A cooperative A cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.(http://www.lawphil.net/statutes/ repacts/ra2009/ra_9520_2009.html)
The history of Savings and Credit Cooperatives (SACCOS) begins at 1850 A.D. from Germany. F.W. Raiffeisen established first SACCOS for economic development of deprived, poor, unemployed and starved people. Analyzing the history of all SACCOS in the world, it found that all are established to prioritize economic empowerment of people and relieving from poverty, unemployment & starvation. The economic development of highly development countries Britain, Canada, Japan and South Korea has a significant contribution of cooperatives.
The CDA issues the MORR. The MORR contains rules and regulations, performance indicators andstandards that will serve as a guide for cooperatives with savings and credit services. These guidelines are necessary to ensure the safety and soundness of the institution, and to improve and strengthen their operations. Compliance to these rules and regulations will help cooperatives engagedin savings and credit operations become stronger, viable and sustainableinstitutions with higher degree of public trust and confidence. (http://cooperativesector.blogspot.com/2008/05/manual-of-rules-andregulations-morr.html)
MORR has the following legal basis:in Section 13 of RA 6939 (CDA Charter) provides for the rule-making authority of CDA:“ The Authority is hereby authorized to promulgate, after due public hearing and upon approval of the President, such rules and regulations as may be necessary to implement the provisions. . .” of the Cooperative Code.
Here are the major componenents of MORR: General Guidelines on the Registration and Operation of Cooperatives with Savings and Credit Operations, Prudential Standards and Best Practices, Good Governance Policies and Ethical Standards, Organization and Management Principles Internal Controls, Deposit, Borrowing and Lending Policies, Model Articles of Cooperation and By-Laws.
With implementation of MORR it is hope that Public trust and confidence will be restored and enhanced, Financial operations of cooperatives will improve and be sustainable; Weak and small cooperatives will be strengthened and thereby grow; whileStrong cooperatives will become stronger and bigger.
Independent Variable Dependent Variable
Figure 1.Degree of compliance in the Manual Rules and Regulations among Savings and Credit Cooperative as influenced by certain identified factors.
Statement of the Problem and the Hypothesis
This study aimed to determine the extent of compliance in the Manual Rules and Regulations among Savings and Credit Cooperatives in the Province of Guimaras engaged in savings and credit operations.
Specifically, the study sought answers to the following questions:
1. What is the extent of compliance in the manual of rules and regulations among savings and credit cooperatives in the Province of Guimaras when taken as entire group and classified according to type of cooperative and paid-up share capital?
2. Are there significant differences in the extent of compliance in the manual of rules and regulations among savings and credit cooperatives when grouped according to type of cooperative and paid-up share capital? Based on the foregoing problem, the hypothesis was posed:
1. There are no significant differences in the extent of compliance in the manual of rules and regulations among savings and credit cooperatives when grouped according to type of cooperative and paid-up share capital.
Significance of the Study
The results of the study may be beneficial to the following:
Cooperative Development Authority. The Cooperative Development Authority will benefit most from the findings of this investigation. The results of this study will give them idea on the current status of cooperatives engaged in savings and credit services. They may find the results of this study useful in the creation and dissemination of policies that could strengthen and develop cooperatives in the country.
Students. The results of this study may likewise help cooperative management students in recognizing realities in the strengths and weaknesses in the dissemination of policies.
Researchers. Future researchers may use the findings of this study as a point of reference of future researchers which may be conducted among cooperatives.
Definition of Terms
The following terms are used in the study are defined both conceptually and operationally:
Cooperative–is an autonomous and dully registered association of persons with a common bond of interest who voluntarily joined together to achieve their social, economic and cultural needs and aspirations by making contributions to the capital required patronizing their products and services and accepting a fair share of risk and benefits to the undertaking in accordance to the generally accepted cooperative principles. (RA 9520)
The same definition was used in this study.
Compliance–Compliance is either a state of being in accordance with established guidelines, specifications, or legislation or the process of becoming so. (http://searchdatamanagement.techtarget.com/definition/compliance)
In this study compliancerefers to the behavior in accordance to the rules and regulation of a Cooperative.
Degree–A degree is any series of steps, a point in a scale or a stage in scale.(http://dictionary.reverso.net/english-definition/degree)
In this study, the same definition was used.
Extent–the range over which something extends or scope. (http://dictionary.reverso.net/english-definition/extent)
As used in this study, extentreferred to the degree of cooperative’s compliance of the MORR.
Manual–A manualis a guidebook or step-by-step guide.
The same definition was used in this study.
Rules and Regulations– a statement of what is possible according to a particular system. It is an authority orders that govern activities: an order prescribed for management or government;
In this study, the same definition was used.
Delimitation to the Study
This survey study aimed to determine the extent of compliance in the manual of rules and regulations among savings and credit cooperatives in the Province of Guimaras.
This study was conducted on August 2012. The participants were the 15 savings and credit cooperatives in Guimaras. A borrowed questionnaire was utilized in the study.
