Guidelines on Social Audit of Cooperatives

March 1, 2013

CDA MEMORANDUM CIRCULAR NO. 016-13

 

Pursuant to the pertinent provisions of Article 80, Chapter IX and Article 53, Chapter V of RA 9520 and Rule 11 of its Implementing Rules and Regulations, the following guidelines is hereby issued.

SECTION 1. Legal Bases. —

The legal bases for this guidelines are as follows:

"Art. 80. Annual Audit. — Cooperatives registered under this Code shall be subject to an annual financial, performance and social audit."

"The social audit shall be conducted by an independent social auditor accredited by the Authority."

"The Authority, in consultation with the cooperative sector, shall promulgate the rules and standards for the social audit of cooperatives.

"Art. 53. Reports. — (1) Every cooperative shall draw up regular reports of its program of activities, including those in pursuance of their socio-civic undertakings, showing their progress and achievements at the end of every fiscal year."

SECTION 2. Coverage. —

All registered cooperatives regardless of types and categories shall be subject to social audit and shall submit the Social Audit Report.

SECTION 3. Social Audit. —

It is a procedure where the cooperative assesses its social impact and ethical performance vis-à-vis its stated mission, vision, goals and code of social responsibility. It is a process to assess the cooperative's contribution for the upliftment of the status not only to its members' economic needs but also social needs and the community where it operates. The cooperative's actual performance and accomplishment are compared to its vision, goals, and social responsibility as it relates to the impact not only to the community but to its regular members as the immediate beneficiary of the decisions and actions it promulgated, passed and implemented. Social Audit will serve as control mechanism to account for its social performance and evaluate its impact in the community taking into account the community development fund which shall be used for projects or activities that will benefit the community where the cooperative operates. DHCSTa

SECTION 4. Objectives/Uses of Social Audit. —

Social Audit validates the support of the cooperative to the seventh cooperative principles on the "Concern for Community" and determines whether the cooperative work for the community's sustainable development through policies approved by their members.

The audit focuses not only to the economic side of the cooperative but also the social aspect of the organization and appraises the cooperative performance as value based organization usually participative, user and community oriented and non-profit but service organization and how its social responsibility for its members and the community as a whole was fulfilled.

Social Auditing is the systematic review of the attitudes, values, behavior, and degree of interaction of people within the cooperative as well as the policies, programs and activities being implemented by the cooperative.

SECTION 5. Social Audit Report. —

The attached Social Audit Tool which was approved by the Board of Administrators per Resolution No. 58-s-2013, shall be used by the cooperatives as basis in reporting its annual socio-civic undertakings to be submitted to the Authority yearly. The Report shall be typewritten or printed in a form prescribed by the Authority. The Chairperson and the General Manager shall certify to the truthfulness of the statement contained in the report while the Chairperson shall finally approve the same.

SECTION 7. n Preparation and Submission of the Required Report. —

The Social Audit Report shall be submitted by the cooperative to the CDA not later than 120 days from the end of each Calendar Year. Failure to file the report on time shall subject the accountable officers to a fine/penalty of one hundred pesos (Php100.00) per day of delay pursuant to Rule 8, Section 7 of the Implementing Rules and Regulations of Republic Act 9520. TaISEH

The cooperative who failed to submit the report may also be subjected to a procedural process of cancellation or may be demanded to merge or consolidate with another cooperative operating in the same area of operation.

SECTION 8. Transitory Provision. —

The Social Audit Report shall be conducted by an independent Social Auditor accredited by the Authority. In the initial year of submission of the Social Audit Report, the cooperative's Internal Auditor or Audit Committee shall conduct the Social Audit and shall prepare the report thereof. Thereafter, it shall be audited by an Accredited Cooperative Social Auditor.

SECTION 9. Effectivity. —

This Circular shall take effect fifteen (15) days after publication with the Office of the National Administrative Register (ONAR).

(SGD.) EMMANUEL M. SANTIAGUEL, Ph.D.Chairperson

ATTACHMENT

THE SOCIAL AUDIT OF COOPERATIVES

The Social Audit

Social Audit is the process whereby a cooperative can account for its social performance, report on and improve that performance. It assesses the social impact and ethical performance of the cooperative in relation to its vision, mission, goals, and Code of Social Responsibility.

It is also process to assess the cooperative's contribution for the upliftment of the status not only to its members' economic needs but also social needs and the community where it operates. The cooperative's actual performance and accomplishment are compared its vision, goals, and social responsibility as it relates to the impact not only to the community but to its regular members as the immediate beneficiary of the decisions and actions it promulgated, passed and implemented. Social Audit will serve as control mechanism to account for its social performance and evaluate its impact in the community taking into account the community development fund which shall be used for projects or activities that will benefit the community where the cooperative operates.

Social Audit validates the support of the cooperative to the 7th cooperative principles, i.e., the "Concern for Community" and determines whether the cooperative work for the community's sustainable development through policies approved by their members. DTESIA

The audit focuses not only to the economic side of the cooperative but also the social aspect of the organization and appraises the cooperative performance as value-based organization usually participative, user and community oriented and non-profit but service organization and how its social responsibility for its members and the community as a whole was fulfilled.

The Social Audit Tool

The social audit tool is an instrument to identify, measure, assess and to report on their social performance. This will provide the user a framework on how to collect data and what data is to be collected.

Similar to financial and management audit, the Social Audit has a one year cycle. The audit steps are also comparable to activities carried out for financial audit.

Consideration of the various aspects of Social Audit is relevant. Verification of records and documents is crucial to get vital information.

The tool will also present the score of the cooperative's social performance, whether outstanding, very good, good, fair or poor. The score/rating should not be taken as the end of it. Any result thereof, shall be the major consideration for improved social performance, which is actually the first and foremost goal of Social Audit.

The Components of the Social Audit Tool

Social Audit for cooperative shall look into the following components with their corresponding points:

I. Organization

This is a measurement of cooperative's fulfilment of its vision, mission and goals, feedback mechanisms, code of good governance and ethical standards.

II. Membership

Measurement on how the cooperative responded to the need of members, observed governance practices, considered provision for benefits of members, and involved members in the affairs of the cooperative.

III. Staff/Employees

Assessment of the cooperative's fulfilment of the needs and welfare of the employees in terms of safety workplace and sanitation, including the provision for compensation and benefits.

IV. Cooperation among Cooperatives

Measurement of the cooperative's affiliation/s and linkages to federations/unions and other cooperatives. aTSEcA

V. Community and Nation

Determines the involvement of the cooperative and its contributions to the community and nation, in general.

VI. Network Alliance and Linkages

Assessment on how the cooperative relates to other organization and its collaborative programs.

Office of the President

COOPERATIVE DEVELOPMENT AUTHORITY

SOCIAL AUDIT OF COOPERATIVES

 

n   Note from the Publisher: Copied verbatim from the official copy. Missing Section 6.