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Social Audit of PANELCO III

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ME 214 and ME 217 Strategic Planning, MDM, PSU 1st Semester 2013

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Social Audit of PANELCO III

  1. 1. Reporters: Jayson C. Agsalud Engr. Felix Anthony R. Sison Dr. Josefina B. Bitonio Professor
  2. 2. Is the government agency created under R. A. 6939 to take charge of the registration, regulation and development of cooperatives.
  3. 3. -is the act creating the Cooperative Development Authority to promote the viability and growth of cooperatives as instruments of equity social justice and economic development, defining its powers, functions and responsibilities, rationalizing government policies and agencies with cooperative functions supporting cooperative development, transferring the registration and regulation functions of existing government agencies on cooperatives such as and consolidating the same with the authority, appropriating funds therefore, and for other purposes.
  4. 4. Audited Financial Statement Stamped received by BIR List of Officers and Training
  5. 5.   Is the process whereby a cooperative can account for its social performance, report on and improve that performance. It assesses the social impact and the ethical performance of the cooperative in relation to its vision, mission, goals and Code of Social Responsibility. It is also a process to assess the cooperative’s contribution for the upliftment of the status not only to it members’ economic needs but also social needs of the community it operates.
  6. 6.     is an instrument to identify, measure, assess and to report on their social performance. This will provide the user a framework on how to collect data and what data is to be collected. has a one year cycle like the financial and management audit. the tool will present the score of the cooperative’s social performance (outstanding, very good, good, fair or poor) the result shall be the major consideration for improved social performance which is its first and foremost goal.
  7. 7. I. II. III. IV. V. VI. Organization Membership Staff/Employees Cooperation among Cooperatives Community and Nation Network Alliance and Linkages
  8. 8. SOCIAL AUDIT OF COOPERATIVES AS OF DECEMBER 31, 2012 General Information: •Name of Cooperative: PANGASINAN III ELECTRIC COOPERATIVE •Present Address of Cooperative: NANCAYASAN, URDANETACITY •Type of Cooperative: PRIMARY •Re-registration Number: 9520-01008918 •Vision / Mission & Goals
  9. 9. Goals: To provide total electrification service in the entire coverage area in the most effective and efficient manner. To improve financial viability, technical sustainability and institutional stability. To enhance at all times the productivity of our resources thru 5’S. To provide a quality, dependable and adequate services surpassing the standards set by the electric industry. To adopt a competitive rate structure which reflect the true cost of providing the desired level of electric service. To provide our employees just and reasonable compensation and benefits and give due regard to their welfare.
  10. 10. To provide our employees with opportunities for professional growth and career advancement on the basis of performance, integrity and loyalty to the Cooperative.  To uphold at all times high standards of business ethics guided by the principle that the Cooperative’s interest and those of the public are complimentary and inseparable.  To fulfil with dedication our moral, spiritual and social responsibilities.  To undertake by us and through third parties and subsidiaries, activities that support and compliment our operations, enhance the use of our resources and contribute to the social and economic development of our country.  (Approval of the VGM by he General Assembly (January 11, 2006 Revised))
  11. 11. SUMMARY OF POINTS OF PANELCO III AREAS OF CONSIDERATION MAXIMUM POINTS COOPERATIVE POINTS ORGANIZATION 15 15 MEMBERSHIP 35 26 STAFF/EMPLOYEES 10 10 COOPERATION AMONG COOPERATIVES 10 8 COMMUNITY AND NATION 25 18 NETWORK ALLIANCES AND LINKAGES 5 5 100 82 TOTAL POINTS 82
  12. 12. QUANTITATIVE RATING For MEDIUM AND LARGE COOPERATIVE 90 – 100 points Outstanding 80 – below 90 points Very Satisfactory 70 –below 80 points Satisfactory 60 –below 70 points Fair Below 60 points Poor
  13. 13. Oo. There’s a lot of room for improvement. Tingnan natin kung anong areas yun and let’s make it better. Ayos! Pasado. Pwede na yan.
