The applicability of social auditing in Maltese co-operative societies

Abstract

Foreign co-operatives such as Co-operative Group, Co-operative Bank, Co-operative Insurance Services, all of which are based in the UK, have undertaken social auditing and published their social audits, of which some are also available on the Internet. The aim of this dissertation is to analyse the applicability of social auditing in Maltese co-operative societies. The research, which extended over nine months, involved mainly the use of semi-structured interviews with fifteen Maltese co operatives societies and five Maltese co-operative auditors. It was found that: • Co-operatives did have social and non-commercial objectives. However, internal objectives were ranked higher than community-based objectives. Social bookkeeping for a full-scope social audit was not yet in place. Those interested in having the social report externally verified viewed a co-operative trained auditor as the appropriate person. All respondents agreed that this social report needs to be disclosed to co-operative members but were reluctant to disclose it to third parties. • Both groups of respondents acknowledged that a fully-fledged professional financial audit was carried out but that the present statutory financial reporting was not giving the clear picture of co-operatives. Nonetheless, few co-operative representatives were willing to go beyond the existing system. Opinions differed between both groups of respondents as to whether social auditing should remain voluntary, where auditors stated that it should be mandatory. Furthermore, the majority of co-operatives were not ready for introducing a social audit. Reasons included deficiencies in professional management, adequate technical audit knowledge and also the lack of genuineness of a number of such co-operatives. • It was also agreed that a social audit could enhance co-operatives, both in their public image and in relation to their competitive customer base and that Apex and CCF were viewed as those organisations that needed to help either technically or financially, in undertaking a social audit. The dissertation concludes that social auditing in Maltese Co-operative Societies is as yet only applicable for internal purposes. Some time needs to pass for cooperatives to embark on a full-scope social audit. Among the recommendations the study proposes, there are the setting-up of a Forum, the creation of an annual questionnaire to co-operatives and the need for more educational courses.