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(NAR) VOL. 22 NO. 3, JULY - SEPTEMBER 2011




The government has made its primary commitment to cause the growth and development of the Filipino people through cooperatives. Members act collectively towards the achievement of unified goals of recognizing the sector as one of the important organizations that contribute to economic development through various business undertakings, including but not limited to provisions on financial assistance and capacity building for livelihood projects of its members.

As part of the development agenda, the various government agencies in partnership with the private and public sector implement programs and projects through the provision on grants, aids, subsidies and donations. The cooperatives were tapped as vehicle and partners towards the growth and development of the communities where it operates. Consequently, the government channels its funding assistance to the Cooperative Development Authority (CDA) as the implementing agency for programs / projects in relation to cooperative development.

To facilitate the release of the fund assistance to cooperatives, the CDA adopt these implementing guidelines for the release of financial assistance that will be coursed thru the Agency by legislators and other financing institutions. These guidelines are applicable to the Priority Development Assistance Fund (PDAF) and similar fund assistance.


a.  The 1987 Philippine Constitution, Article II, Section 9 declares the policy of the State to promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living and an improved quality of life for all;
b.  Article 2 of the Philippine Cooperative Code of 2008 (RA 9520), declares the policy of the state to foster the creation and growth of cooperatives as practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development, equity and social justice;
c.  Executive Order No. 95 dated June 8, 1993 designating the Cooperative Development Authority (CDA) as the Lead Agency on cooperative promotion, development, regulation and to coordinate with agencies with cooperative programs and Executive Order No. 96 which provide among others the implementing rules and regulations on cooperative promotion, organization, development  and supervision by local government units;
d.  Republic Act No. 7160, otherwise known as the Local Government Code, envisions the transformation of the local government units into self-reliant communities and active partners in the attainment of national goals.
e.  DBM National Budget Circular No. 529 dated February 21,2011 prescribing the guidelines for the release of funds chargeable against the Priority Development Assistance Fund (PDAF).


a.  Cooperative — refers to an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.
b.  Fund Assistance — refers to the financial assistance given by the government coursed through the CDA by the sponsoring official / legislator and entrusted to cooperatives for the implementation of cooperative project in the form of grants, aids, subsidies and donation.
c.  Livelihood programs and projects — refers to the approved project activity which aim to create employment opportunities through the provision of a package of integrated services, i.e., technical and other assistsance that promote establishment of income-generating activities for cooperatives and/or its members;
f.  Liquidation report — refers to a document showing the summary of disbursements/expenses incurred in connection with the implementation of the project for a given period of time.


The following requirements shall be complied with in order that the coop be considered beneficiary under this program:

1. duly registered under RA 9520;
2.  certified to be in good standing;
3.  with no unliquidated financial assistance with the Authority;
4.  operating for the last three (3) consecutive years.


The fund may be utilized for the following purposes:

a.  Livelihood/Enterprise development related projects — for the purpose of promoting and developing the entrepreneurship capabilities of individual members.
b.  Credit/relending — relending for the purpose of providing additional capital for livelihood projects of the cooperative and members.
c.  Capacity-building — trainings / seminars related to cooperative management and livelihood project undertaking.
d.  Operational Support System Improvement-installation and implementation of improvement in the existing operational systems of the cooperative that include acquisition of necessary facilities.

The proposal shall be evaluated based on its economic viability and acceptability.



The application for financial assistance shall include the following:

1.  Endorsement letter of the sponsoring legislator
2.  Resolution by the Cooperative's Board of Directors requesting for financial assistance from the legislator containing the following information:

a.  Purpose of the financial assistance
b.  Designation of officer to transact business with CDA

3.  Project proposal detailing the type of projects and the components that needs funding assistance and the equity of the concerned cooperatives. Information on the project proposal should include:

a. Project name /title
b. Brief description of the project
c. Project site / location
d. Intended beneficiaries
e. Benefits to be delivered
f. Systems and procedures to implement the project
g. Project cost estimates
h. Financial projections for three (3) years.
i. Work and Financial Plan

4. Certificate of Good Standing issued by the CDA for this purpose with authenticated copies of:

a. Certificate of Registration and;
b. Latest Articles of Cooperation and By Laws;

5. Certificate of the list of incumbent Officers issued by the Cooperative's Secretary attested by the Chairman;

6. Copy of Audited Financial Statement for the past three (3) years preceding the date of project implementation. For cooperatives which has been in operation for less than three (3) years, report of accomplishment or certification by its Chairman or Secretary that it had previously implemented similar projects;

7. Memorandum of Agreement (MOA) between CDA and cooperative beneficiary duly signed and notarized;

8. Cooperative's certification that cooperative has equity equivalent to least 20% of the total project cost, which shall be in the form of labor land for project site, facilities, equipment and the like, to be used in the project;

9. Proof of similar projects undertaken, if any, indicating the source of funds for their implementation

List of projects undertaken
Projects reports
Photographs as evidence of projects undertaken
Certification issued by the funding government organizations / institutions for previous project undertaking that the project has been completed and liquidated;

10. Sworn affidavit of the Cooperative's Secretary that none of its cooperators, organizers, directors or officials is an agent of or related up to the fourth civil degree consiguinity or affinity to the officials of the Authority authorized to process and / or approve the proposal, MOA and the release of funds.
11. Disclosure by the Cooperative of other related business, if any, and extent of ownership therein (if applicable).


1. duly approved schedule of fund release to cooperatives beneficiary.
2. Interim Fund Utilization Report on the previous release certified by the cooperative's accountant, approved by its Chairman and verified by the internal auditor or equivalent official of the CDA showing a summary of expenses and a status report of accomplishment evidence by pictures.
3. List of beneficiaries of previous releases with their signatures signifying their acceptance/acknowledgment of the project/goods/services.


