IN 2021, the Cooperative Development Authority (CDA) issued two memorandum circulars (MCs) that impacts cooperatives' financial, performance and social audits, and the way they are related to each other.
MC 2021-04, issued in February 2021, circularized the implementation of the performance audit for cooperatives. Under this circular, all cooperatives are required to submit a performance audit report (PAR) to be conducted by either their internal auditor or audit committee. This report consists of a governance and management report (GMR), the financial performance of cooperatives using the following indicators: stability, turnover ratio, efficiency, profitability and structure of assets (STEPS) based on the latest audited financial statements, and a summary report, which contains observations, findings, and recommendations derived from the results of the GMR and the STEPS. The cooperatives will then have their PAR rating and this will in turn be validated during inspection by a designated field cooperative development specialist.
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