National Institute of Co -operative Development – ANNUAL ......06. Brining the efficiency and the quality of co-operative organizations to a higher level. 07. Introducing and carrying

National Institute of Co -operative Development – ANNUAL REPORT

1

2009

Introduction

The Co-operative School of Sri Lanka was restructured as the National Institute of co-operative

Development with the ambition of turning around from the traditional co-operative education system

and presenting to the co-operative movement an education system that consists of modern strategies

and methodologies which would facilitate facing the emerging challenges of globalization.

In order to maintain the independence of the co-operative movement as well as the co-operative

education so as to successfully face globalization the institute was established 01 July 2001 under the

2001 Act 01 of The Establishment of National Institute of Co-operative Development, relieving as

much as possible the obligations to the State.

A Board of Management that consists of representatives of several key ministries and eminent persons

from government and private organisations is responsible for administration, management and control

of the affairs of the institute.

In its primary function the institute endeavors to align with not only local but also international

modern methodologies of education and training so as to upgrade the standard of vocational education

and skills development. The availability of an conducive educational environment, ample space and

facilities are key factors in achieve this goal successfully.

During the year under review many Diploma programs, Certificate courses and subject-related short-

term management development programs were conducted by the institute.


2

2009

The Chairman’s Message

As the 3rd

and the present Chairman of the National Institute of Co-operative Development, I consider

it as a privilege to be able to issue this statement to the Annual Report 2009.

The institute became a Statutory Board on 01 July 2001 under the 2001 Act 01 of The Establishment

of National Institute of Co-operative Development. It is with great pleasure that I reflect upon the

excellent service of the institute during 2009.

The key responsibility of the institute is to develop a more efficient and productive co-operative

movement that is able to overcome the challenges the co-operative movement is facing at present.

With this as the main goal, the institute endeavors to develop knowledge, attitudes and skills in every

field of the co-operative moument.

Initiating a number of courses aimed at achieving the above goal to cater to the co-operative sector in

2009, in my view, is a precursor of the journey of the institute towards success.

The „Samupa Prasadini Award Ceremony‟ can be named as the most special event the institute

organised for the co-operative sector in 2009 and my strong personal feeling is that it rendered and

invaluable service towards the advancement of the sector. This is the very first Performance Award

Competition held in the county‟s history. In addition our institute has carried out a variety of

programs for the purpose of human resource development in the co-operative sector.

I truly appreciate the efforts being made by the Director General and the staff to take his institute

forward in a new direction. At this point in time when there are clearly visible signs of manifestation

of a self-sustainable, independent co-operative movement, I wish with all my heart that this endeavor

will be a resounding success.

P .G. Dissanayake

Chairman

National Institute of Co-operative Development

Polgolla


3

2009

The Message of the Director General

The Co-operative school established in 1943 mainly performed the task of capacity building of the co-

operative movement‟s human resource and with the structural changes adopted under the Act 01 of

2001 the objective was to bring the aims of establishing the co-operative school in to a more

development oriented platform by converting to a Statutory Institute called the National Institute of

Co-operative Development.

The journey of the Institute of Co-operative Development to bring forth a co-operative movement

with a vision and a quality human capital that is rich in values has been full of challenges. However,

the achievements in the face of those challenges show that we have passed some important junctures.

The Institute is looking forward to be even more effective in the coming years by identifying the

needs of the times and the institute as a whole continues on a meticulous plan to build the capacity of

the human capital which is the main resource of the movement.

Gamini Rajaratne

Director General


Polgolla


4

2009

Vision

To achieve in 2015 a co-operative enterprise that is self-sustaining

and independent.

Mission

Uniting with the loyal partners, work force and the co-operators to

facilitate the establishment in Sri Lanka, a co-operative enterprise that

is self sustaining and independent and carrying out innovatively and

creatively the education, training, consultancies, and research and

development towards achieving this goal.


5

2009

Our Five-fold values

Our Five-fold

values

Focusing on the cliental

The co-operative

community is our

cliental. We expect to

regard them all with

respect irrespective of

their status or position

and serve them with

understanding and

equality.

Innovation and Creativity

We have identified the innovation and

creativity as an essential factor in the

development of co-operative enterprise.

Our ambition is to introduce new

programs within the co-operative

philosophy and to launch other new

approaches through such programs that

would bring about the productivity of

the enterprise to a higher level.

Teamwork

Our expectation is to team

up to protect the quality

expected by the client in

every aspect of the

institutional process and

provide a best possible

service to the best of our

ability.

Distribution of a

qualitative service

We confirm and assure

the excellence and high

value of our services.

Valuing the workforce

Bringing the motivation

factor of the workforce to a

higher degree by providing

a suitable working

environment and to

generate a value for their

contribution.


