Social Audit of PANELCO III

Reporters: Jayson C. Agsalud Engr. Felix Anthony R. Sison

Dr. Josefina B. Bitonio Professor

Is the government agency created under R. A. 6939 to take charge of the registration, regulation and development of cooperatives.

-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.

Audited Financial Statement Stamped received by BIR

List of Officers and Training

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.

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.

I. Organization

II. Membership

III. Staff/Employees

IV. Cooperation among Cooperatives

V. Community and Nation

VI. Network Alliance and Linkages

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

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.

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))

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

TOTAL POINTS 100 82

SUMMARY OF POINTS OF PANELCO III

82

90 – 100 points Outstanding

80 – below 90 points Very Satisfactory

70 –below 80 points Satisfactory

60 –below 70 points Fair

Below 60 points Poor

QUANTITATIVE RATING

For MEDIUM AND LARGE COOPERATIVE

Ayos! Pasado. Pwede na yan.

Oo. There’s a lot of room for improvement. Tingnan natin kung anong areas yun and let’s make it better.

AREAS OF CONSIDERATION Maximum Points

Points

Asset Building (12 points)

1. Economic Participation of members (2) 2 0

2. Ownership Participation through Capital Build Up (6)

2.1. Increase in the number of existing members with additional share capital

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

2.4 increase in the amount of deposits 1.5 1.5

II. MEMBERSHIP (35 points)


Points

3. Members Economic Growth (4)

3.1. Upliftment of lives of the members

4 0

A. Members governance (10 points) 1. Information facilities 2. Members participation 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

2 2 2 2 2

2 2

1.5 2

1.5


Points

B. Members’ Benefits (3) 1. Presence and percentage of members benefitting from the members’ social benefits/program/s

1*

2**

1 2

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)

1

2*

2**

1

1 2

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

1 2 2

1

1 2


POINTS

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)

1 1 1 1

1 1 1 1

IV. COOPERATION AMONG COOPERATIVES (10 points)


POINTS

B. CETF due to Membership and Affiliation (2) C. Cooperative Alliance/linkage/network (4 points) 1. Inter-Cooperative Partnership -Business Partnership -Non – business Partnership

2 2 2

0 2 2

Amount allocated for the audit period n/a

Amount remitted for the audit period n/a


Points

A. Contribution to national and community development programs (15 points)

1. Presence of approved Projects/programs 8 8

2. Programs implemented 7 0

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

2 4

2 4

C. Community Outreach 1. Number of members over working population in the area of operation

4

4

V. COMMMUNITY AND NATION (25 points)

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)


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)

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.

MEMBERSHIP

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.

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.

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.

Contribution to National and Community and Development Programs.

Thank you very much

for listening.

Social Audit of Panelco III as of December 31, 2012

Summary of Social Audit, Performance Audit

COOPERATIVE ANNUAL

PERFORMANCE REPORT (CAPR) FOR THE YEAR DECEMBER 31, 2012

A. Name of Cooperative (as of latest amendment, if

any): PANGASINAN III ELECTRIC

COOPERATIVE

B. Cooperative Identification Number (CIN):

003011115

C. Registration Number: 9520-01008918

D. Actual Principal Address: NANCAYASAN,

URDANETA CITY, PANGASINAN

E. Type of Cooperative: ELECTRIC COOPERATIVE

F.1 Organizational Aspect

F.1.1 Leadership

YES NO

Means of Verification Standard Points Points earned

a. Functions, Duties and Responsibilities 9 9 b. Qualifications and Disqualifications 2 2 c. Composition 1 1 d.Continuing Education and Training 4 4 e. Financial Literacy 3 3 f. Succession and Planning

3 3

f.1 Is the policy on succession plan at key levels of the organization formulated?

x

Succession Plan/ Manual of Operations/ Development Plans

1 0

f.2 Is the succession plan embedded in the training program?

x

Training Program vis-à-vis Succession Plan

1 0

f.3 Are volunteers or future leaders included in the succession plan?

x

Succession Plan provision on volunteers

1 0

g. Ethics 2 2 Sub-Total 24 21

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

c.3 Is the institutional capacity building for management staff written and implemented (training and other interventions)?

x

Training Program based on gap analysis made/ Staff Development Plan

1 1

d. Compensation and Benefits 3 3

e. Ethics

Sub-Total 13 11

F.1.4 Structure a. Organizational Structure

2 2

b. Operational Structure

2 2 Sub-Total 4 4

YES NO Means of Verification Standard Points

a. Capitalization 5 3

a.3 Are the continuous subscribed share capital holdings observed by all members?