The descriptive statistics employed were the mean and standard deviation. The Mann-Whitney U and the Kruskall-Wallis test were employed for inferential analysis. The .05 alpha was used as the criterion for the acceptance or rejection of the null hypothesis. All statistical computations were processed via the Statistical Package for Social Science (SPSS) software. Chapter 2
Review of Related Literature
This Chapter presents literature and studies relevant to the present study. It is divided into three parts (1)Cooperatives, (a) History of Cooperative, (b) Characteristic of Cooperative, (c) Principles of Cooperative,(d) Types of Cooperative,(2) Cooperative Management,(3) Values and Practices of Cooperative,(4) Rules And Regulations Implementing Certain Provisions Of The Philippine Cooperative Code Of 2008( Republic Act No. 9520)
Is an autonomous and dully registered association of persons with a common bond of interest who have voluntarily joined together to achieve their social, economic and cultural needs and inspirations by making an equitable contribution to the capital required patronizing their products and services and accepting a fair share of risk and benefits in accordance with
undertaking cooperative principles (R.A. 9520, 2008).
History of cooperative
A Filipinos traveling in Europe during the late part of the 19th century must have been impressed with the success of a new economic movement in effecting a gradual metamorphosis of the economic and social life of the people in those countries. At the turn of the century, Filipinos, in increasing number, traveled and studied abroad and brought home with them new ideas. It was this group of Filipinos who were in close in contact with the new economic movement in Europe.
Two names worthy of note were Dr. Jose P. Rizal and TeodoroSandiko in 1952 enacted Republic Act 821. This law established a system of liberal credit which is specially designed to meet the needs of the small farmer. It also created an administrative agency known as the Agricultural Credit and Cooperative Financing Administration (ACCFA). To implement the great task of rural financing, four interrelated objectives of the law are set forth as follows: To assist small farmers in securing liberal credit.
To promote the effective groupings of farmers into cooperative associations. To establish an orderly and systematic marketing machinery for, and controlled by, the small farmers. To place agriculture on a basis of economic equality with other industries. (www.cda.gov.ph/website/…/coophistory.html)
The Nature and Characteristic of Cooperatives Cooperatives are both associations of people and business enterprises. They distinguished from other organization by their Philosophy, Nature, and Character. 1. Cooperatives are Service- oriented:
Cooperatives are organized to serve their members by providing goods and services at reasonable cost. Members contribute the capital of the cooperatives so that goods and services can be appropriately provided through its business activities and not to maximize the profit or dividends their capitals contributions will earn from the business. In servicing the members, don’t act as charitable organizations. Members are aware that the benefits come from their contributions, patronage refund, and mutual efforts to help one another. The motto is “Cooperatives are not for profits and not for charity but for service”. 2. Cooperatives are community- oriented:
Cooperatives work for the welfare of their members by integrating themselves into the life of the community in particular and the nation in general. Cooperatives enhance the people’s welfare through increased productivity both members and the communities where they are located. By the very nature of their concerns, cooperatives strengthen the economic, social, cultural and ecological base of the community where they operate. 3. Cooperatives are people-oriented:
Cooperatives are not merely economic instruments concerned with dividends and related economic and financial returns. They are the mechanism of change for total human development of man as human being in all the economic, political, cultural, and spiritual aspects. It makes the people with sense of both individual and joint responsibility, so they may rise individually to a full personal life and collectively to a full social life. 4. Cooperative are owned, managed and patronized by members:
Cooperatives are member-owned, member-controlled and member-used. Ownership is a very important factor in the success of any cooperatives. It is very important that members have full authority to manage and control their cooperatives. If cooperatives start and operate solely from borrowed capital, it violates the principle of self-help and loses much of its autonomous character. Cooperatives must depend on the patronage of their members and not from non-, members. However in certain cases a limited patronage by non-members may allow mainly for reasons of business viability and service to the community. 5. Cooperatives are Business enterprises:
Cooperatives engage in businesses with social responsibility. they play a meaningful economic role in the community life by serving and performing as efficiently and responsively as the other financial and business enterprises. Cooperatives have to generate surplus to be able to continually improve and expand its services. They have to be viable, creative, enterprising, and efficient to continually grow and serve the needs of their members. Increasing patronage cannot be maintained without good quality service, management, and performance.
The net surplus generated from the business operations are allocated to the members at the end of each year. 6. Cooperatives develop best through self-help and mutual help: Cooperatives is inspired by “If you want something done, do it yourself” this philosophy is responsible for the success of many cooperatives all over the world and it is best alternative for the poor in any country to unite and help themselves out of their depressed condition. This is not to say they should not be assisted. But assistance from outside, whether technical or financial, must not stifle but stimulate initiatives, self-help and self-reliance.
The principle of subsidiary also applies that before asking or soliciting aid from outside, self-determination and self-capability, should be considered. They should not interfere in the purely internal affairs of the cooperatives, taking care that they preserve their autonomous and independent and self-help through mutual-help characters. On the part of the cooperatives being assisted, they should do their part by seeing to it that the objective of the assistance given is achieved, that they grow stronger rather become dependent upon such assistance.