6

2009

The Aims and the Goals of the Institute

1. Effective development of the human capital involved in the co-operative movement of Sri Lanka

01. Organising discussions, workshops, seminars and field visits to for the advancement of

management level professionals of the co-operative organizations

02. Organising discussions, workshops, seminars and field visits to enhance the knowledge,

skills, and attitudes of middle-managers.

03. Organising workshops and training programs to develop knowledge, skills, capabilities

and attitudes of operations level managers.

04. Enhancing knowledge, skills and capabilities of co-operative officers of the State Sector.

05. Using distant education systems.

2. Contributing to bring the efficiency of the co-operative organizations to a higher level.

06. Brining the efficiency and the quality of co-operative organizations to a higher level.

07. Introducing and carrying out consultancies.

08. Holding at least two „business clinics‟ per year according to requests made by the weak

organizations and helping those organizations to overcome those weaknesses.

3. Carry out research and development activities for expansion and revival of the co-operative

movement.

09. Researching in to the instances of successes and failures of the co-operative movement

and based on findings providing guidance for the benefit of the co-operative movement.

10. Producing and obtaining documentaries about the success stories of the co-operative

movement.

11. Contributing to the creation of model co-operative enterprises and empowering and

organizing women within the co-operative concept.

4. Acting as a centre development of co-operatives

12. Creating and maintaining and information database and a website that covers the entire

co-operative sector.

13. Maintaining a fully equipped library that provides knowledge in all the fields related to

the co-operative sector.

14. Setting up a Co-operative Museum

5. Empowering the civil society to establish and expand the co-operative movement.

15. Taking steps to inculcate the co-operative philosophy and practices in the civil society.

16. Launching a educational supplementary and other publications about the co-operative

movement.


7

2009

6. Forming a network with local and international co-operative organizations.

17. Developing a network with co-operative organizations at the apex of the national co-

operative movement.

18. Securing the membership of the international Co-operative movement and reaping the

benefits by expanding the network.

19. Developing a network with other relevant co-operative institutes of the world.

7. Diversifying the services of the National Co-operative Development Institute to provide facilities

for the Sate Sector, Private Sector and other Non-governmental Organisations.

20. Identifying and conducting programs to cater to the needs of the Private Sector.

21. Identifying the products needed by the State Sector and initiating them.

22. Identifying the products needed by the Non-government Sector and initiating them.

8. Increasing the performance of the Institute of Co-operative Development to provide an excellent

service to the co-operative sector.

23. Developing the knowledge, skills and attitudes of the staff

24. Developing the management processors

25. Raising the quality of services provided for other external institutions.

Main Activities of the Institute

a). Acting as a centre for the promotion and coordination of activities related to he co-operative

development.

b). Among other things, making use of modern techniques in providing training on co-operative

development.

c). Promoting research on co-operative development.

d). Facilitating sharing of information among the people involved in activities related to co-operative

development.

e). Functioning as a resource centre for the collection of data pertaining to co-operative development

and dissemination of collected data through publications.

f). Conducting academic training programs on subjects related to co-operative development and

presenting certificates and other awards of excellence to those who follow such programs and

successfully get through the relevant examinations.

g). Taking over and managing the co-operative enterprises which are in need of management skills.

h). Providing professional advice for co-operative enterprises.

i). Setting up model co-operative villages, model co-operative outlets and regional centres.

j). Collaborate with other institutions which accomplish tasks similar those being carried out by the

institute.


8

2009

Board of Management

The Board of Management of the Institute must consist of the following members

(a) Ex - officio Members

i. The person for the time being holding office as Secretary to the Ministry of the Minister

in charge of the subject of Co-operative Development or his nominee;

ii. The Commissioner of Co-operative Development of the Department of Co-operative

Development;

iii. The Chairman of the National Co-operative Council of Sri Lanka;

iv. The Director General of the institute appointed under the section16

(b) Members appointed by the Hon. Minister (a member so appointed is hereiífter referred to as

and “appointed member”)

i. Three persons who have had a wide experience in the field of co-operatives and

experience in management, nominated by the Minister in charge of the subject of Co-

operative Development;

ii. A representative of the Minister of Higher Education, nominated by the Secretary to the

Ministry of the Minister in charge of that subject; and

iii. A representative of the General –Treasury, nominated by the Secretary to the Ministry of

the Minister in charge of the subject of Finance.

The Board of Management is responsible for administration, management and control of the affairs of

the institute.

The Board of Management must also execute the powers bestowed by the Act upon the institute for

the administrative purposes of the institute.

In addition, directing the resources of the institute to achieve the aims and objectives of the institute

while evaluating and approving annual development plans, annual budgets, policy planning,

supervision and scheduled evaluation of the performance of the institute, analysis and evaluation of

quarterly, mid-year and annual financial reports and Auditor General‟s reports and if the

achievements do not match the expected targets, taking the necessary remedial action to reach the

expected targets are other responsibilities of the Board of Management.


