2011 R - 006 - POLICIES AND GUIDELINES ON CASH ADVANCES

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on February 21, 2011 at the OCGEMPC Board Room, Olongapo City Hall

Resolution No. 2011 – 006

POLICIES AND GUIDELINES ON CASH ADVANCES

WHEREAS, it is necessary to promulgate policies and guidelines regarding cash advances as part of the internal control measures of the cooperative;

NOW THEREFORE, upon motion duly made and seconded, the Board of Directors of the OCGEMPC in session assembled;

RESOLVE, AS IT IS HEREBY RESOLVED to, as it hereby promulgates the following:

Title: POLICIES AND GUIDELINES ON CASH ADVANCES

I. PURPOSES OF CASH ADVANCES – Cash Advances may be allowed only for official/operational purposes. to wit:

1. Purchases of office supplies, fixed assets, merchandise inventory and other supplies when direct payment to the vendor/supplier is not possible under the circumstances of the transaction, or when payment by check is not possible

2. Expenses for repairs, maintenance, and other services

3. Seminars, conferences, conventions, meetings and training attended by officers and staff

4. Other expenditures necessary for the continued operation of the cooperative’s business, such as motor vehicle rental, traveling expenses, and other necessary services

5. Cash advances for salaries, wages or allowances of office employees and staff shall be allowed provided, that these are only for, and do not exceed, the total amount due in the current pay period, and are fully deducted automatically on the nearest payday after the cash advance has been made.

II. LIMITS ON AMOUNT OF CASH ADVANCE

1. Only officers and staff of the cooperative shall be allowed to make cash advances which shall not exceed Twenty Thousand Pesos (P20,000), Only Bonded Officer shall allowed to make cash advances amounting to more than Twenty Thousand Pesos (P20,000).

2. The amount of cash advance shall be limited to the price of the item/s to be purchased, repairs to be undertaken and services to be rendered by Companies/Dealers/Suppliers who do not accept checks as payment.

3. For cash advances re; purchases, repairs and services, such shall be canvassed first to have an idea how much cash advance is to be taken. For this purpose, Request slip, purchase order or job order should be prepared first by the end user, duly approved by the approving authority.

4. For cash advances regarding travels for two days or more, to attend conventions, seminars and trainings, this shall be limited to seminar fees, if any; per diems/traveling allowances, lodging fees and transportation expenses.

III. APPROVAL OF CASH ADVANCES – the approval of cash advances is hereby assigned based on the amounts as follows:

1. Manager Up to 20,000

2. The Chairman Over 20,000 to P100, 000

3. Majority of the Board of Directors Over 100,000 to P500, 000

4. General Assembly Over P500, 000

IV. LIQUIDATION OF CASH ADVANCES

1. All cash advances shall be liquidated within seven days after the transaction has been consummated for which cash advance was taken.

2. Statement of liquidation expenses should be prepared by the employee who took the cash advance. Such liquidation statement should be properly supported and documented. As such, the bookkeeper shall ensure the accuracy, authenticity and correctness of data in the documents prior to booking of liquidation.

3. No succeeding cash advances shall be granted unless the previous cash advance has been properly liquidated in full.

4. Cash advances not liquidated within the period specific shall be booked as accounts receivable from the officer or management staff concerned who made such cash advances and will bear an interest rate of one percent (1%) per month, automatically deducted from the salaries for a maximum period of twelve (12) months until settled in full. Provided however, when the un-liquidated amount is less than P1, 200 the deduction period is a maximum of 6 months.

5. All cash advances are subject to post audit by the Audit and Inventory Committee, while cash advances amounting to more than P20,000 are subject to both pre and post audit by the Audit and Inventory Committee as part of the cooperative’s internal control measures.

V. CASH ADVANCE FORMS

1. The Treasurer or Cashier shall not make any disbursement for cash advance unless supported by a duly approved Cash Advance Form. The following forms shall be printed and used in requesting and liquidating cash advances:

(a) CASH ADVANCE REQUEST and RECEIPT FORM

DATE (State the date here)

Requesting cash advance in the amount of ____(Amount in words and figures)_______ to defray expenses for the following purpose/s: ________

Requested by: (Signature of requestor over printed name), (Position in the Coop)

APPROVED FOR: (Approved amount in words and figures) SUBJECT TO LIQUIDATION WITHIN SEVEN DAYS, and other pertinent coop policies on cash advances.

