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(NAR) VOL. 22 NO. 2, APRIL - JUNE 2011
[ QUEDANCOR-NDA JOINT CIRCULAR NO. 474 S. 2010, June 24, 2010 ]
COLLECTION SYSTEM GUIDELINES FOR THE DAIRY PROGRAM
In view of the desire of both NDA and QUEDANCOR to ensure and accelerate collections of loan accounts, current and past due, including appropriate interests and charges, the PMC for Dairy has resolved that the NDA can directly assist QUEDANCOR in collecting all loan and interest receivables under the Dairy Program. Thus, this Collections System Guidelines are hereby issued to formalize and effectuate this joint collection effort.
| 2.1 | Hasten and sustain collection of outstanding receivables. |
| 2.2 | Provide borrowers easier means to settle their accounts on time to avoid unnecessary charges and penalties. |
| 3.1 | Republic Act (RA) No. 7393 dated 13 April 1992 |
| 3.2 | QUEDANCOR – NDA Memorandum of Agreement |
| 3.3 | Program Management Committee (PMC) Resolution Nos. 32 issued on 25 June 2009 and 33 issued on 03 December 2009. |
| 4.1 | Area Field Office (AFO) – the field office unit of QUEDANCOR under the new organizational structure approved under the Rationalization Plan. In the meantime that the new structure is not in place, the Regional Office (RO) shall be the QUEDANCOR field office. |
| 4.2 | Collection and Remedial Management Unit (CRMU) – a QUEDANCOR Field Office Unit tasked to conduct collection from the borrowers and facilitate remedial measures in case of in-arrears or defaulting borrowers and the like. |
| 4.3 | Finance and Administrative Services Department (FASD)–Accounting Division – a FASD division tasked to consolidate the Monthly Collection Reports prepared and submitted monthly to the QUEDANCOR Area Filed Office (AFO) Accountant by NDA and CRM Officers. The consolidated report shall servIce as FASD’s basis in the preparation of the Schedule of Remittance for NDA’s share on loan collections. |
| 4.4 | Outstanding Balance – total balance of the account consisting of the principal, interest, surcharges, penalties, additional interest, applicable tax, service fee and other finance charges as of the indicated period. |
| 4.5 | Outstanding Principal – the principal balance of the account as of the indicated date. |
| 4.6 | Program Management Committee (PMC) for Dairy – the policy-making body tasked to act, consider and decide on all matters or issues that may arise from the implementation of the Dairy program. It is composed of senior officers from both QUEDANCOR and NDA. |
| 4.7 | NDA Loan Officer – NDA designated loan officer tasked to assist in the collection of the loan amortizations of the borrower. |
This Circular shall govern the implementation of the joint collection effort to be conducted by QUEDANCOR and NDA under the Dairy Program.
To ensure success of the collection efforts and continuity of repayment on outstanding receivables under the Dairy Program, the following policy statements shall be observed:
- Effective and efficient collection system shall be instituted to ensure full recovery of the dairy fund/s loans released.
- Authority is given to all NDA Loan Officers to collect loan amortization of borrowers under the QUEDANCOR-NDA Dairy Program in all areas where borrowers are located.
- Shared collection responsibility and cooperation between QUEDANCOR and NDA shall be observed at all times.
- Whenever necessary/applicable, all outstanding loans under the QUEDANCOR-NDA Dairy Program may be subjected to QUEDANCOR’s existing remedial management programs, namely: 1) Account Remediation Program (ARP); 2) Loan Modification Program (LMP); and 3) Small Claims Program.
- Any promulgation or issuance of amendments, revisions or exemptions to the Dairy Program Guidelines shall be subject to approval/confirmation of the PMC for Dairy.
