THE ROLE AND RESPONSIBILITIES OF SUPERVISORY COMMITTEE

MANAGEMENT COMMITTEE

o   They make decisions regarding the day- to-day management for operations of the society.

o   They arc directly responsible to the share- holders for giving accurate and dependable accounting information in investment decisions without a doubt of its reliability or validity,

o   Management committees are responsible to the general public, government etc on behalf of the shareholders.

o    In other words, they are the responsibilities of the society to the outside world.

SUPERVISORY COMMITTEE/INTERNAL AUDIT 

·         The supervisory committees are the watchdog of the members on the work performance of the management committee.

·                  The committee is answerable to the members.

·                  Their main duty is to ensure that the society is run according to the directions given at the AGM/SGM and in accordance with the co-operative laws and regulations in force. The supervisory committee is not an alternative management body but complimentary to the functions of the management committee.

·                  It serves the same purpose as an internal Audit department in an organization.

WORK PROGRAMME

The supervisory committees meet at least once every quarter to review the activities of the preceding quarter and then report its findings to the management committee. The report covers administrative and financial performance.

   The quarters are:

Jan   -    March        -      1st   Quarter.

April -   June           -      2nd Quarter.

July   - September  -     3rd  Quarter

Oct   -    Dec                -  4th  Quarter

DUTIES

Their duties include checking if the acquisition of assets, recruitment of the staff, record keeping and the general management of the society is done in a manner that would best serve the interest of the members and no loss accrues that could be avoided.

SPECIFIC DUTIES;

o   Periodically evaluate the programme of the society as to their cost effectiveness, Impact on the members’  income, compliance with the AGM/SGM directions and Cooperative Societies Act,  Rules and the By-Laws of  the society.

o   Check the effectiveness of the management committee, e.g. recording and filling of the minutes of AGM/SGM and committee's.

o    Compliance with the cooperative principles.

o    Regularity of committee and general meetings.

o   Check whether cash is regularly verified and bank reconciliations done.

o   Regularly check the performance ratios of the society, e.g. cash ratios, solvency ratios.

o   Check whether members' personal Accounts (shares) arc regularly and accurately updated.

o   Verify whether investments are properly accounted for e.g. Share Certificates are securely kept.

o   Ensure that adequate accounting policies are in place and are working.

o   Check on the presence and the effectiveness of the internal controls in the society.

o   Take note and inform the Management Committee of complaints from the

        members which might be channeled through the committee.

o   Ensure and verify that theeconomic report is prepared and discussed.

o   Check whether the Management Committee is taking any remedial action on any shortcomings revealed.

o   Liaise with the external auditor in areas that the committee would need assistance in carrying out their duties.

o   Ensure that the Management Committee adequately acts on any observations and notes raised by the external auditor.

RELATIONSHIP WITH THE MANAGEMENT COMMITTEE

The supervisory committee and the management committee play a complimentary role in the management of the society and  to ensure that harmony is maintained in between the two committees, the following is to be adhered to: -

o   Work schedules are prepared and presented to the management committee early.

o    Request documents required and working space in time and in writing.

o   Carry out the work expeditiously bearing in mind that the documents are still

o   in use.

o   Prepare written reports detailing the shortfalls noted, the progress made since the last report, and the steps that can be taken to rectify the shortfalls.

o    Always avoid confrontations

o   Never report on unverified information.

o   Report to the management Committee first.

o   Report only those areas not implemented in an AGM/SGM.

o   Do not interfere with the day to day running of the society as this is the

responsibility of the management committee of the society.

LET US PRAY......

OUR FATHER…. 

Considering that service, democracy and brotherhood are the fundamental principles in the co-operative movement;

That our objective is not only to serve the economic but also the social and cultural development as well as the human advancement of the members; 

And that in the co-operative system, the primary co- operatives, the federations and unions, the power of ultimate decision except those reserved by laws, resides in the membership. 

