Cash Management

1. Responsibility Considerations
- Cash Budgeting shall be spearheaded, coordinated and consolidated by the Finance
Division. The Collection Division shall provide collection/forecasts inputs to cash
budgeting.
- Finance Division Head, assisted by the Planning and Budgeting Section , shall be
responsible for financial forecasting and also for the conduct of feasibility studies and
capital budgeting.
- The Collection Division shall responsible for all field collections.
- All office collection activities shall be centralized in the Treasury Section, Finance
Division.
- The Cashier, Treasury Section, Finance Division shall be responsible for the deposit of all
daily collections.
- The Finance Division shall be responsible for the custody and control of all Cash Funds.
- The Cashier shall be responsible for the proper custody and safekeeping of unused checks
and check preparation.
- The initiation of disbursement shall be the responsibility of the division concerned.
- The Accounting Division shall responsible for cost controlling.
- The Finance Division shall be responsible for the disbursement processing functions.
- Duly authorized alternate disbursement signatories and alternate check signatories and
countersignatories shall be responsible for the final pre-review and approval of disbursement
transactions.
- All disbursement releasing functions shall be centralized in the Treasury Section.
- The Accounting Division shall be responsible for the cash accounting functions.
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- The Business Department Manager shall be responsible for the analysis of cost/income
exceptions and financial trends and ratios.
- The Business Department Manager shall exercise general supervision over all collection,
disbursement and other cash management functions.
- The Audit Committee shall be responsible for the post-review/audit of cash transactions
and cash performance and the continuous review and evaluation of the cash systems.

2. Policy Control Considerations

- The cash management policies, as a whole, shall be geared towards:
- Promoting coordination, efficiency and effectiveness of cash management operations;
- Providing understandable guidance in performing cash management functions;
- Maximizing yield of cash resources at acceptable risk levels.
- Promoting the timeliness and reliability of cash management reports.
- Strengthening controls and other safeguards on working capital resources.
- Ensuring compliance
- Promoting continuity of investment and other cash management programs
- Promoting continuing relevance and responsiveness of cash operations.
– Every cash management policy shall be reflective of the basic goals of our coop and the
general membership.
– Every cash management policy shall be positive, clear and understandable.
– Clear-cut cash management policies shall be laid down for the various cash receipts, cash
disbursement and excess fund investments.
– Detailed guidelines shall be developed to implement and enforce cash management
policies.
– The Audit Committee, assisted by the Audit staff, shall continuously monitor whether or
not officers and employees comply with the prescribed cash management policies and
implementing guidelines.
 – The formulation of cash management with participation of knowledgeable officers and
staff whose functions include cash management functions.
– The Board of Directors, assisted by the General Manager and Business Department
Manager shall continuously assess cash management policies.
– All cash management policies, shall be promulgated by the Board of Directors except
those which set forth the scope/limits or which regulate the Board itself which shall be
promulgated by the General Assembly Resolution.

3. Planning Control Considerations

- Definite objectives and plans shall be established for the cash management operations.
- Adequate time importance shall be alloted by those concerned with regard to forward
planning.
- Projected cash flows shall be periodic, accurate, realistic and detailed.
- Such approved cash flow projections shall be strictly followed.
- The Treasurer, General Manager, Business Department Manager, Finance Division Head
and other financial officers shall have clear goals relating to the investment of coop funds.
- Top management must be in accord with the approved cash management objectives and
plans.
- Coop investment and loan portfolios shall be diversified enough so risk from any one
investment or loan type is limited.
- Officers (whether voluntary or paid) and staff exercising supervisory functions shall exert
effort towards promoting the clear understanding of cash management
objectives/plans/strategies particularly as to soundness and practicability.
- Approved goals/plans/budgets shall be used to measure actual performance/results.
- Immediate superiors shall ensure the proper implementation of this planning control
consideration in so far as their immediate subordinates are concerned.
- Approved cash management strategies shall be translated at the position level into
individual cash management tactics and detailed instructions that could be clearly
understood at the individual position level.

4. Receivables Control Considerations

- All loans receivables shall principally be covered by the control considerations set forth in
the basic features of the Credit Management System.
- The receivables of this coop shall be classified into: Loan Receivables, Due from officers
and employees, Cash Advances for Operations, Accounts Receivable - Trade, Account
Receivable – Employees and Other Receivables.
- Every receivable that by its nature normally arises as a result of the release/issue of funds,
property, service and/or other coop resources shall not be allowed without a review and
approval by duly designated coop officers prior to such release/issue.
- All other receivables of a nature not embraced in above such as “Due from officers and
employees” shall nonetheless be duly documented and controlled.
- Custody and dispatching of goods shall be segregated for sales on account operations.
- The access to and responsibility for recording in individual receivable subsidiary records
shall be segregated from the responsibility for the safekeeping of documents supporting
/evidencing the receivable.
- Debtors shall be encourage to pay in advance through post-dated checks.
- As much as practicable, discounts, interest rebates and other incentives shall be allowed to
debtors who pay early ahead of due date.
- The sending of reminders and first notice to member-borrowers and other debtors with
phone numbers may be done through phone to save on follow-up costs.
- The conduct of personal follow-up of receivables by the Collection Division shall be
planned/arranged/assigned.
 - All account balances shall be aged periodically. All overdue accounts shall be reviewed at
prompt intervals so that immediate and timely action can be taken to protect/enforce the
claim.
- No receivable shall be written off unless it has been clearly established that any further
collection effort would be futile or the collection cost would exceed the amount collected.

5. Collection Control Considerations

- All officers and employees performing collection functions shall be familiar with coop
policies, procedures and implementing guidelines on collections.
- Officers and employees to be assigned to accountable collection functions shall be
carefully screened for honestly and trustworthiness.
- All collections, with the exception of saving deposits and sale of stamps shall be
acknowledged by the immediate issuance of a pre-numbered official receipt duly assigned
by the Teller, Collector or Cashier and issued in strict numerical sequence.
- Receipt of savings deposits shall be acknowledged in a duly validated deposit slip plus an
initialed deposit passbook.
- Collections from sale of stamps shall not be receipted.
- Official Receipts shall not be issued for payments by post-dated checks.
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- The Cashier shall acknowledge receipt of total collections turned over to him by signing all
copies of the corresponding daily collection report.
- Every collections accountable officer concerned shall stamp “CANCELLED” on all
voided/canceled official receipts and attach the original and duplicate copy to the daily
collection report and retain the triplicate in the stub copy file.
- The Cashier shall safekeep all collections in the coop vault and deposit all such collections
intact the following banking day.
- Deposits shall only be made to duly designated banks which are nearest to the coop and
which are known to be financially stable.
- The vault and all other safes shall be kept under lock whenever unattended and access to
such shall be limited to duly designated accountable officers.
- The duplicate secret combination of the various vaults including the main vault shall be
lodged in the respective immediate superiors of those in charge of the vault.
- The secret combination of a vault shall be changed whenever there is a change in the
custodian.
- Cash transactions could be conveniently conducted without needing to allow members
access in the treasury section.
- When there are collections through mail, the executive secretary shall be responsible for
opening and listing such mail remittances and a copy of such listing shall be provided to the
Journal Keeper.
- Cash accountable officers shall be appropriately bonded.
- Teller #1 shall handle the savings and fixed deposit collection while teller #2 shall handle
loan collection. All other office collections shall be handled by the Cashier.
- Understandable instructions for various payment transactions shall be posted in a
conspicuous place inside the coop.
- Alternate signatories and countersignatories of certificates of time deposits shall be
designated by the Board of Directors.