x Subscription Schedule vis-à-vis Registry of Members

1 0

a.4 Are penalties for unpaid subscription imposed to members?

x

Schedule of penalty imposed for unpaid subscription or any similar documents

1 0

b. Governance 4 3

b.5 Is the engagement of the services of an external auditor approved by the GA?

x Minutes of the GA Meeting 1 0

c. Ethics 2 2

Sub-Total 11 8

F.2 Social Aspect


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

e.1 Are the following statutory funds funded? (Reserved Fund, Education and Training Fund, Optional Fund, and Community Development Fund)

x

Passbook/Investment Certificate/Financial Statement (other funds and deposits) or any instrument declaring deposits as funding the reserves

4 0

f. Retirement Fund 1 1

Sub-Total 22 18

Total Points - Organizational 74 62


a. Is the program on job rotation practiced?

x

Job Rotation Program or any documents that would assail that is being practiced

1 0

b. Is joint custody implemented?

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

c. Is dual control implemented?

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

Sub-Total 22 19

Total for Non-Financial Component 100 85

Administrative Cost 91,316,498.94

Allowance for Probable Losses onion Receivables 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 2,396,734.98

Average compute PR rate (for MPC) -

Average Total Assists: 1,440,177,557.61

Computed PR rate (for single purpose) -

Deposit for Capital Subscription 989,51,148.56

Earned Assists -

Earning per Share Beginning 0.00119

Earning per Share End 0.06442

External Borrowings 15,351,372.59

Financing Cost 305,306.01

General Reserve Fund -

Gross Margin 315,160,986.14

Gross Revenue 1,992,668,326.61

Inventory 11,685,711.73

Liquid Assists 615,505,114.45

Member's Benefit Expense -

Member's Equity 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 448,154,391.94

Restricted Receivables -

Short Term Payables 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 1,992,668,326.61

Treasury Share -

G.2.1 PROFITABILITY PERFORMANCE Standard Std. Pt.

Earned Points

1.) Profitability Ratio:

Formula: Net Operating Surplus 30% and above 5

Gross Revenue/Gross Margin 25% to below 30% 4

12,030,815.07 10% to below 25% 3

315,160,986.12 5% to below 10% 2

3.82 Below 5% 1 1 In case of break-even or net loss 0

2.) Earning per Share Ratio: Php 2.50 and above 5

Formula:

Net Surplus

Php 2.00 to below Php 2.50 4

Paid-up Capital/Per Value

Php 1.50 to below PHP 2.00 3

59,234,186.40

Php 1.00 to below Php 1.50 2

117,628,416.00

Below Php 1.00 to Php 0.75 1 1

0.50 zero or negative 0

3.) Profitability Growth Rate: 100% and above 5

Formula: Earning per share end-Earning per share beginning 75% to below 100% 4

Earning per share beginning 50% to below 75% 3

0.06561 30% to below 50% 2

0.00119 10% to below 30% 1

55.13 Less than 10% 0 0

4.) Asset Efficiency Rate: 20% and above 5

Formula: Net Surplus 15% to below 20% 4

Total Assets 10% to below 15% 3

59,234,186.40 5% to below 10% 2

1,483,193,822.10 Less than 5% 1 1

3.99

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 4

Average Paid Share up Share Capital 2 points below the inflation rate 3

3 points or more below the inflation rate 2

CORE INFLATION RATE AS OF DECEMBER 31, 2012 = 3.4% Net Loss 1

G.2.2 INSTITUTIONAL STRENGHT

Standard

Std. Pt.

Earned Pts.

1.) Net Institutional Capital 10% and above 6 6 Formula:

(Reserves + Allowance for probable losses on loans and or account receivables) - 8% to below 10% 5 (Problem receivable assests + past due receivables + receivable under litigation + 6% to below 8% 4 Restructured receivables) 4% to below 6% 3


161,527,654.97 Below 2% 1

1,483,193,822.10 Zero or negative 0

10.89 2.) Adequacy of Provisioning (more than 1 year)

Formula:

Allowance for on receivablesprobable

losses 100% and above 7 7 Past due receivables

over 1 year 90% and below 100% 6

108,124,682.22 70% and below 90% 5

46,425,620.76 50% and below 70% 4 232.90 30% and below 50% 3

Sub-Total 20 20

G.2.3 STRUCTURE OF ASSETS Standard Std. Pt.

Earned Pts.

