agrarian reform, rural development, local governance, Philippines

By the end of December 2007, three POs: Rizal Multipurpose Cooperative (RMPC), San Lucas Multipurpose Cooperative (SLMPC), and the San Geronimo Mainuswasgon Agrarian Reform Multipurpose Cooperative (SAGEM MPC) were externally audited for their 2006 and 2007 financial standing. The financial statements of the cooperatives were assessed by the auditor as in compliance with the accepted financial reporting standards.

In the Philippines, audited reports are requirements of the Cooperative Development Agency and the Securities and Exchange Commission as attachments to annual reports. These reports are also the bases of the Bureau of Internal Revenue for determining tax exemption. Moreover, for the POs and the cooperatives, audited reports are the bases for knowing the distribution of interest on share capital and patronage refund of the members and are required for securing donor grants.

There was a time when these cooperatives do not have the capacity to make financial reports and thus could not present an acceptable audit report to government and funding agencies. Where they could, it is usually the cooperatives' Board of Directors who

has the sole responsibility of deciding for the organization, form policies, and create and approve financial reports.

When KAISAHAN began our interventions in Barotac Viejo with fund support from CORDAID, Misereor, and later on from the ADAF of NZAID, efforts were made to enhance the capacity of the cooperatives/people's organizations on organizational strengthening, management, transparency, and accountability. The argument is that in investing in the primary organizations of the basic sectors, they could be able to win for themselves their land cases, secure victories, and sustain the gains. At first, we began with trainings on financial systems, structures and policies, and developing organizational plans. At present, we are already holding barangay-based coaching sessions in order to focus on each organization's issues and provide problem-specific education processes for PO members.

As always, there are at least two ways of making strengthening an organization. It could be through the leaders so they could steer the PO/cooperative through. Or it could be through participatory processes whereby PO leaders and members could be capacitated to strengthen

their organization and generate ownership of the process and of the end product.

In the case of the three audited organizations, the cooperatives have undertaken the process in a good governance - participatory, transparent, and accountable - manner. Surely, this story on the cooperatives' external audit is a celebration of the efforts of ASDP Iloilo stakeholders on PO strengthening and our primacy for good governance.