REVIEWER ELEC

INTRODUCTION TO COOPERATIVE MANAGEMENT

 WHAT IS A COOPERATIVE?
- “A cooperative is an autonomous association of persons united voluntarily to meet
their common economic, social, and cultural needs and aspirations through a jointly-
owned and democratically controlled enterprise”.
 CHARACTERISTICS OF A COOPERATIVE
 Autonomous: Independent and organization base of the enterprise
 Volunteerism: Open membership
 Common needs: People come together to fulfill a mutual need
 Ownership: Members are owners (not merely customers or workers) of the
enterprise and should invest wisely in its growth
 Democratic control: Each members is given a single vote regardless of
contribution/wealth
 Enterprise: A cooperative is not only an association of people, but also a business
enterprise
 UNDERSTANDING THE DIFFERENCES BETWEEN PRIVATE COMPANIES AND
COOPERATIVES
 COOPERATIVE
- Its main purpose is to provide service and savings to members.
- It is essentially a union of persons.
- Its control is democratic; each member has one share and therefore one vote
regardless of their patronage level.
- Ownership is in the hands of its members in the community who use the service.
- Surplus (‘profits’) refunded to members in proportion to patronage.
- Shares are held in name of members only and or are not traded for speculation.
 PRIVATELY INCORPORATED COMPANY
- Its main purpose is to make profit for investors
- It is essentially a union of capital
- Control is not equal; it is based on the number of voting share held. As the volume of
shares purchased is generally unlimited, individual investors can acquire substantial
or complete control.
- Ownership is in the hands of investors who may be located in another community
province or country.
- Surplus allocated in proportion to voting voting shares owned.
- Shares may be freely traded and fluctuate in value.
 A cooperative is different from other business in some very important areas:
 PURPOSE – service and savings to members.
 CONTROL – one member, one vote
  OWNERSHIP – members who use the services.

 SURPLUS – is proportionally distributed to members according to

patronage.
 COOPERATIVE PRINCIPLES
 1ST PRINCIPLE: VOLUNTARY AND OPEN MEMBERSHIP
- Cooperatives are voluntary organizations, open to all persons able to use their
services and willing to accept the responsibilities of membership, without gender,
social, racial, political, religious or other forms of discrimination.
 2ND PRINCIPLE: DEMOCRATIC MEMBER CONTROL
- Cooperatives are democratic organizations controlled by their members, who
actively participate in setting their policies and making decisions. Men and women
serving as elected representatives are accountable to the member-ship. All members
have an equal say at cooperative general meetings and in elections for the
committee that appoints the manager and oversees the running of the cooperative.
Members also have the ability to let their name stand to serve as an elected official
of the cooperative, unlike a customer of a traditional business enterprise
 3rd PRINCIPLE: MEMBER ECONOMIC PARTICIPATION
- Members are both users and owners who contribute equitably to, and
democratically control the capital of their cooperative. Each member is required to
purchase a share, which provides access to goods and services. Unlike a
conventional company where profits are distributed in proportion to the number of
shares a person owns, cooperatives distribute surpluses to members to in
proportion to their transactions with the cooperative thus, members who have done
more business with the cooperative will receive a correspondingly larger share of
the profits.
 4TH PRINCIPLE: AUTONOMY AND INDEPENDENCE
- Cooperatives are autonomous, self-help organizations controlled by their members.
If they enter into agreements with other organizations, including governments, or
raise capital from external sources, they do so on terms that ensure democratic
control by their members and maintain their cooperative autonomy. Cooperatives
do not want to be dominated by governments. Unfortunately, particularly in less
developed countries, this occurs to some extent. Governments, even with good
intentions, have tended to influence cooperatives, either by directing them to
conform to government policies or by giving government officials the authority to
intervene in cooperatives’ affairs, especially where cooperative members’
investments are compromised.