9

2009

During the year under review the management and the administration of the Institute was the

responsibility of the Board of Management which included the following members.

1. Chairman - Mr. P. G. Dassanayake, National Institute of Co-operative Development

2. Member - Mr. Gamini Rajarathna, Director General, National Institute of Co-operative

Development (Sri Lanka Administrative Service)

3. Member - Mr. S. Edirisooriya, Additional Secretary, Ministry of Trade, Marketing,

Development, Co-operative and Consumer Services.

4. Member - Mr. A. P. P. Kithsiri, Commissioner of Co-operative Development

5. Member - Mr. M.T.I.V. Amarasekara, Asst. Derector, Dept. of Public Enterprises General

Treasury w.e.f. 27.06.2007.

6. Member - Mr. Bandupala Ranawaka, Chairman, Sri Lanka National Co-operative Council.

7. Member - Mr. M.I.M.Rafeek, Economist, Dept. of Agriculture

8. Member - Mr. D.D. Nandasiri, Education Director, Ministry of Education.

9. Member - Mr. W.M.W. Abeyratna Bandara, Working Director, Gem & Jewelery Education &

Research Institute

06 Board of Management meeting were held during the rexpective year.


10

2009

Board of Study

The Board of Studies of the Institute shall consist of the following members appointed by the Board

of Management.

a) The Director-General of the Institute who shall be the Chairman of the Board of Studies;

b) A representative of the academic staff of any University nominated by the University Grants

Commission established by the Universities Act, No. 16 of 1978;

c) The Commissioner-General of Examinations or his representative;

d) A representative nominated by the Commissioners of Co-operative Development; and

e) A person employed in the Co-operative sector or private sector, who in the opinion of the

Minister has wide wxperience in Management and Training.

The Board of Management has appointed a Board of Studies for the execution of the

undermentioned activities and functions.

1. Mr. Gamini Rajaratne - Chairman,

Director General


2. Professor Sudantha Ranasinghe - Member, Head of the Division Academy of

Human Socio Open University, Nawala

Nugegoda.

3. Mr. W.M. Ananda - Member, Commissioner of Co-operative Development.

(Central Province) Ehalapola Kumarihamy Mawathe,

Bogambara, Kandy.

4. Mr. Anura Edirisinghe - Member, Commissioner General of Examinations,

Sri Lanka, Dept. of Examination

Palawatha, Battaramulla.

5. Dr.P.H.D. Aluvihare - Member, Senior Lectres, Sri Lanka Open University

Center Kandy Division Polgolla

6. Mrs. M.R. Ranjani Perera - Secretary,

Registrar


Functions of the Board of Studies

a) Formulate programmes for training & research at the Institute.

b) Develop curricula and materials for courses conducted by the Institute.

c) Formulate and approve examination syllabuses, supervise examinations conducted by

the institute and prepare evaluation schemes reating to educational and training

programmes of the Institute;


11

2009

d) Issue the results of examinations conducted by the institute subject to the approval by

the Board of Management; and

e) Prescribe conditions for awarding scholarships, badges and other awards.

During the year under review two Study Board meetings have been held on 01.02.2009 and

27.11.2009 to release the results of examinations of which details are as given below

a) The Study Board meeting held on the 01.02.2009

Courses

Number

sat for the

exam

Pass Referred Fail

1.Higher Diploma in Banking Management (2007) 32 21 08 03

2. Higher Diploma in Accounting (2007) 20 13 07 -

3. Repeat exam

3.1 Higher Diploma in Human Resource Management

(2007)

3.2 Higher Diploma in Auditing(2000)

03

01

02

01

01

-

-

-

Total 56 37 16 03

b) Study Board meeting Held on 27.11.2009

Courses

Number

sat for

the exam

Pass Referred Fail

Number

lett/

postpone

1. Higher Diploma in Social Development

(2007/2008) 16 06 - 01 09

2. Diploma in Information

Technology(2008/2009) 22 17 03 - 02

3. Diploma in Visual Art and Graphic Design

(2007/2008) 11 07 - 03 01

4. Repeat exam Higher Diploma in Social

Development (2006/2007) 01 01 - - -

Total 50 31 03 04 12


12

2009

Staff

There are 59 personnel in the authorized carder for the institute. As at 31 December 2009 the number

of employees were 40 and there were 19 vacancies. The preliminary steps are being taken at present

to fill these vacancies.