  14. 14. II. MEMBERSHIP (35 points) AREAS OF CONSIDERATION Maximum Points Points Asset Building (12 points) 1. Economic Participation of members (2) 2 0 1.5 1.5 2.2. Increase in the amount of share capital 1.5 1.5 2.3 Increase the number of existing members with increased deposit 1.5 1.5 1.5 1.5 2. Ownership Participation through Capital Build Up (6) 2.1. Increase in the number of existing members with additional share capital 2.4 increase in the amount of deposits
  15. 15. AREAS OF CONSIDERATION Maximum Points Points 3. Members Economic Growth (4) 4 0 A. Members governance (10 points) 1. Information facilities 2 2 2. Members participation 2 2 2 1.5 2 2 2 1.5 3.1. Upliftment of lives of the members 3. Members Feedback 3.1 Member’s perception in airing their ideas, feedbacks and opinion 3.2 Members satisfaction on the action made on their feedbacks 3.3 Member’s satisfaction on services
  16. 16. AREAS OF CONSIDERATION B. Members’ Benefits (3) 1. Presence and percentage of members benefitting from the members’ social benefits/program/s C. Member’s Education (10 points) 1. Provision of education to members (5) 1.1. Presence of continuing program that contribute to human development of members. 1.2 Implementation of education program (4) 2. Leadership Development Program (5) 2.1 Presence of leadership program for cooperative officers 2.2 Implementation of program for cooperative officers 2.3 Mandatory Trainings for Cooperative officers Conducted/Attended Maximum Points Points 1* 1 2** 2 1 1 2* 1 2** 2 1 1 2 1 2 2
  17. 17. IV. COOPERATION AMONG COOPERATIVES (10 points) AREAS OF CONSIDERATION A. Membership and Affiliation (4 points) 1. Affiliation and Participation 1.1. Federation: PHILRECA, PHILFECO, PMAP, NAGMEC, RECA I, NRECA, PICPA, IIEE, PEMFE, RMBA 1.2 Union: PEA 2.Support Services (projects/activities) to federation or union other than the patronage of their core business: 2.1 Financial, specify: Membership Fee, Annual Fee 2.2 Non-financial, specify: Task Force Program (Calamity) MAXIMUM POINTS POINTS 1 1 1 1 1 1 1 1
  18. 18. AREAS OF CONSIDERATION MAXIMUM POINTS POINTS 2 0 2 2 2 2 B. CETF due to Membership and Affiliation (2) Amount allocated for the audit period Amount remitted for the audit period n/a n/a C. Cooperative Alliance/linkage/network (4 points) 1. Inter-Cooperative Partnership -Business Partnership -Non – business Partnership
  19. 19. V. COMMMUNITY AND NATION (25 points) AREAS OF CONSIDERATION Maximum Points Points A. Contribution to national and community development programs (15 points) 1. Presence of approved Projects/programs 8 8 2. Programs implemented 7 0 2 2 4 4 4 4 B. Responsiveness to Gender, Elderly, Youth and person with special needs (PWSN) (10 points) 1. Plans and Programs 1.1. Presence of approved policy 1.2. Program implemented C. Community Outreach 1. Number of members over working population in the area of operation
  20. 20.  MEMBERSHIP Asset Building 1. Economic Participation of members (0/2) 2. Members’ Economic Growth (0/4) 3. Members’ Feedback (1.5/2) 4. Members’ Satisfaction on services (1.5/2) 5. Members’ Education (1/2) 6. Leadership Development Programs (1/2)
  21. 21. COOPERATION AMONG COOPERATIVES Support services to federation or union other than the patronage of their core business. (0/2)  COMMUNITY AND NATION Contribution to national and community and development programs. -Implementation of programs (0/7) 
  22. 22. MEMBERSHIP 1. Economic Participation of members -no data available to the cooperative. 2. Members Economic Growth -no data available to the cooperative. 3. Members Feedback -Aside from feedback forms, suggestion box and comments and suggestion forms, members’ feedback should be welcomed through all avenues possible like internet, SMS etc., so that members’ concern can be received and be addressed accordingly.
  23. 23. 4. Members’ Satisfaction on services -every consumer's requests and complaints should be acted upon within a reasonable timeframe and employees of the Cooperative must always be professional in conducting their duties and responsibilities 5. Members’ Education -conduct additional training and livelihood programs that is beneficial to the consumer. 6. Leadership Development Programs -trainings and seminars should regularly be given to employees to update and upgrade their skills and abilities in order to cope up with the emerging challenges in the operation of the cooperative.
  24. 24. COOPERATION AMONG COOPERATIVES Support services to federation or union other than the patronage of their core business. Cooperative Education Training Fund (CETF) due to Federation Amount allocated for audit period n/a Amount remitted for audit period n/a -the Cooperative didn’t have any surplus so it wasn’t able to allocate CETF.
  25. 25. Contribution to National and Community and Development Programs.         Peace and order Eradicate extreme poverty and hunger Achieve universal primary education Culture, tradition and history Sports Improve maternal health Ensure environmental sustainability Youth Development -the implementation of these programs is vital in carrying out the cooperatives’ social responsibilities, thus, requires considerable time and funding.