 5TH PRINCIPLE: EDUCATION, TRAINING, & INFORMATION

 -Cooperatives provide education and training for their members, elected
representatives, managers, and employees so they can contribute effectively to the
development of their cooperatives. They inform the general public – particularly
young people and opinion leaders – about the nature and benefits of cooperation.
Because cooperatives exist to encourage the development of people, ongoing
education of their members, training for volunteers and staff and information for
the general public should be key items of annual expenditure. Cooperatives exist to
encourage the development of people. Training programs can be used to improve
and develop skills of the members on topics such as healthy lifestyles, financial
literacy, home ownership, business skills, sales and marketing, understanding the
law, public speaking, healthy living and meeting procedures.
 6TH PRINCIPLE: COOPERATION AMONG COOPERATIVES
- Cooperatives serve their members most effectively and strengthen the cooperative
movement by working together through local, national, regional, and international
structures. To some co-operators, this principle may seem in contradiction with a
view of the early movement of a ‘small is better’ philosophy believing that
cooperatives were somehow meant to be small in scale and operations in order to
fulfil its mandate to members. Cooperation among cooperatives is not just a guiding
principle but is becoming an imperative at the local, regional and international levels
in order to strengthen the sector, increase buying power and ensure enterprise
viability.
 7TH PRINCIPLE: CONCERN FOR COMMUNITY
- Cooperatives work for the sustainable development of their communities through
policies approved by their members. Cooperatives are founded on strong human
values; they do not just selfishly pursue their own interests at all costs. Even where
not all the members of the local community are members of the cooperative, the
cooperative should consider the needs of the non-members when they can. The
cooperative can play a constructive role in the social and economic life of its local
community. A cooperative should take the lead in promoting care for the
environment and the needs of disadvantaged groups within the community
 COOPERATIVE ADVANTAGES
 Economies of scale
 Contributing to poverty reduction
 Employment creation
 Gender equality
 Youth empowerment
 Business development
 HISTORY OF COOPERATIVES IN THE PHILIPPINES
 19th Century
- At the turn of the 19th century, Filipinos, in increasing number, traveled and studied
abroad and brought home with them new ideas.
- Two names worthy of note were Dr. Jose P. Rizal and Teodoro Sandiko
 Dr. Jose P. Rizal
- In Dapitan, Rizal had his ideas in cooperation partially fulfilled. He put up a school for
the poor community and a store with the help of his pupils on a purely cooperative
basis.
- (ABAKA – only run for a year and barely gave back the capital among members)
 Teodoro Sandiko
- He was appointed as one of the early governors of the Civil Government and he
prepared a bill which aim to protect and develop the agricultural interest of the
country. (Governor of Bulacan)
- He is credited for the passing of the Rural Credit Law and is considered as the Father
of Cooperation in the country.
 1916
- The first rural credit association that was organized under this Law was the
Agricultural Credit Cooperative Association of Cabanatuan, Nueva Ecija (October 18,
1916).
 1926
- At the end of 1926 there were 544 rural credit cooperatives organized in 42
provinces and by 1930 there were 571 associations formed all over the country.
 1927
- The Cooperative Marketing Law (Act 2425) was enacted and approved on December
9, 1927.
 1935
- In 1935, however, about 90% of these cooperatives were inactive with no funds left
in their treasury. The experiment on rural financing, through cooperatives was a
failure.
 1939
- By 1939, only 164 societies were actually organized with a total membership of
around 5,000 farmers. With this number only 35 reported their sale of products to