1. Fund utilization report, indicating the summary of expenses and the status report of accomplishment, certified by the accountant approved by the Chairman of the cooperative and verified by the internal auditor or equivalent official of the cooperative
2. Pictures of implemented projects
3. List of equipment procured by the cooperative out of the fund assistance indicating its brief description, date acquired, acquisition cost and final disposition.
4. Warranty for procurement of equipment
5. In case of dissolution of the cooperative beneficiary in addition to the Official Receipt (OR) acknowledging return of unutilized amount, copy of the vouchers paid by the cooperative
6. Liquidation report


a. Upon receipt of Special Allotment Release Order (SARO), the CDA Central Office/Regional Office verifies whether the cooperative is eligible as beneficiary of the fund assistance. If the identified cooperative beneficiary is eligible, the cooperative should be informed to submit the required documentations. Otherwise, the Central Office/ Regional Office will inform the sponsoring legislator to consider changing the beneficiary.
b. The Central Office/Regional Office may conduct validation of the applicant cooperative relative to verification of the information indicated in the project proposal. The report together with the details of the findings and recommendations shall be submitted to the Executive Director/Regional Director.
c. Upon receipt of the application and complete supporting documents from the cooperative beneficiary, the Central Office/ Regional Office shall request the corresponding Notice of Cash Allocation from the Department of Budget and Management (DBM).
d. The CDA shall conduct briefing to the beneficiary prior to the release of the funds to explain:

1. the contents of the MOA in order for the cooperative to be fully aware of their duties and responsibilities relative to the funds including the sanctions for non-compliance on the provisions of the MOA.
2. how to fill up the liquidation and monitoring reports to be submitted to CDA

e. Preparation and execution of Memorandum of Agreement (MOA) between the CDA and the cooperative beneficiary for this purpose
f. Execute Certificate of Undertaking

Prior to the release of the check, the cooperative shall execute Certificate of Undertaking, indicating obligation to liquidate the fund assistance received.

g. Release of check to the cooperative beneficiary.


The release of fund shall be in accordance with the work and financial plan (WFP)as indicated in their project proposal.

In case of staggered fund release or new fund release covered by another MOA no cooperative shall receive additional releases under an interim Fund Utilization Report of . the previous release certified by its Accountant and approved by its Chairman is first complied with, showing a summary of expenses and a status report of accomplishment evidenced by pictures. The validity of this document shall be verified by the internal auditor or equivalent official of the cooperative. (COA Circular No. 2007-001 dated October 25, 2007)


To ensure the proper utilization of funds as well as to measure the project's impact and contribution to the economy, assisted cooperatives shall be required to submit project progress report as indicated in the MOA to CDA Central Office/ Regional Office.

Funded projects/activities shall be monitored based on the submitted projects  proposal submiteed by the CDA personnel assigned in the area. He / she must submit monitoring report on the project implementation. No cooperative shall use the funds for other purposes other than the approved intended project purpose. In case of any violation of the Agreement , the authority shall demand refund of the whole amount of the released funds.

The CDA shall closely coordinate with the staff of the sponsoring legislator for the monitoring of the project.

The project shall be continously monitored until the  project completion or termination.  A terminal report and Certificate of Completion shall be required after the completion of the project activity. The CDA shall issue the corresponding Certificate of Acceptance to the cooperative beneficiary on the completion of the funded project copy furnished the concerned legislator.

Status of fund releases and monitoring reports shall be prepared and submitted by the Regional Office to Central Office on an annual basis, for purposes of updating the grants/aid databank.

In case the fund assitance was used for re-lending purposes, the monitoring ends on the first 100% cycle of fund utilization upon submission of liquidation report, Certificate of Completion and issuance of Certificate of Acceptance by the CDA.


Based on the Certificate of Undertaking issued by the cooperative prior to the release of the funds, the CDA shall notify the concerned cooperative beneficiary to submit liquidations reports otherwise the Authority will demand refund of the total amount of assistance provided to them.

The cooperative beneficiaries shall liquidate the funds as stipulated in the MOA. In case of lending, the liquidation shall be based on the actual cash disbursement which is equivalent to the total fund assistance received by the cooperative.


The cooperative shall not use the fund assistance to any of the following:

a. Money market placement, time deposit or other forms of investment;
b. Cash advance of any official of the cooperative unless related to the implementation of the project;
c. Payment of salaries, honoraria or any form of allowances of the personnel of the cooperative who are not connected with the project;
d. Purchase of supplies, materials equipment and motor vehicles of the government;
e. Acquisition of assets of the cooperatives, unless necessary for the prosecution of the project and specifically stipulated in the MOA.
f. Other than the original purpose stated in the MOA.


The Authority may:

1. Demand the refund of unused funds or savings after project completion as well as disallowed amounts after financial audits;
2. Initiate appropriate actions against the cooperative for material violations of the provisions of the MOA;
3. Reserves the right to initiate civil/criminal actions against any Director, Officer, or employee of the cooperative for any violation of any provision of the MOA.


The CDA shall distribute these guidelines to all Regional Offices for information and dissemination.


All similar guidelines / issuances that are inconsistent with these guidelines are hereby repealed and amended.


This Circular shall take effect fifteen (15) days upon receipt by the Office of National Administrative Register (ONAR).

Approved by the CDA Board of Administrators on ______ per BOA Resolution No. ____ Series of 2011.

For the Board of Administrators:

Date Filed: 01 August 2011

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