6. Disbursement Control Considerations

- All disbursements shall be by checks except disbursements out of the following revolving
funds:
- Petty cash revolving fund
 - Cashier's revolving fund
- Teller change revolving funds
- Operations revolving fund
– All revolving funds shall be maintained under the imprest system.
– Petty cash revolving fund shall be in the custody of the Finance Division Head and shall
be used to defray petty expenses not exceeding P500.00
– The Cashier's revolving fund shall be set at an imprest amount of P250,000.00 and to be
replenished everyday
– The Teller's change revolving funds shall each be set at an imprest amount of p10,000.00
– The Operations revolving fund shall be in the custody of the Cashier and set at an
imprest amount of P50,000.00 to be replenished at the end of everyday.
– The authority to modify the imprest amounts of revolving funds shall be lodged in the
General Manager upon recommendation of the Department Manager concerned.
– At any given time, the total cash on hand and the unreplenished disbursements for each
fund shall equal the imprest amount of the fund.
– Custodians of revolving funds shall, prepare a revolving fund replenishment summary to
summarize and account for the disbursements made out of the fund in his custody.
– All cash advances including those out of petty cash shall be reported and liquidated as
soon as the purpose intended is served or as soon as it is no longer needed.
– Before a petty cash disbursement is approved, such shall be ascertained to be within
approved budget for the particular expense item for the division concerned.
– Petty cash and other expenses not normally evidenced by receipts shall be reviewed with
particular emphasis on reasonability of amount.
– Each employee, upon arriving and after lunch break shall log his “time-in” and before
timing-off for lunch break and at the end of the day, each employee shall also log his
'time-out” time on his Daily Time Card
– Payroll disbursements for overtime shall be guided by the control considerations
– All employee movements, particularly those affecting payroll shall be reported
immediately to the General Manager
– All new employees shall be required to acknowledge receipt of their salary by signing a
copy of the pay slip.
– All employees who are not paid through payroll but through check shall be required to
acknowledge receipt by signing the disbursement ticket.
– If an employee cannot collect his salary personally, his written authorization shall be
required
– All applicable legal requirements relating to payroll disbursements shall be complied
with.
– Payroll preparation shall be segregated from payroll payment function
– Signed withdrawal slips shall not be used as authority for disbursements
– All banks with which the coop has checking accounts shall be provided with specimen
signatures of officers authorized to sign checks.
– All checks for signature shall be accompanied by a duly processed disbursement ticket
and all necessary supporting documents.
– No check shall be signed in blank or in advance
– All voided or spoiled or cancelled checks shall b stamped “CANCELLED” and
accounted for
– The authority to review, approve and sign disbursement tickets shall be lodged in the
Department Manager concerned and General Manager.
– The authority to sign or countersign checks shall be lodged in the following alternate
check signatories and countersignatories
 – A check register shall be used by the Cashier for registering all checks drawn promptly
and sequentially according to the serial number
– Disbursements for purchases and other expenses shall be made promptly enough as to
avail discounts
– All withdrawals of savings deposits shall be through the Withdrawal Slip form
prescribed
– A member-depositor may withdraw savings deposits through his representative provided
such representative is duly authorized
– A Time Deposit Disposition Form shall be filled-up, signed and used by a member-
depositor for any one of the following time deposit transactions
– Every deposit withdrawal, whether time or savings shall be carefully checked against the
member-depositor's specimen signature in file, in the passbook or in the member's coop
I.D. To ensure the authenticity of the signature in the withdrawal slip.
– The processing of savings and time deposit withdrawals shall not last more than 45
minutes.
– No withdrawal of fixed deposits shall be processed until the written application to the
Board of Directors has been approved and all liabilities and obligations have been settled
or assumed by another member equally acceptable.
– All purchases shall be by check except petty purchases and those through cash advance.
Petty purchases, on the other shall follow the procedures for petty cash revolving fund
disbursements.
– The Disbursement Ticket shall be numbered and stamped “paid” together with all
supporting documents to prevent re-use.
– The reporting of check disbursements shall be on a daily basis.
– The reporting of savings and time deposit withdrawals shall also be on s daily basis.
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7. Fund Management Control Considerations

- Fund management shall involve the efficient management of cash and excess funds by
maximizing cash availability and earnings from idle funds towards the attainment of the
overall goals of the coop
- When the economy is characterized by rising interest rates, the fund management direction
shall be towards reducing to cash to a minimum.
- Cash shall be maintained only for the following purposes: Transactions, Precautionary and
Speculative purposes
- The holding of cash for speculative purposes shall be on the most limited basis only.
- Primarily concerned with and responsible for cash management shall be the Treasurer from
the voluntary officer and management staff from the Finance Division.
- A cash budget shall be used to forecast monthly receipts and disbursements
- This cash budget shall serve as the foundation for cash planning and control. As such, it
shall be realistic, reasonable, and responsive to the goals, direction, plans and needs of the
coop
- The reporting of all information on cash shall be on a daily basis
- Cash budget shall be accompanied by pro-forma balance sheets and income statements, to
enable the coop financial officers to analyze the effect of various policy decisions.
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- As the likelihood for inaccuracies in cash forecasts increases, the provision for
precautionary purposes shall also be increased and vice versa.
- Combination of fast collections and slow disbursements shall be for the purpose of
attaining maximum funds availability.
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- The number of bank accounts shall be limited to avoid the maintenance of unnecessary
pockets of idle funds.
- Procedures shall aim towards eliminating or at least minimizing the loss of discounts due
to clerical inefficiencies.
- Considering that these can be converted to cash on very short notice, marketable securities
shall be used to serve the precautionary purpose of the coop to hold cash.
- In determining the optimal split-between cash and marketable securities ----
- Decisions to invest excess cash in marketable securities shall involve deciding on the
amount to invest as well as deciding what type of security in which to invest.
- The cost of loan operations should be less than the interest and service charges for loans.
- The cost of investing cash and savings and time deposit operations should be less than the
income generated from such cash investments.
- The Finance Division Head shall devote a material portion of his time in managing the
various investment portfolios of the coop
- Fund investment performance shall be periodically and timely reviewed against specific
guidelines and goals.

