Executive summary

Members of Philippine cooperatives have a statutory right to access the cooperative’s books and records—including audited financial statements (AFS), interim financials, ledgers, and related reports—subject to reasonable conditions set by law, the Cooperative Development Authority (CDA), and the cooperative’s bylaws. This article explains the legal basis, scope, limits, and practical steps to request and, if needed, enforce that right, complete with model language and strategy tips.

1) Legal foundation

1.1 Sources of the right

Philippine Cooperative Code of 2008 (Republic Act No. 9520) and its Implementing Rules and Regulations (IRR) require cooperatives to keep books of accounts, prepare annual financial statements, present them to the General Assembly, and submit reports to the CDA.
CDA circulars and memoranda (issued from time to time) detail filing thresholds, audit requirements by asset size or type of cooperative, and standard forms.
Bylaws of each cooperative usually echo these rules, specifying where records are kept, office hours, and who processes member requests (often the Secretary, Records Officer, or Manager).
General principles of cooperative governance: transparency, member economic participation, democratic control—together they support members’ inspection rights.

1.2 Who can inspect

Regular members in good standing have the right to inspect records.
Associate members may have limited or no inspection rights depending on the bylaws.
Proxies or representatives: If allowed by bylaws, a member may authorize a representative (e.g., accountant or lawyer) through a written authorization.

1.3 Records covered

Audited Financial Statements (AFS) for the preceding fiscal year (with auditor’s report and notes).
Interim statements (quarterly or semi-annual, if prepared).
General ledger, journals, subsidiary ledgers (receivables, payables, fixed assets, inventory).
Budget vs. actual reports, management reports, board-approved financial plans, and cash flow statements if formally adopted or presented internally.
Regulatory filings with CDA pertaining to financial condition (e.g., annual reports, compliance certificates).
Minutes of General Assembly and Board meetings where financials were discussed or approved.

Good practice: A cooperative maintains a Records Access Policy that consolidates these sources and sets out procedures and timelines.

2) Scope and limits of access

2.1 Reasonable time, place, and manner

Inspection occurs during office hours at the cooperative’s principal office (or designated records office).
The cooperative may require advance notice, a logbook entry, and staff supervision to protect the integrity of records.
Copies (physical or electronic) should be made available within a reasonable time; the cooperative may charge reasonable reproduction costs.

2.2 Legitimate purpose

While members enjoy a strong transparency right, many bylaws and governance policies require a legitimate purpose tied to membership interests (e.g., understanding patronage refunds, verifying dividend computations, evaluating management performance, examining capital build-up).
Purposes that are vexatious, harassing, purely competitive, or unrelated to membership interests may be refused.

2.3 Privacy and confidentiality

The cooperative must comply with the Data Privacy Act of 2012 when records contain personal data (e.g., employee information, member lists with sensitive identifiers).
Reasonable redactions may be applied to personal data or confidential information (e.g., third-party contracts with non-disclosure clauses) not essential to understanding the financial position.
Members should be allowed to review financial figures and supporting schedules while shielding sensitive personal identifiers.

2.4 Handling originals and chain of custody

Members may inspect originals but generally cannot remove them.
Copies should be certified upon request (e.g., “Certified true copy”), especially for evidence in disputes or filings.
The cooperative should keep an inspection log: date, records accessed, pages copied, supervising staff.

3) The cooperative’s financial reporting duties (why inspection is expected)

Annual GA presentation: Management must present the annual report, including AFS, auditor’s opinion, and reports of the Audit Committee and Board.
External audit: Many cooperatives—depending on asset size, type, or regulatory thresholds—must engage an independent auditor and file AFS with the CDA.
Internal oversight: The Audit Committee (and sometimes a Supervisory or Oversight Committee) reviews financials year-round.
Transparency tools: Bulletin boards, member portals, and periodic newsletters or circulars often carry key financial highlights.