Information about the number of post approved and the number of employees under

each category as at 31.12.2009

No Post Number

of Poste

Officials

present Vacancies

1. Director General 01 01 -

2. Registrar 01 01 -

3. Director - Academic and Development 01 - 01

4. Lecturer 06 05 01

5. Librarian 01 01 -

6. Senior Finance Manager 01 01 -

7. Senior Press Manager 01 - 01

8. Hostel Manager 01 01 -

9. Assistant Registrar 01 - 01

10. Extension Officer 01 - 01

11. Computer Programmer 01 01 -

12. Assistant Lecturer 06 03 03

13. Assistant Hostel Manager 01 01 -

14. Assistant Librarian 01 01 -

15. Management Service Assistant (Graduate) 12 08 04

16. Computer Instructor 03 01 02

17. Computer Word Processor 01 01 -

18. Management Service Assistant 05 02 03

19. Offiset Machine Operator 01 01 -

20. Audio Visual Machine Operator 01 01 -

21. Circuit Bungalow Keeper 01 01 -

22. Driver 04 04 -

23. Service Assistant 07 05 02

Totel 59 40 19


13

2009

Report on Financial Progress

The revenue, expenditure, treasury grants of the National Institute Co-operative Development over the

past Thred years can be summarized as follows.

Income 2007 – 2009

Description 2007 2008 2009

1. Course fees 7,457,997 5,999,038 5,594,102

2. Fees for hostel, lecture halls and

circuit bungalow 3,957,200 6,390,476 6,130,260

3. Service charges 793,779 1,730,750 1,158,914

4. Commissions on meals 610,177 1,284,315 972,492

5. Printing and publication charges 84,052 155,285 387,932

6. Miscellaneous income 1,507,334 1,692,359 1,607,621

Total 14,410,539 17,252,223 15,851,319

Expenditure 2007 – 2009


1. Salaries and Wages 16,365,336 17,535,359 18,445,338

2. Transport costs 617,452 542,174 623,357

3. Supplies and Services 3,843,495 3,775,773 2,896,742

4. Maintenance Costs 1,452,350 1,838,114 1,686,323

5. Contracted Services 6,094,609 8,130,603 8,969,645

6. Other 708,115 622,995 1,513,243

Total Expenditure 29,081,357 32,445,018 34,134,648

Grants from the Treasury 2007 – 2009


Capital grants 37,160,000 19,500,000 49,400,000

Recurrent grants 13,135,738 19,680,000 21,470,211


14

2009

Information About Academic Activities

Progress of the courses organized by the Institute 2007 – 2009

Course

2007 2008 2009

No. of

courses

No. of

participants

No. of

courses

No. of

participants

No. of

courses

No. of

participants

Diploma 8 142 7 124 2 55

Certificate 4 90 3 103 4 124

Short-term 51 1756 36 1051 37 1331

Total 63 1988 46 1278 43 1510

In comparison to the previous year, during the year under review there is a relative decline in the

number of diploma and certificate courses organized by the institute while there is an increase in the

number of short-term management development programs. The main influencing factor for this trend

was programs being developed according to the identified needs of the co-operative movement.

Courses designed to cater for the external institutions 2007 – 2009

Year 2007 2008 2009

Number of courses conducted 377 368 329

Total Participants 20925 21439 16715

The institute took necessary steps to satisfy the external parties by upgrading the physical resources of

the institute and administrative amendments. As a result it was possible to achieve a significant

increase in the number of organizations that sought training facilities of our institute.

1. Human Resource Development

The top priority of the institute is the development of the human resource of the co-operative

movement. A number of programs were initiated during the year under review to achieve this

objective.

1.1 Training of the officers of the Department of Co-operative Development

a). Higher Diploma in Co-operative Development

Sixteen co-operative promotion and investigation officers who were recruited to the Development of

Co-operative development of the North Central Province were selected for the Higher Diploma in Co-

operative Development in 2008 and their program was completed in 2009. Nine of the selected

candidates completed the program successfully.


15

2009

Name of the course Participation

in 2007

Participation

in 2007

Participation

in 2007

01. Higher Diploma in Co-operative Development 41 09 -

The number of higher diplomas held for the co-operative development officers during the 2005-2009

period and the participation in each year is summarized in the table below:

Year Number of

Programs

Number of

participants

2005 2 80

2006 1 32

2007 1 41

2008 1 9

2009 - -

b). Certificate Course in Co-operative Development

This is a training program conducted to make the appointments of the co-operative development

officers permanent. During the year under review 48 Co-operative Development officers who were

recruited in 2007 to the Co-operative Development Department of the Western Province were trained

under this course.

In addition in September 2009 again 47 co-operative inspectors were admitted to the institute for

training for the duration of one year. Details are given below.

