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description
Management
Performance
Tool
Cooperative Management & Governance Seminar
Nueva Segovia Consortium of Cooperative
Caoayan, Ilocos Sur
October 5-7, 2011
Management Performance
C
Compliance with administrative and legal requirements. This
includes set of questions which looks at whether the credit cooperative
complies with the various legal requirements by Cooperative
Development Authority, Bureau of Internal Revenue, Department of
Labor and others.
O
Organizational structures and linkages. This includes questions
on the Cooperative’s governance and membership structure, affiliations
and linkages with federations and other organizations promoting
cooperative development.
O
Operation and Management. This includes indicators that deter
presence or absence of the necessary systems, policies and procedures for
efficient and effective management of the credit cooperatives.
P
Plans and Programs. This includes parameters to determine whether the
credit cooperative has a developmental plan and an approved annual plan
and budget.
1. COOP PESOS
Management Performance
P
Portfolio Quality. It provides the officers to monitor the quality of portfolio of the
Cooperative. The status of the health of the portfolio will either propel the Cooperative to
grow more or imperil its whole sustainability program. Two indicators are included: (1)
Portfolio at Risk; and (2) Allowance for probable losses on loan.
E
Efficiency. The second group of indicators focuses on the operations and
administrative efficiency of the delivery of financial services. Six indicators are included:
(1) Asset yield; (2) Operational self-sufficiency; (3) Rate of return on member’s share;
(4) Loan Portfolio profitability; (5) Cost per peso loan; (6) Administrative Efficiency.
S
Stability. The stability of credit Cooperative is important to ensure that financial
services are delivered to its members in a sustained manner. Stability indicators are: (1)
Solvency; (2) Liquidity; and (3) Net Institutional capital.
O
Operations. This indicator highlights the new thrust of Philippine Cooperative
movement. Strong emphasis is given on mobilizing voluntary savings from members and
less dependence on borrowings. Operation indicators includes: (1) Performance of
membership growth; and (2) Trends in external borrowings.
S
Structures of assets. These four ratios ascertain the quality and the structure of the
assets of Cooperative: (1) Non-earning assets; (2) Total deposits; (3) Net Loan
Receivables; and (4) Total members.
a. Profitability Ratio
Measure the capacity of the cooperative to
generate surplus
Net Operating Surplus
---------------------------------------------------------------
Gross Operating Revenue or Gross Margin
30% and above 5 points
25% to below 30% 4 points
10% to below 25% 3 points
5% to below 10% 2 points
below 5% 1 point
b. Earning per share
Measure the capacity of cooperative to provide
earnings to members' capital contribution
Net Surplus
-----------------------------------------------------
Members' Equity - Treasury Share
Php 2.50 and above 5 points
Php 2 to below 2.50 4 points
Php 1.50 to below 2.00 3 points
Php 1.00 to below 1.50 2 points
below Php 1 to Php 0.75 1 point
c. Profitability Growth Rate
Measure the growth rate of profitability
for the period
Earning/share end – Earning/share
beginning
------------------------------------------------------
Earning per share beginning
100% and above 5 points
75% to below 100% 4 points
50% to below 75% 3 points
30% to below 50% 2 point
10% but below 30% 1 point
d. Asset Efficiency Rate
Measure the efficient use of assets to
generate surplus
Net surplus
Total Assets
20% and above 5 points
15% to below 20% 4 points
10% to below 1% 3 points
5% to below 10% 2 points
below 5% 1 point
e. Rate of Interest on Share Capital (as
prescribed in the by-laws; or if not provided,
follow Rule 10 of IRR)
Measure the return on members' share capital
Amount of Interest on Share Capital
Average Paid up Share Capital
Higher than the inflation rate 5 points
within the inflation rate 4 points
2 pts below inflation rate 2 points
3 pts or more below inflation rate 1 point
f. Rate of Patronage
Measure the rate of returns on members'
patronage
30% & above of the NS 5 points
for distribution to members
25% to below 30 % 4 points
15% to below 25% 3 points
10% to below 15 % 2 points
5% to below 10% 1 point
Note: if the rate of patronage refund is more than twice the rate of interest on capital, the rating is zero
a. Net Institutional Capital
Measure the level of institutional capital after subtracting
the allowance for probable losses
(Reserves + APLL and/or A/R) – (Problem Assets + Past Due
Receivables + Receivables Under Litigations +
Restructured Receivables)
-----------------------------------------------------------------------------------