  26. 26. Social Audit of Panelco III as of December 31, 2012 Thank you very much for listening.
  27. 27. Summary of Social Audit, Performance Audit
  28. 28. COOPERATIVE ANNUAL PERFORMANCE REPORT (CAPR) FOR THE YEAR DECEMBER 31, 2012
  29. 29. A. B. C. D. E. Name of Cooperative (as of latest amendment, if any): PANGASINAN III ELECTRIC COOPERATIVE Cooperative Identification Number (CIN): 003011115 Registration Number: 9520-01008918 Actual Principal Address: NANCAYASAN, URDANETA CITY, PANGASINAN Type of Cooperative: ELECTRIC COOPERATIVE
  30. 30. F.1 Organizational Aspect F.1.1 Leadership a. Functions, Duties and Responsibilities b. Qualifications and Disqualifications c. Composition d.Continuing Education and Training e. Financial Literacy f. Succession and Planning f.1 Is the policy on succession plan at key levels of the organization formulated? f.2 Is the succession plan embedded in the training program? f.3 Are volunteers or future leaders included in the succession plan? g. Ethics Means of YES NO Verification Succession Plan/ Manual of x Operations/ Development Plans Training Program x vis-à-vis Succession Plan Succession Plan x provision on volunteers Sub-Total Standard Points Points earned 9 2 1 4 3 3 9 2 1 4 3 3 1 0 1 0 1 0 2 24 2 21
  31. 31. YES NO Means of Verification Standard Points Points earned a. Functions, Duties and Responsibilities 3 3 b. Personnel Policy 2 2 c. Staff Development and Career Planning 3 3 c.1 Is the performance appraisal conducted at least once a year? x Performance Appraisal of every staff 1 0 c.2 Is the performance gap analysis conducted at east once a year? x Result of gap analysis per performance appraisal made 1 0 Training Program based on gap analysis made/ Staff Development Plan 1 1 3 3 13 11 c.3 Is the institutional capacity building for management staff written and implemented (training and other interventions)? x d. Compensation and Benefits e. Ethics Sub-Total
  32. 32. YES NO Means of Verification a. Capitalization 5 a.4 Are penalties for unpaid subscription imposed to members? Schedule of penalty imposed x for unpaid subscription or any similar documents Governance b.5 Is the engagement of the services of an external auditor approved by the GA? c. Subscription Schedule vis-àvis Registry of Members x Minutes of the GA Meeting Ethics Sub-Total 1 0 1 0 3 1 0 2 x 3 4 a.3 Are the continuous subscribed share capital holdings observed by all members? b. Standard Points 2 11 8 F.1.4 Structure a. Organizational Structure b. Operational Structure Sub-Total 2 2 4 2 2 4
  33. 33. YES NO Means of Verification Standard Points Points earned a. Maintenance of Books of Accounts 2 2 b. Manuals 6 6 c. Business Operation 2 2 d. Compliance to Government Requirements 7 7 e. Statutory Fund 4 0 4 0 1 1 Sub-Total 22 18 Total Points - Organizational 74 62 e.1 Are the following statutory funds funded? (Reserved Fund, Education and Training Fund, Optional Fund, and Community Development Fund) Passbook/Investment Certificate/Financial Statement (other funds and deposits) or x any instrument declaring deposits as funding the reserves f. Retirement Fund F.2 Social Aspect
  34. 34. YES a. Is the program on job rotation practiced? b. Is joint custody implemented? c. Is dual control implemented? NO Means of Verification Standard Points Points earned x Job Rotation Program or any documents that would assail that is being practiced 1 0 x Requirement of the presence and direct observation of a second person in the performance of important asks and functions. Both persons shall be accountable for the physical protection of the items and records involved (Operation of vault and handling of cash and vital documents) 1 0 x The work of one person is to be verified by a second person to ensure that the transaction is properly authorized, recorded and settled (Checks, CTD, Borrowings, Due to and Due from accounts) 1 0 22 19 100 85 Sub-Total Total for Non-Financial Component
