2011 R - 039 - SUPPLEMENTAL LOANS POLICY INCREASING THE NUMBER OF CO-MAKERS FOR LARGE AMOUNTS OF LOANS

Excerpts from the Minutes of the Regular Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 18 August 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011-039 - SUPPLEMENTAL LOANS POLICY INCREASING THE NUMBER OF
CO-MAKERS FOR LARGE AMOUNTS OF LOANS

WHEREAS, there is a shortage of members who qualify as co-makers for large amounts of loans because few have the required capacity to pay;

WHEREAS, many members are suggesting that multiple co-makers for a single loan would be benefit those who need larger loans, and at the same time provide better security for the cooperative;

NOW THEREFORE, on motion of Director Helson C. Cañero, seconded by Director Ira B. Daylo the Board of Directors of the OCGEMPC in meeting assembled do hereby:

RESOLVE, AS IT IS HEREBY RESOLVED, that except for secured loans, loans amounting from P40,000 to P50,000 shall require two co-makers, while loans amounting to more than P50,000 shall require three co-makers;

RESOLVE FURTHER, that a single co-maker shall be allowed for a loan amounting to more than P40,000 when the co-maker of such a loan is a permanent employee, has the capacity to pay for the loan, and waives his/her privilege to avail of any loan until the loan that he/she co-makes is fully paid;

Done this 18th day of August 2011 at Olongapo City, Philippines.

2011 R - 036 - REVISING THE POLICIES ON SAVINGS DEPOSITS

Excerpts from the Minutes of the Regular Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 18 August 2011 at the OCGEMPC Training Room, City Hall, Olongapo City

Resolution No. 2011-036 - REVISING THE POLICIES ON SAVINGS DEPOSITS

On motion of Director Ira B. Daylo, seconded by Director Jerico C. Ballon the Board of Directors of the OCGEMPC, in meeting assembled do hereby:

RESOLVE, AS IT IS HEREBY RESOLVED, that the existing OCGEMPC policies on savings deposits be revised, as they are hereby revised effective on 01 October 2011, as follows:

1. The minimum balance required to maintain a savings deposit account is FIVE HUNDRED PESOS (P500) for those who have been OCGEMPC members for more than one (1) year. These members, whose savings account balances are less than P500 shall be given a chance, until February 2012, to increase their savings balances to at least the minimum amount; provided that after February 2012, those with more one year membership whose savings account balances are below P500 shall be considered as not in good standing for the year 2011.

2. The minimum average monthly balance to earn interest is FIVE THOUSAND PESOS (P5, 000) in the preceding year, to be computed and compounded annually.

3. The minimum amount that may be withdrawn from a savings account is ONE HINDRED PESOS (P100).

4. Withdrawals amounting to TEN THOUSAND PESOS (P10, 000) or more shall be released in the form of checks.

5. Savings accounts that have been dormant for twelve (12) months shall be charged a monthly service fee of FIFTY PESOS (P50).

Done this 18th day of August 2011 at Olongapo City, Philippines.

2011 R - 027 - PROMULGATING POLICIES ON TRAVEL AND TRANSPORTATION

Excerpts from the Minutes of the Regular Meeting of the Board of Directors of the Olongapo City Government Employees Multi-Purpose Cooperative (OCGEMPC) Held on 30 June 2011 at the OCGEMPC Training Room

Resolution No. 2011-027

PROMULGATING POLICIES ON TRAVEL AND TRANSPORTATION

WHEREAS, there is a need to promulgate policies on travel and transportation, in order to discourage unnecessary travel, and rationalize expenses for official travel and transportation;

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

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

Title: Travel and Transportation Policies, Rules and Regulation

I. Purposes of Travel

Official travel shall be allowed only for the following purposes:

1. To procure necessary items from Manila or anywhere outside of Olongapo when such item is not locally available, or when such is more cost efficient

2. To attend seminars, training activities, and other necessary educational purposes

3. To attend meetings, conferences, congresses, and other such functions at the behest of the Cooperatives Development Authority and/or in fulfilment of the cooperative’s organizational obligations

4. To confer with, or deliver and/or follow-up documents at the CDA regional or national office, and /or other agencies

5. To travel for other purposes that are necessary and beneficial to the cooperative

II. Approval of Official Travel

Travel becomes official only when duly approved as follows:

1. Travel by members of the management staff shall be approved by the Manager.

2. Travel by all officers shall be approved by the Chairperson.

3. All travels for educational and training purposes, by members, staff and officers shall be recommended for approval by the Education Committee and the Chairman is not authorized to approve such travel without the Committee’s positive recommendation.

4. Individual or group travels with aggregate costs of more than Twenty Thousand Pesos (P20, 000) shall be approved by the Board of Directors.

III. Official Travel and Transportation Costs

1. Per Diems

a. Expenses for official travel outside of Olongapo City, except SBFZ, Zambales, Bataan and Pampanga, shall be compensated with per diems at the rate of Five Hundred Pesos (P500.00) per day to cover meals, snacks and other minor expenses.

b. Per diems for official travel to SBFZ, Zambales, Bataan and Pampanga shall be at the rate of Three Hundred Pesos (P300.00) per day.

2. Lodging/Hotel Expenses

a. In addition to the travel per diem, an official traveller shall be granted a lodging allowance at the rate of Eight Hundred Pesos (P1, 000.00) per night when overnight stay is necessary to accomplish the official purpose of the travel.

b. The above provided policies on per diems and lodging allowance may not apply in the case of seminars, conferences and the like, where packages are offered that include meals and lodging. In such cases, the OCGEMPC may pay seminar/conference fees including meals and lodging in lieu of the usual per diems and lodging fees, for the duration of the activity.

3. Transportation Costs

a. In addition to the per diem and lodging allowance, the OCGEMPC shall bear the actual transportation costs incurred for official travel through land, sea and air

b. While the OCGEMPC does not have its own vehicle as yet, the preferred mode of land travel is through public transport, i.e. bus, jeepney, taxi

c. When absolutely necessary, and when public mass transportation is not practicable, a rented vehicle such as a car or van maybe used, provided that the rental and fuel cost is not higher than the current market cost for such.

IV. Documentary Requirements for Official Travel

1. All official travel shall be supported by a duly approved travel order/authorization document, and an itinerary of travel indicating the estimated cost of the travel.

2. The OCGEMPC shall not pay the cost of any travel made without prior authorization unless the failure to secure prior authorization is satisfactorily justified to the Board.

3. Travel to attend seminars, conferences and other out-of-town activities shall not be approved unless supported by an invitation from the organizers or sponsors of such activity.

V. Cash Advances, Liquidation and Other Post-Travel Requirements

1. Cash advances for official travel shall be allowed subject to the existing policies, rules and regulations regarding cash advances.

2. The approving authority of a travel, at his/her discretion, may require a traveller to submit a certificate of appearance from the office, agency or organization that will be the destination of the travel. The approving authority shall indicate this requirement on the approved travel authorization, or verbally inform the traveller before departure

3. Attendees to an out-of-town educational or training activity shall submit a written report on the activity attended to the Education Committee within seven (7) working days from completion of the said activity.

4. Attendees to an out-of-town activity required by the CDA, or to fulfil an organizational obligation of the OCGEMPC shall submit a written report on the activity attend to the Board within seven (7) working days from completion of the activity, or render a verbal report in the Board meeting immediately after completion of the activity attended.

VI. Effectivity

1. These policies, rules and regulations take effect on 01 July 2011 until revoked or amended by the OCGEMPCI Board of Directors.

Done this 30th day of June 2011 at Olongapo City, Philippines.

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.