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MEMORANDUM CIRCULAR No.2016-05
Series of 2016
TO : ALL CONCERNED
SUBJECT    : AMENDED GUIDELINES ON THE ESTABLISHMENT OF COOPERATIVE SATELLITE OFFICES
DATE : October 11, 2016


Pursuant to the powers vested by Republic Act 6939 and RA 9520, the Authority hereby promulgates the following amended Guidelines on the establishment of cooperative satellite offices.

Section 1. Legal Bases

This Guidelines is promulgated consistent with the policies of the State articulated in Article 2 paragraph 1,  RA 9520 and in Section 1, RA 6939 which are, “to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice”, and    “to promote the viability and growth of cooperatives as instruments of equity, social justice and economic development, respectively.

Section 2.  Objectives

a. To prescribe the requirements for the establishment of a cooperative satellite office;

b. To determine jurisdiction over the cooperative satellite office;

c. To specify the conditions that must be properly observed in operating a cooperative satellite office;

d. To lay down the procedures in case of transfer/relocation of a cooperative satellite office;

e. To lay down the procedures in case of voluntary closure of a cooperative satellite office;

f. To set the sanctions for any violation of this Guidelines.

Section 3.  Scope

All cooperatives intending to establish satellite offices and those with existing satellite offices already shall be covered by this Guidelines, except cooperative banks.

Section 4.  Definition of Terms

a. Principal/Main Office – refers to the registered head office as indicated in the articles of cooperation and bylaws of the cooperative where the business and cooperative activities are conducted and central records and main books of accounts are kept.  

b. Satellite Office – refers to an office established by a cooperative outside of its principal/main office but within its area of operation to provide limited services to its members but which does not however maintain books of accounts as it is done only by the principal/main office.

For purposes of this Guidelines, the term satellite office shall include an extension office, a sub- office or other terms of similar import.

c. Letter of Authority – refers to the official document issued by the Authority authorizing the establishment and operation of a cooperative satellite office.

d. Registering EO – refers to the CDA Extension Office exercising jurisdiction over the place where the principal office of the cooperative is located.

e. Issuing EO -  refers to the CDA Extension Office, other than the Registering EO, exercising jurisdiction over the place where the cooperative satellite office will be established.

Section 5. Jurisdiction

If the cooperative satellite office will be established within the area where the principal office is located, the approval and issuance of the Letter of Authority shall be made by the Extension Office (Registering EO) exercising jurisdiction over the said place. For cooperatives registered with the Central Office, applications for Letter of Authority to establish a cooperative satellite office shall be approved and issued by the Executive Director.

If the proposed cooperative satellite office will be established outside the jurisdiction of the Registering EO, the application to establish a cooperative satellite office shall still be filed with the said Registering EO. The Registering EO shall then make an evaluation and determination of compliance by the applicant cooperative with the documentary requirements set forth in Section 6 hereof.  

Upon a finding that all the documentary requirements have been completely complied with, the Registering EO shall thereafter forward the application together with the supporting documents and its appropriate recommendation to the EO that exercises jurisdiction over the place where the cooperative satellite office will be established.

The EO where the proposed cooperative satellite office will be established shall issue a Letter of Authority only upon determination, after conducting an independent evaluation and validation, that there are cooperative members residing in the area where the cooperative satellite office will be established and are in need of its services.

Upon issuance of the Letter of Authority, the EO shall then notify and furnish the Registering EO a copy of said Letter of Authority. In like manner, the Registering EO and the applicant cooperative shall also be notified in case of denial of the application for Letter of Authority to establish a cooperative satellite office by the EO concerned.

Section 6. Documentary Requirements

The application for a Letter of Authority to establish a cooperative satellite office shall be accompanied by the following documents:

a. Certificate of Compliance for the preceding year;

b. Oath of Undertaking signed by the Chairperson of the cooperative for the specific services/activities to be undertaken by the proposed satellite office;

c. Certification as to available space and manpower to manage the office; and

d. Official Receipt showing payment of the processing fee.