Grant us your Grace, to make integrity and unselfishness the basic standards of conduct; 

To guard against the use of our position in the co-operative for personal advantage; 

To discharge our responsibilities so as to promote and protect the best interest of the co-operative and its members; 

To accept the obligations of attendance, learning and participation relating to the position held; 

To give issues, objective hearings, to vote according to conscience and to support majority rulings;

And to encourage open, democratic procedures in the election of qualified candidates for volunteer service to fellowmen. All these we ask of YOU. 

Amen.

WHAT IS A CO-OPERATIVE AND TYPES OF CO-OPERATIVES IN KENYA

Cooperatives Meaning and Definition

Dictionary Meaning: Run collectively based on economic cooperation

Definition : a commercial enterprise owned and managed by and for the benefit of members

Objectives of Cooperative Society

• Render service rather than making profit
• Mutual help instead of competition
• Self help instead of dependence

Characteristic Features 

• Open membership: The membership of a Co-operative Society is open to all those who have a common interest. A minimum of ten members are required to form a co-operative society. The Co–operative societies Act does not specify the maximum number of members for any co-operative society.
• Voluntary Association: Members join the co-operative society voluntarily, that is, by choice. A member can join the society as and when he likes, continue for as long as he likes, and leave the society at will.
• State control: To protect the interest of members, co-operative societies are placed under state control through registration. While getting registered, a society has to submit details about the members and the business it is to undertake. It has to maintain books of accounts, which are to be audited by government or independent auditors.
• Sources of Finance: In a co-operative society capital is contributed by all the members. However, it can easily raise loans and secure grants from donors/financial institutions after its registration.
• Democratic Management: Co-operative societies are managed on democratic lines. The society is managed by a group known as “Board of Directors”. The members of the board of directors are the elected representatives of the society. Each member has a single vote, irrespective of the number of shares held.
• Service motive: Co-operatives are not formed to maximize profit like other forms of business organization. The main purpose of a Co-operative Society is to provide service to its members. For example, in a Consumer Co-operative Store, goods are sold to its members at a reasonable price by retaining a small margin of profit. It also provides better quality goods to its members and the general public.
• Separate Legal Entity: A Co-operative Society is registered under the Co-operative Societies Act. After registration a society becomes a separate legal entity, with limited liability of its members. Death, insolvency or lunacy of a member does not affect the existence of a society. It can enter into agreements with others and can purchase or sell properties in its own name.
• Distribution of Surplus: Every co-operative society in addition to providing services to its members, also generates some profit while conducting business. Profits are not earned at the cost of its members. Profit generated is distributed to its members on the basis of members’ participation in the business of the society.
• Self-help through mutual cooperation: Co-operative Societies thrive on the principle of mutual help. They are the organizations of financially weaker sections of society. Co-operative Societies convert the weakness of members into strength by adopting the principle of self-help through mutual co-operation. It is only by working jointly on the principle of “Each for all and all for each”, the members can fight exploitation and secure a place in society.

Types :

• Consumers’ Co-operative Society: These societies are formed to protect the interest of general consumers by making consumer goods available at a reasonable price.They buy goods directly from the producers or manufacturers and thereby eliminate the middlemen in the process of distribution.
• Producers’ Co-operative Society: These societies are formed to protect the interest of small producers by making available items of their need for production like raw materials, tools and equipment, machinery, etc.
• Co-operative Marketing Society: These societies are formed by small producers and manufacturers who find it difficult to sell their products individually. The society collects the products from the individual members and takes the responsibility of selling those products in the market.
• Co-operative Credit Society (Saccos): These societies are formed to provide financial support to the members. The society accepts deposits from members and grants them loans at reasonable rates of interest in times of need.
• Housing Co-operative Society: These societies are formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rate of interest to members to construct their own houses.
• Investment Co-operatives: Formed for purposes of investment.
• Multipurpose Co-operatives: They deal with more than one activity. Ministry discourages their registration.