the Bureau of Commerce.
 1952
- In recognition of the strategic position occupied by our farmers in the social
structure and economic development of the country, the Philippine Congress
enacted Republic Act 821 in 1952. This law established a system of liberal credit
which is specially designed to meet the needs of the small farmers.
 CREATION OF THE AGRICULTURAL CREDIT AND COOPERATIVE FINANCING
ADMINISTRATION (ACCFA)
- 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
 DIFFERENT TYPES OF COOPERATIVES
 Consumer Cooperatives
- This is one of the best known forms cooperatives found around the world.
- They are owned and controlled by the people that buy the products and services
sold, managed or distributed by the cooperatives.
- Their mandate is to acquire the products and services required by their members at
the lowest possible cost with the highest possible quality.
- Examples: Baguio Teachers Camp Consumers Cooperative, Basao Farmers
Consumers Cooperative, and Tiwi Indigenous Peoples Asenso Consumers Cooperative
- These cooperatives can operate in three different ways:
 as buying clubs where products and services are obtained by the cooperative
only when the members place an order;
 as retail stores where the members come in to shop; and
 as service providers where members order the service, such as cable
television, internet access, water or natural gas.
 Producer Cooperatives
- The Producer Cooperatives were one of the first kinds of Cooperatives developed to
explore and provide solutions to the farmers’ production in the early 1880.
- Producers Cooperatives are also known as marketing cooperative where the
members provide the cooperative with the same production that the cooperative
markets in a processed or value-added form.
- The Cooperatives’ mandate is to commercialize the members input by seeking the
best price possible on the market.
 Worker Cooperatives
- Worker cooperatives are identified as the third type of cooperative owned and
controlled by their employees. The purpose of the worker cooperative is to create
jobs for their members and allow them control of their workplace.
- Members provide the capital to finance the business, each sharing the costs and
risks of ownership.
- The management of a worker cooperative is concentrated in the business part and
classified as a third type of cooperative where the members are employees.
- Usually the worker cooperatives are services cooperative offering services to other
business and they are generally printing, nursery schools, janitorial cleaning,
consulting, mail/package delivery, manufacturing and food services.
- Examples: Cubao Motor Specialist Workers Cooperative, Samahang Inilulunsad Ang
Kapayapaan at Pag-unlad (SIKAP) Workers Cooperative, and Unified Skilled Workers
Cooperative (2017)
 Credit Cooperatives
- A credit coop is an association of small borrowers and savers (typically micro and
small business owners, small farmers, and rank-and-file employees) who cannot
afford access to traditional banking services.
- This type of coop helps members save and/or borrow money at a much lower cost
than what banks charge.
- Examples: Mutual Savings and Credit Cooperative of the Philippines, PLDT Employees
Credit Cooperative, and U.P. Credit Cooperative
 Marketing Cooperatives
- Marketing coops cater to producer-members (typically farmers), providing services
such as packing, promoting, and selling products for them.
- Doing so eliminates the need for middlemen between producers and consumers,
which helps maximize the profits that members receive from their produce.
- Examples: Palawan Sunflower Farmers Marketing Cooperative, Bacacay Fisherfolk
Marketing Cooperative, Cavite Farmers Feedmilling and Marketing Cooperative
(1976), and San Miguel Central School Teachers and Employees Marketing
Cooperative
 Advocacy Cooperatives
- An advocacy coop promotes and advocates a specific cause such as education and
environmental conservation.
- It organizes and conducts charitable activities, like training and livelihood projects,
