1/30/2018. What are the Contents of Governance and Management Audit Report?

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1 GOVERNANCE AND MANAGEMENT AUDIT WORKING PAPER (PERFORMANCE AUDIT REPORT) 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. There are two (2) major components in the working paper. The 1st component is the Governance Reports while the 2nd component is the Management Report/Records A. GOVERNANCE OFFICERS DOCUMENTS Please Check if available A.1 General Assembly 1. Approval of Plans and Budget 2. Acceptance/approval/confirmation /ratification of the following report of the Board and committees 2.1 Board Report 2.2 Committee Reports 2.3 Management Reports Remarks GOVERNANCE AND MANAGEMENT AUDIT WORKING PAPER (PERFORMANCE AUDIT REPORT) B. MANAGEMENT /RECORDS What are the Contents of Governance and Management Audit Report? DOCUMENTS Please Check if available Remarks The presentation of the Governance and Management Audit Report shall at least include the following parts: B.1 Organizational/Operational Structure 1. Organizational Chart 2. Management Functional Chart 3. Functional Statement of Each unit/department/section a) Basic Information ; b) Executive Summary; c) Objectives and Scope of the Audit; d) Observations /Findings and e) Recommendation and Conclusion

2 Officers Required to Undergo Mandatory Trainings 1. Board of Directors; 2. Secretary; 3. Treasurer; 4. Election Committee; 5. Audit Committee; 6. Ethics Committee; 7. Mediation and Conciliation Committee; 8. Other Committees created by the General/Representative Assembly; and 9. General Manager or Chief Executive Officer, Undertaken / Completed(MC ) Section 3. Required Trainings for cooperative officers CATEGORY OF COOP Micro-cooperatives cooperatives with total assets of 3 Million and below All other cooperatives with total assets of more than 3 million Additional trainings for officers of cooperatives engaged in savings and credit with at least Five Million Pesos (Php5,000,000.00) worth of deposit liabilities based on their latest Audited Financial Statement TRAINING COURSE Fundamentals of Cooperatives Governance and Management of Cooperatives Fundamentals of Cooperatives Governance and Management of Cooperatives Financial Management 8 Risk Management 4 Credit Management 4 Section 4. Period of Compliance. Cooperative officers shall complete the required trainings within the first half of their term. Section 6. Inclusion in the Cooperative Election Guidelines. Cooperatives shall include in their election guidelines the following: A policy requiring all officers to comply with the mandatory training requirements and the person responsible to ensure compliance thereof, this shall be the election committee, in case of elective officers, and in the case of appointed officers, the Board of Directors. Provision that non-compliance with the training requirements during their term shall be one of the grounds for disqualification for future election or appointment in any position in the cooperative. Provision that the cooperative shall ensure that all officers shall undertake/comply with the mandatory training during his/her half of his/her term.

3 Section 8. Sanctions for non-compliance/failure to comply with the mandatory training. For the Cooperative Officers. Failure of a cooperative officer to comply with the required trainings during his/her term shall be a ground for his/her disqualification as future officer of the cooperative in any position until he/she has complied with the required trainings. For the Cooperative Willful failure of the concerned cooperative to comply with the training requirements for its officers, despite notice shall be a ground for the non-issuance of the Certificate of Compliance to the cooperative for the next immediate year. Section 10. Submission of the required report on the List of Officers and Trainings Undertaken/ Completed. xxx the cooperative shall submit an annual report which shall reflect the specific names and positions of all the incumbent officers of the cooperative and the required trainings these officers have undertaken/completed for the year being reported in compliance to training requirements for cooperative officers. The cooperative shall submit the report even if the cooperative officers have not complied or partially complied with the required trainings. For secondary and tertiary cooperatives Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachments: A. Social Audit Report including its program of activities pursuant to its socio-civic goals; B. Governance and Management Audit for Cooperatives (Performance Audit Report,including copies of the semi annual Report on mediation and conciliation as received by the Authority ; C. Financial Statements audited by an External Auditor accredited by the CDA (including electronic submission); D. Undertaken / Completed;

4 For secondary and tertiary cooperatives E. List of affiliates and cooperatives which have remitted their respective Cooperative Education and Training Funds (CETF); F. Business consultancy assistance including the nature, cost, and the use of CETF; and G. Other training activities undertaken specifying therein the nature, participants, and cost of each activity. For Micro Cooperatives Cooperative Annual Progress Report (CAPR) which shall have the following attachments: A. Financial Statements audited by any of the following: 1) External auditor accredited by the Board of Accountancy (BOA); 2) Audit Committee of the cooperative; or 3) Audit committee of the federation or union where the cooperative is affiliated, B. Undertaken/ Completed; Micro cooperatives, however, are required to encode their CAPR through the web based system within six (6) months from the issuance of the COC. For Electric Cooperatives 1. Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachment: A. Social Audit Report including its program of activities pursuant to its socio-civic goals; B. Governance and Management Audit for Cooperatives (Performance Audit Report), including copies of the semi annual Report on mediation and conciliation as received by the Authority ; C. Financial Statements audited by an External Auditor accredited by the CDA (including electronic submission) and D. Undertaken / Completed 2. List of Members issued with Share Capital Certificate.

5 Cooperatives with less than one year of operation Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachments. Financial Status Reports signed by the Audit Committee and the Chairman of the Cooperative: Statement of Financial Condition Statement of Operation MC GUIDELINES IN THE IMPOSITION OF FINES AND PENALTIES FOR DELAYED SUBMISSION OF REQUIRED REGULAR When Delay is Incurred Cont Delay shall commence on the day following the last day prescribed for the filing of reports. However, should the last day of filing fall on a Saturday, Sunday or nonworking holiday, the last day for filing shall be the next working day. If the delay is due to fortuitous events, including but not limited to fire, storms, or other natural calamities an order from any competent court or government agency; or a declared national emergency or public disorder including strikes and lockout, the period for such delay may be excused, provided that the Authority is given due notice within fifteen (15) days from the cessation of the cause of the delay. Thereafter, the cooperative shall be given another thirty (30) days to file the required report, the lapse of which shall consider the cooperative in delay.