The number of certificate courses held during the 2007-2009 period and the participation in each year

is summarized in the table below:

Year

Description

Number of

courses

Number of

participants

2007 1 41

2008 - -

2009 2 95


16

2009

Course Conducted Date of

commencement

Date completed /

Date scheduled for

completion

Number of

participants

1. Certificate Program in Co-operative

Development (Western Province) 2009.01.05 2009.07.17 48

2. Certificate Program in Co-operative

Development (Central and Eastern

Provinces)

2009.09.07 2010.09.30 47

Total 95

1.2 Diploma Courses in Co-operatives

Five Diploma Courses were held during the year under review. Four programs commenced in 2008

and completed in 2009 and the other program commenced in 2009. The details are given below:


commencement

Date completed /

Date scheduled for

completion

Number of

participants

1. Diploma in Auditing 2008/2009 2008.05.26 2009.06.26 19

2. Diploma in Banking Management

2008/2009 2008.08.11 2009.08.11 24

3. Diploma in Business Management

2008/2009 2008.10.20 2009.10.20 09

4. Diploma in Human Resource

Management 2008/2009 2008.10.28 2009.10.28 17

5. Diploma in Social Development

2009/2010 2009.01.19 2010.01.19 21

Total 90

A summary of the number of Diploma Courses held during 2005-2009 and the participation given

below:

Year

Description

Number of

courses

Number of

participants

2005 5 195

2006 4 75

2007 4 85

2008 5 93

2009 1 21


17

2009

1.3 Certificate Courses

Certificate courses can be described as foundation courses that are held for the skills development of

the operations level staff of the co-operative societies. During the year under review 01 certificate

course was held and 22 trainees participated.

1. Certificate Course in Banking Management 2009/2010

A summary of the number of diploma programs held during 2005-2009 and the participation given

below:

Year

Description

Number of

courses

Number of

participants

2005 3 63

2006 3 32

2007 2 26

2008 1 27

2009 1 22

1.4 Subject related short-term management training programs

The institute annually organizes several short-term management skills development programs

targeting leaders of Co-operative Societies, employees and officials attached to Departments Co-

operative Development and leaders of the co-operative sector.

Among these there are programs organized by the institute on its own as well as those that are

organized based on requests and needs of various co-operative organizations. The table below shows

such programs held during the year under review.

Year

Description

Number of

courses

Number of

participants

2005 11 419

2006 9 340

2007 53 1756

2008 36 1051

2009 37 1331


18

2009

The Short-term Management Courses Organised in 2009


commencement

Date

completed /

Date

scheduled for

completion

Number of

participants

1' Training Program for the Co-operative Board of Directors

2009.08.09 2009.08.30 39

2' Training Mahaweli Officers for the auditing of Farmer Organisations

2009.03.26 2009.03.27 25

3'Skills Development Workshop for the Reagional Managers

2009.02.20 2009.02.21 42

4' Leadership and Accounting Workshop 2009.02.24 2009.02.26 30

5' Training Program on Office Management and Accounting

2009.03.21 2009.06.27 26

6' Training of Trainers 2009.06.20 2009.06.24 32

7' Training Workshop for the Director Board 2009.07.18 2009.07.19 45

8'Computer Training Program (for the Department of Probation and Child Care Services)

2009.07.28 2009.10.28 32

9' The Duties of a Representative of the Genral assembly (Co-operative Society, Negambo)

2009.07.18 2009.07.19 21

10' Training Program on Decision Making 2009.08.21 2009.08.22 22

11' Challenges Faced by the ‘Rural Banks’ of Sri Lanka

2009.08.21 2009.08.21 40

12' The Preliminary Accounting Training Progam for the pensioners of the Kandy District

2009.09.05 2009.09.05 110

13' Using cost and Management Accouning Techniques in Decision Making.

2009.10.03 2009.10.06 33

14' Skills Development for Auditors 2009.09.10 20

15' Development of Co-operative Societies and New Trends (Borelapanathara Co-operative Society Ltd.)

2009.09.20 60

16' Strategic Marketing Management (Western Co-operative Development Department)

2009.12.16 26

17' Training on human ecsaces Assessment 2009.12.09 30

18' Course on Information Technology (Department of Animal Production and Health, Central Province)

2009.01.23 2009.06.19 20

Total 653


19

2009

Courses conducted free of charge or for a concessionary fee for the benefit

of the co-operative sector.

During the year under review 19 short-term management training programs were conducted with the

aim of improving the management skills of the staff of organizations in the co-operative sector. The

required funds for these were obtained from the Co-operative Fund of the People‟s Bank and

Consolidated Fund of the Government. The table below gives a description of such programs held in

2009.


commencement

Date completed

/ Date

scheduled for

completion

Number of

participants

1' The new rules for the appraisal of co-operative examinations.

2009.06.01 2009.06.02 59

2' The new rules in for the appraisal of co-operative examinations.

2009.06.12 2009.06.13 57

3' Updating accounting procedures and auditing techniques.

2009.07.07 2009.07.08 30

4' Training of the board of directors of rural banks. 2009.09.10 2009.10.12 22

5' Contribution of women in Co-operative Development. 2009.10.10 2009.10.11 28

6' Developing skills of members of Co-operative Boards of Directors.

2009.10.28 2009.10.29 20

7' Good governance for co-operative societies. 2009.11.13 2009.11.14 47

8' Skills development for members of the Boards of Directors of co-operatives for increased productivity.

