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Samal Multi-Purpose Cooperative Strategic Audit
Samal Multi-Purpose Cooperative Strategic Audit
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I. The Company………………………………………………………………………1
Introduction
Strategic Options
INTRODUCTION
of interest, who have voluntarily joined together to achieve a lawful common social or
economic end, making equitable to contribution to the capital required and accepting
a fair share of the risks and benefits of the undertaking in accordance with universally
have a rich and vibrant history in the Philippines and have been a force for positive
change in the people of the Philippines for over 100 years. Its core principles are
Furthermore, Philippine cooperatives have enjoyed overall growth but many have
faced challenges. According to Jones (2019), one of many reasons for a cooperative
failure was lack of education and training that is strongly correlated with the following
support and loyalty; vested interests among cooperative leaders, leading to graft and
Philippines Cooperative Draft of 2020 showed that there are 18,065 number of
cooperatives in the Philippines and has 10.7 million overall members (10% of the
population). Among those are 9,541 multi-purpose cooperatives all across the
Peñaplata, Samal District, Island Garden City of Samal, Davao del Norte. As of 2020,
the cooperative’s number of regular members are 8,631 and associate members is
12, 197, so all in all the cooperative is consists of 20,828 members. The cooperative
is engaged in encouraging thrift and savings mobilization among the members for
capital, formation, creating funds in order to grant loans for productive and
providential purposes to its members, providing goods and services, and other
requirements of the members, and promoting the Cooperative as a way of life for
SIMC has proven that they are highly competitive cooperative for over 50
years. However, during the SIMC’s annual report for the year 2020, the cooperative
faced some strategic problems/issues. First issue is it lacks full dissemination and
implementation of its code of governance and ethics for its members; secondly,
members perception in airing their ideas, feedbacks, and opinion is very limited;
third, its members’ satisfaction on the action made on their feedbacks and services is
low; fourth the low utilization of education to members; fifth, it has less effective plans
and programs for responsiveness to Gender, Elderly, Youth and Person with Special
Needs members and affiliation; sixth, it has low utilization of its Continuing Education
Training Fund (CETF) due to federation/union; and Seventh it has a weak internal
Hence, this study intently aims to address such given problems/issues for SIMC’s
In May 1971, or four years later, the Peñaplata Parish Credit Cooperative
Union, Inc. (PPCCUI), the first of its kind in the Municipality of Samal was registered
with the then Cooperative Administration Office (CAO) and officially started the
operation. The initial capital was P 75.00 and P 5.00 each incorporator which was
lent to members at 1% interest rate per month. The word “Parish” was inserted in the
After ten years of operation the membership had been increased. However,
commitments among the members who were then reluctant in paying promptly their
obligations.
Somehow, the cooperatives officers realized that the shortcomings being
experienced by the organization can only be possibly done by those who are
aggressive, committed, and innovative. Inspired by this belief, in 1986 they opted to
pass unto the new set of leaders the responsibilities of managing the cooperative
and such decision were compensated since from the year onwards the latter’s
financial status did again momentum and after almost two years, stability was
eventually attained. Hereafter, the trust and confidence of the general membership
was recovered.
The early years of 1990’s was considered as the most fruitful and productive
one’s ever experienced by the organization where the cooperative status gained
prominence not only in the locality but likewise in Samal Island as manifested by its
through the Local Special Bodies as mandated by the 1991 Local Government Code.
Further, these external resources were augmented by the capital share from
Committee which was very active as it is today. It was also during this period that the
cooperative extended its services to the other two Districts namely Babak and
Kaputian. This was made possible in 1991 when it was re – registered with the
Samal Island Multipurpose Cooperative. During these years the services were
expanded from regular and special productive loan to income generating projects,
financing loans for those engage in medium - scale business enterprises, and salary
loans for private and government employees in the same manner that it already
accepted considerable amount for regular savings and special savings deposits for
members and non – members respectively which was actually practiced even before
the late 1990’s. SIMC is registered under the Cooperative Development Authority
Region 11.
