Page 16 - LESSION 16.pmd

Management of An Inclusive ECCE Centre

16.6 Accounting and Auditing

The main objective of auditing is to enable the ECCE staff to form an opinion on
Notes the accuracy of the financial statements prepared by them for a given period.
Auditing also helps them to improve the centre’s accounting system. The secondary
objective of auditing is to detect or prevent errors. Auditing, therefore, enhances
staff skills in financial management and evaluates performance.

The funding agencies issue financial regulations from time to time whereby audited
accounts of a given financial period must be submitted to facilitate financial
decisions, for example, allocation of grants.

At the end of each financial year or budget period the Centre Head has a statutory
responsibility to prepare and present to the funding bodies an audited financial
report. This should give a true view of the financial position of the centre.
Therefore, it must be done with reasonable care and skill.

Auditing is of two types:
• Internal Auditing

• External Auditing

Internal auditing is intended to ensure regular and frequent checking on a centre’s
financial transactions and records. It also serves to check whether all financial
transactions have taken place according to budget, to set procedures following
management policies.The focus of external auditing is to establish the truth and
fairness of the accounts. It gives added credibility to unaudited financial statements
and records of the centre’s financial transactions. It confirms their compliance to
the statutes.

16.6.1 Importance of Accounting and Social Auditing

Accounting and social auditing is the process of communicating the social and
environmental effects of organizations’ economic actions, to particular interest
groups within society and to society at large. This can help an organisation to
investigate its performance against social, environmental and economic objectives,
and ensure that it is working in accordance with its values. Social accounting
may be defined as identification and recording of business activities regarding
social responsibility. Social responsibility concept is the one of the important
concept of management. Social accounting is very important tool to measure the
performance of any company in view of social responsibility.

Objectives of Social Accounting

The main objective of social accounting is effective utilization of resources. The
others are to:
• Provide you with an ongoing record of how your ECCE centre has developed
and changed overtime;

130 EARLY CHILDHOOD CARE AND EDUCATION