4) How to make an effective request

4.1 Preparatory steps

Check the bylaws and the cooperative’s Records Access Policy for procedural requirements.
Define your purpose (e.g., reconcile patronage refund, verify share capital balances, understand an expense variance).
Identify the specific records and period (e.g., “AFS for FY 2023; GL and AR subledger for Jan–Mar 2024”).
Decide whether you need inspection only or inspection + copies (certified or plain).
Consider whether you’ll be assisted by an accountant or legal counsel (attach an authorization letter if needed).

4.2 Model request letter (adapt as needed)

[Date]

The Secretary
[Name of Cooperative]
[Address]

Subject: Request to Inspect and Obtain Copies of Financial Statements and Supporting Records

Dear [Secretary/Manager]:

I am a regular member in good standing of [Cooperative]. Pursuant to the Cooperative Code, the IRR, CDA regulations, and our Bylaws, I respectfully request to inspect, during reasonable office hours, the following records at our principal office and to obtain copies at reasonable cost:

1) Audited Financial Statements (AFS) for FY [year] with notes and auditor’s report;
2) Management letter (if any) issued by the external auditor for the same period;
3) General ledger and subsidiary ledgers (AR/AP/Fixed Assets) for [date range];
4) Minutes of Board/GA meetings where the [year] AFS were deliberated/approved;
5) Annual report to CDA for [year] and proof of filing.

Purpose: To review the cooperative’s financial condition, validate share capital balances and patronage refund computations, and prepare proposals for the next General Assembly.

Kindly confirm a schedule within [7–10] business days and advise the reproduction cost per page. If digital copies are available, I consent to receiving them electronically.

Thank you.

Sincerely,
[Member’s Name]
[Membership No.]
[Contact Details]

4.3 Service and timelines

Serve the request in writing via the cooperative’s official email, records counter, or registered mail.
Reasonable confirmation window: 5–10 business days is common practice.
If inspection requires extensive collation or redaction, the cooperative should propose a schedule and cost estimate in good faith.

5) Grounds for denial and how to respond

5.1 Common (and sometimes improper) grounds cited

“The records are confidential.”
“Only the Board can see the AFS.”
“You must wait until the next GA.”
“We don’t provide ledgers to members.”

Response: The financial statements are member property in the sense that they report on the cooperative’s collective resources. While privacy and confidentiality must be respected, the cooperative should facilitate access through redaction and supervision rather than blanket refusals.

5.2 Proper limitations

Requests that are unduly burdensome, overbroad (e.g., “every voucher for five years”), or clearly harassing may be narrowed.
Inspection can be scheduled to prevent disruption.
Personal data may be redacted where not necessary to the member’s purpose.

5.3 Narrowing a request (sample language)

“To minimize burden, I’m willing to limit the scope to (a) the AFS, (b) GL trial balance with account-level detail for FY 2023, and (c) the AR and AP aging reports as of year-end.”

6) Internal remedies before escalation

6.1 Engage governance bodies

Audit Committee: Ask it to facilitate access or certify compliance gaps.
Grievance/Conciliation Committee: Many bylaws require internal conciliation/mediation before external action.
Board of Directors: Submit a board-level query or request inclusion in the next board agenda; ask for a written resolution granting access.

6.2 General Assembly leverage

Propose a GA resolution directing management to adopt a Records Access Policy, publish financial highlights, or impose compliance timelines.
Move to include an agenda item on financial transparency or an independent special review.

7) External enforcement options

Choose the least costly and most cooperative path first; escalation should be evidence-driven.

7.1 Cooperative Development Authority (CDA)

Administrative complaint: File a verified complaint for failure to comply with reporting, disclosure, or inspection obligations.
Possible outcomes: Directives to produce records, administrative fines, orders to correct compliance lapses, and monitoring.
Good practice: Attach your written requests, proof of receipt, and any refusal or non-response.

7.2 Mediation/conciliation

If mandated by bylaws or cooperative policy, pursue mediation with a neutral third party (sometimes via CDA-accredited mediators). This can produce binding settlements on access and timelines.