  35. 35. Administrative Cost Allowance for Probable Losses onion Receivables 91,316,498.94 1,081,244,682.22 Allowance for Probable Losses on Investments - Allowance for Probable Losses on Loans - Allowance Required for 1 year and above - Amount Allotted for Interest on Share Average compute PR rate (for MPC) Average Total Assists: Computed PR rate (for single purpose) Deposit for Capital Subscription Earned Assists 2,396,734.98 1,440,177,557.61 989,51,148.56 - Earning per Share Beginning 0.00119 Earning per Share End 0.06442 External Borrowings Financing Cost General Reserve Fund Gross Margin Gross Revenue 15,351,372.59 305,306.01 315,160,986.14 1,992,668,326.61
  36. 36. Inventory Liquid Assists Member's Benefit Expense Member's Equity 11,685,711.73 615,505,114.45 919,475,165.63 Net Surplus 59,234,186.40 Non-earning Assets 19,362,347.40 Operating Cost 303,130,172.07 Paid-up Share Capital 117,628,416.00 Par Value 100.00 Past Due Receivables for 31 days to 240,201,116.21 Past Due Receivables for more than 46,425,620.76 Problem Receivable Assists Rate of Interest on Share Capital 0.00% Rate of Patronage Refund - Receivable Under Litigation - Receivables Restricted Receivables Short Term Payables 448,154,391.94 178,853,958.84 Social Service Expense 1,850,255.58 Total Assets ( current) 627,190,826.18 Total Assets (non-current) 856,002,995.91 Total Deposit Liabilities 231,878,712.30 Total Liabilities 563,718,656.47 Total volume of Business Treasury Share 1,992,668,326.61 -
  37. 37. G.2.1 PROFITABILITY PERFORMANCE 1.) Profitability Ratio: Formula: Net Operating Surplus Gross Revenue/Gross Margin 12,030,815.07 315,160,986.12 2.) Earning per Share Ratio: Standard 30% and above 25% to below 30% 10% to below 25% 5% to below 10% 3.82 Below 5% In case of breakeven or net loss Php 2.50 and above Net Sur plu Formula: s Paid-up Capital/Per Value 59,234,186.40 117,628,416.00 Php 2.00 to below Php 2.50 Php 1.50 to below PHP 2.00 Php 1.00 to below Php 1.50 Below Php 1.00 to Php 0.75 0.50 zero or negative Std. Pt. 5 4 3 2 1 Earned Points 1 0 5 4 3 2 1 0 1
  38. 38. 3.) Profitability Growth Rate: 100% and above 5 Formula: Earning per share end-Earning per share beginning 75% to below 100% 4 50% to below 75% 3 0.06561 30% to below 50% 2 0.00119 10% to below 30% 1 Earning per share beginning 55.13 Less than 10% 4.) Asset Efficiency Rate: 0 20% and above 5 15% to below 20% 4 10% to below 15% 3 5% to below 10% 2 Less than 5% 1 5.) Rate of Interest on Share Capital Higher than the inflation rate 5 Formula: Amount Allocated for Interest on Share Capital Within the inflation rate 4 2 points below the inflation rate 3 3 points or more below the inflation rate 2 Net Loss 1 0 Formula: Net Surplus Total Assets 59,234,186.40 1,483,193,822.10 1 3.99 Average Paid Share up Share Capital CORE INFLATION RATE AS OF DECEMBER 31, 2012 = 3.4% 4
  39. 39. G.2.2 INSTITUTIONAL STRENGHT Standard 10% and above 1.) Net Institutional Capital Std. Pt. 6 Formula (Reserves + Allowance for probable losses on loans : and or account receivables) 8% to below 10% (Problem receivable assests + past due receivables + receivable under litigation + 6% to below 8% Restructured receivables) 4% to below 6% Total Assets Earne d Pts. 6 5 4 3 2% to below 4% 2 Below 2% 1 Zero or negative 0 100% and above 7 90% and below 100% 6 108,124,682.22 70% and below 90% 5 46,425,620.76 50% and below 70% 232.90 30% and below 50% 4 3 161,527,654.97 1,483,193,822.10 10.89 2.) Adequacy of Provisioning (more than 1 year) Allowance for on Formul receivablesprobable a: losses Past due receivables over 1 year Sub-Total 20 7 20
  40. 40. G.2.3 STRUCTURE OF ASSETS Standard 1.) Percentage of on-Earning Assets to Total Assets Std. Pt. 10% and below 5 Above 10% to 20% 4 Above 20% to 30% 3 Above 30% to 40% 2 Above 40% 1 40% to below 50% 5 50% to below 60% 3 30% to below 40% 3 1,107,146,564.56 60% to below 70% 2 1,483,193,822.10 20% to below 30% Below 20% to above 70% 2 Less than 20% 0 Earned Pts. NonFormul Earning a: Assets Total Assets 19,362,347.56 1,483,193,822.10 5 1.31 2.) Members' Equity to Total Assets Formul Paid-up Share Capital + Deposits for a: Capital Subscription Total Assets 74.65 1 1
