some important cooperative practices
TRANSCRIPT
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Alexander B. RaquepoCooperative Governance Practitioner and Advocate
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1. Coops must allocate an allowance for probable losses (bad debts). The standard allocation is 35% for past due loans below 1 year and 100% for loans above 1 year.
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2. According to Philippine Coop Laws, Cooperatives are tax exempted. However, to enjoy this privileged the cooperative must apply for tax exemption at BIR.
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3. Cooperatives are required to submit yearly reports to the Cooperative Development Authority (CDA), a requirement in getting a Certificate of Operation (CO). A Certificate of Good Standing (CGS) is also issued by CDA for coops who have sound financial conditions.
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4. Regular monitoring of DOSRI (Directors, Officers, Staff and Related Interests) must be undertaken. A separate report must be prepared.
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5. Cooperatives are required to use the approved Standard Chart of Accounts (SCA) and must compute its COOP-PESOS Rating every month. COOP-PESOS is a rating system developed by CDA to evaluate the soundness and stability of cooperatives.
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C – Compliance with Administrative and Legal Requirements;
O – Organizational Structure and Linkages;
O – Operational Management; and
P – Plans and Programs.
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P – Portfolio Quality (Portfolio at Risk and Allowance for Probable Losses);
E – Efficiency (Asset Yield, Cost per Peso Loan, Administrative Efficiency, Loan Portfolio Profitability, Operational Self-Sufficiency);
S – Stability (Liquidity, Solvency);O – Operations (Membership Growth,
External Borrowings); andS – Structure of Assets (Non- Earning
Assets, Total Deposits, Share Capital, Loans Receivables)
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6. The basic qualification of Board of Directors will be at least College graduate or 3 years experience in business. Once elected, they are required to undergo a coop governance course.
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7. Loan delinquency is now computed based on Portfolio At Risk (PAR) and not based on loan maturity.
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8. Cooperatives are required to fund its Reserve Funds. This fund must be deposited separately.
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9. Coops are encouraged to network or link with other coops or become active members of apex organizations.
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10. Cooperatives must be externally audited yearly by an independent CPA accredited by CDA or PICPA.
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11. Coop records must be updated and regularly audited by the Audit and Inventory Committee.
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12. Loans must be properly documented with all the necessary attachments complete and duly signed.
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13. The cooperative must have a continuous capital build up (both share and savings) to minimize outside loans.
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14. Remember this- “Your cooperative is in the business of business and is not a social welfare organization.” All transactions therefore must be treated in a business manner.
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15. Monthly meeting of the BODs is a must and also the Committees (Credit, Audit, Education, etc.). During this BOD monthly meeting, the GM must report the operations of the cooperative.
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16. Cooperatives must have a regular Annual Plan and Budget and a 5-Year Strategic Plan.