7.3 Court action (as a last resort)

Mandamus: Petition to compel the performance of a ministerial duty (e.g., to allow inspection under law and bylaws).
Injunction: To restrain actions that would defeat your inspection rights (e.g., destruction of records).
Damages/attorney’s fees: Where bad faith or willful refusal is shown.
Courts typically look for: (1) your membership status; (2) a clear legal right to inspect; (3) a demand and refusal or unreasonable delay; and (4) that your request is reasonable and for a legitimate purpose.

8) Practical playbook for members

Paper trail: Always write, date, and keep proof of delivery.
Be specific: Identify periods, documents, and purpose.
Offer accommodations: Accept supervised inspection; agree to redactions of personal data.
Reasonable costs: Ask for a per-page fee and digital options to reduce expenses.
Deadlines: Request confirmation in 5–10 business days; propose two or three inspection dates.
Escalation ladder: Secretary/Manager → Audit Committee → Board → Grievance/Mediation → CDA → Courts.
GA strategy: Secure allies, prepare a short member brief on why transparency helps patronage refunds, credit risk management, and dividend stability.
Professional review: Where amounts are material or complex, bring a CPA (with authorization) to your inspection.

9) Cooperative-side compliance checklist

□ Up-to-date books of account and AFS (with signed auditor’s report where applicable).
□ Records Access Policy (timeframes, costs, redaction standards, supervision).
□ Data Privacy measures (masking IDs, minimum necessary disclosure).
□ Inspection logbook and copy certification process.
□ Annual GA pack (AFS, management letter summary, Audit Committee report).
□ CDA filing tracker and proofs of submission.
□ Training for staff on handling member requests courteously and lawfully.

10) Frequently asked questions

Q: Can the cooperative refuse because a third-party lender considers terms confidential? A: The cooperative may redact pricing formulas or counterparty identifiers, but it should disclose aggregate amounts, maturities, interest expense, and their financial impact since those are part of the financial statements.

Q: Do I need to show a “proper purpose”? A: Best practice is to state one. Reviewing financial condition, verifying share capital/patronage, and preparing GA proposals are all legitimate.

Q: How fast must the cooperative respond? A: The law expects reasonable promptness; many policies fix 5–10 business days for acknowledgment and scheduling. Excessive or unexplained delays may justify escalation.

Q: Can I take photos or request spreadsheets? A: Unless prohibited by policy for security reasons, members may request electronic copies. If spreadsheets exist (e.g., trial balance exports), providing them reduces cost and errors; however, the cooperative may prefer PDFs or certified hard copies for integrity—negotiate a workable format.

Q: What if the AFS show irregularities? A: Elevate to the Audit Committee, propose a special audit or forensic review, and consider CDA reporting if laws or fiduciary duties may have been breached.

11) Model escalation notice (firm but constructive)

[Date]

The Chairperson and Board
[Name of Cooperative]

Re: Follow-up on Request to Inspect Financial Statements

Dear Directors:

On [date], I requested access to the cooperative’s financial statements and supporting records for [period]. As of today, [x] business days have passed without a schedule or with a refusal lacking specific legal grounds.

In the spirit of cooperative values and pursuant to the Cooperative Code, IRR, CDA regulations, and our Bylaws, I respectfully renew my request and ask for an inspection date within five (5) business days. Failing that, I intend to seek relief through our Grievance/Mediation mechanism and, if necessary, with the CDA and other appropriate fora.

I remain open to reasonable supervision, scheduling, and redactions to protect personal data.

Respectfully,
[Member]

12) Key takeaways

Members’ access to financial statements is a core governance right that supports democratic control and economic participation.
Cooperatives should enable access through reasonable procedures, not block it.
When disputes arise, use a graduated approach: clarify, narrow, document, mediate, then escalate to CDA or the courts if necessary.
Both sides benefit from clear policies, predictable timelines, and privacy-aware disclosure.

This article provides general information on Philippine cooperative governance and member rights. For specific cases—especially where large amounts or potential fraud are involved—consult a Philippine lawyer or a CPA familiar with cooperative audits.