7. Cooperatives serve best when they answer the real felt needs of the members: We do expect the members to participate in the activities and to patronize the business if the services they do needs and felt are serve. It is important therefore that the proper approaches and techniques are employed to ensure that the needs of the members are identified and recognized before any cooperatives is organized. The assistance should begin from the organization stage and sustain through the developmental stage up to the point when the cooperative begin to operate on a self-sustaining basis. 8. Cooperatives develop best from bottom to top:
Organizationally, their development should be from the Primary level to the secondary, tertiary and up to the Apex. Geographically, they should develop from community to City, Regional, and National, to International. The Primary cooperatives are the foundation stoned of the whole cooperatives structure. Organizing the Apex before the base is like building the roof of the house before the foundation. Sooner or later, in such a case, the roof topples down because the foundation is weak and unable to support its load. 9. Development of cooperatives is enhanced through a multi-sartorial approach:
Having in mind the specific roles of each sector, the government, non-government and the cooperatives sector, must play a multi-sartorial approach can ensure that all aspect of development process are considered. This enhances the smooth and continuous development of the cooperatives. This approach involves the participation of all sectors from planning stage to the implementation, evaluation and monitoring of all activities. Such approach enhances true people power, enlightened, democratic, and participation in all levels, both organization and geographical. (http://prokoop..com/the-nature-and-characteristic-of-cooperatives/) Cooperative Principles
The International Cooperative Alliance is a world-wide association of cooperatives. The Statement of Cooperative Identity which it adopted in 1995 contains seven cooperative principles that are more socially-minded: Voluntary and Open Membership
Democratic Member Control
Member Economic Participation
Autonomy and Independence
Education, Training and Information
Cooperation Among Cooperatives
Concern for Community
Types of Cooperatives
Cooperatives may fall under any of the following types:
(a) Credit Cooperative–is one that promotes and undertakes savings and lending services among its members. It generates a common pool of funds in order to provide financial assistance and other related financial services to its members for productive and provident purposes;
(b) Consumer Cooperative–is one the primary purpose of which is to procure and distribute commodities to members and non-members; (c) Producers Cooperative–is one that undertakes joint production whether agricultural or industrial. It is formed and operated by its members to undertake the production and processing of raw materials or goods produced by its members into finished or processed products for sale by the cooperative to its members and non-members
(d) Marketing Cooperative–is one which engages in the supply of production inputs to members and markets their products;
(e) Service Cooperative–is one which engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services;
(f) Multi-Purpose Cooperative– combines two (2) or more of the business activities of these different types of cooperatives;
(g) Advocacy Cooperative–is a primary cooperative which promotes and advocates cooperativism among its members and the public through socially-oriented projects, education, and other similar activities to reach out to its intended beneficiaries;
(h) Agrarian Reform Cooperative–is one organized by marginal farmers majority of which are agrarian reform beneficiaries for the purpose of developing an appropriate system of land tenure.
(i) Cooperative Bank–is one organized for the primary purpose of providing a wide range of financial services to cooperatives and their members;
(J) Dairy Cooperative–is one whose members are engaged in the production of fresh milk which may be processed and/or marketed as dairy products;
(k) Education Cooperative–is one organized for the primary purpose of owning and operating licensed educational institutions, notwithstanding the provisions of Republic Act No.9155.
(l) Electric Cooperative–is one organized for the primary purpose of undertaking power generation, utilizing renewable sources, including hybrid systems, acquisition and operation of sub transmission.
(m) Financial Service Cooperative–is one organized for the primary purpose of engaging in savings and credit services and other financial services; (n) Fishermen Cooperative–is one organized by marginalized fishermen in localities whose products are marketed either as fresh or processed products; (o) Health Services Cooperative–are one organized for the primary purpose of providing medical, dental, and other health services.
(p) Housing Cooperative–is one organized to assist or provide access to housing for the benefit of its regular members who actively participate in the savings program for housing. It is co-owned and controlled by its members; (q) Insurance Cooperative– is one engaged in the business of insuring life and property of cooperatives and their members; (r) Transport Cooperative–is one which includes land and sea transportation, limited to small vessels, as defined or classified under the Philippine maritime laws, organized under the provisions of RA 9520; (s) Water Service Cooperative–is one organized to own, operate and manage waters systems for the provision and distribution of potable water for its members and their households;
(t) Workers Cooperative–is one organized by workers, including the self-employed, who are at the same time the members and owners of the enterprise. Its principal purpose is to provide employment and business opportunities to its members and manage it in accordance with cooperative principles; and (u) Other types of Cooperatives as may be determined by the Authority. www.cda.go:v.ph/website/html/cooptypes.html)
Traditionally, the cooperative movement has had deep ties to the world’s wide array of religions and ideologies. It has continuously explored its own belief systems and attempted to identify those personal ethics and social ideas, if any, that is shared by cooperators and motivate our future actions.
Self-help–People have the will and the capability to improve their destiny peacefully through joint action which can be more powerful than individual effort, particularly through collective action in the market. Democracy–Members have the right to participate, to be informed, to be heard and to be involved in making decisions. Members are the source of all authority in the cooperative.
“The basic unit of the cooperative is the member Equality–Equal rights and opportunities for people to participate democratically will improve the use of society’s resources and foster mutuality, understanding and solidarity. Equity–Fair distribution of income and power in society and its economic life should be based on labor, not ownership of capital. Solidarity–Cooperatives are based on the assumption that there is strength in mutual self-help and that the cooperative has a collective responsibility for the well-being of its members. (www.cooperativegrocer.coop/articles/2004-01-09/)
These are practical response to local needs. Some are adopted from standard international practices, others are local innovations. But all these are aimed at perfecting cooperative operations. They are: Capital Formation Starting a new cooperative can create a need for substantial capital. A problem develops when trying to operate with limited membership equity capital. The task of financing a new cooperative with member equity alone is usually impossible. Therefore, the best source of additional funds needed is from members in the form of: a) membership fee or purchase of stock; b) agreement to withhold portion of net earnings profits); c) by assessment based on units of products sold or purchased.