8. Accounting Control Considerations

- All staff involved in accounting functions should be familiar with accounting conventions,
principles and standards.
- All journal and ledgers shall be under the sole custody of the Accounting Division.
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- Physical facilities and controls shall be provided to ensure adequate safeguarding of
subsidiary ledgers.
- All entries in the books of accounts including corrections, shall be in ink.
- All regular adjusting journal entries (RAJE), reversing journal entries (RJE),
reclassification journal entries (RCJE), and auditor's adjusting entries (AAE) shall be
effected using duly reviewed and approved Journal Vouchers.
- Every Journal Voucher shall be supported by appropriate documents.
- Every entry in any book of account shall be properly dated and cross-referred to
corresponding supporting documentation.
- Ticking-off marks shall be used to indicate that the item concerned has been
recorded/posted to appropriate book.
- The responsibility for every entry in every book of account shall be fixed and pinpointed
using initials/signatures/ user Ids/codes.
- The posting of cash transactions to individual Subsidiary ledgers shall be on an “on-line”
basis.
- All accounting entries to the Certificate shall be based on the duly processed time deposit
disposition forms.
- The duplicate copy of cash advance for employees forms in the unliquidated “suspense”
file shall serve as subsidiary ledger for cash advances for operations account advanced to
officers and employees.
- The Journal Keeper, Accounting Division shall check completeness of numerical sequence
of all official receipts and deposit slips.
- The approval of the check disbursement shall be considered as the act that consummates a
disbursement transaction as to necessitate taking up in the books.
- Every page of a Journal of a ledger after being filled-up shall be certified as correct by the
staff responsible.
- All such accountable forms received shall be turned over for safekeeping to the Journal
Keeper, Accounting Division who shall acknowledge receipt specifying the series of serial
numbers received.
 - Every issuance of accountable forms shall be acknowledged signed by the accountable
staff receiving them.
- Journal Keeper shall absolutely have no access to individual subsidiary ledgers and/or
update/delete access to computer records of individual accounts.
- Accountable staff to whom accountable form booklets were issued shall be responsible for
the proper safekeeping of unissued accountable forms still in their custody.
- At the end of every transaction day, a summary proof tape (SPT) of entries to individual
subsidiary ledgers (ISL) shall be generated by the business machine/computer.
- The Accounting Division Head shall be primarily responsible on various summary totals in
the SPT.
- The daily totals/recapitulations of journals shall be ticked-off upon posting to the
corresponding control account in the General Ledger.
- Postdated checks received as payments shall not be recognized as collections until the
arrival of their maturity dates.
- Every legitimate claim the validity of which is definitely recognized shall be properly
recorded as a receivable.
- Trial balances, income statements,balance sheets and cash flow statements shall be
prepared on a daily basis.
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- Subsidiary ledger totals shall be reconciled with corresponding control accounts in the
General Ledger at least once a month.
- All used-up ledger, journals and other books of accounts shall be placed in safety fire-proof
storage under the restricted custody of the Accounting Division Head and made available for
audit at any reasonable time.

9. Monitoring Control Considerations

- The replenishment for the various revolving funds shall be subject to random and/or
detailed review by the Business Department Manager and Audit Department.
- All collections and all funds are subject to yearly cash counts by the Audit Department and
the External Auditor as part of the yearly financial audit exercise.
- All unaccounted fund overages identified during cash counts shall be credited to the coop
as miscellaneous income. Shortages, on the other hand, shall be charged to the account of
the Accountable Officer.
- Accountable forms shall also be subjected to inspection, count and/or review on a surprise
random basis by the Audit Department.
- All bank statements and paid checks sealed by the bank shall be delivered directly to the
Audit Department Head.
- Bank accounts shall be reconciled at least once a month by the Financial and Compliance
Audit Staff of the Audit Department.
- Bank reconciliations shall include accounting for all check numbers, signatures,
endorsement, payee's name, date, comparison with records, identification of unrecorded
bank credits/debits, outstanding checks and deposits in transit.
- All long outstanding checks shall be reported by the Audit staff to the Business Department
Manager for proper follow-up and control.
- All reconciling items shall systematically followed-up and promptly cleared.
- Direct confirmation of receivables shall be conducted by the Financial and Compliance
Audit staff at least once a year.
- All accounts written off shall be subjected to post-audit.
- Spot checking of bundy card entries vis-a-vis actual attendance shall be conducted on a
random, periodic or surprise basis.
- The General Manager shall, from time to time, check Overtime Authorization Slip claims
against time records in which the actual time-ins and time-outs of employees are logged.
 - Business machine and computer breakdown shall be subject to on-the-spot
observation/inspection and post-review by the representative of the Audit committee
- All disbursements approved in excess of approved budget shall be subject to post-audit.
- Disbursement transactions whose checks were both signed and countersigned by coop paid
staff shall be subject to random review by the Audit Department.
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- Plans and budget shall be subjected to post-review by the performance Audit staff, Audit
Department.
- Cash Management policies and practices, system and procedures shall be subject to
continuous policy review and evaluation by the Systems Audit Staff, Audit Department.
- Cash transactions shall be audited to ensure compliance with policies and implementing
guidelines.
- The periodic performance of the cash management function as a whole as well as the
various responsibility centers performing cash management function shall be subjected to
audit.

