DUTIES AND POWERS OF THE MANAGEMENT COMMITTEE/BOARD OF DIRECTORS

The Committee of the society subject to any directions from the General Meeting generally direct the affairs of

BOARD OF DIRECTOS

BOARD OF DIRECTOS

the society. Its procedures, powers and duties are prescribed by the Co-operative Societies Act Cap 490, Co-operative Rules and the By-Laws of the society. In particular the management committees or board of directors shall:

a) Observe in all its transactions the Act, the Rules, the by-laws and prudent business practices.

b) Act upon all applications for membership.

c) Make provision for sufficient funds for loans.

d) Ensure that true and accurate records and accounts of the society’s money, properties, capital reserves, liabilities, income and expenditure are kept and maintained;

e) Prepare and develop long-term management plans and budgets for presentation at the General Meeting;

f) Propose to the General Meeting the amount and kind of surety bond, or other security, which shall be given by the member of the committee or employee having custody of or handling funds or property of the society;

g) Determine and recommend to the General Meeting the interest rates on loans, the maximum maturities and terms of payment or amortization of loans from time to time and the maximum amount that may be loaned with or without security to any member;

h) Cause the audited accounts to be displayed in a conspicuous place at its registered office and branches at least two weeks before presentation of accounts to its members at the general meeting;

i) Lay before the General Meeting audited accounts, together with proposals for the disposal of net surplus, if any;

j) Recommend to the General Meeting the dividend rate to be paid on shares, if any, and interest to be paid on deposits;

k) Fill through co–option, vacancies occurring in the committee between General Meetings;

INVESTMENT

INVESTMENT

l) Recommend investments of the society;

m) Authorize the conveyance of properties;

n) Authorize borrowing and lending operations of the society in accordance to the Act and the Rules;

o) Designate a depository or depositories for the funds of the society;

p) Employ and fix the remuneration of the employees in accordance with the terms and conditions of service as approved by the Commissioner;

q) Impose fines as provided for under these by-laws;

r) Approve transfer of shares;

s) Supervise the recovery and collection of loans from members and recommend to the General Meeting the write off of bad debts.

t) Perform or authorize any actions consistent with the Act, the Rules and these by-laws, unless specifically reserved for the General Meeting;

u) Provide adequate budget for education and training of members, the committee and staff; and

v) Perform such other duties as the General meeting may from time to time direct.

THE SUPERVISORY COMMITTEE

1. DEFINITION

Section 2 (a) of the Co-operative Society Act, No. 12 of 1997 (as amended in 2004) has the following simple definition:-

Supervisory Committee

Supervisory Committee

“Supervisory Committee” means an oversight committee elected at a General Meeting.

2. ESTABLISHMENT

The Supervisory Committee is established under Rule 28 of the Co-operative Society Rules (Legal Notice No. 123 of 2004) which states as follows:-

28. (1) Every society shall have a supervisory committee consisting of three members
each elected at a general meeting for a period of three years and one member of the
supervisory committee shall retire annually.
(2) Notwithstanding the provision of sub-rule (1), any member of the supervisory
committee may be removed by a resolution of a general meeting.
(3) The duties of the supervisory committee shall include—
(a) verification of all transactions of the society;
(b) writing periodic reports of its findings to be tabled at management
committee meetings;
(c) submission of its reports to the Commissioner;
(d) presenting its reports to the general meeting.

(4) Notwithstanding the provisions of sub-rule (3), the supervisory committee shall not perform the duties or exercise any of the powers of the Committee of the society.

3. ELECTION 

The election of the Supervisory Committee is conducted in accordance with the Rule 28 and relevant By-laws of the society.

4. QUALITIES OF THE SUPERVISORY COMMITTEE

a) The members of the Supervisory Committee shall meet the same qualifications as those of the members of the Management Committee

b) In addition at least one member of the member of the committee shall have basic bookkeeping, accounting, auditing or financial management knowledge. Where no such person is elected, those elected may be taken for basic accounting training.

5. POSITION OF THE SUPERVISORY COMMITTEE

a) The Committee is elected directly by the members at a General Meeting. It occupies the same position as the Management Committee in the organization structure of the society.

b) The Committee is independent

c) The Committee is not a Sub-Committee of the Management Committee

6. ROLE OF THE SUPERVISORY COMMITTEE

The Supervisory Committee is the Internal Audit Committee of the Society. Its role is complimentary to that of the Management Committee which is mainly to ensure that there is an effective control system in the Society.

The main objective is that of assisting the Management Committee in ensuring that adequate checks and balances are put in place that the principles of transparency and accountability are observed for the good of the Society and its members. There should be no antagonizing between the two committees.

7. DUTIES OF THE SUPERVISORY COMMITTEE

The main duties of the Supervisory Committee are provided for under respective By-laws of each society and include the following:-

