Question & AnswerQ&A (MEMORANDUM CIRCULAR NO. 2018-01)
The legal basis for conducting social audits on cooperatives is anchored on Article 80 and Article 53 of the Philippine Cooperative Code of 2008, which mandates annual financial, performance and social audits, and regular reporting of cooperative activities including socio-civic undertakings.
The social audit covers all registered cooperatives regardless of type or category, focusing on assessing their social performance in relation to their social development plans and budgets.
The social audit shall be conducted by an independent social auditor accredited by the Cooperative Development Authority (CDA), or by the cooperative's internal auditor or audit committee designated to perform this function.
The two phases are Social Performance Assessment and Social Impact Assessment. However, the guidelines provided cover only the first phase, Social Performance Assessment.
The key areas reviewed include the cooperative’s Vision, Mission, Core Values, and Social Goals; Policies and Guidelines on Social Development; Social Development Programs for the Cooperative and Community; and Utilization of Community Development Fund.
A Social Audit Report is a certified report prepared by the auditor as a result of the social audit conducted, which includes a narrative report with comments, observations, and recommendations, as well as the accomplished Social Audit Working Document.
The Management Social Performance Report is prepared by the cooperative's management at the end of the year to present the accomplishments of the cooperative’s social development plan. It serves as a reference for auditors but is retained within the cooperative.
The Social Audit Working Document is the instrument used by the auditor in the conduct of the social audit to determine the cooperative’s social performance.
The cooperative must submit the Social Audit Report, which includes the narrative report and the accomplished Social Audit Working Document, attached to the Cooperative Annual Progress Report (CAPR) in the prescribed form.
The revised guidelines took effect fifteen (15) days after publication with the Office of the National Administrative Registry (ONAR), and cooperatives were required to adopt the revised forms starting with the 2018 social performance reporting to be submitted in 2019.