Planning and Budgeting

1. Responsibility Considerations
– Composition of Budget Committee that shall formulate and decide on general policies,
guidelines and programs to this coop's budgetary system.
– Cost and Expenses planning, budgeting and scheduling and controlling shall be the
responsibility of the various Division Heads/Committee Chairman and PT leaders.
– The Finance Division shall consolidate all the budgets and estimates planned, proposed
and prepared by the individual cost centers such as divisions/committees and PT's.
– The Finance Division, Planning and Budgeting Section shall review, evaluate, analyze
and revise (if necessary) the individual budget estimates of the different
divisions/committees and PT's.
– The Planning and Budgeting Section of the Finance Division shall provide realistic,
measurable and attainable individual segments estimates/budgets.
– The Business Department Manager, assisted by the Finance Division head shall be
responsible for the development of investment plans and for the analysis of the financial
trends and ratios.
– The Finance Division shall serve as the responsibility/ profit center while the Collection
Division shall plan specific collection targets.
– Collection targets/forecasts in the cash flow projections shall be made in direct
coordination with the Collection Division.
– Costs/Expenses and Disbursements forecasts shall be made in direct coordination with
the General and Cost Accounting Section, Accounting Division and cost prices shall
further be coordinated with the Purchasing Officer/Property Management Staff.
– The Budget Committee in coordination with the Finance Division, Planning and
Budgeting Section shall evaluate and finalized over-all budget's/programs and
Forecasted Financial Statements.
2. Policy Control Considerations
- Adequate, clear and understandable budgeting policies.
- The planning and budgeting policies, shall be designed to encourage/allow individual
members concerned to participate and cooperate in the planning and budgeting processes.
- The budgeting policies shall allow the individual members, officers and employees enough
motivation, freedom and authority to influence, contribute and share in the making of the
budgets set for their respective segments.
- The budget policies shall further strengthen controls and other safeguards to maximize
yields/outputs through minimized costs of inputs/resources.
 - The budgetary policies shall be structured such that there is a reasonably great chance of
attaining the goals set for each segment/division/committee and PT in order to further attain
the coop's-wide objectives in line with its life purpose, mission and vision.
- Clear-cut budget policies and guidelines shall be developed, formulated and implemented
on the making of the various income forecasts and financial budgets to ensure success of the
budgetary system.
- Shall be reflective or coherence, harmony, unity and integrity between life purpose, vision,
goals, missions, priorities and plans and individual desires and disciplines.
- Allow proper balancing among processes and important activities of individual roles each
is supposed to play, to achieve the coop's goals as well as the individual's personal goals –
thus making them more productive and efficient in the process.
- Ensure the paramount importance of effective leadership before efficient management.
- Policies on the control
3. Costs/Expenses Planning Considerations
- Definite plans and objectives as well as methods and programs on Costs/Expenses shall be
set in harmony with economic and social goals of this coop.
- The various divisions/committees/PTs, as cost centers, shall plan and program their
respective costs and expenses.
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- Costs/Expenses budgets/plans shall be accomplished, accurate, zero-based, quantified in
peso-terms and made in application of relevant techniques.
- Costs/Expenses budgets shall be so planned and prepared because such budgets, once
approved, shall serve as basis and determinants for coop's future actual cost and expenses.
- Costs/Expenses shall be ascertained as to necessity and reasonability.
- Certain costs/expenses analysis shall be planned hand in hand with corresponding activities
or targets/objectives.

4. Revenue Forecasting Considerations

- Clearly defined revenues-standards and policies shall be set to serve as guidelines in the
making of revenue budgets
- The afore-mentioned standards and policies shall be in line with the coop's goals and
responsive to the demands/needs of the members.
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- The term revenue , for this purpose, shall mean interest income that this cooperative
expects to generate.
- Revenue budget shall be accurate, accomplished, zero-based and made in application of
combined relevant techniques, like trend analysis, correlation analysis and internal estimates
approach.

5. Financial Cash Flow Planning Considerations

- Basic policies and objectives on cash management planning shall be set in order to
optimize balances in meeting short-term needs. Any excess cash shall be invested in income
generating assets/projects
- Realistic, reasonable and measurable estimates shall be projected so as to plan beforehand
appropriate courses of action even before the possible occurrence of any cash shortage and
overage.
- Cash flow planning shall be in accord and in line with the policies, controls,
considerations, objectives of this cooperative's cash management system.
- The cash flow plan/cash budget shall be used to –

6. Capital Investment Planning Considerations

- Shall formulate clear and adequate investments policies and guidelines reduced in writing
 to ensure proper planning and prioritizing of investment projects.
- Clear goals relating to the investment of coop funds shall be established.
- Plans for the acquisition of capital investment projects/assets shall be adequately planned,
evaluated and discussed in terms of planned or proposed financing schemes.
- Plans for investment of funds not yet needed for operations shall be so planned at such
levels were risk is minimized; liquidity is optimized and income is maximized.
- In the process of evaluating capital investment plans, various analytical techniques and
tools shall be considered to ensure the profitability and economic worth of the project
proposal and the risk involved shall be thoroughly taken and the variability of possible
returns shall be assumed in relation to a wide range of factors.
- The afore-mentioned investments proposals/plans once finalized shall pass board approval
before being interlocked with the budget plans for the year.

7. Time/Range/Perspective Planning Considerations

- Long-term perspective
- Medium-term perspective
- Short-term perspective
Financial Planning and Budgeting
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Imagine it is the end of the fiscal year. Management is scrutinizing the past year's performance as
well as planning for next year. If you are involved in the planning and budget process you may very
well be in "spreadsheet hell" trying to collect data from a variety of sources, make sense of it all and
come up with a budget that will be both achievable and acceptable to senior levels of management.
This report will serve as a roadmap to efficient planning and budgeting for improved accuracy and
corporate performance.

8 Principles of Finance

1. The risk-return tradeoff: The higher the risk of an investment, the higher the expected rate of
return must be.

2. The Liquidity Versus Profitability Principle: There is a trade-off between liquidity and
profitability; gaining more of one ordinarily means giving up some of the other.
Liquidity: Having enough money in the form of cash, or near-cash assets, to meet your financial
obligations. Alternatively, the ease with which assets can be converted into cash.
Profitability: A measure of the amount by which a company's revenues exceed its relevant
expenses.
3. The Matching Principle
The maturity of a firm’s assets should match the maturity of the firm’s liabilities, i.e. short-term
assets should be financed with short term liabilities; long-term assets should be financed with long-
term sources of financing.
If you violate the matching principle, you create a problem either of too little liquidity or too little
profitability.

The Matching Principle states that short-term assets (current assets) should be financed with short-
term liabilities (current liabilities) and that long-term assets (fixed assets) should be financed with
long-term sources of financing (long-term debt, preferred stock, and common equity). (Let's assume
the following balance sheet values, in millions of dollars.)

Liquidity: The ability to pay your bills when they come due. (Liquidity actually has two meanings,
depending on the context. The definition given in the 1st sentence is the use of the word in the
corporate finance arena. In investments, liquidity means the ability to convert your investment into
cash easily; i.e., the ability to sell it without having to drop the price to find a buyer. The corporate
finance definition is the one used on this page.
Profitability: Revenues minus costs; frequently expressed as a percentage of some other number
(e.g., profit/sales, profit/equity, etc.).
Working Capital: The term as used here is Gross Working Capital. It is simply a synonym, or
another name, for Current Assets. (The term Net Working Capital is Current Assets minus Current
Liabilities; it is a measure of the company's liquidity). The term used on this page refers to gross
working capital: another name for Current Assets.