Cash Trading–This is business done on a cash and carry basis. The customer enjoys at least the use of the goods and services for the cash payment he/she gives. Selling at market price–Cooperatives offer goods and services at prevailing market prices. This promotes stability. It can cope with operational expenses and cover up the negative effects of shrinkage, depreciation and losses. Cooperatives can avoid destructive competition–Fostering constructive competition among cooperatives will safeguard the interests of consumers. Cooperatives are encouraged to cooperate in unison and bring their joint power in the market up. Constant expansion–As organizations, cooperatives have to grow for community services.
Expansion is a must. It is done intensively and extensively. New members should be recruited to accumulate more capital and savings to support operation of the expanded business and services. Quality standardized goods–Cooperatives are intended to develop communities through the production of high quality goods and provision of better services. Cooperatives could help by patronizing only standardized products and services of high quality. Cooperatives can be organized with enough people and capital. They respond to the needs of the community. Needs arise when there are people.(www.cda.gov.ph/website…/coophistory.html)
Rules And Regulations Implementing Certain Provisions Of The Philippine Cooperative Code Of 2008 Pursuant to the provision of Art. 139 of Republic Act No. 9520 otherwise known as the Philippine Cooperative Code of 2008, the Cooperative Development Authority hereby issues the following rules and regulations implementing certain provisions of the said code.Sec.1 1. Title. These Rules shall be known as the “Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008.”
In Rule 2 Subsidiary Cooperative Sec. 1. The legal basis for this Rule is Art. 5 (16) of the Code, quoted as follows: “Art. 5 (16) Subsidiary Cooperative refers to any organization all or majority of whose membership or shareholders come from a cooperative, organized for any other purpose different from that of, and receives technical, managerial and financial assistance from, a cooperative, in accordance with the rules and regulations of the Authority.”
In Rule 3 Multi-Purpose Cooperative Sec. 1. The legal basis for this Rule is Article 10 of the Code quoted as follows: “Art. 10. Organizing a Primary Cooperative. – Any newly organized primary cooperative may be registered as multi-purpose cooperative only after compliance with the minimum requirements for multi-purpose cooperatives to be set by the Authority. A single-purpose cooperative may transform into a multi-purpose or may create subsidiaries only after at least two (2) years of operation.”
In Rule 4 DivisionsOfCooperativesSec. 1. The legal basis for this Rule is Art. 20 of the Code, quoted as follows: “Art. 20. Division of Cooperatives. – Any registered cooperative, may by a resolution approved by a vote of three-fourths (3/4) of all the members with voting rights, present and constituting a quorum, resolve to divide itself into two (2) or more cooperatives. The procedure for such division shall be prescribed in the regulations of the Authority.
The new cooperatives shall become legally established upon registration with the Authority: Provided, That all the requirements set forth in this Code have been complied with by the new cooperatives: Provided, further, That no division of cooperative in fraud of creditors shall be valid.
In Rule 5 Guidelines Governing The Procedure For Merger Or Consolidation Sec. 1. The legal bases for this Rule are Articles 21 and 22 of the Code quoted as follows: “Art. 21. Merger and Consolidation of Cooperatives. – Two (2) or more cooperatives may merge into a single cooperative, which shall be either one of the constituent cooperatives or the consolidated cooperatives. No merger or consolidation shall be valid unless approved by three-fourths (3/4) vote of all members with voting rights, present and constituting a quorum of each of the constituent cooperatives at separate general assembly meetings.
The dissenting members shall have the right to exercise their right to withdraw their membership pursuant to Article 30. (3) The Authority shall issue the guidelines governing the procedure of merger or consolidation of cooperatives. In any case, the merger or consolidation shall be effective upon the issuance of the Certificate of Merger or Consolidation by the Authority. Art. 22. Effects of Merger and Consolidation. – The merger or consolidation of the cooperatives shall have the following effects:
(1)The constituent cooperatives shall become a single cooperative, which in case of merger shall be the surviving cooperative, and in case of consolidation, shall be the consolidated cooperative.
(2)The separate existence of the constituent cooperatives shall cease, except that of the surviving or the consolidated cooperative. (3)The surviving or the consolidated cooperative shall possess all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of a cooperative organized under this Code;
(4)The surviving or the consolidated cooperative shall possess all the assets, rights, privileges, immunities and franchises of each of the constituent cooperatives; and (5)The surviving or the consolidated cooperative shall be responsible for all the liabilities and obligations of each of the constituent cooperatives in the same manner as if the surviving or consolidated cooperative had itself incurred such liabilities or obligations. Any claim, action, or proceeding pending by or against any such constituent cooperatives may be prosecuted by or against the surviving or consolidated cooperative, as the case may be. Neither the rights of creditors nor any lien upon the property of any of such constituent shall be impaired by such merger or consolidation.”
In Rule 6 Guidelines For Laboratory Cooperatives Sec. 1. Legal Basis. The legal basis for this Rule is the third paragraph of Art. 26 of the Code, quoted as follows: “Art. 26. Kinds of Membership. – A cooperative organized by minors shall be considered a laboratory cooperative and must be affiliated with a registered cooperative. A laboratory cooperative shall be governed by special guidelines to be promulgated by the Authority.”