Total Assets
10% and above 6 points
8% to below 10% 5 points
6% to below 8% 4 points
4% to below 6% 3 points
2% to below 4% 2 points
below 2% 1 point
b. Appropriate Provisioning for Probable Losses
b.1 Past due of more than one (1) year
Measures the adequacy of provision for probable losses
for past due accounts of more than one (1) year
Allowance for probable losses on receivables
Past due receivables over one (1) year
100% and above 7 points
90% to below 100% 6 points
70% to below 90% 5 points
50% to below 70% 4 points
30% to below 50% 3 points
10% to below 30% 2 points
Below 10% but not zero 1 point
b. Appropriate Provisioning for Probable Losses
b.2 Past due of thirty one (31) days to one (1) year
Measures the adequacy of provisions for probable
losses for past due accounts 31 days to 1 year
APL on receivables - allowance required for
past due receivables one year and above
Total past due receivables 31 days to 1 year
35% and above 7 points
30% to below 35% 6 points
25% to below 30% 5 points
20% to below 15% 4 points
15% to below 20% 3 points
10% to below 15% 2 points
Below 10% but not zero 1 point
a. Percentage of non-earning assets to
total assets
Measures the percentage of non-earning assets
to total assets
Non-earning Assets
---------------------------------------
Total Assets
10% and below 5 points
Above 10% to 20% 4 points
Above 20% to 30% 3 points
Above 30% to 40% 2 points
Above 40% 1 point
c. Members' equity to total assets
Measures the degree of participation of
members' share to total assets
Paid-up Share + Deposit for Capital
Subscription
-----------------------------------------------------
Total Assets
40% to below 50% 5 points
50% to below 60% 3 points
30% to below 40% 3 points
60% to below 70% 2 points
20% to below 30% 2 points
Below 20% or Above 70% 1 point
d. Deposit liabilities to total assets
Measures the percentage participation of
deposit liabilities to total assets
Total deposit liabilities
Total Assets
30% to 40% 5 points
Above 40% to 50% 4 points
20% to below 30% 4 points
Above 50% to 60% 3 points
Below 20% to 10% 3 points
Above 60% to 70% 2 points
Below 10% to 5% 2 points
Above 70% or below 5% 1 point
e. External borrowings to total assets
Measures the dependence of cooperative to
external borrowings
Total external borrowings
Total Assets
No external borrowings 5 points
1% to 20% 4 points
above 20% to 30% 3 points
above 30% to 40 % 2 points
above 40% 1 point
a. Volume of business to total assets
Measure the capacity of assets to generate
business
Total volume of business
Total assets
100% and above 5 points
75% to below 100% 4 points
50% to below 75% 3 points
25% to below 50 % 2 points
5% to below 25% 1 point
below 5% zero
b. Solvency
Measures the degree of protection that the cooperative has
for members savings and share capital in the event of
liquidation of coop's assets and liabilities
(Assets + APL) - [ (Total liabilities - Deposit liabilities)+
(Past due receivables + restructured receivables +
receivables under litigation)]
---------------------------------------------------------------------------------
Deposit liabilities + Share capital
110% and above 5 points
100% to below 110% 4 points
85% to below 100% 3 points
75% to below 85% 2 points
50% below 75 % 1 point
c. Liquidity
Measures the cooperative's ability to service
withdrawal of members' deposit on time
Liquid assets - Short term payables
Total members' deposit
15% to 30% 5 points
Below 15% to 10% 4 points
Above 30 to 50% 4 points
Below 10% to 5% 3 points
Above 50% to 60% 3 points
Below 5% to 1% 2 points
Above 60 to 80% 2 points
Above 80% or below 1% 1 point
d. Efficiency
d.1 Cost per volume of business
Measures the efficiency in managing the cooperative's
business
Operating cost – (Members‘ Benefit Expense
+ Social Service Expense)
----------------------------------------------------------------------------
total volume of business
25 cents and below 5 points
26 to 22 cents 3 points
33 to 39 cents 2 points
40 to 46 cents 1 point
47 cents and above zero
d. Efficiency
d. 2 Administrative efficiency
Administrative cost – (Members Benefit
Expense + Social Service Expense)
-------------------------------------------------------------
Average total assets
10% and above 5 points
Above 10% to below 15% 3 points
Above 15% to below 20% 2 points
Above 20% to below 25% 1 point
Above 25% zero
d. Efficiency
d.5 Turnovers
Measures the number of times receivables or inventories
are moving within the reporting period
Receivables (trade &loans)
Average Receivables
4 times and more 5 points
3 to below 4 times 3 points
2 to below 3 times 2 points
Below 2 times 1 point
Protection, Effective Financial
Structure, Asset Quality, Rates of
Return, Liquidity, and Signs of
Growth, the PEARLS system was
originally designed and implemented
with Guatemalan credit unions in the
late 1980s.