Approved by: (Signature of approving authority over printed name)

(Position in the Coop)

RECEIPT:

I hereby acknowledge receipt of the above-stated amount on (date of receipt), and I hereby bind myself to the coop policies on cash advances.

(Signature over printed name or requestor)

Copy Furnished: The Coop Bookkeeper

(b) CASH ADVANCE LIQUIDATION FORM

Name of Employee: ________________________ Liquidation Date: ______

Position in the Coop: _______________________ Cash Advance Date: _______

AMOUNT OF C. A. _____ (In words and figures) __________ C. A. Voucher No. __

Particulars: (Expense Item/s) Supporting Document/s: Amount:

1.____________ _____________________ P_______________

2.____________ _____________________ P_______________

3____________ _____________________ P_______________

4.____________ _____________________ P_______________

5.____________ _____________________ P_______________

TOTAL LIQUIDATED: P_______________

Amount to be refunded to the Coop / reimbursed by the Coop P ______________

Prepared by: Checked by: Approved by:

_______________________ _____________________ _____________________

Officer/Staff who made Bookkeper/ Accountant Approving Authority

a cash advance

Copy Furnished: The Coop Bookeeper

______________________________________________________

RESOLVED FURTHER, that these policies and guidelines take effect immediately upon approval by the OCGEMPC Board.

Done this 21st day of February 2011 at Olongapo City, Philippines.

2011 R - 005 - POLICIES AND GUIDELINES ON OVERAGES AND SHORTAGES IN CASHIERING

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on February 21, 2011 at the OCGEMPC Board Room, Olongapo City Hall

Resolution No. 2011 – 005

POLICIES AND GUIDELINES ON OVERAGES AND SHORTAGES IN CASHIERING

WHEREAS, it is necessary to promulgate cashiering policies and guidelines as part of the internal control measures of the cooperative;

NOW THEREFORE, upon motion duly made and seconded, the Board of Directors of the OCGEMPC in session assembled;

RESOLVE, AS IT IS HEREBY RESOLVED to, as it hereby promulgates the following:

Title: POLICIES AND GUIDELINES ON OVERAGES AND SHORTAGES, RE: CASHIERING

I. CASH AUDIT

1. The Audit and Inventory Committee shall conduct monthly surprise cash counts in the presence of the bookkeeper, the Coop Manager, and a witness who is a member of said Committee.

2. The surprise cash count shall be documented, and in case of an adverse finding, the Board of Directors, thru the Secretary, shall be furnished a copy within five (5) days from date of cash count. In case there are no adverse findings, Cash Count Reports shall be furnished to the Board every 3 months.

II. OVERAGES: If upon conduct of surprise cash count by the Audit and Inventory Committee (AIC), and on overage is discovered, the following shall be done:

1. The bookkeeper shall locate the difference between the Cash book and the cash count. Meantime, said overage shall be booked as ACCOUNTS PAYABLE. Entry would be: Debit CASH ON HAND and Credit ACCOUNTS PAYABLE.

2. If after a month, such discrepancy can not be traced, said overage shall be booked by the Bookkeeper as OTHER INCOME. Entry would be: Debit ACCOUNTS PAYABLE and Credit OTHER INCOME.

III. SHORTAGES: Shortages discovered during a SURPRISE cash counts being conducted by the Audit and Inventory Committee (AIC) shall be treated as follows:

1. If the amount is less than P100, the Treasurer/Cashier or back up should immediately pay for the said shortage;

2. If the involved amount is more than P100 but less thanP500, said shortage shall be booked as Accounts Receivable against erring officer/staff and MUST be paid in the next payday nearest to the discovery of the Shortage.

3. When the shortage is more than P500, said shortage shall be booked as Accounts Receivable against erring officer/staff and MUST be settled in equal semi monthly deduction from the payroll for a reasonable period, but not to exceed 12 months.

4. If upon investigation, shortages are being incurred due to willful act of the person in charge, that is, due to dishonesty, such shall be a ground for administrative sanction for first offense, as follows:

Amount Involved Penalty

Less than P500 Written Reprimand

P500 to P5, 000 Immediate Preventive Suspension

Over P5, 000 to P10, 000 Termination of Employment/Membership

5. However, if shortages become repetitive, or habitual shortages are being incurred due to integrity problems, despite the administrative sanctions imposed, and regardless of the amount involved, said officer/staff shall be terminated from his/her employment and/or membership in the Cooperative.