In Rule 7 Functions, Responsibilities And Training Requirements Of Directors, Officers And Committee Members Sec. 1. The legal basis for this Rule is Art. 44 of the Code, quoted as follows: “Art. 44. Functions, Responsibilities, and Training Requirements of Directors, Officers, and Committee Members. The functions and responsibilities of the directors, officers and committee members, as well as their training requirements shall be in accordance with the rules and regulations issued by the Authority.”
In Rule 8 Reports Required For Cooperative Sec. 1. The legal basis for this rule is Art. 53 of this Code, quoted as follows: “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. The reports shall be made accessible to its members, and copies thereof shall be furnished to all its members of record. These reports shall be filed with the Authority within one hundred twenty (120) days from the end of the calendar year. The form and contents of the reports shall be prescribed by the rules of the Authority.
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 fiscal year of every cooperative shall be the calendar year, except as may be otherwise provided in the by-laws. (2) If a cooperative fails to make, publish and file the reports required herein, or fails to include therein any matter required by this Code, the Authority within fifteen (15) days from the expiration of the prescribed period, send such cooperative a written notice stating its non-compliance and the commensurate fines and penalties that will be imposed until such time that the cooperative has complied with the requirement”
In Rule 9 Guidelines For The Liquidation Of Cooperatives Sec. 1. The legal bases for this Rule are Art. 69, 70, and par. 2, Art. 72 (4) of the Code, quoted as follows: “Art. 69. Liquidation of a Cooperative. – Every cooperative whose charter expires by its own limitation or whose existence is terminated by voluntary dissolution or through an appropriate judicial proceeding shall nevertheless continue to exist for three (3) years after the time it is dissolved, not to continue the business for which it was established but for the purpose of prosecuting and defending suits by or against it; settlement and closure of its affairs, disposition, conveyance and distribution of its properties and asset.
At any time during the said three (3) years, the cooperative is authorized and empowered to convey all of its properties to trustees for the benefit of its members, creditors and other persons in interest.
From and after any such conveyance, all interests which the cooperative had in the properties are terminated. Upon the winding up of the cooperative affairs, any asset distributable to any creditor, shareholder or member(s) who is unknown or cannot be found shall be given to the federation or union to which the cooperative is affiliated with. A cooperative shall only distribute its assets or properties upon lawful dissolution and after payment of all its debts and liabilities, except in the case of decrease of share capital of the cooperative and as otherwise allowed by this Code.”
“Art. 70. Rules and Regulations on Liquidation. – The Authority shall issue the appropriate implementing guidelines for the liquidation of cooperatives.”
“Art. 72. Capital Sources. – (b) Subsidies, donations, legacies, grants, aids and such other assistance from any local or foreign institution whether public of private: Provided, That capital coming from such subsidies, donations, legacies, grants, aids and other assistance shall not be divided into individual share capital holding at any time but shall instead form part of the donated capital or fund of the cooperative. Upon dissolution, such donated capital shall be subject to escheat.”
In Rule 10 Capitalization And Accounting Procedures Of Cooperatives Sec. 1. Legal Basis. The legal basis for this Rule is Art. 71 of the Code, quoted as follows:
“Art. 71. Capital. – The capitalization of cooperatives and the accounting procedures shall be governed by the provisions of this Code and the regulations which shall be issued.”
Rule 11 Social Audit Of Cooperatives Sec 1. Legal Basis.
The legal basis for this Rule is Art. 80, paragraph 4, 5 and 6 of the Code, quoted 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.”
In Rule 12 Financial Service Cooperative (Fsc) Sec. 1. The legal basis for this Rule is Art. 121 (1) and (14) of the Code, quoted as follows: “Art. 121. Regulation and Supervision. – The Authority shall exercise lead regulatory powers and supervision over the operations of the financial service cooperatives, to wit: (1) Issue rules and regulations for the safe and sound operations of financial service cooperatives. (14) Appoint a conservator or a receiver as may be necessary subject to the rules and regulations to be promulgated by the Authority in coordination with the BSP, taking into consideration the grounds, powers and procedures under Sections 29 and 30 of Republic Act. No. 7653 as may be deemed appropriate to financial service cooperatives.
The Authority shall include in its rules and regulations appropriate sanctions and penalties, on the financial service cooperatives, its members, and officers and responsible, its members, officers and responsible persons, for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of this Code.”
”Sec. 22.Manual of Rules and Regulations. The Authority shall develop a Manual that will cover: (1) the Rules and Regulations for the safe and sound conduct of operations of Financial Service Cooperatives; (2) Rules and Regulations for the appointment of a Conservator or a Receiver as may be necessary in coordination with the BSP, taking into consideration the grounds, powers and procedures under Sections 29 and 30 of Republic Act No. 7653 as may be deemed appropriate to Financial Service Cooperatives; and (3) the appropriate sanctions and penalties on the Financial Service Cooperatives, it’s Members, Officers and Responsible Persons, for any action that fails to adhere to sound and prudent management practices or are inconsistent with the provisions of the Code, other applicable laws on cooperatives, rules , regulations , circulars or orders issued by the Authority, and require the cooperative to undertake corrective or remedial measures relative thereto.
The appropriate prudential Rules and Regulations applicable to the Financial Service Cooperatives will be developed by the BSP, in coordination with the Authority.