  41. 41. 3.) Deposit Liabilities to Total Assets Formu Total Deposit la: Liabilities 30% to 40% Above 40% to 50% 4 Above 50% to 60% 3 Below 20% to 10% 15.6 3 4 20% to below 40% Total Assests 231,878,712 .30 1,483,193,8 22.10 5 3 Above 60% to 70% 2 Below 10% to 5% 2 Above 70% 1 Below 5% 1 Zero 0 3
  42. 42. 4.) EXTERNAL BORROWINGS No External Borrowings 5 1% to 20% 4 4 Above 20% to 30% 3 Above 30% to 40% 2 Above 40% 1 60% to 70% 5 55% to below 60% 4 50% to below 55% 3 448,154,391.94 45% to below 50% 2 1,483,193,822.10 40% to below 45% 1 1 FORMULA: Total External Borrowings Total Assets 15,351,372.59 1,483,193,822.10 1.04 5.) Receivables to Total Assets Formula: Loan/Accounts Receivables Total Assets 30.22 Sub-Total 25 14
  43. 43. 1.) Volume of Business to Total Assets Formula: Total Volume of Business 100% and above 75% to below 100% 2 5% to below 25% 1 less than 5% 0 110% and above 5 100% to below 110% 4 85% to below 100% 3 75% to below 85% 2 50% to below 75% 1 less than 50% 1,992,668,326.61 3 25% to below 50% Credit: Loans Released; Consumer/Producer/ Marketing: Sales; Service; Service Income 4 50% to below 75% Total Assets 5 0 5 1,483,193,822.10 134.35 2.) Solvency ( Assets + Allowance for probable losses) - [(Total Liabilities Formula: - Deposit Liabilities) + ( Past due Receivables + Restructured Receivables + Receivables under Litigation)] Deposit Liabilities + Share Capital 1,546,105,297. 12 349,507,128.30 442.37 5
  44. 44. 15% and to 30% 3.) Liquidity Formula: Below 15% to 10% 436,651,155.6 1 231,878,712.3 0 0.15 2 Zero or negative 0 25 cents and below 5 3 2 40 to 46 cents 303,130,172.0 7 1,992,668,326. 61 Below 1% to 5% Above 60% to 80% Above 80% or below 1% 33 to 39 cents Total Volume of Business 3 26 to 32 cents 4.) Cost per Volume of Business Operating Cost - ( Members' benefit expense + Social Formula: Service Expense) 3 Above 50% to 60% 188.3 1 4 Below 10% to 5% Total Members' Deposit 4 Above 30% to 50% Liquid Assets - Short Term Payables 5 1 47 cents and above 0 5 2 1 5
  45. 45. 5.) Administrative Efficiency Administrative Cost - (Members' benefit expense + Formula: Social Service Expense) 6.) Turn-Over Ratio ( Note: Get the average, if both formula is applicable) Account Receivable Turn-Over: 6.34 Net Credit Sales Ave. Account Receivables 1,992,668,326.61 409,279,917.38 Account Receivable Turn-Over: 4.87 Total Loans Released Ave. Loans Receivables If multi-purpose cooperative, add the rating of the accounts Receivables Turn Over and Loans Receivables Turn Over and divide by 2 to get the average. For a single type, select whatever is applicable to the coop. 4 Above 15% to below 20% 91,316,498.94 1,440,177,557.61 5 Above 10% to below 15% Average Total Assets 10% and below 3 Above 20% to below 25% Above 20% 2 1 4 times and more 3 to below 4 2 to below 3 Below 2 Zero or negative 5 4 3 2 1 4 times and more 3 to below 4 2 to below 3 Below 2 Zero or negative 5 4 3 2 1 Sub-Total 5 5 30 30 Total Financial Component 100 71
  46. 46. Total - Financial Component 100 71 H. RATING SYSTEM TO GET THE SCORE NON-FINANCIAL : 100 X 35% = 35 FINANCIAL : 100 X 65% = 65 GANNERED POINTS NON-FINANCIAL FINANCIAL MUTIPLIER 35% 65% TOTAL RATING 29.75 46.15 75.90
  47. 47. ADJECTIVAL RATING MEDIUM AND LARGE SMALL MICRO Excellent Performance 91-100% 81-100% 75-100% Very Satisfactory Performance 81-90% 71-80% 61-74% Satisfactory Performance 71-80% 61-70% 51-60% Fair Performance 61-70% 51-60% 41-50% Needs Improvement 60% & below 50% & below 40% & below
  48. 48. 82 Point Very Satisfactory Performance 76.90 Point Satisfactory Performance
  49. 49.  COOPERATIVE ANNUAL PERFORMANCE REPORT (CAPR) As of December 31, 2012

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