building were initiated by the Cooperative. Among its programs and activities are the
following: Angus Deboning, Candle Making and Sardines Making for the livelihood
program, Bloodletting, Sports activities for Youth Development and Health program
and Tree Planting for Environmental Sustainability. A total of five hundred twenty-five
(525) benefited foretasted programs fund sourced from the (CDF) Community
Development Fund. The Coop has approved policy in response to Gender, Elderly,
Youth and Person with Special Needs. Orientation on Gender Sens1nvity was
conducted with a point of one (1). SIMC upholds partnership among cooperatives
and other Organizations. Among others are MCN as an NGO, CCOC or Cooperative
Development Council of the City and strong linkage with the local Government Unit
Fifty (50) Lawn Lots sold at Samal Memorial Gardens (131 Total Lawn Lots sold);
One (1) Foreclosed Property Sold at San Jose (470 sqm.); Implementation of SIMC
Activity with Provincial Economic Enterprise and Development Office (PEEDO) and
City health Office; Livelihood Training (Candle Making) for members during the
pails, brooms, waste bins, and first aid kit to Beneficiary public schools in the island
quality services in uplifting the economic status of the stakeholders for a better and
capital requirements and the Cooperative strong credit ratings and healthy capital
The Cooperative manages its capital structure and makes adjustments to it. In
order to maintain or adjust the capital structure, the Cooperative may accept new
members, adjust the amount of interest in share capital and patronage refund and
objectives, policies and processes in 2020, 2019 and 2018. SIMC is composed of 11
Committee.
Accounting, Account Management, Credit Administration & Loan Servicing and Cash
these are regular and 8,006 are associates; and 4,191 are beneficiaries under the
micro lending program. The amount of share capital in CY 2020 is 123,805,841, this
Members under the micro finance program has benefitted the following
services: group insurance, medical and health assistance, educational, and burial
current year are the following services: PME, Livelihood, Leadership Training,
accorded with just compensation and benefits. Staff and Employees of their
The Cooperative operation is driven by the six standard areas of concern. The
three components in these areas have an aggregate actual score of twelve (12) out
of the fifteen (15) standard rating. VMG and Feedback Mechanism generated perfect
score, however the Code of Governance and Ethical Standards which fall short of its
score is still being attended. Based on the Committee Report generated from the
50th General Assembly of Samal Island Multi-Purpose Cooperative. The Social Audit
Committee presented the results of their evaluation concerning the six areas such as
Community and Nation, and Network, Alliances and Linkages which are deemed
Strategic options help the step process that includes identifying direction,
analyzing resources, implementing and formulating strategies and evaluating their
effectiveness. SIMC prepares its strategy for a competitive market and to assists in
its goals. Members of the cooperative are being informed/ updated through website/
social media. SIMC installed its own website where the member accessed vital
information about the operation while membership meeting is done periodically while
suggestion boxes located in the strategic area of the cooperative per branch office
programs for nation building were initiated by the cooperative such as candle
approved policy in response to Gender, Elderly, Youth and Person with Special
Needs. The cooperative ethics committee devoted its time in research, discussion
be useful in the discharge of its duties and functions. To gather more relevant data,
committee was actualized. Also, the committee develop and disseminates its code of
governance and ethical standards through research activities on the existing
group discussion with selected employees in each branch and rewriting the draftees
CGES and aligning this with SIMC Policy or Manual Operations. This milestone
activities done by the committee is essential in order to achieve its goal to overcome
the 0 participation at code of Governance and Ethical Standards. SIMC strive to work
hard to deliver excellent service to the general membership and enjoin the
mediation of members attending trainings and seminars would be a great help in the
On the other hand, Audit of the Financial Statements objectives are to obtain
reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors'
report that includes opinion. As part of an audit in accordance with PSA, SIMC
audit. SIMC see to it that audit committee obtain an understanding of internal control
relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness
performance to ensure that these are in accordance with the cooperative principles
Code of Governance and Ethics, Members satisfaction on the action made on their
Special Needs.
