In our last column I shared on the possible areas of concern for the utilization of the community development fund (CDF) and the benefits derived by cooperatives when there is a crafted policy. It was pointed out that CDF is intended to help address the needs of members and non-members residing within the area of operation of a cooperative. As an institution with a mission to meet members’ needs, part of its net surplus goes to projects and activities that will benefit the community where it operates especially non-members. Similar to corporations that has corporate social responsibility, the recently amended Cooperative Code provided for funding for community development that is consistent with the international cooperative principles.
To fully understand the concept of social audit let us have a look at the issuances related to such topic. The Cooperative Development Authority issued Memorandum Circular No. 2013-16 series of 2013 entitled “Guidelines on Social Audit of Cooperatives” dated March 1, 2013 duly signed by Chairperson Emmanuel M. Santiaguel. Section 1. Legal Bases. The legal basis for this guidelines are as follows: “Article 80. Annual Audit-Cooperatives registered under this Code shall be subject to an annual financial, performance and social audit. The social audit shall be conducted by an independent social auditor accredited by the Authority. The Authority, in consultation with the cooperative sector, shall promulgate the rules and standards for the social audit of cooperatives.” “Article 53. Reports. (1) Every cooperative shall draw up regular reports of its program of activities, including those in pursuance of their socio-civic undertakings, showing their progress and activities at the end of every fiscal year.”
Section 2. Coverage. All registered cooperatives regardless of types and categories shall be subject to social audit and shall submit Social Audit Report. Section 3. Social Audit. It is a procedure where the cooperative assess its social impact and ethical performance vis-à-vis its stated mission, vision goals and code of social responsibility. It is a process to assess the cooperative’s contribution for the upliftment of the status not only to its members’ economic needs but also social needs and the community where it operates. The cooperative’s actual performance and accomplishment are compared to its vision, goals and social responsibility as it relates to the impact not only to the community but to its regular members as the immediate beneficiary of the decisions and actions promulgated, passed and implemented. Social Audit will serve as control mechanism to account for its social performance and evaluate its impact in the community taking into account the community development fund which shall be used for projects or activities that will benefit the community where the cooperative operates.
Section 4. Objectives/Uses of the Social Audit. Social Audit validates the support of the cooperative to the seventh cooperative principles on the “Concern for the Community” and determines whether the cooperative work for the community’s sustainable development through policies approved by their members. The audit focuses not only on the economic side of the cooperative but also the social aspect of the organization and appraises the cooperative performance as value based organization usually participative, user and community oriented and non-profit but service organization and how its social responsibility for its members and the community as a whole was fulfilled. Social auditing is the systematic review of the attitudes, values, behavior, and degree of interaction of people within the cooperative as well as the policies, programs and activities being implemented by the cooperative.
Section 5. Social Audit Report. The attached Social Audit Tool which was approved by the Board of Administrators per Resolution no. 58 series, 2013 shall be used by the cooperatives as basis in reporting its annual socio-civic undertakings to be submitted to the Authority yearly. The Chairperson and the General Manager shall certify to the truthfulness of the statement contained in the report while the Chairperson shall finally approve the same.
To be continued…
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