In Rule 13 Voluntary Arbitration Sec. 1.The legal basis for this Rule is Art. 137 of the Code quoted as follows: “Art. 137. Settlement of Disputes, Conciliation, and Mediation Proceedings. – Disputes among members, officers, directors, and committee members, and intra-cooperative, inter-cooperative, intra-federation or inter federation disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the bylaws of cooperatives and in such other applicable laws. The conciliation and mediation committee of the cooperative shall facilitate the amicable settlement of intra-cooperative disputes and disputes among members, officers, directors, and committee members.
Should such conciliation and mediation proceedings fail, the matter shall be settled through voluntary arbitration: Provided, however, That before any party can validly file a complaint with the Authority for voluntary arbitration, it must first secure a certification from its conciliation and mediation committee and from the cooperative union or federation to which it belongs that despite all efforts to settle the issues, the same have failed. The jurisdiction of the voluntary arbitration shall be exclusive and original and their decisions shall be appealable to the Office of the President.
The Authority shall issue and adopt the proper rules of procedure governing arbitration as the primary and exclusive mode for dispute resolution in accordance with the Alternative Dispute Resolution Act of 2004. For this purpose, the Authority shall constitute a list of Qualified Voluntary Arbitrators.”
This implementing Rules and Regulations was approved by the Joint Congressional Oversight Committee on Cooperatives During it’s meeting on February 16,2010 at the Senate of the Philippines, Pasay City pursuant to Article 138 of R.A 9520.(http://www.cda.gov.ph/website/Downloads/IRR-certain-provisions.pdf)
Research Design and Methodology
Chapter Three consists of three parts: (1) Purpose of the Study and Research Design, (2) Method and (3) Data Analysis Procedure.
Part One, Purpose of the Study and Research Design, restates the purpose of the study and explains the research design and the variables used in the study.
Part Two, Method, describes the participants, the data gathering material and research procedure employed.
Part Three, Data Analysis Procedure, discusses the statistical tools used to analyze the data.
Purpose of the Study and Research Design
This study aimed to determine the extent of compliance in the manual of
rules and regulations among cooperatives in the province of Guimaras. The descriptive method of the research was used in this study. The descriptive method use to gather information about present existing conditions as well as to describe the nature of the situation.
The subjects of this study were the 15 savings and credit cooperatives in Guimaras. They were classified according to type of cooperative and paid-up share capital. The simple random sampling was employed in the selection of subjects of the study.
Table 1 shows that when grouped according to type of cooperative, majority of the subjects were non-school based, 13 (87.7%) while 2 (13.3) were school-based. In terms of paid-up share capital, only 1 (6.7%) has P500, 00-1,000,000 capital, 5 (33.33%) has above one million pesos, and more than half, 9 (60%) has below P500, 000 paid-up share capital. Table 1
A. Types of Cooperative
Paid in Capital
500,000.00 – 1,000,000
Data- Gathering Instrument
The study made use researcher-made validated questionnaire checklist in gathering data. The instrument made by the researchers, was based on the concepts of the manual of rules and regulations of the Cooperative Development Authority which enumerated the COOP-Indicators to be used as bases for the extent of compliance in the MORR. The instrument was made-up of two parts.
Part 1 was composed of the profile of cooperative that included the name of the cooperative, type of cooperative and its paid-in capital.
Part two was the questionnaire proper. It gathered the responses of the respondent concerning the concept provided by MORR. The participant were requested to put a (/) mark on the “YES” column on the item(s) which they assessed as positively complied by their cooperative and “NO “column on the item(s) which they assessed as negatively complied by their cooperative.
For statistical purposes, numerical values were assigned to the respective responses as follows: Weight Responses 1 YES 2 NO
To interpret the mean score obtained by the respondents, the researchers used the following scale of means and their corresponding description. Scale Description
1.00-1.50 Positively Complied
1.51-2:00 Negatively Complied
Data Analysis Procedure
The following statistics were employed in the analysis of the obtained data:
Mean was used to determine the level of Managers assessment on the compliance of MORR among cooperatives in the province of Guimaras. Kruskall Wallis Test- is a non-parametric inferential statistic was used to compare two or more independent groups for statistical significance of differences.It was used to test the significant difference in the extent of compliance of Manual Rules and Regulations among cooperatives in the province of Guimaras when classified as paid in capital.
The non-parametric test is used instead of the parametric test in order to avoid certain assumptions concerning normality and homogeneity of variable. The Mann-Whitney U Test is used to compare differences between two independent groups when the dependent variable is either (a) ordinal or (b) interval but not normally distributed. It is the nonparametric alternative to the independent t-test. It was used to test the significant difference in the extent of compliance of Manual Rules and Regulations among cooperatives in the province of Guimaras when categorized according to type.
This chapter is divided into two parts: (1) Descriptive Data Analysis and (2) Inferential Data Analysis.
Part One, Descriptive Data Analysis present the description data and their respective analysis and interpretation.
Part Two, Inferential Data Analysis present the significant difference and relationship between variables.
Descriptive Data Analysis
Extent of Compliance in the Manual of Rules and Regulations Data in table 2 showed that generally, savings and credit cooperatives had positively complied the Manual of Rules and Regulations whether taken as an entire group or classified according to certain categories. This was revealed by the obtained mean scores which fell within the 1.00-1.50 scale.