Solutions
build a foundation to its members on their ethical frameworks on where the individual
can improve their ethical standards and overcome the 0 participation on the Code of
Governance and ethics that provide personal rules or strategies for ethical decision
making that will act more consistently and confidently. Moreover to the
responsiveness to gender, elderly, youth and person with special needs can also
frameworks are a personal value that give more priority to such virtues as honesty,
fairness, integrity and self-respect. It also to practice gender equality and develop
advantage. Develop strategic leadership that will inspires all members to successfully
Service development in which can fully satisfy the all members to the actions
of their feedback. In which develop more high security at workplace, facilities and to
their accounts. Provide more safety needs like first aid kit, disinfecting tools and
materials especially alcohol to avoid the virus like Covid as well as the safety gear
like mask and plastic covers that help to avoid more face contact.
PART TWO: COMPANY EVALUATION
COMPANY ANALYSIS
A. Management Review
ASSETS
SHARE CAPITAL
NET SURPLUS
DEPOSITS
LOANS
a. Assets;
b. Share Capital;
c. Deposits; and
d. Loans.
The Cooperatives total assets for the past five years had stable upward
movements of which it had an average increase of 10%. This shows that the
BOD had successfully formulated strategic plan of which the management had
succesfully implemented.
Its share capital made its peak on 2020 obtaining 29% incremental
change from 2019 having only 6% positive movement. This contrues that
members of the cooperative and new investors place their money to the
positive impact garnering an average of 9% for the past five years of its
Finally, the Cooperatives primary strength is the loan component. Facts shows
that there is a stable upward trend from 2016 to 2020. This only provides that
A.2 Weakness
shown in the table; it had positive effect from 2016 to 2017 performances,
however from 2018 to 2019 a -44% drop occured. And eventually a drastic fall
of 62% from 2019 to 2020. It primary cause is the effect of pandemic that
B. Election Review
B.1 Strength
The election committee conducts the 2020 annual election with the
assembly and responsibly cast their votes, the selfless effort of the officers
This result shows the growing awareness and active involvement of the
competent and dedicated leaders towards achieving the goals set forth.
B.2 Weakness
BOD should also an option for “No election” in case the members opts to
retain the prior officers. At most, the conduct of election shall be recorded by
The Social Audit Committee for 2020 reveals positive overall results of
its evaluation of its socia audit with respect to the six areas of consideration
namely;
1. Organization;
2. Membership;
3. Staff/Employees;
I ORGANIZATION 15 15 12
II MEMBERSHIP 35 25 34
III STAFF/EMPLOYEES 10 10 10
IV COOPERATION AMONG COOPERATIVES 10 9 8
V COMMUNITY AND NATION 25 20 22
VI NETWORK ALLIANCES AND LINKAGES 5 5 5
TOTAL 100 84 91
VERY
RATING SATISFACTORY OUTSTANDING
ASSETS
81 84 91 93 84
3% 9% 2% -9%
103% 109% 102% 91%
C. 1 Strength
Based on the graph it is evident that the performance of SIMC is increasing
every year. This means that the officers, committees, management and staff
are working hand in hand towards the betterment of the cooperative. However
during 2020 the rating decline due to COVID-19 global pandemic. SIMC’s
social activities were greatly affected because of some programs and trainings
were not realized due to the pandemic. Members economic status were also
C.2 Weakness
There was major drop off points for Membership. It can be connected to
status of the workers. Such business closure creates a negative impact to the
welfare of the working class in particular to the private industries. This explains
the abrupt downturn from “Outstanding” rating for 2018 and 2019 with score of
D.1 Strength
The audit committee based their audit on result or output. Hence the
A. Internal Control
B. Recurring Analysis
C. Policy Reformation
These audit areas constitutes the core group of the SIMC. The issues
identified in these areas will great affect the operations of the Cooperative.
cooperative for incurring huge losses which is detrimental to its goals and
objectives.
D.2 Weakness
pinpoint the real problem. Its form of audit may cause large amount of time
and money without knowing the real cause of the problem emanates. While it
may be true that the existence of a problem prompts the audit committee to
subject it, it does not guarantee wether it is the source of problem or not. It
would entail lost of money in conducting an audit where it is source from the
List of Delinquent Accounts from the four (4) Branches for Mediation and
possible settlement.