  1. Making an investigation into the affairs of the Society at least once every quarter and presenting a written report to the Management Committee and the Commissioner.
  2. Carrying out an Audit of the Society at least once every quarter and presenting a report as above.
  3. From time to time and at least every years cause the Pass Book or Payslips or Statements of accounts of all members to be compared with the Members’ Personal Accounts maintained by the Society.
  4. Make annual reports to the Annual General Meeting with copies to the Management Committee and the Commissioner.
  5. In order to accomplish the main duties above, the Supervisory Committee is required to undertake the following specific tasks among others:-
  • Scrutiny of minutes of all committees and General Meetings.
  • Scrutiny of members’ cheques/loan registers.
  • Verify receipts and disbursement of society funds.
  • Verify the assets of the society against the assets register from time to time.
  • Scrutinize the acquisition and disposal of goods and services and adherence to the procurement and disposal regulations.
  • Verify deductions through the check off system, cash and bank standing order remittances.
  • Confirm cash regularly and reconcile it with the records.
  • Check out bank accounts monthly and their reconciliation.
  • Check delinquent loans among the Committee, staff and members and ensure appropriate action is taken.
  • Verify society investments.
  • Analyze expenses of the society.
  • Check loan applications and note anomalies.
  • Check balance sheets and income and expenditure statements to ensure their accuracy.
  • Ensure the books of the society are kept in accordance with the internationally accepted standards.
  • Make regular review of budgets against actual performance.
  • Attend to member’ complaints.
  • Assist the management committee in seeking to problems facing the society.
  • Generally ensure that the society is operating according to the law and working towards the achievement of the stated goals and objectives.
  • Carry out any other duties as may be prescribed in the Act and the Rules.

8. MEETINGS OF THE SUPERVISORY COMMITTEE

  1. Routine meetings of the Supervisory Committee shall be held as provided for in the By-Laws and approved budget of the society.
  2. The Supervisory Committee should hold at least one quarterly joint meeting with the Management Committee to discuss their reports.
  3. Minutes of all Supervisory Committee meetings should be recorded and maintained as permanent records of the society.
  4. The Internal Auditor of the society may participate in the deliberations of the Supervisory Committee as an ex-official member. Where the society has no internal auditor, the accountant/bookkeeper/manager may participate in the same capacity.
  5. The manager or Management Committee of the society shall at all times make available to the Supervisory Committee all books of account and all other records of the society for inspection.
  6. Joint meetings are normally chaired by the chairman of the Management Committee.

9. ALLOWANCES

The Supervisory Committee should draw sitting and any other allowances as provided for in the budget approved by the General Meeting.

 

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

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.

Duties of the Management and Supervisory Committees

The Management Committee

The Management Committee is the governing body of the society elected from the general membership and consists of nine (9) members. It includes the Chairman, Vice chairman, Treasurer and Secretary all of whom are elected by the Committee from amongst the members of the Committee.

Members of the committee hold office for a period of three years provided that, one-third of the committee members retires every year but are still eligible for re-election.

The Management Committee of the society subject to any directions from the General Meeting generally direct the affairs of the society. Its procedures, powers and duties are as prescribed by the Act, Rules and the By-laws. In particular, it shall:

  • Observe in all its transactions the Act, the Rules, these By-laws and prudent business practices.
  • Act upon all applications for membership.
  • Make provision for sufficient funds for loans to members.
  • Ensure that true and accurate records and accounts of the society’s money, properties, capital reserves, liabilities, income and expenditure are kept and maintained;
  • Prepare and develop long term management plans and budgets for presentation at the General Meeting;
  • Propose to the General Meeting the amount and kind of surety bond, or other security, which shall be given by the member of the committee or employee having custody of or handling funds or property of the society;
  • Determine and recommend to the General Meeting the interest rates on loans, the maximum maturities and terms of payment or amortization of loans from time to time and the maximum amounts that may be loaned with or without security to any member;
  • Cause the audited accounts to be displayed in a conspicuous place at its registered office and branches at least two weeks before presentation of accounts to its members at the general meeting;
  • Lay before the General Meeting audited accounts, together with proposals for the disposal of net surplus, if any;
  • Recommend to the General Meeting the dividend rate to be paid on shares, if any, and interest to be paid on deposits;
  • Fill through co–option, vacancies occurring in the Management Committee between General Meetings;
  • Recommend investments of the society;
  • Authorize the conveyance of properties;
  • Authorize borrowing and lending operations of the society in accordance with the Act and the Rules;
  • Designate a depository or depositories for the funds of the society;
  • Employ and fix the remuneration of the employees in accordance with the terms and conditions of service as approved by the Commissioner;
  • Impose fines as provided for under the By-laws;
  • Approve transfer of shares;
  • Supervise the recovery and collection of loans from members and recommend to the General Meeting the write off of bad debts.
  • Perform or authorize any actions consistent with the Act, the Rules and the By-laws, unless specifically reserved for the General Meeting;
  • Provide adequate budget for education and training of members, the committee and staff; and
  • Perform such other duties as the General Meeting may from time to time direct.

The Supervisory Committee

Co-operative societies  have supervisory committees consisting of three members each elected at the General Meeting for a period of three years and one member of the supervisory committee retiring annually. The supervisory committee verifies all transactions of the co-operative society. The supervisory committee cannot perform any of the duties or exercise any of the powers of the management committee of the society.

The specific duties of the supervisory committee shall be to:

  • confirm cash regularly and reconcile it with the records
  • check out bank accounts monthly and their reconciliation
  • make pass books or members personal accounts audits
  • check delinquent loans among the committee and members and ensure appropriate action is taken
  • verify society investments
  • analyze expenses of the society
  • check loan applications and note any anomaly
  • check balance sheets and income and expenditure statements to ensure their accuracy
  • check whether the books of the society are kept in accordance with the accounting standards
  • make regular checks on budgetary control by the officials
  • attend to and receive members complaints
  • prepare and present reports to the management committee for discussion during joint meetings
  • submit its reports to the commissioner
  • present its report to the annual general meeting
  • co-operate with the management committee in seeking solution to problems facing the society
  • carry out other duties as prescribed in the Rules.
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