7.1 Functions and Responsibilities
7.1.1 NDA Loan Officer a. Secures photocopy of the Dairy Program borrower’s Loan Amortization Schedule and updated Statement of Account from concerned QUEDANCOR AFO/RO preparatory to this program’s collection activities; b. Collects loan amortizations directly from the borrowers and deposits collections in a Trust Fund maintained by NDA for the purpose; c. Prepares Monthly Collection Report (Exhibit A) for collections undertaken supported by certified photocopy of Official Receipts/Deposit Slips and submits copy of the report to NDA Head Office and QUEDANCOR AFO/RO every 3rd day of the following month; d. Prepares Monthly Interest Collection Remittance Report and remits to QUEDANCOR AFO/RO every 10th day of the following month the interest portion (100%) of the loan amortization collected from the borrowers; N.B. QUEDANCOR’s share on the principal (29%) shall remain with the NDA as partial payment by the former to the latter for the contribution to the Dairy Program Fund. e. Conducts regular visitation of the borrowers with outstanding loans and monitors progress of the project; and, f. Coordinates regularly with the concerned QUEDANCOR AFO/RO and NDA Head Office on matters relating to the implementation of the Dairy Program and this guideline. 7.1.2 QUEDANCOR AFO/RO – CRM Officer a. Provides photocopy of Amortization Schedule and up-dated Statement of Account of borrowers under the Dairy Program to designated NDA Loan Officer; b. Collects loan amortizations and regularly updates own copy of the borrower’s individual loan ledgers; c. Prepares Monthly Collection Report (Exhibit A) for collections undertaken and furnishes AFO/RO Accountant a copy of the report every 3rd day of the following month; and d. Coordinates regularly with the concerned NDA Loan Officer and AFO/RO Accountant on matters pertaining to the implementation of the Dairy Program and this guideline. 7.1.3 QUEDANCOR AFO/RO Accountant a. Monitors regular submission of the AFO/RO Cashier’s Collection Report and the CRM Officer’s Monthly Collection Report for collections made under the Dairy Program; b. Verifies/reviews correctness of AFO’s/RO’s Consolidated Monthly Collection Report prepared by the AFO/RO Cashier I; c. Submits AFO’s/RO’s Consolidated Monthly Collection Report to FASD/Fin- Accounting Division every 7th day of the following month; d. Assists in the conduct of quarterly reconciliation with NDA for collections/remittances under the Dairy Program; and, e. Coordinates regularly with the NDA RO, FASD/Fin and CRM Officers on matters pertaining to the implementation of the Dairy Program and this guideline. 7.1.4 QUEDANCOR AFO/RO – Account Analyst a. Updates borrowers QLMS records and individual loan ledgers. 7.1.5 QUEDANCOR AFO/RO – Cashier I a. Prepares AFO’s/RO’s Consolidated Monthly Collection Report including the reports submitted by CRM Officers and submits the same to the AFO/RO Accountant on or before the 5th day of the following month. 7.1.6 NDA Head Office (HO) NDA HO shall furnish QUEDANCOR HO copy of the Monthly Consolidated Collection Report for collections undertaken by its designated NDA Loan Officers supported by photocopies of Official Receipts (OR) and/or deposit slips. 7.1.7 QUEDANCOR Head Office – FASD/Fin The QUEDANCOR HO – FASD/Fin shall prepare a Consolidated Monthly Collection Report for collections undertaken by all AFOs/ROs which will serve as basis in the remittance of NDA’s share on all collections made by QUEDANCOR AFO/RO/CRM Officers and Cashier every 10th day of the following month. Likewise, the FASD/Fin – PMC Member Officer shall update and provide NDA with a copy of the report on Status of the Dairy Program Fund.
8.1 On Principal Loan
Sharing of loan collection on the principal shall be based on the contributions of both NDA (P35,900,000.00) and QUEDANCOR (P15,000,000.00) to the Dairy Program Fund as follows:
NDA - P35,900,000.00 (71%) QUEDANCOR - P15,000,000.00 (29%) Total P50,900,000.00 (100%) ============
QUEDANCOR’S share on the principal (29%) for collection made by NDA Loan Officer shall remain with NDA as partial payment for its contribution to the Dairy Program Fund.
8.2 On Interest and Other Charges
Interest and other charges (surcharges, penalties, etc.) accruing on the loan shall be 100% credited to QUEDANCOR, thus, NDA shall remit to QUEDANCOR AFO/RO the interest and other charges every 10th day of the following month.
