Fight Against Poverty - Case Study of CSR Audit by PricewaterhouseCoopers - A Learning Lesson
Fight against poverty is not so easy when our auditors have no skill and knowledge in adopting the social audit standards. This is not "stable" which produces "good horse". This is "horse" alone, known for its skill and talent. Big audit firms are just "stable". It needs "good horse", with good skill, knowledge and talent to improve the social audit business in India. Talent may be there in financial audit business. But there is huge quality and skill gap in the social audit business and the ESG Audit business in India. This gap is just nightmare. This is difficult to fight against poverty.
This is quality question mark from not less than the big social audit firm, PricewaterhouseCoopers Private Limited (PwC). The PwC conducted Social Impact Assessment Audit of CSR Projects of REC Limited in Orissa. Audited utilization certificate which is financial in nature, are relied strongly by the auditor along with the project completion report and the memorandum of agreement with the supplier. This is not fault finding. But it needs honest admission. This shall give better edge and respect to the PricewaterhouseCoopers, which is more than 130 years in the audit business. This is not stable, which improves "horse quality". This is alone the "horse", known for its talent and skill. If "horse" is poor, entire quality audit shall collapse.
The PricewaterhouseCoopers has failed to take note of the "CSR Project Main Objective". The main objective of the CSR project was to improve the home-lighting in poorly electrified areas of Odisha and distribution of solar lanterns in poorly electrified areas of backward districts of Odisha.
The auditor fails to understand the basic difference between the "Poor Electrified Area" with the "Good Electrified Area" and "Backward Districts" with the "Smart Rich District". The CSR beneficiary which was meant for the "Poor Electrified Area" has been supplied in the "Good Electrified Area" at Bhubaneshwar. The CSR benefit was meant for the backward districts of Orissa, like Nabrangpur, Malkangiri, Koraput, Rayagada and Kalahandi. This was not meant for "Smart Rich District Bhubaneshwar" the State Capital of Orissa. The "Dindayal Upadhyaya Gram Jyoti Yojana”, Ministry of Power, defines "electrified village" as one that has the following: (i) provision of basic infrastructure such as distribution transformers and lines in the inhabited locality, (ii) provision of electricity in public places like schools, panchayat office, health centers, dispensaries, and community centers, and (iii) at least 10% of the total number of households in the village are electrified.
The Major CSR beneficiary in this project is the "Kalinga Institute of Social Science"(KISS) at smart city Bhubaneshwar. The KISS is good electrified area, with rich and excellent supply of electricity from the distributor transformer. The power cut off rate is almost zero at the KISS. The KISS has also self generating electricity, with solar electricity mounted on the roof. Hence, the KISS is a good electrified area. This is demonstrated very clearly with the "Visual Management Tool" mostly used in the Social Audit. This also demonstrates that the CSR benefit was not meant for the KISS. This was meant entirely for the poor people of the backward districts of Orissa.
This is a big lapse in the audit quality part. The auditor, used the "Audited utilization certificate", to make a blind opinion. In social audit, any trust on the "financial document" is wrong and bogus approach. Whenever any social scheme or CSR projects are there, the financial document should not be trusted.
This is seen clearly, the CSR program has not been delivered to the target population. This is blunder by pass of standard. To fill such huge gap of audit quality and standard, as reflected in the PricewaterhouseCoopers (PwC), the Institute of Chartered Accountants of India has introduced the Social Audit Standard, required to be mandatorily implemented by the Qualified Social Auditor. The standard now mandates case study tool, which is almost missing in the above case.
If case study is here the "subject" user might have thrown data at Bhubaneshwar, with the actual use of CSR benefit. Since, electricity is available most of the time, the CSR benefit has little relevancy. This was meant for the poor people of Orissa, residing in the backward districts. Most auditors, as demonstrated above do not know the importance of the case study or do not know where to begin ! This is skill and quality gap!
