Prove
Account fully for what you did and what changed.
A report on your social, environmental and economic performance and impact across the year, built on evidence you collected as you went rather than reconstructed afterwards.
Social accounting and audit
A full account of what the whole organisation achieved this year, socially, environmentally and financially, checked by people who do not work for you.
Prove, improve, account
The Social Audit Network sums up the purpose in three words, and they are worth taking in that order — the middle one is the reason most organisations keep doing it after the first year.
Improve
Find out what is not working while you can still change it.
The process puts your objectives, your stakeholders' views and your actual results side by side. Most organisations find something uncomfortable in the first year, which is the point.
Account
Answer to the people you exist for.
Members, beneficiaries, funders and staff get a report that has been questioned by somebody independent, rather than a set of selected highlights.
The four steps
One cycle, on the same annual rhythm as your financial accounts. Each step is a question rather than a task, which is how the guide frames it.
- 1
What difference do we want to make?
Purpose, scope, stakeholders and objectives.
You set out what the organisation exists to do, agree which parts of it this period's accounts will cover and which stakeholders will be consulted, and say plainly what is not covered. It ends in a Social Accounting Plan.
- 2
How do we know we are making a difference?
Indicators, and the routine that collects them.
Each objective gets indicators and a source of data, and consultation with stakeholders is built into the year rather than bolted on at the end. Most of the work of social accounting is here, and it is mostly ordinary record-keeping done deliberately.
- 3
What is the difference we are making?
The Draft Social Accounts.
Everything collected is analysed and written up against the objectives, with the uncomfortable findings in it. Anything awkward goes in with the context explained and a note of what has been done about it.
- 4
Can we prove we made a difference?
Verification by a Social Audit Panel.
The draft goes to a panel of stakeholders and independent people, chaired by a social auditor approved by the Social Audit Network. They question it and ask for evidence, then issue a Social Audit Statement.
How it gets verified
The vocabulary matters, because these are four different documents and people use the names interchangeably. What you can put in front of a funder is the last one.
Draft Social Accountsprepared by you, from the year's evidence
Social Audit Panelstakeholders and independents, chaired by an approved auditor
Social Audit Statementthe panel's finding on accuracy and relevance
Social Reportthe audited account, for funders and members
The Social Audit Network keeps the register of approved social auditors who chair the panels. Levels of assurance vary — audited self-verification for basic accounts, a standard audit or standard plus for fuller ones.
How it differs from SROI
Scope
An SROI values one programme. Social accounting accounts for the whole organisation across a whole year, on a repeating cycle, which is why it sits naturally alongside your financial year end rather than as a separate project.
The line on money
This is the real difference. Where an outcome has a genuine financial value, social accounting will use it. Where it does not, it declines to invent one, and reports the change through description, observation and what the people it happened to actually said.
SROI takes the opposite view: assign a financial proxy, state it openly, and let it be challenged. Neither is wrong. They disagree about what a number is for.
Verification
SROI assurance is optional and is done by Social Value International. Social accounting builds verification into the method: a panel of your own stakeholders plus independent people, chaired by an approved auditor, which questions the draft before it becomes a report.
Using both
They are compatible. A common pattern is annual social accounts for the organisation, with an SROI on the one programme a funder is asking hard questions about. The comparison table sets out which is which.
Running it in a small organisation
Social accounting scales down better than SROI does, because the method is a discipline rather than a calculation. A very small organisation can run a credible cycle on:
- A written statement of what you are trying to achieve, and for whom.
- Three or four indicators per objective that you can actually collect, chosen before the year starts rather than after it.
- One structured conversation with each stakeholder group during the year.
- An honest draft, including what did not work.
- A panel — which for a small organisation might be three people, one of whom does not know you.
Questions
Is this the same as our statutory accounts?
No, and it does not replace them. Statutory accounts report money. Social accounts report what the money achieved, alongside the environmental and economic effects. They work best prepared together, from the same records.
Who can chair a Social Audit Panel?
A social auditor approved by the Social Audit Network, which keeps the register. We prepare social accounts and we do not verify them — that would defeat the purpose — but we will help you find an auditor.
Do we have to publish it?
Nothing compels you to. The point of the method is accountability to your stakeholders, so an unpublished social report is a strange object. Most organisations publish and use it as their annual impact report.
What if the accounts show something bad?
Then they go in, with the context explained and a note of what you have done about it. A panel that finds only good news will say so, and that finding is worth less than the process cost you.
How is this different from an impact report?
Most impact reports are written by the organisation, about the organisation, with no external check. A social report has been questioned by a panel that includes people who do not work for you, and carries their statement.
Sources
- Prove! Improve! Account! The New Guide to Social Accounting and AuditAlan Kay, Social Audit Network. The four steps, the audit panel and the verification chain.
- Social Audit NetworkWhat social accounting is, the four-step cycle and the register of approved social auditors.
- The Principles of Social ValueSocial Value International. The eight principles, the practitioner training and the assurance scheme built on them.
- A guide to Social Return on Investment (2012)The six stages, the Impact Map, the four adjustments and the arithmetic. Originally published by the Cabinet Office.