1.) Percentage of on-Earning Assets to Total Assets 10% and below 5 5

Formula:

Non-Earning Assets Above 10% to 20% 4

Total Assets Above 20% to 30% 3

19,362,347.56 Above 30% to 40% 2

1,483,193,822.10 Above 40% 1

1.31

2.) Members' Equity to Total Assets

Formula:

Paid-up Share Capital + Deposits for Capital Subscription 40% to below 50% 5


30% to below 40% 3

1,107,146,564.56 60% to below 70% 2

1,483,193,822.10 20% to below 30% 2

74.65

Below 20% to above 70% 1 1

Less than 20% 0

3.) Deposit Liabilities to Total Assets 30% to 40% 5

Formula:

Total Deposit Liabilities Above 40% to 50% 4

Total Assests 20% to below 40% 4

231,878,712.30 Above 50% to 60% 3

1,483,193,822.10 Below 20% to 10% 3 3

15.63 Above 60% to 70% 2

Below 10% to 5% 2

Above 70% 1

Below 5% 1

Zero 0

4.) EXTERNAL BORROWINGS

FORMULA: Total External Borrowings

No External Borrowings 5

Total Assets 1% to 20% 4 4

Above 20% to 30% 3

15,351,372.59 Above 30% to 40% 2

1,483,193,822.10 Above 40% 1

1.04 5.) Receivables to Total Assets

Formula: Loan/Accounts Receivables 60% to 70% 5


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

30.22

Sub-Total 25 14

1.) Volume of Business to Total Assets

Formula: Total Volume of Business 100% and above 5 5


50% to below 75% 3 Credit: Loans Released; Consumer/Producer/ 25% to below 50% 2

Marketing: Sales; Service; Service Income 5% to below 25% 1

1,992,668,326.61 less than 5% 0

1,483,193,822.10

134.35

110% and above 5 5

2.) Solvency 100% to below 110% 4

Formula:

( Assets + Allowance for probable losses) - [(Total Liabilities - Deposit Liabilities) 85% to below 100% 3

+ ( Past due Receivables + Restructured Receivables + Receivables under Litigation)] 75% to below 85% 2

Deposit Liabilities + Share Capital 50% to below 75% 1

less than 50% 0 1,546,105,297.

12

349,507,128.30

442.37

15% and to 30% 5 5

3.) Liquidity Below 15% to 10% 4

Formula:

Liquid Assets - Short Term Payables Above 30% to 50% 4

Total Members' Deposit Below 10% to 5% 3

Above 50% to 60% 3 436,651,155.6

1 Below 1% to 5% 2 231,878,712.3

0

Above 60% to 80% 2

188.31

Above 80% or below 1% 1

Zero or negative 0 4.) Cost per Volume of Business

Formula:

Operating Cost - ( Members' benefit expense + Social Service Expense)

Total Volume of Business 25 cents and below 5 5

26 to 32 cents 3 303,130,172.0

7 33 to 39 cents 2 1,992,668,326.

61 40 to 46 cents 1

0.15 47 cents and above 0

5.) Administrative Efficiency

Formula:

Administrative Cost - (Members' benefit expense + Social Service Expense) 10% and below 5 5

Average Total Assets Above 10% to below 15% 4

Above 15% to below 20% 3

91,316,498.94 Above 20% to below 25% 2 1,440,177,557.61 Above 20% 1

6.34 6.) Turn-Over Ratio ( Note: Get the average, if both formula is applicable) 4 times and more 5 5

3 to below 4 4 Account Receivable Turn-Over: Net Credit Sales 2 to below 3 3

Ave. Account Receivables Below 2 2 Zero or negative 1

1,992,668,326.61 409,279,917.38

4.87 Account Receivable Turn-Over: Total Loans Released 4 times and more 5

Ave. Loans Receivables 3 to below 4 4 2 to below 3 3 Below 2 2 Zero or negative 1

If multi-purpose cooperative, add the rating of the accounts Receivables Turn Over and Loans Sub-Total 30 30 Receivables Turn Over and divide by 2 to get the average. For a single type, select whatever Total Financial Component 100 71 is applicable to the coop.

H. RATING SYSTEM

TO GET THE SCORE

NON-FINANCIAL : 100 X 35% = 35

FINANCIAL : 100 X 65% = 65

Total - Financial Component 100 71

GANNERED POINTS MUTIPLIER RATING NON-FINANCIAL 35% 29.75 FINANCIAL 65% 46.15

TOTAL 75.90

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

76.90 Point Satisfactory Performance

82 Point Very Satisfactory Performance

COOPERATIVE ANNUAL

PERFORMANCE REPORT (CAPR)

As of December 31, 2012