Most Auditor, either ignore case studies tool or confuse it with other types of social research. The Impact Case Study Tool (ICS Tool), what I developed, is a smart breed of the case study Tool. The importance of this tool is that, it can be synchronized with the "Why-Why Analysis" and "Fish Bone Skeleton Analysis", to identify at the same time key metrics problem area. The ICS Tool, deeply examines the "subject" in question. But, this tool is very difficult to handle by less experienced person. This needs excellent experience of Human Resource Management experience & knowledge with the "Lean Management" experience. The "subject" is tested around "Why-Why Analysis" and sometimes social auditor turns up again for two to three times before the "subject", after conducting the "Fish Skeleton Bone Analysis."
ICS Tool : In Social Audit
I used this tool in my past experience very efficiently in the ESG Audit as well as handling the recruitment drive, conducting the satisfaction survey of the employees on salary benchmark and conducting company environment on employees retention and the prevention of sexual harassments measurement.
This Tool, needs the first qualification and skill to assimilate and mix with the "subject" completely. The quality and skill of the social auditor shall be of such degree, so that he can enter and sit inside the belly of the subject and extract necessary information. In Social Audit, this is important tool for undertaking qualitative research in the Social Impact Assessment Audit.
In one example, demonstrated below, our "subject" character, has received excellent impact of high degree level, where CSR performance is captured. This changes picture completely of the CSR delivery. A CSR program at Mumbai has been investigated as an example for shelter less people during cyclone. The CSR service delivery covered proper shelter with dry clothes, food, medicines, bag to keep domestic items, bed roll for sleeping, utensils for cooking and provided near shelter job exchange consultation to provide job during flood. The "subject" who has been deeply investigated is "Vijay Srivastava", from Kanpur. Our "subject" hero. "Vijay", home is the open sky. He narrates the impact story in Hindi, which English translation is given at the end:
विजय कहते हैं "अभी एक सप्ताह से अधिक समय हुई है जब मुंबई में चक्रवात ओखी के कारण दिसंबर २०२२ में एक दशक में सबसे अधिक 24 घंटे की बारिश हुई थी। तापमान में तेजी से गिरावट आई, स्कूल बंद कर दिए गए और कर्मचारियों को सलाह जारी कर दी की वे घर से कार्य करें । लेकिन जब शहर पर ऐसी कोई आपदा आती है, तो सबसे अधिक खतरा वहां के बेघर लोगों को ही होती है। विजय बताते हैं : " वह बेघर है। वास्तविक बाढ़ केवल कुछ दिनों तक रहती है, इन शहरों में बेघर लोग पहले और बाद में कई दिनों तक प्रभावित होते हैं। ये ज्यादातर कामकाजी लोग हैं और अनौपचारिक काम जैसे व्यवसायों में ये लगे रहते हैं । इनमें बुजुर्ग, विकलांग और पीढ़ियों से सड़कों पर रहने वाले परिवार भी शामिल हैं। मानसून के दौरान, वे गीले कपड़े पहनते हैं और कई दिनों तक भूखे रहते हैं, जिससे वे बीमार हो जाते हैं। उनके पास कपड़े सुखाने के लिए कोई जगह नहीं है, और जिस बोरी में वे अपने कपड़े रखते हैं वह भी भीग जाती है। उनके पास सोने और खाना पकाने के लिए कोई जगह नहीं है। छोटी दुकानें जहां से वे खाना खरीद सकते हैं, ऐसे मौसम में बंद हैं। अधिकांश बेघर हैं, और बाढ़ के बाद लगभग पांच दिनों तक उन्हें काम नहीं मिलता है। इसलिए उनके पास खाना खरीदने के लिए भी पैसे नहीं हैं।"
संस्था के जनकल्याण कार्यक्रम पर विजय बोलते हैं : “यह बहुत ही अच्छी बात है, हमारे जैसे लोगों के सिर पर कम से कम एक छत है। यह छत अब हमें बारिश , तूफ़ान , धुप और ठण्ड से सुरक्षा देती है। अब मैं बेघर नहीं हूँ। बारिस के समय अब मुझे गीले कपडे नहीं पहनने पड़ते क्योंकि सूखे कपडे रखने के लिए बैग है और उसमें अतिरिक्त गर्म कपडे और कम्बल हैं। मैं अब भूखा भी नहीं रहता क्योंकि संस्था अन्नदान करती है। अब मैं बीमार भी नहीं पड़ता। क्योंकि स्थिति अच्छी हो गई है और संस्था आवश्यक दवा भी उपलब्ध करती है। कपडे सूखे रह सके, अब इसकी अच्छी सुविधा है। अब सोने और खाना बनाने के लिए मेरे पास अच्छे साधन हैं , बिछावन हैं और बिस्तर भी हैं। पटरियों पर अब नहीं सोना पड़ता। अब काम भी संस्था दिलवा देती है। मेरे जैसे लोग , जो कुशल श्रमिक हैं , अब इधर उधर नहीं भटकना पड़ता। एम्प्लॉयमेंट एक्सचेंज की सुविधा संस्था दे रही है। पहले के जीवन और आज के जीवन में जमीन आसमान का अंतर है। अब मैं शांती से भगवान कृष्ण का भजन करता हूँ और उन्हें धन्यवाद देता हूँ की उन्होंने संस्था के माध्यम से तत्काल मुझे मदद पहुंचाई"