Section 7.Processing Fee

The processing fee for the issuance of Letter of Authority for each cooperative satellite office shall be as follows:

Processing Fee    Category of Coop
Php 500.00    Primary
Php 1,000.00    Secondary
Php 2,000.00    Tertiary

Section 8. Services/Activities Allowed in a Cooperative Satellite Office
The cooperative satellite office shall render services and conduct business activities, which shall not be limited to the following:

1. Recruitment of members;

2. Acceptance of applications for membership;

3. Acceptance of loan applications;

4. Collection and acceptance of payments for share capital contributions, loans, and/or utility bills in the case of electric and water service cooperatives;

5. Release of loans, patronage refund, and interest on capital.
All applications for membership, loans and other business transactions accepted in the satellite office shall be endorsed to the principal/main office for appropriate action. In no case shall the satellite office exercise discretion on such matters.

Section 9. Conditions for Cooperative Satellite Office Operations

The following shall be the conditions that must be observed in operating a cooperative satellite office:

1. Presence of a signage as a cooperative satellite office;

2. List of specific transactions that may only be undertaken as approved by the cooperative’s Board of Directors;

3. Presence of Operational Structure;

4. Submission of summary reports to the head office;

5. Presence of a Barangay Permit and a Mayor’s Permit that should be posted in the office at all times;

6. Maintenance of Accountable Forms (e.g. Cash Acknowledgement/Provisional/ Official Receipt, vouchers, etc.);

7. Maintenance of record of daily transactions to be submitted to the principal/main office;

8. Official Receipts showing payments of processing fees;

9. Availability of appropriate logistics (e.g. personnel complement, computer, tables, chairs, cash register, cash vault of box, if applicable, etc);

10. Presence of a minimum number of personnel as determined by the principal/main office to effectively discharge the functions of the satellite office;

11. Turn-over or deposit  of all collections within the day to the    account of the principal/main office or imprest system of handling cash; and

12. Other conditions as may be determined by the Authority.
Section10. Relocation/Transfer of Cooperative Satellite Office Cooperatives may be allowed to relocate /transfer their satellite offices subject to the following conditions:

a. Notice to the Authority of such relocation/transfer of satellite office  at least three (3) months before the actual transfer;

b. Posting of notice of relocation/transfer in a conspicuous place  where the satellite office is located at least three (3) months prior to the scheduled date of relocation/transfer;

c. Payment of processing fee amounting to Php 500.00 for the issuance of new Letter of Authority upon surrender and cancellation of the old Letter of Authority.

Section 11.Satellite Office Inspection

To ensure compliance with the conditions for cooperative satellite office operations, the authorized personnel of the Registering EO shall conduct an annual inspection of the satellite office located within the area where the cooperative’s principal/main office is found.

For cooperative satellite offices established in the area outside where the principal/main office is located, the authorized personnel of the Extension Office having jurisdiction over the area where the satellite office is located shall conduct an annual inspection of said satellite office. Provided, however, that the Registering EO shall be furnished a copy of the inspection report.

Section 12.Voluntary Closure of a Cooperative Satellite Office

Voluntary closure of cooperative satellite office shall be allowed provided that the following procedures are complied with:

1) Submission of a Letter of intention to close a satellite office at least three (3) months prior to the closure;

2) Sending of Notice/Posting of Notice of Closure in a conspicuous place of the satellite office  in order to inform members and/or creditors of the satellite office of such closure at least three (3) months prior to the closure;

3) After compliance with the first two (2) procedures, the Authority shall issue an Order of Closure of the cooperative satellite office to the concerned cooperative. Cancellation of the Letter of Authority shall follow as a matter of course.

Failure to comply with the above procedures shall bar the cooperative from establishing another satellite office anywhere within its area of operation.

Section 13.Sanctions

Any violation of this Guidelines shall be subject to the following:

1. Cancellation of the Letter of Authority without prejudice to the imposition of the applicable administrative sanctions to the cooperative under RA9520;

2. Non-issuance of the Certificate of Compliance (COC).

Section 14. Transitory Provisions

Cooperatives which have already established satellite office/s prior to the effectivity of this Guidelines are hereby given one (1) year from the effectivity hereof to comply with the herein prescribed requirements.

Section 15. Effectivity.

This Circular amends Memorandum Circular No. 2012-17, series of 2012 dated July 19, 2012 and shall take effect fifteen (15) days following the approval of the Board of Administrators and the filing of copy hereof to the Office of Administrative Register (ONAR).

Approved by the CDA Board of Administrators pursuant to Resolution No. 359, s-2016 dated October 18, 2016.

For the Board of Administrators
By:

ORLANDO R. RAVANERA
Chairman


RESOURCE:
pdf  MC 2016-05