2009.11.23 2009.11.24 25

9' Management Studies 2009.12.24 2009.12.29 59

10' Training for Managers of rural banking services. 2009.12.20 2009.12.21 38

11' Development of entrepreneurial skills of members of Boards of Directors for increased productivity.

2009.12.14 2009.12.15 14

12' The workshop for members of the commission on grievances of co-operative employees.

2009.11.20 2009.11.21 32

13' Training of staffs for the benefit of the co-operative societies of the eastern province.

2009.11.17 2009.11.18 33

14' Training of staffs for the benefit of the co-operative societies of the Eastern Province.

2009.12.02 2009.12.21 33

15' Training of staffs for the benefit of the co-operative societies of the eastern province.

2009.12.07 2009.12.08 33

16' Training for the employees of Ampara co-operative society Pvt. Ltd.

2009.12.19 2009.12.20 40

17' Development of marketing skills of Regional Managers of MPCS.

2009.12.12 2009.12.13 32

18' Development of marketing skills of branch Managers of MPCS.

2009.12.12 2009.12.13 38

19' Workshop on preliminary aspects of project management and project evaluation.

2009.12.19 2009.12.20 38

Total 678


20

2009

Other Diploma’s and Certificate Courses

These Diplomas and Certificate courses were launched to provide computer literacy, knowledge of

information technology and proficiency in English for the school leavers and government servants.

1. Diploma Course in Information Technology

This is a six months full-time Diploma in Information Technology that was designed to improve the

knowledge of information technology of school leavers who are expecting employment. One program

was conducted during the year under review and the program that was started in 2008 was completed

this year. The details are given in the table below:

Program Date of

Commencement

Date of

completion/Scheduled

for completion

Number of

participants

1. Diploma in Computer Technology

2008/2009 2008.10.01 2009.05.15 20

2. Diploma in Computer Technology

2009/2010 2009.09.15 2010.03.15 34

Total 54

2. Certificate Course in English

This course that was designed with the aim of increasing the proficiency of English language of

school leavers was started with 30 students and was successfully completed by 07 of them.


21

2009

Special Activities initiated in 2009

Organizing a productivity competition to upgrade efficiency of the co-operative organizations

Under “Mahinda Chinthanaya Vision for the Future” it became essential to obtain the contribution of

the co-operative movement to provide the customers a more efficient service under trade and

commerce which are essentially vital factors in the national economy. As an approach towards this

objective, in 2007 a program for the promotion of efficiency was introduced for the first time in Sri

Lanka to bring performance of the co-operative organizations to a higher level. This brought the

attention of the entire co-operative movement on how to reshape the co-operative to create

performance targets for its members and through the competition they maintained their performance

to achieve those targets. The presenting of awards to co-operatives that won was presided by His

Excellency the President. It has been decided to hold this competition every two years and the

2009/2010 competition is now underway with the collaboration of Ministry of Internal Trade and Co-

operative Development Departments of all the provinces and co-operatives.

One of the goals of the „Mahinda Chinthanaya‟ program is to re-strengthen the co-operative

movement to provide goods to the consumer at just, fair and reasonable price and plans are underway

to establish within the institute‟s premises, a super-market as a model for the Cope-City sales outlets

that are operating island wide to achieve this objective. It is expected that this will help achieve the

following aims:


22

2009

I. To conduct training programs which would improve the knowledge, skill and attitude of the staff

of the 300 Co-op City outlets and over 1,000 Mini Co-op City outlets established island-wide, to

equip them to face the challenges of market competition.

II. Providing goods of high quality for the consumers at a reasonable price.

III. To function as a centre for research and development on a super-market concept exclusive to the

co-operative sector.

Engage in research activities for the expansion and revival of the co-operative movement.

The Research and Development Unit that was needed for the future progress of the co-

operative movement was established in 2009 and the Unit carried out the following activities:

I. Launch training programs after a study conducted parallel to the “Nagenahira Navodaya”

(Awakening East) program, on how to resurrect the regressed co-operative movement in that

region.

Eastein Province Navodaya Program

II. In order to bring about a new lease of life to the estate sector, studies were carried out with the

aim of upgrading the quality of the co-operatives of estate-residents and based on the findings a

guiding-manual was printed for training of working committee members of the estate co-

operatives.

Promotion of International Relations


23

2009

III. A initial steps have been taken to publish a bi-annual magazine which would contain articles that

explore various facets of the co-operative movement which would help those involved in the

sector to upgrade their knowledge.

IV. Carrying out consultancies for the uplifting of low-performing co-operatives.

Developing a network among the national and international co-operative organizations.

It has been identified as a main goal in the „Mahinda Chinthanaya Vision for the Future‟ that Sri

Lanka should be made a globally important economic hub and the country should develop and

strengthen its international relations. As an application of this vision we have worked to build a

network with the international co-operative organizations particularly to exchange knowledge and

skills which would nurture the Sri Lankan co-operative movement.