4. PEARLS
5. CAMEl
(C) CapitaL(A) Asset quality(M) Management(E) Earnings and(L) Asset Liability management
6. Gawad Pitak
Given by Land Bank of the Philippines
LANDBANK also has its own Cooperative Accreditation
Criteria or CAC, based on the seven pillars of
cooperativism - membership, capital build-up and
savings, leadership and management, business
operations, books of accounts and financial statements,
and affiliations. Using these criteria, LANDBANK annually
rates co-ops and classifies them A, B, C, D, and F
according to their maturity levels
Primary CooperativeEligibility and Qualifying Criteria
• Must be duly registered with the CooperativeDevelopment Authority (CDA);
• Must be in Good Standing for the past three(3) preceding years;
• Must be existing for at least 5 years and mustbe operationally gainful for the last three (3)years– for Medium/Large Cooperative;
CDA Gawad Parangal
CRITERIA for PRIMARY COOPWEIGHT/ POINTS
1. Organization, Leadership and Management
40
2. Financial Mgt. and Business Operation
35
3. Social Relevance 20
4. Awards and Recognition 5
Eligibility/Qualifying Criteria for Federation
• Must be duly registered federation with theCooperative Development Authority (CDA);
• Must be in Good Standing for the past three (3)preceding years;
• Must be existing for at least 5 years and must beoperationally gainful for the last three (3) years
• Compliant with the legal and administrativerequirements of CDA and other governmentagencies
CRITERIA WEIGHT/ POINTS
1.Organization, Leadership and Management
40
2.Financial Mgt. and Business Operation
35
3.Social Relevance 20
4.Awards and Recognition 5
Eligibility/Qualifying Criteria for Union
• Must be duly registered union with the CooperativeDevelopment Authority (CDA);
• Must be in Good Standing for the past three (3)preceding years;
• Must be existing for at least 5 years and must becontinuously operating for the last three (3) years
• Compliant with the legal and administrativerequirements of CDA and other government agencies
CRITERIA WEIGHT
1.Organization, Leadership and Management
40
2.Services Rendered 35
3.Social Relevance 20
4.Awards and Recognition 5
Eligibility/Qualifying Criteria for Cooperative Leaders
• Must be a cooperative member in good standing for the past ten (10) years immediately preceding the nomination – With share capital not exceeding 10% of the
total subscribed capital – Actively participating in the SMCBU program of
their cooperative – Regularly attending General Assembly Meeting – Patronizing the services of cooperatives
• Presently or had been an officer of cooperatives for at least five (5) years whether elective or appointive
• Eligibility/Qualifying Criteria
• With no derogatory record / No administrative or criminal record
• With exemplary contributions to cooperative development
• Must be nominated/endorsed by at least four (4) different type of organizations from the following : cooperative, government organizations, local government units, private sector, other institutions
Eligibility/Qualifying Criteria CDO-LGU
• Must come from a province/chartered or independentcity or components cities and municipalities
• Formally organized/established/created office
• With Cooperative Development Officer duly appointed
• With staff and budget
• Must have relevant cooperative developmentprogram/s.
• Must be endorsed by CDS and at least one (1)cooperative in the area
CRITERIA WEIGHT/ POINTS
1.Organization, Management & Leadership
40
2. Program Implementation 60
TOTAL 100
The balanced scorecard (BSC) is astrategic performance management tool – a
semi-standard structured report, supported
by proven design methods and automation
tools, that can be used by managers to keep
track of the execution of activities by the
staff within their control and to monitor the
consequences arising from these actions.
8. Balanced Scorecard
It is the most widely adopted performance
management framework reported in the annual
survey of management tools undertaken by Bain
& Company, and has been widely adopted in
English-speaking western countries and
Scandinavia in the early 1990s). Since 2000, use
of the Balanced Scorecard, its derivatives (e.g.,
performance prism), and other similar tools
(e.g., Results Based Management) has alsobecome common in the Middle East, Asia andSpanish-speaking countries.
8. Balanced Scorecard