RESOLVED FURTHER, that these policies and guidelines take effect immediately upon approval by the OCGEMPC Board.

Done this 21st day of February 2011 at Olongapo City, Philippines.

2011 R - 004 - POLICY GUIDELINES ON DISBURSEMENT OF FUNDS IN GENERAL, AND CONTROL OF CASH, IN PARTICULAR

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 17 January 2011 at the CPDO Conference Room, City Hall, Olongapo City

Resolution No. 2011-004

POLICY GUIDELINES ON DISBURSEMENT OF FUNDS IN GENERAL, AND CONTROL OF CASH, IN PARTICULAR

WHEREAS, in order to effectively control and safeguard the fixed assets of the OCGEMPC and for proper monitoring, it is necessary to promulgate policies and guidelines regarding fixed assets, for the guidance all concerned;

NOW THEREFORE, upon motion duly made and seconded, the Board of Directors of the OCGEMPC in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED to, as it hereby promulgates the following guidelines:

Title: DISBURSEMENT OF FUNDS IN GENERAL, AND CONTROL OF CASH IN PARTICULAR

A. DISBURSEMENT OF OCGEMPC FUNDS

1. The Treasurer, Cashier and all concerned officers and staff of the coop shall not disburse funds without prior approval from the appropriate approving authority.

2. Disbursement Vouchers for the payment of expenses, payment of coop obligations and other necessary expenditures must be approved depending on the amount involved, as follows:

a. Manager Up to P10,000

b. Board Chairperson Over P10,000 to P100,000

c. Majority of Board Members Over P100,000 to P500,000

d. General Assembly Over P500,000

3. The Manager, the Chairman, and the Board of Directors are herby granted the authority to approve fund releases as provided above.

B. PETTY CASH FUND (PCF) AND REVOLVING FUND (RF)

1. Custodianship

A Petty Cash Fund (PCF) amounting to FIVE THOUSAND PESOS (P5, 000) is hereby set up to take care of minor disbursements, consisting of day-to-day expenses amounting to not more than ONE THOUSAND PESOS (P1, 000).

A Revolving Fund (RF) amounting to FIFTY THOUSAND PESOS (P50, 000) is hereby set up for payment of members’ savings deposit withdrawals and loan proceeds not exceeding P10, 000. The RF may also be used for other minor disbursements exceeding the PCF limit of P1,000 but not more than P5,000 provided however that the disbursement is limited to the following:

When the payee does not accept checks

Where the disbursements is for payment of labor costs to each worker in a project payroll

Foy payment of food, drinks and other incidental expenses during meetings, training activities, after-office-hours staff work, and other similar group activities

For disbursement of cash advances for travel and other minor expenses

For other transactions where cash is the mode of payment that is most practical, convenient and beneficial to the cooperative.

The funds shall be maintained on imprest system. At any given time, the total cash on hand and the un-replenished disbursements should be equal to the amount of the fund.

The RF shall be in the custody of the Cashier or, in the absence of the cashier, the designated custodian; while the PCF shall be in the custody of the Administrative Officer or the designated custodian. Access to and responsibility for each of the funds is limited to the respective custodian who shall be under the supervision of the Treasurer only in as far as their custody of funds is concerned

Each fund is kept separately and should never be mixed together.

2. Petty Cash Voucher / Withdrawal Slip / Revolving Voucher

A Petty Cash Voucher (PCV) is required for disbursement from the Petty Cash Fund, while Savings Withdrawals Slip or RF Voucher is required for disbursement from the Revolving Fund.

3. Replenishment

The Petty Cash/Revolving Fund contains request fo replenishment when the funds run low and insufficient to cover petty expenses or revolving fund disbursements. For the PCF, the replenishment point is P1, 200. For the RF the replenishment point is P10, 000 or as an actual need to replenish arises.

The Treasurer shall release the replenishment funds based on the Disbursement Voucher duly approved by the Manager and supported by the Replenishment Summary for PCF or RF, as the case may be, together with the duly approved PCF/RF Vouchers. As an exception to item A.3. of these policies, the Manager is hereby authorized to approve Disbursement Vouchers for the replenishment of the RF regardless of amount.