4. Leverage
Leverage is a magnification of earnings that results from having fixed costs in the company. Simply
put, leverage is a measure of the degree of sensitivity of earnings to some other measure.
(a) Operating leverage
A magnification of earnings (Net Operating Income or EBIT) that results from having fixed
operating costs in the company. (Examples of fixed operating expenses are salaries, utilities,
depreciation, and property taxes.)
(b) Financial leverage
A magnification of earnings (E.A.T.) that results from having fixed financial costs in the company.
(The only type of fixed financial cost considered here is interest expense.)
(c) Total or combined leverage
A magnification of earnings that results from having fixed costs of any type in the company.
Total Leverage = Operating Leverage x Financial Leverage
Formulas:
- Operating leverage is equal to the percentage change in operating income divided by the
percentage change in sales.
- Financial leverage is equal to the percentage change in net income divided by the percentage
change in operating income.
- Total leverage measures the percentage change in net income divided by the percentage change in
sales.

5. Time Value of Money Principle: A dollar today cannot be compared to a dollar in the future.
Given a choice of receiving a dollar today or a dollar at some point in the future, a rational person
will always choose to receive the dollar today. Regardless of inflation, a dollar today can be
invested and will earn a return over a period of time. In order to compare dollars today to dollars in
the future, we must convert one into an equivalent amount of money in the other's time period. For
example, assume you are asked, "Which do you prefer to receive - $4,000 today or $5,000 in four
years?" To compare the two numbers, we might convert the $5,000 to be received in five years into
an equivalent amount of money in "today's dollars."
Future Value: A concept that asks, "How much money will I have at the end of x periods if I invest
$1.00 today at r percent per period? "E.g., "How much money will I have at the end of 5 years if I
invest $1.00 today at 6% per year?"
Present Value: A concept that asks, "How much money will I have to invest today at r percent in
order to have $1.00 at the end of x periods? "E.g., "How much money will I have to invest today at
6% per year in order to have $1.00 at the end of 5 years?"
Compound Interest: Interest is paid not only on the original principal, but also on any interest
earned in prior periods.
Annuity: A fixed amount of money paid out or received in consecutive time periods. For example,
a cash flow of $5,000 for 6 consecutive years is an annuity.

6. Valuation
The value of an asset is equal to the present value of its future cash flows. The rate used for the
present value calculations (the capitalization rate) should be the minimum acceptable return, given
the risk of the investment.
Value = Present Value of Future Cash Flows
or
Value = Future Cash Flows x Present Value Factor
7. The Interest Rate vs. Bond Price Principle: There is an inverse relationship between the
market rate of interest and the price of existing fixed income securities, including bonds.
AA bond rating: One of several categories (e.g., AAA, AA, A, BBB, etc.) that are assigned to bonds
that reflect the bond's default risk (the probability of the bond not paying its owner the promised
payments).
Face Value (or Par Value): The amount of money paid to a bondholder at maturity.
Coupon Rate: The interest rate that a bond is legally obligated to pay. The interest on the bond is
equal to the coupon rate times the face value (e.g., 6% times $1,000, or $60 per year).

8. The Portfolio Effect Principle: As assets are added to a group (portfolio), the risk of the total
portfolio decreases. This will be true as long as the correlation of the asset being added and the
portfolio is less than +1.0.
Correlation: The extent to which two items move in concert. Correlation has two components: a
direction and magnitude. The direction is shown as a plus or minus sign; the magnitude is shown as
a number between zero and one. For example, a correlation of -1.0 indicates that to assets move in
opposite directions but by the same percentage amount. That is, when one moves up by 10%, the
other moves down by 10%. A correlation of +1.0 means that the two assets move in the same
direction and by the same relative amount. A correlation of zero means that the two assets'
movements are unrelated or random.
http://online.wsj.com/article/SB10001424052748704912004575252723109845974.html
http://www.pcworld.com/article/184520/mozilla_endorses_bing_over_google_privacy_issues.html
www.guardian.co.uk/technology/blog/2010/jun/29/dell-problems-capacitors

policies are adaptation of principles of an organization

problems with procedures

– time frame bounded problems
– how efficient and effective
– gaano kasinop

processes that are not fit

h

General overview
objective
scope
history
based history

How does the system help the needs of the members

What is the impact of this to the members
How does the system create a big impact with the members

how does it work

- processes and procedures involved

STUDY OF INFORMATION SYSTEM FUTURE REQUIREMENTS:

EVALUATION OF THE ACCOUNT MANAGEMENT:

Policies:
(Full documentation of all cash management consideration be referred to the 13 systems
documentation)
(Based on the 13 Systems – Cash Management System and Financial Planning and Budgeting
System documents)

SYSTEM OBJECTIVES:

Scope: Tumatagos sa iba't-ibang systems pero mainly concerned on finance and collection
division with regards on cash management.

Cash Management System

• To establish and maintain clear cash management policies
• To attained cash inflow targets
• To safeguard all receivables and collections.
• To ensure that what should be billed is actually billed; what should followed-up is actually
followed-up; and what should be collected is actually collected at the right time.
• To ensure proper planning, budgeting and scheduling of disbursements.
• To ensure that all disbursements are approved within the budget.
• Maximized and optimized funds not yet needed for operations under such terms/conditions.
• All cash management transactions are fairly present in the books and financial reports.
• To promote coordination, efficiency and effectiveness of all cash management operations
and activities.

PRINCIPLES:

POLICIES:
There are nine(9) considerations can be seen on 13 system documentation that will serve as
the policies on cash management.

(Full documentation of all cash management considerations be referred to the 13 systems

documentation)

1. Responsibility Considerations
➢ Cash budgeting shall be the responsibility of the various Division Heads/Committee
Chairmen/PT Leaders in so far as the cash requirements of their respective
division/committees/PTs are concerned. Such cash budgeting shall be spearheaded,
coordinated and consolidated by the Finance Division while the Collection Division shall
provide collection targets/forecasts inputs to cash budgeting.
➢ Finance Division
• Cash Budgeting
• Custody and control of all Cash Funds
• Responsible for the disbursement processing functions
➢ Collection Division
• Collection/forecasts inputs to cash budgeting
• All field collection
➢ Finance Division Head and Planning and Budgeting Section
• Responsible for financial forecasting and conduct of feasibility studies and capital
budgeting
➢ Treasury Section and Finance Division
• All office collection activities
 ➢ Treasury Section
• All disbursement releasing functions
➢ Cashier
• Responsible for the proper custody and safekeeping of unused checks and check
preparation
➢ Cashier, Treasury Section and Finance Division
• Responsible for the deposit of all daily collections
➢ Accounting Division
• Responsible for cost controlling
• Responsible for the cash accounting functions
• Preparation of daily trial balances of accounts and daily financial statements
• Submission of monthly financial statements accompanied with financial ratios
• Preparation of monthly exception reports
➢ Business Department Manager
• Responsible for the analysis of cost/income exceptions and financial trends and ratios.
• Shall exercise general supervision over all collection, disbursement and other cash
management functions.
➢ Audit Committee
• Responsible for the post-review/audit of cash transactions and cash performance and the
continuous review and evaluation of the cash systems.
➢ The initiation of disbursement shall be responsibility of the division concerned.
Duly authorized alternate disbursement signatories and alternate check signatories and
countersignatories shall be responsible for the final pre-review and approval of disbursement
transactions.

