In the history of social protection programmes in India, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is the most expansive and ambitious programme ever. In 2009/10 alone, over 380 billion rupees (US$8 billion) were spent to employ over 50 million households under this scheme. To oversee such expansive coverage, an elaborate monitoring and evaluation system has been enshrined in the law. It was also realised that non‐state actors need to be included in the monitoring process for collective accountability and ensuring transparency. Social audits are unique collaborative governance mechanisms which are not only participatory programme evaluation exercises but also lead to empowerment of the poor. They are a platform for the vulnerable to raise their ‘voice’ and assert their ‘rights’; to hold the administration accountable and assume collective responsibility, thereby potentially transforming social protection to social justice. This article analyses the social audit framework from a policy design perspective, in light of field reports and recent changes in the rules and aims, to unravel why, despite the merits, it is not yet the ‘magic silver bullet’ for poverty alleviation.