The obtained standard deviations which ranged from .00 -.92 revealed the narrow dispersion of the means indicating homogeneity of the cooperatives extent of compliance with MORR.
Extent of Compliance in the Manual of Rules and Regulations among Savings and Credit
Cooperatives in the Province Guimaras
A. Entire group1.22Positively Complied.13
B. Type of Cooperative
Non-school based1.22Positively Complied.14
C. Paid-up share capital
Below P500, 0001.30Positively Complied.10
P500, 000-P1, 000,0001.15Positively Complied.00
Above P1, 000,0001.11Positively Complied.92
Inferential Data Analysis
Data in Table 3 revealed that there is no significant difference in the extent of compliance of manual rules and regulations among cooperativeswith savings and credit Services in the Province of Guimaras when classified according to type of cooperative (u = 12.50, p=.993).
Mann- Whitney U-tests Results for the Differences in the Extent of Compliance in the Manual Rules and Regulations Among Savings and Credit Cooperatives in the Province of Guimaras when Categorized According to Type of COoperative. CategorySum of Ranks Mean Rank u Sig. Type of
School-based Cooperative 16.50 8.25
Non-school-based Cooperative 103.50 7.96 _______________________________________________________________________ Data in Table 4 showed that significant differences existed in the extent of compliance in the manual of rules and regulations among savings and credit cooperatives in the province of Guimaras when classified according to paid-up share capital (x2 = 7.43, p = .024)
Kruskall-Wallis Test Results for the Difference in theExtent of Manual Rules and Regulations Among Savings and Credit Cooperatives in the province of Guimaras when categorized as to paid-in capital. Category Mean Rank df x2 Sig. Paid-in Capital
Below 500,000 10.59 2 7.43 0.024 500,000-1, 000,000 5.00
Above 1,000,000 4.00
Summary, Conclusions and Recommendations
This chapter is divided into four parts: (1) Summary of the Problem, Method and finding, (2) Conclusions, (3) Implication, and (4) Recommendations.
Part One, Summary of the Problem, Method and finding, reports on the salient points of the study and the findings.
Part Two, Conclusions, presents the generalizations derived from the findings of the study.
Part Three, Implication, clarities the finding of the present investigation to the theories and practice with regard to extent of compliance of MORR among cooperatives in the province of Guimaras.
Part four, Recommendations, presents some suggestions based on the findings and conclusions.
Summary of the Problem, Method and Findings
The main purpose of this study was to determine the Extent of Compliance of Manual of Rules and Regulations among Cooperatives with Savings and Credit services in the Province of Guimaras, as influence by independent variable such as type of cooperative and paid-in capital.
Specifically this study sought to answers to the following questions:
1. What is the Extent of Compliance in the Manual of Rules and Regulations among Savings and Credit Cooperatives in the Province of Guimaras when taken as entire group and classified according to type of cooperative and paid-up share capital?
2. Are there significant differences in the extent of compliance in the manual of rules and regulations among savings and credit cooperatives when grouped according to type of cooperative and paid-up share capital?
In view of aforementioned problems the following hypotheses were advanced:
1. When taken as an entire group or classified according to certain categories, the managers assess the extent of compliance of Manual Rules and Regulations as positively complied.
2.) When grouped according to type of cooperative there is no significant difference but there is a significant difference when classified according to paid-up share capital it was revealed by the narrow dispersion of the means indicating homogeneity of the cooperatives extent of compliance with MORR. Conducted in October 2012, this survey research had for its participants the fifteen (15) Cooperatives in the province of Guimars..
The participants of the study were classified according to type of cooperative and paid-up Capital. The data-gathering instruments were composed of two parts. Part I, for the general information and Part II, for assessing extent of compliance. These assessments were composed of thirty four (34) items. The data gathered were subjected to the following Mean results,standard deviations , non-parametric test ,Kruskall- Wallis Test and Mann Whitney U- Test. The 0.05 alpha levels were used as the criterion for the acceptance or rejection of the null hypothesis. The study result revealed the following:
1. The Extent of compliance of Manual of Rules and Regulations for credit and Savings Cooperative in the Province of Guimaras showed “Positively Complied” when classified according type of cooperative and paid-up capital. 2. The study showed that there is no significant difference extent of compliance of MORR when classified according type. 3. The study showed that there is significant difference extent of compliance of MORR when classified according paid-up capital. 4. Positive and significant relationship existed between the savings and credit cooperatives in the province of Guimaras and their extent of compliance of MORR.
In the light preceding finding, the conclusion of this study means as follows:
In general the study presented that there is no significant difference in the assessment of the managers in the extent of compliance of MORR among cooperatives when classified in type of cooperative and there is a significant difference when classified in paid-in capital. This means that the cooperative in the province of Guimaras, regardless of school or non-school-based, or their paid-in capital, have complied the MORR.
In view of the foregoing conclusions, the following proposals are progressive:
1. Knowing that the Cooperatives extent of compliance MORR is positively complied, the managers in order to maintain these results must organized worthwhile activities and programs. This will help establishing open communication among the members.
2. Managers should advance wider, knowledge on how to upsurge their paid-in capital in order for them to comply the essential capitalization at the least 3 million in order to apply for a licensed operate.
3. Further, studies should be conducted on the effectiveness of the MORR in cooperatives with saving and credit operations especially in loan transaction.