to help its beneficiaries.
- Examples: PH-Haiyan Advocacy Cooperative, Community Empowerment and
Transformation Advocacy Cooperative, and Philippine Natures Educators Advocacy
Cooperative
 Agrarian Reform Cooperatives
- This type of coop exists to help marginal farmers and agrarian reform beneficiaries
develop a system for land tenure, development, consolidation, or management in
locations covered by agrarian reform.
- Examples: Antipolo, Namo, Nasuje, Inararan, Calomagon Agrarian Reform
Cooperative, Dalit Brookside Agrarian Reform Beneficiaries and Farmers Multi-
purpose Cooperative, Fatima Agrarian Reform Cooperative, and Asturias Farmers
Agrarian Reform Cooperative
  Dairy Cooperatives
- Through this type of cooperative, dairy farmers produce, process, and/or market
milk and dairy products to retail stores, wholesale stores, or in their own stores.
- Examples: Mountain High Dairy Cooperative, Cagayan Valley Maunlad Cattle and
Dairy Cooperative, and Northern Tumauini Cereal and Dairy Farmers Cooperative
 Education Cooperatives
- Education cooperatives own and run licensed educational institutions in the
Philippines.
- Examples: One Pinoy Wins Education Cooperative, The Learning Library Education
Cooperative, and Victoria Community Education Cooperative
 ADDITIONAL COOPERATIVES
 Electric Cooperatives
- Typically operating in rural communities, electric cooperatives engage in power
generation and distribution to provide electricity to their members.
- Examples: Benguet Electric Cooperative, Palawan Electric Cooperative, and Siargao
Electric Cooperative Inc.
 Fishermen Cooperatives
- This type of coop is created and operated by marginalized fishermen who manage
each others’ fishing activities and market their fresh and processed products.
- Examples: Parañaque Aquamarine Fishermens Cooperative, Samahan ng Maliliit na
Mangingisda sa Dagupan City Fishermen Cooperative, and Dock Area Fishermen
Cooperative
 Health Services Cooperatives
- Health services coops provide for the medical, dental, maternity, and other
healthcare needs of their members.
- Examples: Laguna Health Services Cooperative, Medical Mission Group Qatar
Overseas Filipino Expatriates Hospital and Health Services Cooperative, and Metro
Rizal Doctors Health Services Cooperative
 Housing Cooperatives
- Housing coops help their members get access to low-cost and secure housing by
sharing homeownership costs.
- Examples: Alyansa Ng Mamamayan Sa Caloocan Housing Cooperative, Ang Bagong
Bahay Housing Cooperative, and Damayan Neighborhood Housing Cooperative
 Insurance Cooperatives
- Insurance coop members share their premium to insure the life and property of
their cooperative and members.
- Examples: CLIMBS Life and General Insurance Cooperative, 1 Cooperative Insurance
System of the Philippines Life and General Insurance, and Coop Life General
Insurance & Financial Service Agency (8TH FASTEST INSURANCE GLOBALLY)
  Transport Cooperatives
- Transport coops provide land or sea public transport services using small vessels
such as jeepneys, buses, taxis, transportation network vehicle services (TNVS), or
tourist vehicles.
- Examples: Senate Employees Transport Service Cooperative, People’s Transport
Service Cooperative, Commonwealth Transport Service and Development
Cooperative, and Lagro – Novaliches Jeepney Drivers and Operators Transport
Cooperative
 Water Service Cooperatives
- A water service coop provides a reliable supply of potable water for its members’
households by reducing the costs of transactions and water system management.
- Examples: Blue Water Service Cooperative, Community Water Service Cooperative
of Bagong Silang, and Antipolo Water Service Cooperative
 Multi-Purpose Cooperatives
- A lot of cooperatives in the Philippines are of multi-purpose type, offering two or
more types of services to their members. For example, a coop may provide both
lending and production services to its farmer-members.
- Examples: Tulong Kapatiran Multi-purpose Cooperative, Cordillera Agriculturists
Multi-purpose Cooperative, and Ateneo De Manila Multi-Purpose Cooperative