6 Total Loss or Destruction of Records due to Fortuitous Event or Force Majeure Upon favourable recommendation of the concerned Extension Office Director, and upon approval of the Board of Administrators, the submission of the mandatory reportorial requirements may be waived in case of total destruction/loss of records and reports due to force majeure or fortuitous events.. Waiver of Penalties In order for said waiver to apply, the cooperative shall submit the following: 1. Certification issued by the Local Government Unit (LGU) or Barangay Certificate where the principal office of the cooperative is located stating the occurrence of such force majeure or fortuitous event; 2. Letter of application for relief in the submission of regulatory requirements signed by the Chairperson and/or the General Manager of the cooperative; 3. Damage Assessment Report Fines and Penalties Failure to file the required regular reports with the corresponding attachments on time shall subject the Accountable Officers to a fine of One Hundred Pesos (Php100.00) per day of delay. Electric Cooperatives shall be subject to an additional fine of P100/day for the delay in the submission of the List of Members Issued with Share Certificate. Micro Cooperatives which refer to cooperatives with assets of Three Million Pesos Php3,000, and below based on Audited Financial Statements for the covered Reporting Period, shall be exempted from the monetary penalties but may be meted the penalty of non-issuance of Certificate of Compliance. COOPERATIVES: Every cooperative shall have the following documents ready and accessible to its members and representatives of the Authority for inspection during reasonable office hours at its official address: "(a) A copy of this Code and all other laws pertaining to cooperatives; "(b) A copy of the regulations of the Authority; "(c) A copy of the articles of cooperation and bylaws of the cooperative;

7 "(d) A register of members; "(e) The books of the minutes of the meetings of the general assembly, board of directors and committee; "(f) Share books, where applicable; "(g) Financial statement; and "(h) Such other documents as may be prescribed by laws or the bylaws. COOPERATIVES: Each cooperative shall maintain records of accounts such that the true and correct condition and the results of the operation of the cooperative may be ascertained therefrom at any time. The financial statements, audited according to generally accepted auditing standards, principles and practices, shall be published annually and shall be kept posted in a conspicuous place in the principal office of the cooperative. COOPERATIVES: shall submit reports with the Authority within one hundred twenty (120) days from the end of the calendar year.. Failure to file the required reports shall subject the accountable officer/s to fines and penalties as may be prescribed by the Authority, and shall be a ground for the revocation of authority of the cooperative to operate as such. The board of directors shall present the complete audit report to the general assembly COOPERATIVES: Ensure that the reports are accessible to its members, and copies thereof shall be furnished to all its members of record. The accountant or the bookkeeper of the cooperative shall be responsible for the maintenance of the cooperative in accordance with generally accepted accounting practices. He shall also be responsible for the production of the same at the time of audit or inspection.

8 Duties and Responsibilities The audit committee shall be responsible for the continuous and periodic review of the books and records of account to ensure that these are in accordance with generally accepted accounting practices. He shall also be responsible for the production of the same at the time of audit or inspection. Duties and Responsibilities of the Cooperative The Cooperative External Auditor (Article 81) The auditor shall submit to the board of directors and to the audit committee the financial audit report which shall be in accordance with the generally accepted auditing standards for cooperatives as jointly promulgated by the Philippine Institute of Certified Public Accountants (PICPA) and the Authority Rights of the Members (Art.83) A member shall have the right to examine the records required to be kept by the cooperative under Article 52 of this Code during reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records without charge except the cost of production. Rights of the Members (Art.83) Any officer of the cooperative who shall refuse to allow any member of the cooperative to examine and copy excerpts from its records shall be liable to such member for damages and shall be guilty of an offense which shall be punishable under Article 140 of this Code: Provided, That if such refusal is pursuant to a resolution or order of the board of directors, the liability under this article shall be imposed upon the directors who voted for such refusal.

9 Rights of the Members (Art.83) Provided, further, That it shall be a defense to any action under this article that the member demanding to examine and copy excerpts from the cooperative records has improperly used any information secured through any prior examination of the records of such cooperative or was not acting in good faith or for a legitimate purpose in making his demand. Penal Provisions (Art. 140) The following acts or omissions affecting cooperatives are hereby prohibited: "(6) The following are considered offenses punishable by a penalty of imprisonment of not less than one (1) year nor more than five (5) years or a fine of not more than Fifty thousand pesos (P50,000.00) or both at the discretion of the court: (a) Omission or refusal to furnish any information, report or other document that is required under this Code; Penal Provisions (Art. 140) The following acts or omissions affecting cooperatives are hereby prohibited: "(b) Providing information, reports or other documents to the Authority that are required under this Code which the person knows to be false or misleading; "(d) Making an entry required under this Code in a book or register, which the person knows to be false or misleading; "(e) Hindering an authorized person from making an inspection, audit, examination or investigation required under this Code; "(f) Failure to comply with an order or written instructions issued or given by the Authority; Penal Provisions (Art. 140) "In case of violation of any provision of this Code, the individual or individuals, and in the case of organizations or government agencies, its officers, and directors shall, upon conviction by a Court, each suffer a penalty of not less than two (2) years but not more than five (5) years imprisonment or a fine in the amount of not less than Twenty thousand pesos (P20,000.00), or both at the discretion of the court. In the case of a public official or employee, the offender shall upon conviction, suffer the accessory penalty of temporary absolute disqualification.