2. Policy Control Considerations

– these shall be the guide on how to make policies on cash management
➢ The cash management policies, as a whole, shall be geared towards:
• Promoting coordination, efficiency and effectiveness of cash management operations;
• Providing understandable guidance in performing cash management functions;
• Maximizing yield of cash resources at acceptable risk levels.
• Promoting the timeliness and reliability of cash management reports.
• Strengthening controls and other safeguards on working capital resources.
• Ensuring compliance
• Promoting continuity of investment and other cash management programs
• Promoting continuing relevance and responsiveness of cash operations.
➢ Every cash management policy to be adopted shall be
• reflective of the basic goals of our coop and the general membership.
• positive, clear, understandable and reduced to writing and communicated to all officers
and staff concerned.
➢ Clear-cut cash management policies shall be laid down for the various cash receipts, cash
disbursement and excess fund investments.
➢ Detailed guidelines shall be developed to implement and enforce cash management policies.
➢ The Audit Committee, assisted by the Audit staff, shall continuously monitor whether or not
officers and employees comply with the prescribed cash management policies and
implementing guidelines.
➢ The formulation of cash management policies shall be in consultation with and/or with
participation of knowledgeable officers and staff whose functions include cash management
functions.
 ➢ The Board of Directors, assisted by the General Manager and Business Department Manager
shall continuously assess cash management policies.
➢ All cash management policies, shall be promulgated by the Board of Directors except those
which set forth the scope/limits or which regulate the Board itself which shall be promulgated
by the General Assembly Resolution.

3. Planning Control Considerations

➢ Definite objectives and plans shall be established for the cash management operations.
➢ Adequate time importance shall be alloted by those concerned with regard to forward
planning.
➢ Projected cash flows shall be periodic, accurate, realistic and detailed.
➢ Such approved cash flow projections shall be strictly followed.
➢ The Treasurer, General Manager, Business Department Manager, Finance Division Head
and other financial officers shall have clear goals relating to the investment of coop funds.
➢ Top management must be in accord with the approved cash management objectives and
plans.
➢ Coop investment and loan portfolios shall be diversified enough so risk from any one
investment or loan type is limited.
➢ Officers (whether voluntary or paid) and staff exercising supervisory functions shall exert
effort towards promoting the clear understanding of cash management
objectives/plans/strategies particularly as to soundness and practicability.
➢ Approved goals/plans/budgets shall be used to measure actual performance/results
➢ Immediate superiors shall ensure the proper implementation of this planning control
consideration in so far as their immediate subordinates are concerned.
➢ Approved cash management strategies shall be translated at the position level into individual
cash management tactics and detailed instructions that could be clearly understood at the
individual position level.

4. Receivables Control Considerations

➢ All loans receivables shall principally be covered by the control considerations set forth in
the basic features of the Credit Management System.
➢ The receivables of this coop shall be classified into: Loan Receivables, Due from officers
and employees, Cash Advances for Operations, Accounts Receivable - Trade, Account
Receivable – Employees and Other Receivables.
➢ Every receivable that by its nature normally arises as a result of the release/issue of funds,
property, service and/or other coop resources shall not be allowed without a review and
approval by duly designated coop officers prior to such release/issue.
➢ All other receivables of a nature not embraced in above such as “Due from officers and
employees” shall nonetheless be duly documented and controlled.
➢ Custody and dispatching of goods shall be segregated for sales on account operations.
➢ The access to and responsibility for recording in individual receivable subsidiary records
shall be segregated from the responsibility for the safekeeping of documents supporting
/evidencing the receivable.
➢ Debtors shall be encourage to pay in advance through post-dated checks.
➢ As much as practicable, discounts, interest rebates and other incentives shall be allowed to
debtors who pay early ahead of due date.
➢ The sending of reminders and first notice to member-borrowers and other debtors with
phone numbers may be done through phone to save on follow-up costs.
➢ The conduct of personal follow-up of receivables by the Collection Division shall be
planned/arranged/assigned.
 ➢ All account balances shall be aged periodically. All overdue accounts shall be reviewed at
prompt intervals so that immediate and timely action can be taken to protect/enforce the claim.
➢ No receivable shall be written off unless it has been clearly established that any further
collection effort would be futile or the collection cost would exceed the amount collected.

5. Collection Control Considerations

➢All officers and employees performing collection functions shall be familiar with coop
policies, procedures and implementing guidelines on collections.
➢Officers and employees to be assigned to accountable collection functions shall be
carefully screened for honestly and trustworthiness.
➢All collections, with the exception of saving deposits and sale of stamps shall be
acknowledged by the immediate issuance of a pre-numbered official receipt duly assigned by
the Teller, Collector or Cashier and issued in strict numerical sequence.
➢Receipt of savings deposits shall be acknowledged in a duly validated deposit slip plus an
initialed deposit passbook.
➢Collections from sale of stamps shall not be receipted.
➢Official Receipts shall not be issued for payments by post-dated checks.
➢All persons authorized to receive collections on behalf of the coop shall, at the end of the
every day, turn over his collections using a daily collection report with the attachment of
duplicate Official Receipts and original Deposit Slips and all arranged in numerical
sequences.
➢The Daily Collection Report shall contain a breakdown and classification of collections all
shall be prepared and certified by the concerned
➢The Cashier shall acknowledge receipt of total collections turned over to him by signing all
copies of the corresponding daily collection report.
➢Every collections accountable officer concerned shall stamp “CANCELLED” on all
voided/canceled official receipts and attach the original and duplicate copy to the daily
collection report and retain the triplicate in the stub copy file.
➢The Cashier shall safekeep all collections in the coop vault and deposit all such collections
intact the following banking day.
➢Deposits shall only be made to duly designated banks which are nearest to the coop and
which are known to be financially stable.
➢The vault and all other safes shall be kept under lock whenever unattended and access to
such shall be limited to duly designated accountable officers.
➢The duplicate secret combination of the various vaults including the main vault shall be
lodged in the respective immediate superiors of those in charge of the vault.
➢The secret combination of a vault shall be changed whenever there is a change in the
custodian.
➢Cash transactions could be conveniently conducted without needing to allow members
access in the treasury section.
➢When there are collections through mail, the executive secretary shall be responsible for
opening and listing such mail remittances and a copy of such listing shall be provided to the
Journal Keeper.
➢Cash accountable officers shall be appropriately bonded.
➢Teller #1 shall handle the savings and fixed deposit collection while teller #2 shall handle
loan collection. All other office collections shall be handled by the Cashier.
➢Understandable instructions for various payment transactions shall be posted in a
conspicuous place inside the coop.
➢Alternate signatories and countersignatories of certificates of time deposits shall be
designated by the Board of Directors.
6. Disbursement Control Considerations
➢All disbursements shall be by checks except disbursements out of the following revolving
funds:
• Petty cash revolving fund
• Cashier's revolving fund
• Teller change revolving funds
• Operations revolving fund

➢ All revolving funds shall be maintained under the imprest system.