GOVERNANCE OF COOPERATIVES
 DEFINITION OF COOPERATIVE
- Cooperatives are people-centred enterprises owned, controlled and run by and for
their members to realise their common economic, social, and cultural needs and
aspirations.
- 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
- As businesses driven by values, not just profit, cooperatives share internationally
agreed principles and act together to build a better world through cooperation.
- They are not owned by shareholders.
- Cooperatives bring people together in a democratic and equal way. 
 WHAT IS CDA?
- The Cooperative Development Authority (CDA) is the lead government agency
mandated by virtue of Republic Act No. 9520 (Philippine Cooperative Code of 2008)
to promote the viability and growth of Philippine cooperatives. It is the only
government agency that registers cooperatives.
- In order to qualify, you must have
  At-least 15 members in your proposed cooperative.
 The proposed business name, which should include the word “cooperative”,
 Other necessary requirements (eg: economic survey, articles of cooperation and its
by-laws and the names of the cooperative’s directors)
 PURPOSE
 The declared purpose of the law, among others,
 Foster the creation and growth of other cooperatives
 Promote self-reliance
 Economic development and social justice.
 There are 14 official purposes according to Article 6
 14 PURPOSES (1-6)
 (1) To encourage thrift and savings mobilization among the members;
 (2) To generate funds and extend credit to the members for productive and
provident purposes;
 (3) To encourage among members systematic production and marketing
 (4) To provide goods and services and other requirements to the members;
 (5) To develop expertise and skills among its members;
 (6) To acquire lands and provide housing benefits for the members;
 (7) To insure against losses of the members;
 (8) To promote and advance the economic, social and educational status of the
members;
 (9) To establish, own, lease or operate cooperative banks, cooperative wholesale
and retail complexes, insurance and agricultural/industrial processing
enterprises, and public markets;
 (10) To coordinate and facilitate the activities of cooperatives;
 (11) To advocate for the cause of the cooperative movements;
 (12) To ensure the viability of cooperatives through the utilization of new
technologies;
 (13) To encourage and promote self-help or self-employment as an engine for
economic growth and poverty alleviation; and
 (14) To undertake any and all other activities for the effective and efficient
implementation of the provisions of this Code.
 TWO TYPES OF MEMBERS
 Regular member 
 is one who has complied with all the membership requirements
 entitled to all the rights and privileges of membership as stated in the
Cooperative Code and the cooperative by laws.
 Associate member 
 no right to vote and be voted upon
 entitled only to such rights and privileges provided by the cooperative's by laws.
  Laboratory cooperative
 Organized by minors
 HOW TO ORGANIZE A COOPERATIVE (6 STEPS)
 Get organized
 Prepare a general statement called an economic survey
 Draft the cooperative’s by-laws
 Draft the articles of cooperation
 Secure bond for accountable officer(s)
 Register your cooperative with the Cooperative Development Authority (CDA)
 DEFINITIONS OF TERMINOLOGIES
 MEMBER
- includes a person either natural or juridical who adhering to the principles set forth
in this Code and in the Articles of Cooperative, has been admitted by the cooperative
as member;
 GENERAL ASSEMBLY
- shall mean the full membership of the cooperative duly assembled for the purpose
of exercising all the rights and performing all the obligations pertaining to
cooperatives
 BOARD OF DIRECTORS
- body entrusted with the management of the affairs of the cooperative
 COMMITTEE
- any body entrusted with specific functions and responsibilities under the bylaws or
resolution of the general assembly or the board of directors
 ARTICLES OF COOPERATION
- articles of cooperation registered under this Code and includes a registered
amendment thereof;
 BYLAWS
- means the bylaws registered under this Code and includes any registered
amendment thereof;
 REGISTRATION
- operative act granting juridical personality to a proposed cooperative and is
evidenced by a certificate of registration;
 COOPERATIVE DEVELOPMENT AUTHORITY
- refers to the government agency in charge of the registration and regulation of
cooperatives as such hereinafter referred to the Authority;
 UNIVERSALLY ACCEPTED PRINCIPLES
- body of cooperative principles adhered to worldwide by cooperatives;
 REPRESENTATIVE ASSEMBLY
- full membership of a body of representatives elected by each of the sectors
  OFFICERS OF THE COOPERATIVE
- shall include the members of the board of directors, members of the different
committee created by, general manager or CEO, and members holding other
positions as may be provided for in their bylaws;
 SOCIAL AUDIT
- is a procedure wherein the cooperative assesses its social impact and ethical
performance according to the mission, vision, goals and code of social responsibility.
 PERFORMANCE AUDIT
- shall refer to an audit on the efficiency and effectiveness of the cooperative as a
whole; its management and officers; and its various responsibility centers
 SINGLE-LINE OR SINGLE PURPOSE COOPERATIVE
- shall include cooperative undertaking activities which are related to its main line of
business or purpose;
 SERVICE COOPERATIVES
- are those which provide any type of service to its members, including but not limited
to, transport, information and communication, insurance, housing, electric, health
services, education, banking, and savings and credit;
 SUBSIDIARY COOPERATIVES
- refers to three or more primary cooperatives, doing the same line of business,
organized at the municipal, provincial, city, special metropolitan political subdivision,
or economic zones

