GOVERNANCE AND

MANAGEMENT
COOPERATIVE

OVERVIEW OF SOCIAL AND ECONOMIC

STANDARDS FOR COOPERATIVES
 PERFORMANCE AUDIT REPORT
(GOVERNANCE AND MANAGEMENT AUDIT REPORT FOR
COOPERATIVESMC NO. 05-2017) Series of 2017
GOVERNANCE AND

Legal Basis
MANAGEMENT
COOPERATIVE

Article 53 of R.A. 9520, otherwise known as the

Philippine Cooperative Code of 2008, to wit:
“Every cooperative shall draw up regular reports of its
program of activities, including those in pursuance of their
socio-civic undertakings, showing their progress &
achievements at the end of every fiscal year. xxx”
 PERFORMANCE AUDIT REPORT
(GOVERNANCE AND MANAGEMENT AUDIT REPORT FOR
COOPERATIVESMC NO. 05-2017) Series of 2017
GOVERNANCE AND

Legal Basis
MANAGEMENT
COOPERATIVE

Article 80 of the same Code states:

“Cooperatives registered under this Code shall be subject
to an annual financial, performance, and social audit. xxx”
Rule 8, Section 2 (b) of the Implementing Rules and
Regulations of R.A. 9520 specifies Performance Audit
Report as one of the mandatory reports to be submitted to
the Authority.
 PERFORMANCE AUDIT REPORT

Purpose
GOVERNANCE AND

The purpose of the Governance and Management Audit Report

MANAGEMENT
COOPERATIVE

is to determine the presence of the documents needed to be

maintained by every cooperative in the operation and
management of its business. Specifically, the report will serve as:

a. regulatory and supervisory tool of CDA in programming the

roadmap of developmental intervention for management and
governance of cooperatives; and
b. management tool of cooperative to identify problem areas in
its governance and management practices.
GOVERNANCE AND PERFORMANCE AUDIT REPORT

Coverage
MANAGEMENT
COOPERATIVE

This Guideline shall govern and cover all registered

cooperatives, regardless of types and categories, except
for micro cooperatives which have the option to use
and/or submit the report.
 PERFORMANCE AUDIT REPORT

Parts of the Performance Audit Report

GOVERNANCE AND

1. Governance and Management Report

MANAGEMENT
COOPERATIVE

The Governance and Management report comprises the

non-financial component of the Performance Audit
Report. To prepare this report, a Governance and
Management Working Paper shall be used. The remarks
portion should indicate findings in the document
whether it is not in the possession by the right person,
found to be incomplete in substance, or the document is
not duly signed by responsible officers.
 PERFORMANCE AUDIT REPORT

Parts of the Performance Audit Report

GOVERNANCE AND

1. Governance and Management Report

MANAGEMENT
COOPERATIVE

There are two (2) major components in the working

paper. The first component is the Governance
Reports while the second component is the
Management Report/Records.
 PERFORMANCE AUDIT REPORT

2. Financial Performance Standards for Cooperatives

This report reflects the financial performance of the cooperative
GOVERNANCE AND

using its Stability, Turn-Over Ratio, Efficiency, Profitability and

MANAGEMENT
COOPERATIVE

Structure of Assets (STEPS) as indicators.

The STEPS is computed based on the selected formulas or ratios,
data of which will be sourced from the Audited financial
Statements, Notes to Financial Statement and Cooperative
Annual Progress Report.
The indicators under the STEPS are composed of major
categories with a corresponding formula/ratio.
 PERFORMANCE AUDIT REPORT

3. Performance Audit Report

GOVERNANCE AND

This report contains the overall summary of the

MANAGEMENT
COOPERATIVE

observations and findings gathered from the Governance

and Management Report – Part 1. It contains the strong
areas of the cooperative and the areas to be improved or
for compliance.
The Cooperative shall provide the actions needed and
timelines for each area to be improved or for
compliance.
 PERFORMANCE AUDIT REPORT

The report also shows the result of the Financial

GOVERNANCE AND

Performance (STEPS) and the overall rating for the non-

MANAGEMENT
COOPERATIVE

financial and financial components.

Only this report can be printed, duly signed by the
Cooperative’s Audit Committee Chairperson or Internal
Auditor and approved by the Chairperson or the
General Manager.
 PERFORMANCE AUDIT REPORT

Part I
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

A. GOVERNANCE AND
MANAGEMENT REPORT
 PERFORMANCE AUDIT REPORT

Part I
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

B. MANAGEMENT REPORTS/
RECORDS
 PERFORMANCE AUDIT REPORT

Part II
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

FINANCIAL PERFORMANCE
STANDARDS
 PERFORMANCE AUDIT REPORT

STEPS
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

S – STABILITY
 Liquidity
 Quick Asset Ratio
 Solvency
 Net Institutional Capital
 Capital Adequacy Ratio
 PERFORMANCE AUDIT REPORT

STEPS
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

T – TURN-OVER RATIO
 Asset Turn-Over
 Receivable Turn Over
 Accounts Receivable Turn-over
 Loans Receivable Turn-over
 Service Receivable Turn-over
 PERFORMANCE AUDIT REPORT
STEPS
E – EFFICIENCY
GOVERNANCE AND