➢ Petty cash revolving fund shall be in the custody of the Finance Division Head and shall
be used to defray petty expenses not exceeding P500.00
➢ The Cashier's revolving fund shall be set at an imprest amount of P250,000.00 and to be
replenished everyday
➢ The Teller's change revolving funds shall each be set at an imprest amount of P10,000.00
➢ The Operations revolving fund shall be in the custody of the Cashier and set at an
imprest amount of P50,000.00 to be replenished at the end of everyday.
➢ The authority to modify the imprest amounts of revolving funds shall be lodged in the
General Manager upon recommendation of the Department Manager concerned.
➢ At any given time, the total cash on hand and the unreplenished disbursements for each
fund shall equal the imprest amount of the fund.
➢ Custodians of revolving funds shall, prepare a revolving fund replenishment summary to
summarize and account for the disbursements made out of the fund in his custody.
➢ All cash advances including those out of petty cash shall be reported and liquidated as
soon as the purpose intended is served or as soon as it is no longer needed.
➢ Before a petty cash disbursement is approved, such shall be ascertained to be within
approved budget for the particular expense item for the division concerned.
➢ Petty cash and other expenses not normally evidenced by receipts shall be reviewed with
particular emphasis on reasonability of amount.
➢ Each employee, upon arriving and after lunch break shall log his “time-in” and before
timing-off for lunch break and at the end of the day, each employee shall also log his
'time-out” time on his Daily Time Card
➢ Payroll disbursements for overtime shall be guided by the control considerations
➢ All employee movements, particularly those affecting payroll shall be reported
immediately to the General Manager
➢ All new employees shall be required to acknowledge receipt of their salary by signing a
copy of the pay slip.
➢ All employees who are not paid through payroll but through check shall be required to
acknowledge receipt by signing the disbursement ticket.
➢ If an employee cannot collect his salary personally, his written authorization shall be
required
➢ All applicable legal requirements relating to payroll disbursements shall be complied
with.
➢ Payroll preparation shall be segregated from payroll payment function
➢ Signed withdrawal slips shall not be used as authority for disbursements
➢ All banks with which the coop has checking accounts shall be provided with specimen
signatures of officers authorized to sign checks.
➢ All checks for signature shall be accompanied by a duly processed disbursement ticket
and all necessary supporting documents.
➢ No check shall be signed in blank or in advance
➢ All voided or spoiled or cancelled checks shall be stamped “CANCELLED” and
 accounted for
➢ The authority to review, approve and sign disbursement tickets shall be lodged in the
Department Manager concerned and General Manager.
➢ The authority to sign or countersign checks shall be lodged in the following alternate
check signatories and countersignatories
➢ A check register shall be used by the Cashier for registering all checks drawn promptly
and sequentially according to the serial number
➢ Disbursements for purchases and other expenses shall be made promptly enough as to
avail discounts
➢ All withdrawals of savings deposits shall be through the Withdrawal Slip form
prescribed
➢ A member-depositor may withdraw savings deposits through his representative provided
such representative is duly authorized
➢ A Time Deposit Disposition Form shall be filled-up, signed and used by a member-
depositor for any one of the following time deposit transactions
➢ Every deposit withdrawal, whether time or savings shall be carefully checked against the
member-depositor's specimen signature in file, in the passbook or in the member's coop
I.D. To ensure the authenticity of the signature in the withdrawal slip.
➢ The processing of savings and time deposit withdrawals shall not last more than 45
minutes.
➢ No withdrawal of fixed deposits shall be processed until the written application to the
Board of Directors has been approved and all liabilities and obligations have been settled
or assumed by another member equally acceptable.
➢ All purchases shall be by check except petty purchases and those through cash advance.
Petty purchases, on the other shall follow the procedures for petty cash revolving fund
disbursements.
➢ The Disbursement Ticket shall be numbered and stamped “paid” together with all
supporting documents to prevent re-use.
➢ The reporting of check disbursements shall be on a daily basis.
➢ The reporting of savings and time deposit withdrawals shall also be on a daily basis.
➢ The Cashier shall review report computation and adequacy/authenticity of supporting
documents, check the total disbursements to agree with the total amount per duly and
approved and acknowledged Teller's Fund Requisitions for the day and unused fund
requisitions.
➢ To ensure completeness of deposit withdrawal recordings, daily sequential numbers shall
be assigned to Withdrawal Slips and Time Deposit Disposition Forms immediately upon
approval.

7. Fund Management Control Considerations

➢ Fund management shall involve the efficient management of cash and excess funds by
maximizing cash availability and earnings from idle funds towards the attainment of the
overall goals of the coop
➢ When the economy is characterized by rising interest rates, the fund management
direction shall be towards reducing to cash to a minimum.
➢ Cash shall be maintained only for the following purposes: Transactions, Precautionary
and Speculative purposes
➢ The holding of cash for speculative purposes shall be on the most limited basis only.
➢ Primarily concerned with and responsible for cash management shall be the Treasurer
from the voluntary officer and management staff from the Finance Division.
➢ A cash budget shall be used to forecast monthly receipts and disbursements
 ➢ This cash budget shall serve as the foundation for cash planning and control. As such, it
shall be realistic, reasonable, and responsive to the goals, direction, plans and needs of
the coop
➢ The reporting of all information on cash shall be on a daily basis
➢ Cash budget shall be accompanied by pro-forma balance sheets and income statements,
to enable the coop financial officers to analyze the effect of various policy decisions.
➢ As the likelihood for inaccuracies in cash forecasts increases, the provision for
precautionary purposes shall also be increased and vice versa.
➢ Combination of fast collections and slow disbursements shall be for the purpose of
attaining maximum funds availability.
➢ blank
➢ The number of bank accounts shall be limited to avoid the maintenance of unnecessary
pockets of idle funds.
➢ Procedures shall aim towards eliminating or at least minimizing the loss of discounts due
to clerical inefficiencies.
➢ Considering that these can be converted to cash on very short notice, marketable
securities shall be used to serve the precautionary purpose of the coop to hold cash.
➢ In determining the optimal split-between cash and marketable securities ----
➢ Decisions to invest excess cash in marketable securities shall involve deciding on the
amount to invest as well as deciding what type of security in which to invest.
➢ The cost of loan operations should be less than the interest and service charges for loans.
➢ The cost of investing cash and savings and time deposit operations should be less than
the income generated from such cash investments.
➢ The Finance Division Head shall devote a material portion of his time in managing the
various investment portfolios of the coop
➢Fund investment performance shall be periodically and timely reviewed against specific
guidelines and goals.