REGISTRATION OF COOPERATIVES
 AS A REVIEW
 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 risks and benefits of the undertaking in accordance with
the universally accepted cooperative principles.
 The Cooperative Development Authority (CDA) is the lead government agency
mandated by virtue of Republic Act No. 9520 (Philippine Cooperative Code of
2008) to promote the viability and growth of Philippine cooperatives. It is the
only government agency that registers cooperatives.

 PRIVILEGES ENJOYED BY COOPERATIVES

 Cooperatives shall enjoy the privilege of depositing their sealed cash boxes or
containers, documents or any valuable papers in the safes of the municipal or
city treasurers and other government offices free of charge, and the custodian of
 such articles shall issue a receipt acknowledging the articles received duly
witnessed by another person;
 Cooperatives organized among government employees, notwithstanding any law
or regulation to the contrary, shall enjoy the free use of any available space in
their agency, whether owned or rented by the Government;
 Cooperatives rendering special types of services and facilities such as cold
storage, ice plant, electricity, transportation, and similar services and facilities
shall secure a franchise therefore, and such cooperatives shall open their
membership to all persons qualified in their areas of operation;
 In areas where appropriate cooperatives exist the preferential right to supply
government institutions and agencies rice, corn and other grains, fish and other
marine products meat, eggs, milk, vegetables, tobacco and other agricultural
commodities produced by their members shall be granted to the cooperatives
concerned;
 Preferential treatment in the allocation of fertilizers and in rice distribution shall
be granted to cooperatives by the appropriate government agencies;
 Preferential and equitable treatment in the allocation or control of bottomries
of commercial shipping vessels in connection with the shipment of goods and
products of cooperatives;
 Cooperatives and their federations, such as market vendor cooperatives, shall
have preferential rights in management of public markets and/or lease of public
market facilities, stall or spaces;
 ORGANIZING A COOPERATIVE
 Step 1: Get organized.
 Step 2: Prepare a general statement called an economic survey
 Step 3: Draft the cooperative’s by-laws
 Step 4: Draft the articles of cooperation
 Step 5: Secure bond for accountable officers
 Step 6: Register with the CDA
 CDA MAIN OFFICE
- 827 Aurora Blvd, Immaculate Conception, Quezon City, 1111 Metro Manila
 CDA NCR AND REGION IV-A

MANAGEMENT OF COOPERATIVES
 COOPERATIVE MANAGEMENT
Cooperative management means:
● foster free circulation of information within the company,
● establish support and reward behaviors based on trust and mutual help,
● make sure that the company’s best interest is also the best interest of its employees in
order to induce them into participating,
● mobilize human skills, processes, as well as financial and technological resources so that
the company’s goals can be reached.
● In simpler words, it is the manipulation of resources to achieve objectives
 THE SEVEN M’S’ OF MANAGEMENT
 Money
- is done to meet day to day business requirements and the funds involved in meeting
those requirements are known as working capital.
 Machine
- or the basic tools to produce goods or generate services.
 Men
- is referred to as a human resource. It is the recruitment, selection, training,
promotion and grievances handling of personnel. 
 Material
- basic ingredient in management be it a service industry or a product industry. Most
of the industries locate them self nearby to the availability of material
 Method
- Common known as the art of doing. A set of procedures and instructions is known as
a method.
 Management
- incorporates key aspects that managers have to deal with on a regular basis,
including marketing, production, research & development, finance and operations.
 Moral Values
- the way business is conducted.

 ORGANIZATIONAL STRUCTURE – (Base on the nature of business

 ROLE OF MANAGEMENT
- Management combines ideas, processes, materials, facilities, and people to
effectively provide needed services to member-owners. Management is the decision
making element of the cooperative.
 LOCAL COOPERATIVES
- bookkeepers or office managers
 REGIONAL COOPERATIVES
- Employment to graduates.
- Provide management training for local managers, using their own staffs or
management consulting firms as trainers
 STATE COOPERATIVES
- Offer basic director, management, and employee training to local cooperatives.
- Conduct programs
 COOPERATIVE MANAGER
 THERE ARE 4 GENERAL WAYS
 1. Adjusting decision making to a business where the customers are also the owners
 2. Dealing with complex issues
 3. Working in a service-oriented organization is a spotlighted atmosphere.
 4. Have unique management implications of business ownership and control.
 RESOURCES TO MANAGE
- Like any other business, three major types of resources must be managed in a
cooperative
 PEOPLE
 - The most important resource in a cooperative is people.
- The success of all phases of the business depends on competent personnel working
together smoothly and efficiently
- Training was highly important in the areas of improving customer relations,
educating members about the cooperative way of doing business, working
effectively with a board of directors, identifying member needs.
- Management should also motivate and reward employees.
 CAPITAL
- Financial management, a key to operating cooperatives, involves managing assets
such as cash, accounts receivable, inventories, fixed assets, and investments in other
organizations.
- One important aspect of this type of resource is for the project manager to talk to its
project sponsors about their expectations for the money that is planned to be spent.
 Financial management involves:
- (1) considering funds available and source for additional capital;
- (2) allocating funds among assets to be financed; and
- (3) ensuring that all aspects of financing are dealt with in a manner consistent with
sound business practices and cooperative principles.
 FACILITIES
- Building and equipment can represent a large proportion of a cooperative’s assets
-  Therefore, important management considerations include
 scheduled maintenance;
 rearrangement,
 remodeling,
 and replacement to improve operating efficiency; daily operating cost records;
 preventive maintenance programs;
 adequate insurance;
 observance of safety, health, and other environmental regulations.