Translation in English:
Vijay is a daily wage laborer. Vijay said “It has been just over a week since Mumbai received its highest 24-hour rainfall in a decade due to Cyclone Okhi in December 2022. Temperatures dropped sharply, schools were closed and employees were issued orders to work from home. But when such a disaster hits the city, it is the homeless people who are most at risk”. Vijay said further "He is homeless. The actual flooding lasts only a few days. But, the homeless people in these cities being affected for several days before and after. These are mostly working people, engaged in occupations like rag picking, rickshaw pulling and informal work. These also include the elderly, the disabled and families who have been living on the streets for generations. During monsoon, they wear wet clothes and remain hungry for several days, causing them to fall ill. They have no place to dry their clothes, and the sack in which they keep their clothes also gets wet. They have no place to sleep and cook. Small shops from where they can buy food are closed in such weather. Most of the homeless are daily wage laborers, and do not find work for about five days after the floods. That's why they don't even have money to buy food”.
Vijay speaks on the public welfare program of the organization: “This is a very good thing, people like us at least have a roof over their heads. This roof now protects us from rain, storm, sun and cold. I am no longer homeless. Now I don't have to wear wet clothes during rains because there is a bag to keep dry clothes and it has extra warm clothes and blankets. Now I don't even remain hungry because the organization donates food. Now I don't even fall ill. Because the situation has become better and the organization also provides necessary medicines. Clothes can remain dry now, this is a good facility. Now I have good equipment, bedding and beds for sleeping and cooking. No more sleeping on the road tracks. Now the organization also search job for me. People like me, who are skilled workers, no longer have to wander here and there. The organization is providing the facility of employment exchange. There is a world of difference between the earlier life and today's life. Now I peacefully worship Bhagwan Krishna and thank Him for immediately helping me through the organization".
The Orissa CSR delivery was meant for "Vijay" like people. This was not delivered to the target population. This is the quality of poor social audit.
This is now entirely left upon on the "Qualified Social Auditor", to implement the ESG Audit and the Social Impact Assessment Audit, with proper standard and quality determination as mandated by the SEBI Law and the Institute of Social Auditors of India.
Before parting with this opinion, the Social Impact Assessment report in above Orissa's case is without auditor's name! Who is the auditor not known? What is his background not known? This is poor practice. This is seen mostly from the unqualified people, who are in the job of Social Audit. They create blunder mistakes and error. Now this is not permitted, as standard. The Law and Regime on Social Audit have changed.
( Birendra K Jha, is a Pan India practitioner on the "Social Impact Assessment Audit" & "ESG Audit". He is a Qualified & Certified Social Auditor from the ISAI (ICAI). He is Director of HR Lab, a Social Audit firm. Apart from Social Audit, he provides consultation on the ESG Audit & Practice; CSR Audit, CSR funds; CSR Programs; CSR Need Assessment; CSR Program Measurement; Entry & Registration- Social Stock Exchange & provides Capacity Development Training to industries on the CSR & ESG. He is based at Delhi-NCR. He overlooked at senior position as General Manager and Deputy General Manager in the previous South Korean MNC Company in India handling human resource practice and social audit on the ESG practices for more than a decade. He may be approached at: birendrajha03@yahoo.com )
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