Strength
The process of serving and delivering the Notices was done by the
members of the Committee itself and with the assistance of the Area
Collectors since face to face and assemblies were at its height of prohibition. It
can be shown upon that Kaputian District had mediated around 3 out of 4
Weakness
Samal district with total number of 10 members subject for mediation
acted upon was Babak District with 13% or 1 out of 4 members was mediated.
suffered lengthy and strict lockdowns not only in Manila but throughout all
provinces including Davao del norte. It cause their actions and responses to
F. Credit review
LOAN RELEASES
NO. OF
BRANCHES AMOUNT
ACCOUNTS
BABAK 2,007 87,243,916
SAMAL 5,581 250,097,314
KAPUTIAN 3,073 54,231,487
DAVAO 894 29,208,477
TOTAL 11,555 420,781,194
TOTAL AMOUNT OF LOAN RELEASES FROM
MAIN AND BRANCHES
87,243,916
420,781,194 250,097,314
54,231,487
29,208,477
5000
0
BABAK SAMAL KAPUTIAN DAVAO
COMPARATIVE RESULTS ON THE AMOUNT OF
LOAN RELEASES
300,000,000 267,264,139
250,097,314
250,000,000
200,000,000
150,000,000
92,542,231
87,243,916
100,000,000 72,421,385
54,231,487
38,524,351
29,208,477
50,000,000
-
BABAK SAMAL KAPUTIAN DAVAO
Strength
The Samal Branch coveted the top spot for both number of loans and
amount of loans releases with 48% and 59% respectively. Followed by the
Babak branch which acquired 17% of number of loans processed and 21%
amount of loans processed. On the third spot is the Kaputian branch which
obtains 27% of the number of loans processed and 13% of the amount of
loans processed for the year 2020. This indicates that the intervention made
by the three branches amidst the pandemic results to effective and efficient
outputs.
during the year 2020. A fact that the branches exceeded the 2019
number of loans are the amount releases which the results contradicts with.
Weakness
restrictions in davao city is much more than in Island Garden City of Samal
(IGACOS).
loans granted from CY 2019 to CY 2020. The main reason of this could be
This affects the economic stability of working class situated in IGACOS and
Customers
Collaborator
COLLABORATORS –
KEY WORDS: DISTRIBUTOR, SUPPLIER AND ALLIANCES
Other alliance formed in collaboration with the Government facilitated activities was
the SIMC Service Tent during BJMP Vaccination Program and the Talicud Island Garden
City of Samal " LTO Caravan" in support to LGU-Samal initiated Emission Service. These
activities which was being supported by the organization for the social benefit of the
community, not just among the members of the Cooperative but also from the people
residing in Samal.
Competitor
client through online. Tagum cooperative has an official website in where you
can access through membership and loans and you can research and
sustaining the social and economic well-being of members and the community
by providing highly innovative and relevant products and services. There core
religious discrimination. You may shop, you may join, and you may leave the
independence.
Strength
strong financing, strong diverse workforce and democratic owner control this
are the capabilities that by virtue of being rare, costly to imitate, and non
Weaknesses
TC weakness is obsolete technologies in where it may increase cyber
attack and having weak cyber security vulnerabilities can put the coop into a
huge problem like to experience hacking the accounts and bash the coop of
Opportunities
Threats
Regulations that coop can put to risk by increasing the operational cost of man
substitute service based on the ability of consumers to find what they want
the country. The SMIC believe that a cooperative strong financial position it
can readily meets its maturing obligations and continue as going concern.
Under R.A. No. 9520, cooperatives are exempted from the payment of al
parts which are not available locally as certified by the Department of Trade
and Industry.
the key governance practice of the SMIC. The details and content of each
declaration of policy, vision core values and goals of the cooperative. Article 7
staff. Article 12 the accountability in the external auditor. Article 13 the rights of
the members such as right to information, right to share capital and patronage
cash counts.
SMIC employees support program and work environment conformed with the
Environment is conducive.
cooperative. Among its programs and activities are bangus deboning, candle
making and sardines making for the livelihood program, bloodletting, sports
activities for youth development and health program and tree planting for
environmental sustainability.
Technology
an indispensable on the technology where they can check their annual report
audit and finance through the Microsoft excel, making sales transaction online
hold meetings, access common databases, share information and files, make
plans and solve problems together without ever meeting face to face. Which
they also practices the e-mail in sending reports, web blogs, text message,
online media, electronic commerce and social networks and It is very helpful