Level of Effectiveness of Internal Control Systems of Cooperatives in Batangas City

Abstract

This study aims to assess the level of effectiveness of the internal control system of Cooperatives in Batangas City. The descriptive-survey method was utilized. The researcher employed the use of modified type of survey-questionnaire with 45 items for assessment of the target respondents. The respondents generally assessed their respective control environment as effective while the current control and monitoring activities as well as CDA compliance were all assessed as very effective. For a more effective control environment, cooperative policies and procedures must be clearly and continuously communicated to the members. It is also helpful to establish a documentation process that will clearly define authority and responsibilities both the members and officials. Maintaining the basic segregation of duties in cooperatives must be ensured despite limited personnel. This will also allow an opportunity for better monitoring activities. It is worth to have at least one activity that will keep the employees engaged like team-building, simple dinner or workshop. The researcher strongly recommends that the board of directors should create different committees that will handle each activity of the multipurpose cooperative. To keep the transparency flowing, quarter variance reviews can be implemented to identify if the cooperative is operating in accordance to what has been projected at the start of the year. This will also aide to identify unusual fluctuations and variances that may indicate fraud or other circumstances that need to be resolved immediately. Cooperatives must also take into consideration theageing of the members and start to attract individuals in their mid-30’s to become members. This will ensure not only the continuity of the cooperative as an organization but also allow succession of established policies and accounting practices of the cooperative.