 MANAGEMENT TOOLS FOR COOPERATIVES

 1. ACCOUNTING SYSTEM
- A complete and accurate accounting system is vital for effective management.
- It must produce several financial statements needed in planning and controlling,
such as: (1) monthly and annual balance sheets and operating statements; (2)
functional or enterprise accounts pertaining to departments or specific lines of
business; and (3) special accounts such as patronage records, accounts receivable
aging, member equity, and patron financing.
- An independent auditor periodically verifies the accuracy of the cooperative’s
business records.
- Larger cooperatives also use internal audit reports.
  2. CONTROL REPORTS
- Credit and inventory analysis include the following:
 Monthly aging of accounts and notes receivable
 Selected financial and operating ratios
 Monthly accounting of selected inventories, including shrinkage reports
 3. SECURITY AND SAFETY
- To protect the cooperative, the board is responsible for adequately insuring
employees and assets.
- Employees handling funds should be bonded.
- Facilities need to be appraised and arranged internally and fenced to minimize
pilferage.
- The board should adopt programs to protect the health and safety of employees and
patrons and measures to comply with environmental protection standards.
(Must be insured and have warranties)
 4. EVALUATION AND TRAINING
- Management will be evaluated even if the process is not formally planned. Member-
owners continually evaluate their hired management in terms of how well the
cooperative is serving members.
- In addition, business leaders, who know about or deal with the cooperative,
indirectly evaluate its management.
- Larger cooperatives use professional management consulting firms to assess
whether the cooperative’s management structure is efficient, locate weaknesses and
strengths, and suggest what types of management training are needed.
- They may use the Management Appraisal Report.
- It concerns land (facilities and equipment), people, and capital.
- This is accomplished by using the management functions of planning, organizing,
motivating, and controlling
(Ineevaluate ng board of directors kung nagagamit ba ng mga employees ang mga
funds ng tama. Mag SWOT Analysis para malaman ang tmanag training)
 5. INCENTIVE PROGRAMS
- In addition to job descriptions and salary ranges, managers in an increasing number
of cooperatives use incentive payment plans to encourage productivity.
- Also, many use certificates of merit or special activities to recognize superior
employee performance
(Employees must be properly compensated such as allowances and merits)
 6. COMMUNICATIONS
- Managers communicate with employees, members, and the public in a variety of
ways-membership and employee publications, annual reports, member and
employee meetings, and reports by educational and Government agencies.
- One regional cooperative has used satellite transmission for conducting its annual
meeting simultaneously at multiple sites.
 - Distance learning, CD-ROM computer media, computer simulation and self-
contained units with video tapes, facilitator guides and workbooks are being used in
educational programs for directors, managers, and employees.
(Must have open communication from Employees to stakeholders)
 7. STRATEGIC PLANNING
- Strategic planning is a formal and systematic process. It is long-term and different
than short-term or annual budgeting.
- Its primary purpose is to determine the current position of the cooperative and chart
its future direction. The planning horizon is usually 3 to 10 years.
- Strategic planning is objective oriented and focuses on specific measurable actions.
It is based on available and factual information and assumptions regarding the
future.
- Strategic planning uses the cooperative’s strengths to put it in the best possible
position while change is occurring
(Break even point)

 PATRONAGE RECORD – Transaction na ginagawa ng members sa cooperatives

 MEMBER EQUITY – Paggustong magdagdag ng capital
 EXTERNAL AUDITOR – Pagmalaki na yung cooperative