In this several programs are now underway with Co-operative College of Malaysia and the Vaikunth

Mehta National Institute of Co-operative Management of India.

New recruitments to the Staff

The lack of staff to carryout the functions of the institute systematically and eficiently was

rectified in 2009 by recruiting personnel as given below:

Post/Position Number recruited

1. Lecturers 01

2. Computer Programmer 01

3. Registrar on contract basis 01

Total 03


24

2009

The sections which contribute to carryout the activities of the institute

successfully and their activities and available facilities

Hostels Division

The main function of the hostel division is to provide accommodation facilities according to the needs

of all those who come for training.

The hostel division consists of seven hostels including 5 two story, and one 3 story buildings that can

provide accommodation facilities for 230 people at a time.

Common Hostels Luxury Rooms with AC

Hostels Rooms Facilities for Hostelers

1' D Hostels 20 40

2' E Hostels 20 40

3' F Hostels 20 40

4' G Hostels 20 40

5' H Hostels 5 18

6' A. Rathnayaka Hostels ^A/C& 14 26

7' New Rathnayaka Hostels ^A/C& 22 26

Total 121 230

Canteens controlled by the hostels division cater food buffet style for both national and international

hostellers as it is required and at the same time cater for 100-300 trainees who come daily for training.

Library Division

Generally the readership of the library is lecturers, trainees and other staff.

There are 20, 545 books in the collection and in 2009, 248 new books were accessed. The latest

acquisition consists of publications on Co-operative subject and Management, Accounting, Sociology,

Computer and other related subjects.


25

2009

The Examinations Division

This division holds all the examinations under a structured procedure of examinations for all the

courses such as the certificate course for co-operative inspectors, diploma program and higher

diploma programs for co-operative professionals and certificate courses. The releasing of results for

all the examinations are done with the approval of the Board of Study.

Audio-Visual Unit

This unit provides the audio-visual equipment needed for training programs. Maintenance of overhead

projectors provided for the lecture halls, supplying the transparencies for those projectors are among

the services provided by this unit. In addition the valuable video film projector facilitates the

displaying video films on a wide screen. This facility has become a very important feature of the

computer courses as it helps to project what is displayed on a computer screen on the wide screen and

this helps all the participants in the class to view the lesson clearly.

Academic and Training Section

The main objective of the institute is to provide education and training pertaining to the co-operative

sector. To fulfill this aspiration the institute‟s academic and development division consists of several

sub-departments as shown below:

1. Human Resource Development Unit

2. Research and Development Unit

3. Financial Management and Development Unit

4. Business Management and Development Unit

5. Consultancy Services Unit

6. Promotion of Productivity and Quality Unit

7. Co-operative Development Unit

Each of the above section functions under a lecturer and there are 10 both male and female lecturers

and apart from this there is an affiliated pool of experts on various subjects. The institute has made an

effort to increase the quality of the courses conducted by the institute by obtaining the services of the

in-house lecturers as well as external resource-persons.

The institute possesses over 07 lecturs halls equipped with latest audio-visual facilities and with a

total seating capacity of 990. The details are given below:


26

2009

No. Halls Seating

Capacity

1. Vincent Subasinge 600

2. Rathnayake 55

3. Rochdale 100

4. New Rochdale 80

5. Hall B 100

6. Hall C1 35

7. Hall C2 20

Total 990

The award of diplomas and certificates for the trainees who successfully completed the course

conducted by the institute in 2007/2008 was held on 24.05.2009 and the award ceremony was

presided over by the Hon. Minister Bandual Gunawardene who holds the portfolio of co-operatives.

At this occasion 165 received certificates as diploma holders and 82 received certificates as certificate

holders.

Printing Division

The institute is processes a fully equipped medium-level printing unit that prints all the study material,

tutorial needed for the courses as well as other books, magazines and printing orders received from

other organizations.

Caption: The printing press

Physical Resources and Physical Resources Development

The National Institute of Co-operative Development has taken steps to develop the physical resources

of the institute which is essential if the institute is to become a human resource development and

training institute of national and international standing.


27

2009

The institute‟s existing resources include 8 lecture halls and classes including air-conditioned halls, 07

hostels to provide accommodation for trainees, a computer lab equipped with 80 computers. During

the year under review the physical resources of the institute were developed as follows.

The institute received as 49.4 million rupees as capital grants and it was utilized as follows for

physical resource development:

Description

The funds

allocated for the

year 2009

Expenditure as

at 31.12.2009,

Rs.

