Dissertation Abstract "MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN REGIONI.BASIS FOR AN IMPROVED INTERNAL CONTROL SYSTEM OF COOPERATIVES
MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN REGION I. BASISFOR AN IMPROVED INTERNAL CONTROL SYSTEM OF COOPERATIVES AGUSTIN D. CORTEZ JR. SAINT LOUIS COLLEGE Lingsat City of San Fernando, La Union Region I Compiled by: Jacqueline L. De Leon Acting Chief RIT Cooperative Development Authority Dagupan Extension Office March 2011
ACKNOWLEDGMENT The researcher would like to express his sincere and profound gratitudefor the immeasurable assistance, guidance, and inspiration extended to him bypeople with great heart and mind. Dr. Josefina B. Bitonio, his adviser, for her motherly and generousassistance from the beginning until the completion of this study; Dr. Rosario C. Garcia, Dean of the Graduate Studies, for her valuableinputs and guidance; Members of the dissertation panel chaired by Dr. Nora A. Oredina, whohave extended her expertise and her words of inspiration; Dr. Caridad O.Abuan, Dr. Fe D. Domingo, Dr. Josefa Catherine T. Bada, Dr. Betsy LuisaP. Ancheta, who have shared their wisdom and concern and their meaningfulcomments and suggestions for the refinement of this research work; The Managers of the cooperatives who have been very accommodatingand open minded in providing the needed information relevant to thecompletion of the study; The Cooperative Development Authority (CDA) ROI personnel andstaff for their assistance; Relatives, friends and colleagues for their words of encouragement andprayers; Special mention is given to his family, his wife Minerva, his lovelydaughters Angelika and Marianne who have been the source of his energy, andinspiration while conducting this study; his mother and brothers for theirprayers; Above all, to the Father Almighty, Who is the source of life, knowledge,and all blessings, for his unconditional love, protection and guidance in everyactivity that the researcher undertakes. Agustin De Peralta Cortez Jr.
DEDICATIONThe researcher humbly dedicate this piece of work, fruit of sacrifices and inspiration to his family: Angelika Marie and Marianne Angela, his sweet and lovely daughters, his wife Minerva who have been his light and source of inspiration all along, to his mother and brothers, and to GOD Almighty. Agustin Cortez Jr.
DISSERTATION ABSTRACTTITLE : MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN REGION I. BASIS FOR AN IMPROVED INTERNAL CONTROL SYSTEM OF COOPERATIVESAuthor : AGUSTIN D. CORTEZ JR.Adviser : DR. JOSEFINA BITONIO Assistant Regional Director, Cooperative Development Authority Region IDegree : DOCTOR OF PHILOSOPHY IN MANAGEMENT (Ph.D.M).Institution : SAINT LOUIS COLLEGE Lingsat City of San Fernando, La Union Region IKey Terms : Management, Internal Control System, Multi-Purpose Cooperative, Basis, Improved Internal Control SystemAbstract This study aimed to assess the management of internal control system of Multi-Purpose Cooperatives operating in Region I. Specifically, it sought to answer the following questions: 1) what is the profile of the internal control system of multi-purpose cooperatives along organization and human resources, production & operations, marketing, and finance?; 2) to what extent of adoption are the internal control practices by the cooperatives on organization and human resources, production & operations, marketing, and finance?; 3) what are the strengths & weaknesses of the internal control practices of cooperatives?; 4) what internal control system can
be proposed to improve and to maintain the efficient and effective operation ofmulti-purpose cooperatives in Region I? The descriptive research design was used in the study. The researcherused questionnaire checklist as the main source of data. It was administered tothe 50 millionaire cooperatives operating in Region I with certificate of goodstanding through the managers. The revised Cooperative Annual PerformanceReport submitted by the cooperatives to the Cooperative DevelopmentAuthority was also used in supplementing and validating the data gathered.Frequency counts, percentages, and weighted mean were the statistical toolsused. It was revealed in the study that the cooperatives developed an AnnualProgram and Development as well as Strategic Plan as anchored on the Vision,Mission, Goals, and Objectives (VMGO) of the organization; they followed thestandard procedures in the organization and staffing of personnel and keyofficials; members supported the development program of the cooperatives;they have business alliance with other cooperatives and federations; there exista written manual of policies and procedures with specific provisions on hiring,promotion, and firing, staff development, compensation, benefits, andperformance appraisal; individual personnel file is properly kept and secured;the cooperatives comply with the government requirements in the conduct ofthe business; the BOD and management conduct monthly review andassessment of the actual performance in relation to the predeterminedobjectives and targets; pre-membership seminars were conducted by the
cooperatives to new and existing members as part of the information drive toeducate, to campaign, to attract potential members, and to retain existingmembers of the cooperative; regular internal and external audits were beingconducted to check the veracity of the transactions of the cooperativeparticularly on its financial resources. The study also noted that cooperativeswere strong in the internal control system on organization and humanresources. However, not all personnel were given personnel handbook/manualand personnel, officers and members were not fully recognized and rewardedfor their exemplary performance. It was also revealed in the study that controlmeasures on production/operations, marketing except on the allocation ofapproved budget for sales promotions and marketing and the feedbackmechanism to determine the satisfaction level of customers, and finance werestrong. Based on the findings of the study, the cooperatives generally adoptstrong internal control systems relative to organization and human resources,production/operations, marketing, and finance. In the light of the findings and conclusions drawn from the study, theresearcher sets forth the following recommendations: 1) Cooperatives shouldalways follow, implement, and monitor the internal control system on theidentified control points. 2) Cooperatives should continue to be guided by theannual program and development, and strategic plan in consonance with theidentified vision, mission, goals, and objectives of the organization. 3) Regularreview of the VMGO and the existing policies and procedures in the different
control points should be done considering the trends, innovations, andregulatory policies affecting the cooperative industry. 4) Personnel handbook/manual should be issued to all personnel. 5) The cooperative should come upwith institutionalized policies and guidelines in giving recognition and rewardsto officers, management staff, and members. 6) Cooperatives shouldappropriate and approve budget for sales promotion and marketing whenevernecessary. 7) Cooperatives should institutionalize a feedback mechanism toassess the level of satisfaction of customers. 8) A related study on themanagement of internal control system of cooperatives should be conducted tothe non-operating cooperatives to fairly compare and determine the differencesin the implementation and its impact on the internal control system adopted bycooperatives.