The RF and the PCF may be replenished by the Treasurer every end of the month regardless of the amount disbursed for purposes of matching income and expenses monthly through preparation of the income statement.

The replenishment check should be payable to the fund custodian.

4. Regular Cash Count of the Funds

The Cashier daily ensures the cash balance tally with the cashbook, verified by the Treasurer, witnessed by the Manager.

RESOLVED FURTHER, that the concerned officers, management staff and members of the OCGEMPC be, as they are strictly required to implement, adhere to, and abide by these Policy Guidelines;

Done this 17th day of January 2011 at Olongapo City, Philippines.

2011 R - 003 - SETTING POLICIES AND GUIDELINES ON FIXED ASSETS

Excerpts from the Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 17 January 2011 at the CPDO Conference Room, City Hall, Olongapo City

Resolution No. 2011-003

SETTING POLICIES AND GUIDELINES ON FIXED ASSETS

WHEREAS, in order to effectively control and safeguard the fixed assets of the OCGEMPC and for proper monitoring, it is necessary to promulgate policies and guidelines regarding fixed assets, for the guidance all concerned;

NOW THEREFORE, upon motion duly made and seconded, the Board of Directors of the OCGEMPC in session assembled:

RESOLVE, AS IT IS HEREBY RESOLVED to, as it hereby promulgates the following:

Title: POLICIES AND GUIDELINES ON FIXED ASSETS

I. APPROVAL OF ACQUISITION

The acquisition of Fixed Assets must have prior approval by the appropriate approving authority. The authority to approve the acquisition of Fixed Assets is hereby assigned based on the acquisition cost of the asset, as follows:

1. Manager Up to P10,000

2. The Chairman Over P10,000 to P100,000

3. Majority of the Board of Directors Over P100,000 to P500,000

4. General Assembly Over P500,000

II. ACCOUNTING TREATMENT OF FIXED ASSETS

A. Capitalized

1. Fixed Assets of the OCGEMPC acquired/purchased with an acquisition cost of P2, 000.00 and above, with an estimated useful life of more than one year shall be treated as capital expenditures of the coop, which shall be subject to depreciation.

2. Major repairs/improvements on Fixed Assets of the OCGEMPC shall likewise be capitalized subject to existence of the following conditions:

a) The repairs/improvements should substantially increase/improve the useful life of the Fixed Assets; and

b) The cost of the repair/improvement should not be less than P2, 000.00 or 25% of the acquisition cost, whichever is higher.

B. Semi-expendable (Not capitalized)

The following purchased Fixed Assets shall be treated as outright expense (Supplies Used) of the coop:

1. Those whose acquisition cost are less than P2,000.00

2. Those whose estimated useful life are one year and below regardless of its acquisition cost

C. Depreciation

1. Depreciation shall be computed in accordance with the approved useful life of the assets’ rate of depreciation and must be taken up periodically in the books.

2. When a unit is fully depreciated, a nominal value of P1.00 shall be carried in both the controlling account and in the subsidiary ledger to represent each fully-depreciated unit.

3. As a general rule, the first depreciation charge on an asset item begins with the next reporting period after the acquisition.

4. Periodic provision for depreciation shall be made to cover the decline in value of the assets. The computation shall be based on the following formula:

Annual Depreciation = Cost of Property less Salvage Value

Estimated Years of Life of the Property

5. Some assets may be depreciated monthly using the following

formulas:

a) For the original acquisition cost, monthly depreciation shall be computed as follows:

Monthly Depreciation = (Acquisition Cost - 1.00) / (EUL x 12 mos.)

b) For those with capitalized major repairs/improvements, it shall be computed as follows:

Monthly Depreciation = (Book Value + Cost of Repairs – 1.00)

(New EUL x 12 mos.)

6. Whenever practicable, monthly depreciation of Fixed Assets may be booked every end of month. In such cases, for newly purchased Fixed Assets, the initial depreciation shall be booked in full the following month after acquisition. Thus, no depreciation shall be booked on the month of acquisition.

D. Useful Life of Fixed Assets

For purposes of computing depreciation of fixed assets, the following classification of assets and the corresponding useful life of each asset shall be used:

1. Furniture and Furnishings – 5 years

This classification covers building accessories, which are generally for the working and/or convenience of office staff and clients. Examples are chairs, tables, sofas, top glass, mirrors carpets, shades, draperies, moveable dividers, decorative boxes and frames, paintings, wall clocks, waste baskets and vases.