 Administrative Efficiency
MANAGEMENT
COOPERATIVE

 Cost Borrowing Rate

 Cost Per Volume of Business
 Extent of Volume of Business
 Growth in members’ contribution
 Delinquency Rate
 Adequacy of Provisioning of APLL
 Over 12 months past due
 1-12 months past due
 PERFORMANCE AUDIT REPORT

STEPS
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

P – PROFITABILITY
 Return on Assets
 Return on Member’s Share
 Return on Net Surplus
 PERFORMANCE AUDIT REPORT

STEPS
GOVERNANCE AND

S – STRUCTURE OF ASSETS
MANAGEMENT
COOPERATIVE

 Percentage of Non-Earning Asset over

total assets
 Percentage of Investment
 Extent of Assets financed by obligations
 Extent of External Borrowings
 Extent of Assets financed by member’s
share capital
GOVERNANCE AND PERFORMANCE AUDIT REPORT

AREAS TOTAL POINTS

MANAGEMENT
COOPERATIVE

GOVERNANCE &
MANAGEMENT X 40%
FINANCIAL
(STEPS) X 60%
TOTAL 100%
 SOCIAL AUDIT FOR COOPERATIVES
REVISED GUIDELINES ON SOCIAL AUDIT OF COOPERATIVES
MC NO. 2018-01 Series of 2018
GOVERNANCE AND

Cooperative’s social development services, the Social

MANAGEMENT
COOPERATIVE

Audit of cooperatives consists of two (2) phases, namely:

 Social Performance Assessment; and,
 Social Impact Assessment
This Guidelines, however, covers only the first phase of
the Social Audit Process. A separate Guidelines for Social
Impact Assessment shall be set forth in a separate
memorandum circular which has yet to be issued.
 SOCIAL AUDIT FOR COOPERATIVES

Article 80 of the same Code states:

GOVERNANCE AND

“Cooperatives registered under this Code shall be

MANAGEMENT
COOPERATIVE

subject to an annual financial, performance, and

social audit. xxx”
 SOCIAL AUDIT FOR COOPERATIVES

Article 53 of R.A. 9520, otherwise known as the

GOVERNANCE AND

Philippine Cooperative Code of 2008, to wit:

MANAGEMENT
COOPERATIVE

“Every cooperative shall draw up regular reports of

its program of activities, including those in
pursuance of their socio-civic undertakings,
showing their progress & achievements at the end
of every fiscal year. xxx
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

Coverage
MANAGEMENT
COOPERATIVE

All registered cooperatives, regardless of types and

categories, shall be subject to social audit as herein
contemplated..
 SOCIAL AUDIT FOR COOPERATIVES

Objectives of the Circular

GOVERNANCE AND

• To guide the cooperative in the assessment of

MANAGEMENT
COOPERATIVE

its social performance;

• To require the cooperative to use the
prescribed tools and format in the preparation
and submission of social audit report; and,
• To provide the manner and period of submitting
social audit report to the CDA.
 SOCIAL AUDIT FOR COOPERATIVES
2. Social Dev’t.
1.Social Plan and Budget
10. Social Impact
Assessment- Goals Tools
GOVERNANCE AND

MANAGEMENT
COOPERATIVE

3. Social Dev’t..
9. Social Audit Program
SOCIAL AUDIT
REPORT
4. Social
8. Social Audit Performance
Working Paper
5. Social
7. Auditor Performance
6. Management Assessment-
Social Performance
Report
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

2.Social Devt
MANAGEMENT
COOPERATIVE

Plan & Budget

Clear statement of
acceptable and Annual programs, Set of activities and
desirable future social projects and activities projects that the
conditions that provide with corresponding cooperative
direction for the things resources approved by implements to achieve
that the coop wants to the BOD and the GA. its social goals
achieve.
1.Social Goals 3. Social Devt
Program
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

MANAGEMENT
COOPERATIVE

5.Mgt. Social
Performance Report
Effective translation of
a cooperative’s mission Review of the
into practice in line Report on the
performance of the
with accepted social accomplishment of the
cooperative vis=a=vis
values or making a cooperative’s social
its social development
cooperative’s social development plan.
plans and budget
mission a reality.
6.Social Performance
4.Social Performance
Assessment
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

8.Social Audit
MANAGEMENT
COOPERATIVE

Working Document
Either the cooperative’s Set of activities and
internal auditor, audit Instrument used by the projects that the
committee or social auditor in the conduct cooperative
auditor designated by of social audit. implements to achieve
it. its social goals

7.Auditor 9. Social Audit

Report
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

MANAGEMENT
COOPERATIVE

Process of monitoring, analyzing, and

evaluating the intended social
outcome/result both positive and
negative as well as the planned
interventions and social change
processes involved in said
interventions
GOVERNANCE AND SOCIAL AUDIT FOR COOPERATIVES

MANAGEMENT
COOPERATIVE

THANK YOU VERY MUCH FOR

YOUR KIND ATTENTION

GOD BLESS YOU!!!