For loans collected by QUEDANCOR AFOs/ROs, the FASD/Fin – Accounting Division shall prepare a Consolidated Monthly Collection Report which shall serve as basis in the remittance to NDA of its share on the principal loan amortizations.
Remittance by QUEDANCOR FASD/Fin to NDA HO of its share on the principal amortizations collected shall be every 10th day of the month from approval of this Circular and shall continue until payables with the NDA for its contributions to the Dairy Program Fund are fully settled.
NDA and QUEDANCOR shall undertake reconciliation of collections and remittances on a quarterly basis to regularly monitor collections and remittances made and immediately reconcile any variance based on the collection and remittance reports submitted by both agencies.
The AFO/RO Accountant shall be guided by the following accounting entries to ensure proper recording of collections and remittances by NDA RO:
10.1 Upon submission of the Monthly Collection Report by NDA RO
Receivable from NDA (interest portion)
P3,000.00 Payable to NDA 2,000.00 Trade Receivable P2,000.00 Interest Income 3,000.00
To record payment of borrower X for loan released under the Dairy Program per OR No. xxx dated xxx for P5,000.00 and to recognize partial return of NDA’s investment:
NDA Share (71%) QUEDANCOR Share (29%) *Interest and other charges (QUEDANCOR)
* Note: Interest and other charges shall accrue to QUEDANCOR
10.2 Upon receipt of the remittance on interest collected by NDA RO
Cash P3,000.00 Receivable from NDA P3,000.00
To record remittance on interest collected by NDA per check No. xxx:
10.3 For collection made by QUEDANCOR
Cash/Collecting Officer P7,500.00 Trade Receivable P4,000.00 Interest and other charges 3,500.00
To record payment of borrower X for loan released under the Dairy Program per OR No. xxx.
10.4 To remit the principal portion (71%) of NDA for collection made by QUEDANCOR
Payable to NDA (71% of P4,000.00)
P2,840.00 Cash in Bank P2,840.00
All borrowers with outstanding loans under the Dairy Program shall be informed by the QUEDANCOR AFO/RO and NDA RO about the Collection System Guidelines and NDA Loan Officers shall be properly introduced to the borrowers by way of a letter to ensure smooth implementation of the program.
| 12.1 | QUEDANCOR AFO/RO – Account Analyst shall update the borrower’s individual Loan Ledger and prepare the corresponding up-dated Statement of Account (SOA). |
| 12.2 | The AFO/RO Accountant shall then verify and certify correctness of the SOA and secure copy of the borrower’s Schedule of Loan Amortizations and provide NDA Loan Officer a copy of the same together with the approved SOA. |
| 12.3 | NDA Loan Officers shall then use the SOA and Schedule of Loan Amortizations to collect and monitor payment of the borrowers under the QUEDANCOR-NDA Dairy Program. |
| 12.4 | NDA Loan Officer and QUEDANCOR CRM Officer shall coordinate with each other to determine which area or borrower to collect thus avoiding confusion for both officers and the borrowers. |
| 12.5 | Collection of NDA Loan Officers shall be deposited to a Trust Fund especially maintained by NDA for the purpose while collections by QUEDANCOR CRM Officers shall be deposited to QUEDANCOR’s usual collection account with the bank. |
| 12.6 | Every end of the month, the NDA Loan Officer and QUEDANCOR CRM Officer shall prepare a Monthly Collection Report which will serve as basis in the remittance of each agency’s share in the loan collection as indicated in preceding sections of this circular. |
| 12.7 | At the Head Office level, NDA and QUEDANCOR shall conduct quarterly reconciliation of collections and remittances and updates on the Status of the Dairy Program Fund. |
Effectivity of this Circular shall retroact to 02 May 2010 and shall remain in effect until revoked or cancelled by the PMC for Dairy.
Adopted: 24 June 2010
Approved: Approved: (SGD.) ORKHAN H. USMAN (SGD.) FEDERICO A. ESPIRITU, MNSA NDA – OIC Administrator President and CEO