilization.
  • Also, there is a need to establish Grievance Redressal Committees at the village level to address issues promptly.
• Feedback Mechanism: Establish a feedback loop where audit findings are used to improve the MGNREGA program. Identify systemic issues and work towards continuous improvement.