8. Accounting Control Considerations

➢ All staff involved in accounting functions should be familiar with accounting
conventions, principles and standards.
➢ All journal and ledgers shall be under the sole custody of the Accounting Division.
➢ blank
➢ Physical facilities and controls shall be provided to ensure adequate safeguarding of
subsidiary ledgers.
➢ All entries in the books of accounts including corrections, shall be in ink.
➢ All regular adjusting journal entries (RAJE), reversing journal entries (RJE),
reclassification journal entries (RCJE), and auditor's adjusting entries (AAE) shall be
effected using duly reviewed and approved Journal Vouchers.
➢ Every Journal Voucher shall be supported by appropriate documents.
➢ Every entry in any book of account shall be properly dated and cross-referred to
corresponding supporting documentation.
➢ Ticking-off marks shall be used to indicate that the item concerned has been
recorded/posted to appropriate book.
➢ The responsibility for every entry in every book of account shall be fixed and
pinpointed using initials/signatures/ user Ids/codes.
➢ The posting of cash transactions to individual Subsidiary ledgers shall be on an “on-line”
basis.
➢ All accounting entries to the Certificate shall be based on the duly processed time
deposit disposition forms.
 ➢ The duplicate copy of cash advance for employees forms in the unliquidated “suspense”
file shall serve as subsidiary ledger for cash advances for operations account advanced to
officers and employees.
➢ The Journal Keeper, Accounting Division shall check completeness of numerical
sequence of all official receipts and deposit slips.
➢ The approval of the check disbursement shall be considered as the act that consummates
a disbursement transaction as to necessitate taking up in the books.
➢ Every page of a Journal of a ledger after being filled-up shall be certified as correct by
the staff responsible.
➢ All such accountable forms received shall be turned over for safekeeping to the Journal
Keeper, Accounting Division who shall acknowledge receipt specifying the series of
serial numbers received.
➢ Every issuance of accountable forms shall be acknowledged signed by the accountable
staff receiving them.
➢ Journal Keeper shall absolutely have no access to individual subsidiary ledgers and/or
update/delete access to computer records of individual accounts.
➢ Accountable staff to whom accountable form booklets were issued shall be responsible
for the proper safekeeping of unissued accountable forms still in their custody.
➢ At the end of every transaction day, a summary proof tape (SPT) of entries to individual
subsidiary ledgers (ISL) shall be generated by the business machine/computer.
➢ The Accounting Division Head shall be primarily responsible on various summary totals
in the SPT.
➢ The daily totals/recapitulations of journals shall be ticked-off upon posting to the
corresponding control account in the General Ledger.
➢ Postdated checks received as payments shall not be recognized as collections until the
arrival of their maturity dates.
➢ Every legitimate claim the validity of which is definitely recognized shall be properly
recorded as a receivable.
➢ Trial balances, income statements,balance sheets and cash flow statements shall be
prepared on a daily basis.
➢ blank
➢ Subsidiary ledger totals shall be reconciled with corresponding control accounts in the
General Ledger at least once a month.
➢ All used-up ledger, journals and other books of accounts shall be placed in safety fire-
proof storage under the restricted custody of the Accounting Division Head and made
available for audit at any reasonable time.

9. Monitoring Control Considerations

➢ The replenishment for the various revolving funds shall be subject to random and/or
detailed review by the Business Department Manager and Audit Department.
➢ All collections and all funds are subject to yearly cash counts by the Audit Department
and the External Auditor as part of the yearly financial audit exercise.
➢ All unaccounted fund overages identified during cash counts shall be credited to the
coop as miscellaneous income. Shortages, on the other hand, shall be charged to the
account of the Accountable Officer.
➢ Accountable forms shall also be subjected to inspection, count and/or review on a
surprise random basis by the Audit Department.
➢ All bank statements and paid checks sealed by the bank shall be delivered directly to the
Audit Department Head.
➢ Bank accounts shall be reconciled at least once a month by the Financial and
 Compliance Audit Staff of the Audit Department.
➢ Bank reconciliations shall include accounting for all check numbers, signatures,
endorsement, payee's name, date, comparison with records, identification of unrecorded
bank credits/debits, outstanding checks and deposits in transit.
➢ All long outstanding checks shall be reported by the Audit staff to the Business
Department Manager for proper follow-up and control.
➢ All reconciling items shall systematically followed-up and promptly cleared.
➢ Direct confirmation of receivables shall be conducted by the Financial and Compliance
Audit staff at least once a year.
➢ All accounts written off shall be subjected to post-audit.
➢ Spot checking of bundy card entries vis-a-vis actual attendance shall be conducted on a
random, periodic or surprise basis.
➢ The General Manager shall, from time to time, check Overtime Authorization Slip
claims against time records in which the actual time-ins and time-outs of employees are
logged.
➢ Business machine and computer breakdown shall be subject to on-the-spot
observation/inspection and post-review by the representative of the Audit committee
➢ All disbursements approved in excess of approved budget shall be subject to post-audit.
➢ Disbursement transactions whose checks were both signed and countersigned by coop
paid staff shall be subject to random review by the Audit Department.
➢ blank
➢ Plans and budget shall be subjected to post-review by the performance Audit staff, Audit
Department.
➢ Cash Management policies and practices, system and procedures shall be subject to
continuous policy review and evaluation by the Systems Audit Staff, Audit Department.
➢ Cash transactions shall be audited to ensure compliance with policies and implementing
guidelines.
➢ The periodic performance of the cash management function as a whole as well as the
various responsibility centers performing cash management function shall be subjected
to audit.

Planning and Budgeting System

• To establish clear budget policies and program.
• To attained the integration of the coop's segmental objectives.
• Enable all members to participate and aware in achieving the coop-wide objectives.
• To promote the viability and growth of this cooperative that shall be responsive to the
members' needs.
• To compel periodic planning, budgeting, prioritizing and scheduling of costs and
disbursements.
• To ensure maximized, realistic and attainable revenue and other income targets.
• To quantify, the plans and proposals more meaningful and much easier to evaluate.
• To allow monitoring and evaluation of actual operating results through performance
evaluation reports when necessary.
• To allow flexibility in planning on the budget/estimates.
• To provide an overall short-range and long-range financial visualization
• To inform and update management of the coop's operation and financial condition, thus,
making them well-prepared for any consequences.
• To ensure continuity of directions despite changes in leadership.
• To provide reasonable assurance of the budgetary system.
• To satisfy legal and contractual requirements.
• To ensure future and continuing responsiveness to the needs of its members in uplifting their
quality of life.