Oxford Advanced Learner’s Dictionary sixth edition
Edited by Sally Wehmeier
http://www.lawphil.net/statutes/repacts/ra2009/ra_9520_2009.html http:// cooperativesector.blogspot.com/2008/05/manual-of-rules-and regulations-morr.html http://www.picpa.com.ph/getmedia/e30bf83f-6859-4390-9733-71a5ebba321e/e_MORR–ITS-SIGNIFICANCE-TO-COOP-AUDITORS-by-HON.-LECIRA-V.-JUAREZ.aspx http://searchdatamanagement.techtarget.com/definition/compliance http://dictionary.reverso.net/english-definition/extent
http://www.cda.gov.ph/website/Downloads/IRR-certain-provisions.pdf Seward (1990)
LETTER TO THE VALIDATOR
Letter to the Validator
July 20, 2012
The undersigned are undertaking an undergraduate thesis Extent of Compliance of Manual of Rules and Regulations among Cooperatives with Savings and Credit services in the Province of Guimaras, in partial fulfillment of the requirements for the degree Bachelor in Cooperatives Management.
In this connection, may we request for your expertise in validating the questionnaire for data gathering instrument in this study.
Your suggestions or comment shall be highly appreciated.
Thank you very much.
Very truly yours,
AILA MARIE ERPELUA
PROF. MARIA CORAZON SAMORIN
LETTER TO THE RESPONDENTS
Letter to the Respondents
July 20, 2012
The undergraduate are taking an undergraduate thesis entitled Extent of Compliance of Manual of Rules and Regulations among Cooperatives with Savings and Credit services in the Province of Guimaras, as a requirement for the undergraduate degree Bachelor in
In this connection, we would like to seek your help to answer honestly the attached questionnaire checklist. We assure you that your responses will be treated with utmost confidentiality.We look forward to your favorable consideration for this matter.
Thank you very much.
Very truly yours,
Data Gathering Instrument
These instruments are intended to gather data for an undergraduate thesis
entitled Extent of Compliance of Manual of Rules and Regulations among Cooperatives with Savings and Credit services in the Province of Guimaras partial fulfillment of the requirements for the degree Bachelor in Cooperatives Management.
I. General Instruction: Provide the answers on the following item correctly. Please do not leave any blank unanswered.
A. Cooperative Profile
Name ( Optional) :_____________________________________
Name of Cooperative:__________________________________
Types of Cooperative: School- based Coop. Non School-based Coop.
II.Directions: Below are the items which are COOP Indicators of the MORR. Kindly read each item carefully and determine if the items are complied with in your cooperative, put a check (/) mark on the YES column and if not, put a check (/) mark on the NO column. Please do not leave any item unanswered.
Compliance with Administrative and Legal Requirement of CDA
1. The bond of accountable officers is current.
2. The articles of cooperation and by-laws are updated.
3. The share capital certificate/passbook issued to members is regularly updated whenever necessary.
4. The CDA required reports accomplished are in prescribed format and submitted within the prescribed period.
5. The annual registration requirements of the cooperative have been submitted.
6. The appropriate taxes, if any are withheld and remitted.
7. The cooperative is knowledgeable and classified as to its tax exemption privileges and tax obligations.
8. The books of account are registered.
9. The local business permit/license has been acquired.
10. The legal minimum wage and 13th month pay to employees are complied with.
11. The mandatory insurance premiums like SSS Phil. Health, PAGIBIG have been remitted.
12. The employees are provided additional retirement plans other than those provided by law.
13. The employees are paid upon retirement.
1. The quorum retirement as indicated in the cooperative by-laws been achieve during the conduct of the recent GA meeting.
2. The authorized capital of the cooperative is fully subscribed.
3. The cooperative has a capital build-up program where 70% of members participate.
4. 70% of the members have saving deposit with the cooperatives.
5. The cooperative has an annual program development.
6. Pre-membership education seminar for new members is regularly conducted.
7. Cooperative education is regularly conducted for new current members.
8. The cooperative has depositor below 18 years old.
9. The cooperative is involved in community service.
10. The cooperative pays annual dues, CETF loans and other accounts to the federation/union of their choice.
OPERATION AND MANAGEMENT
1.Does the cooperative has written Manuals of Policies and Procedures with specific provisions on the following:
c.) Savings Deposits
d.) Time Deposits
e.) Financial Management
e.1) Asset/Liability Management
e.3)Internal Control and Audit
f.) Human Resource Development
f.1)Hiring Promotion and Firing
1.) The cooperative has a code of Governance and Ethical Standards.
2.The Board of Directors and Committee Members are elected in accordance with the cooperative by-laws and elections guidelines/procedures
3.The Board of Directors meets on regular basis (at least once a month
4. All the meetings of the BOD are properly recorded and updated.
5.There is a full-time and qualified manager in the cooperative
6. There is a policy on succession of the manager and other top positions.
7.All employees have individual personal files
8.The cooperative has an organizational structure
PLANS AND PROGRAMS AND PERFORMANCE
1.Does the cooperative have defined objectives plans and programs particularly in the following:
a.) Vision of the statement of mission and goal.
b.) Development of strategic plans.
c.) Approval annual plan and budget
2. The BOD and management conduct monthly review and assessment of the cooperative actual performance in relation to its target.