MANAGEMENTOFMULTI-PURPOSECOOPERATIVESINREGIONI.BASISFORANIMPROVEDINTERNALCONTROLSYSTEMOFCOOPERATIVES
St. Louis College, Lingsat, San Fernando City, La Union
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Dissertation Abstract "MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN REGIONI.BASIS FOR AN IMPROVED INTERNAL CONTROL SYSTEM OF COOPERATIVES
1. MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN REGION I. BASIS
FOR 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
2. ACKNOWLEDGMENT
The researcher would like to express his sincere and profound gratitude
for the immeasurable assistance, guidance, and inspiration extended to him by
people with great heart and mind.
Dr. Josefina B. Bitonio, his adviser, for her motherly and generous
assistance from the beginning until the completion of this study;
Dr. Rosario C. Garcia, Dean of the Graduate Studies, for her valuable
inputs and guidance;
Members of the dissertation panel chaired by Dr. Nora A. Oredina, who
have extended her expertise and her words of inspiration; Dr. Caridad O.
Abuan, Dr. Fe D. Domingo, Dr. Josefa Catherine T. Bada, Dr. Betsy Luisa
P. Ancheta, who have shared their wisdom and concern and their meaningful
comments and suggestions for the refinement of this research work;
The Managers of the cooperatives who have been very accommodating
and open minded in providing the needed information relevant to the
completion of the study;
The Cooperative Development Authority (CDA) ROI personnel and
staff for their assistance;
Relatives, friends and colleagues for their words of encouragement and
prayers;
Special mention is given to his family, his wife Minerva, his lovely
daughters Angelika and Marianne who have been the source of his energy, and
inspiration while conducting this study; his mother and brothers for their
prayers;
Above all, to the Father Almighty, Who is the source of life, knowledge,
and all blessings, for his unconditional love, protection and guidance in every
activity that the researcher undertakes.
Agustin De Peralta Cortez Jr.
3. DEDICATION
The 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.
4. DISSERTATION ABSTRACT
TITLE : MANAGEMENT OF MULTI-PURPOSE COOPERATIVES IN
REGION I. BASIS FOR AN IMPROVED INTERNAL CONTROL
SYSTEM OF COOPERATIVES
Author : AGUSTIN D. CORTEZ JR.
Adviser : DR. JOSEFINA BITONIO
Assistant Regional Director, Cooperative Development
Authority Region I
Degree : DOCTOR OF PHILOSOPHY IN MANAGEMENT (Ph.D.M).
Institution : SAINT LOUIS COLLEGE
Lingsat City of San Fernando, La Union
Region I
Key Terms : Management, Internal Control System, Multi-Purpose
Cooperative, Basis, Improved Internal Control System
Abstract
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
5. be proposed to improve and to maintain the efficient and effective operation of
multi-purpose cooperatives in Region I?
The descriptive research design was used in the study. The researcher
used questionnaire checklist as the main source of data. It was administered to
the 50 millionaire cooperatives operating in Region I with certificate of good
standing through the managers. The revised Cooperative Annual Performance
Report submitted by the cooperatives to the Cooperative Development
Authority was also used in supplementing and validating the data gathered.
Frequency counts, percentages, and weighted mean were the statistical tools
used.
It was revealed in the study that the cooperatives developed an Annual
Program and Development as well as Strategic Plan as anchored on the Vision,
Mission, Goals, and Objectives (VMGO) of the organization; they followed the
standard procedures in the organization and staffing of personnel and key
officials; members supported the development program of the cooperatives;
they have business alliance with other cooperatives and federations; there exist
a written manual of policies and procedures with specific provisions on hiring,
promotion, and firing, staff development, compensation, benefits, and
performance appraisal; individual personnel file is properly kept and secured;
the cooperatives comply with the government requirements in the conduct of
the business; the BOD and management conduct monthly review and
assessment of the actual performance in relation to the predetermined
objectives and targets; pre-membership seminars were conducted by the
6. cooperatives to new and existing members as part of the information drive to
educate, to campaign, to attract potential members, and to retain existing
members of the cooperative; regular internal and external audits were being
conducted to check the veracity of the transactions of the cooperative
particularly on its financial resources. The study also noted that cooperatives
were strong in the internal control system on organization and human
resources. However, not all personnel were given personnel handbook/manual
and personnel, officers and members were not fully recognized and rewarded
for their exemplary performance. It was also revealed in the study that control
measures on production/operations, marketing except on the allocation of
approved budget for sales promotions and marketing and the feedback
mechanism to determine the satisfaction level of customers, and finance were
strong.
Based on the findings of the study, the cooperatives generally adopt
strong 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, the
researcher sets forth the following recommendations: 1) Cooperatives should
always follow, implement, and monitor the internal control system on the
identified control points. 2) Cooperatives should continue to be guided by the
annual program and development, and strategic plan in consonance with the
identified vision, mission, goals, and objectives of the organization. 3) Regular
review of the VMGO and the existing policies and procedures in the different
7. control points should be done considering the trends, innovations, and
regulatory policies affecting the cooperative industry. 4) Personnel handbook/
manual should be issued to all personnel. 5) The cooperative should come up
with institutionalized policies and guidelines in giving recognition and rewards
to officers, management staff, and members. 6) Cooperatives should
appropriate and approve budget for sales promotion and marketing whenever
necessary. 7) Cooperatives should institutionalize a feedback mechanism to
assess the level of satisfaction of customers. 8) A related study on the
management of internal control system of cooperatives should be conducted to
the non-operating cooperatives to fairly compare and determine the differences
in the implementation and its impact on the internal control system adopted by
cooperatives.