2. Fixtures – 5 Years

This group refers to permanent or semi-permanent attachments closely related to the building but not classed as building. Examples: counters, tellers’ cages, fixed dividers or partitions, built-in cabinets/shelves and bins.

3. Business Machines – 5 Years

This includes all standard office machines or mechanically-operated office equipment such as typewriters, adding/calculating machines, copying machines, check writers, Bundy clocks and numbering machines.

4. Office Equipment – 5 Years

This category embraces all office apparatus which are not mechanically operated. It includes cabinets, safe, vaults, trays, racks and paper cutters.

5. Computer Machines – 2 Years

This group includes all component units and peripherals of a computer system.

6. Appliances – 5 Years

This group includes devices used for improving working conditions in an office. It also covers musical, communication and ventilation facilities. Examples: air-conditioning unit, electric fan, radios, stereo set, refrigerator, intercom system, floor polisher, water dispenser, coffee maker and photo equipment.

7. Other Equipment and Instruments – 5 Years

This classification embraces power units, security and safety devices and trade equipment instruments. Examples: generators, motors, fire extinguishers, printing/bookbinding equipment and photo equipment.

8. Motor Vehicles – 5 Years

Included in this group are: cars, vans, pick-up trucks, and motorcycle

9. Books – 2 Years

This covers all technical, professional and general reference books.

10. Leasehold Improvements – 10 Years

III. MONITORING AND ACCOUNTABILITY

The effectively account the existence of Fixed Assets and their proper maintenance the OCGEMPC Administrative Officer shall serve concurrently as Property Officer who shall be responsible for its administration. The duties and responsibilities of the designated Property Officer shall be as follows.

1. Assign Property Numbers of all Fixed Assets of the Coop whether Capitalized or Semi- expendable.

2. Maintain a logbook for semi-expendable Fixed Assets.

3. Maintain list of Fixed Assets under the custody of officers or employees, who shall be directly accountable. The receipt of Fixed Assets should be duly acknowledged and properly filed by the Property Officer/Custodian. Likewise, he shall acknowledge any Fixed Assets returned or turned over to him. For such purposes, a Memorandum of Receipt and Invoice Receipt shall be accomplished.

4. Recommend the immediate repair of Fixed Assets being used in the operations of the coop.

5. Recommend the replacement of unserviceable Fixed Assets needed by management and staff.

6. Recommend the disposition of all unserviceable Fixed Assets or those no longer in use although still serviceable.

7. Preparation of monthly report of Fixed Assets as to Status (Serviceable/Unserviceable or no longer in use and for disposal)

8. Assist in the Annual Physical Inventory of Fixed Assets to be conducted by the Audit and Inventory Committee.

IV. DISPOSITION

Disposition of Fixed Assets must be approved by the Board of Directors unless the amount involved is more than P200, 000.00 in which case, the disposition must be approved by the General Assembly.

The following shall be strictly observed in the disposition of Fixed Assets:

1. Fixed Assets shall be disposed subject to the existence of any of the following conditions:

a) Fully depreciated Fixed Assets, the replacements of which are duly approved.

b) Fixed Assets that are no longer being utilized.

c) Unserviceable Fixed Assets or those beyond repair.

d) Fixed Assets whose repair would no longer be beneficial or economical.

2. Manner of Disposition

a) When the amount involved is P50, 000 or more, disposition shall be through Sealed Building, which should be participated in by at least three bidders. In case of failure in bidding for two (2) consecutive times, disposition shall be through Negotiated Sale.

b) When the amount involved is less than P50,000, disposition shall be by negotiated sale or in manner that is most beneficial to the OCGEMPC.

V. ACCOUNTING TREATMENT OF DISPOSED / RETIRED ASSETS

1. The Manager shall authorize the elimination from the Balance Sheet of an item of property, plant and equipment on disposal or when the asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.

2. Gains or loses arising from the retirement or disposal of an item of property plant and equipment should be determined as the difference between the net disposal proceeds and the book value of the asset and should be recognized as income or expenses in the Income Statement.

RESOLVED FURTHER, that the foregoing policies and guidelines shall take effect immediately and that all concerned are enjoined to strictly implement, adhere to and abide by the same.

Done this 17th day of January 2011 at Olongapo City, Philippines.