1. Work on the 2nd

phase of the multipurpose building 12,500,000 9,242,800

2. Balance construction work of the auditorium 26,400,000 26,400,000

3. Purchase of furniture and equipment 8,100,000 1,000,000

4. Wiring and Supply of electricity to the multi purpose

building 2,400,000 2,272,795

Total 49,400,000 38,915,595

Auditorium Multipurpose Building

The construction of the multipurpose building that commenced in 2000 was interrupted due to lack of

funds. In 2007 the work recommenced when funds for the completion of the building were received

and it was possible to complete the construction in May 2009. The total cost of construction amounted

to a sum of 28.6 million rupees. The building consists of 4 stories and the ground floor will be used

for the model co-operative supermarket and the remaining 4 floors will be used to 4 computer labs

and 4 lecture halls. Also, for the convenience of our clients, space is proposed to be provided for a

customer service outlet of the People‟s Bank.

Apart from this, in December 2009 the recommencing of construction work of the auditorium

which began in 2001 and was interrupted, was handed over to the Central Engineering Consultancy

Bureau for Engineering (CECB) Works for an amount of 134.5 million.

Gamini Rajarathna

Director General


28

2009

BALANCE SHEET AS AT 31st DECEMBER 2009

AS AT AS AT

31.12.2008 31.12.2009

NOTE Rs. Rs.

ASSETS

NON CURRENT ASSETS

Property, Plant & Equipment

2 385,710,391 386,798,385

Long Term Debts, Invest, & Deposits

3 332,500 645,000

386,042,891 387,443,385

Differed expenditure on Transformers

- 3,397,818

Less : Written off differed expenditure against income

- (35,938)

Balance differed expenditure on Transformer

- 3,361,880

CURRENT ASSETS

Short Term Investment 4 2,500,000 -

Debtors Receivables & Deposits 5 11,541,881 39,299,967

Stock 6 158,132 462,434

Cash at Bank 7 4,946,554 16,531,472

19,146,567 56,293,873

TOTAL ASSETS

405,189,458 447,099,138

EQUITY & LIABILITIES

CAPITAL & RESERVES

Capital 8 233,254,215 233,254,215

Accumulated Profit/(Loss) 9 (59,274,351) (63,793,304)

173,979,864 169,460,911

RESERVES

Capital Grant from Treasury 10 212,278,075 261,678,075

Capital Grant from Ministry 11 4,491,392 3, 941,392

216,769,468 265,619,468

NON CURRENT LIABILITIES

Provision for Gratiuty

811,749 1,205,968

Retention Money

4,516,474 4,437,786

5,328,222 5,643,753

CURRENT LIABILITIES

Creditors & Accrued Expences 12 9,111,904 6,375,007

Bank Over Draft

- -

9,111,904 6,375,007

TOTAL EQUITY & LIABILITIES

405,189,458 447,099,138

INCOME & EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31st DECEMBER 2008


29

2009

ACTUAL ACTUAL

NOTE 2008 2009

Revenue

Rs Rs

Grant for Recurrent Expences 13

19,680,000 21,470,211

Other Income 14

17,252,223 15,851,319

36,932,223 37,321,530

LESS : EXPENDITURE

01. PERSONNEL EMOLUMENTS 15 17,535,359 18,445,338

02. TRAVELLING 16 542,174 623,357

03. SUPPLIES & REQUISITIES 17 3,775,773 2,896,742

04. MAINTENANCE 18 1,838,114 1,686,323

05. CONTRACTUAL SERVICES 19 8,130,603 8,969,645

06. OTHERS 20 622,995 1,513,243

07. DEPRECIATION

8,631,586 9,323,575

08. Written off of differed expenditure on Transformer

35,938

41,076,603

43,494,163

Surplus or (Deficit) over the income

before extraordinary items

(4,144,380) (6,172,633)

Extraordinary items (Net profit or Loss) 21 - -

Surplus or (Deficit) over income before tax

(4,144,380) (6,172,633)

Less: Provision for taxation

- -

Net Surplus/(Deficit) for the period

(4,144,380) (6,172,633)


30

2009

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER, 2009

Excss of Expenditure over income before taxation (6,172,633)

Adjustments for -

Interest paid 1,653,680

Prior year adjustment (108,572)

Interest income 9,323,575

Depreciation 35,938

Written off on Deffered expenditure 66,882

Retention on repair of building (357,143)

Profit on sale of Fixed Assets 210,857

Provision for Bad debtors 465,251

Provision for gratiuty (71,032)

Gratuity Payment 11,219,436

Operating Profit/(loss) before working capital changes 5,046,803

Changes in working capital

Decrease/(Increase) in debtors, Receivables & Deposit (26,943,812)

(Decrease)/ Increase in cred: & accrued expences (2,736,897)

Decrease/(Increase) in stock (304,302) (29,985,011)

Net cash flows from operating activities

Cash flows from investing activities

Retention money paid (538,425)

Investment in property, plant & equipment (4,356,172)

Investment in capital work – in – progress (7,893,280)

Deffered expenditure on Transformer (1,717,080)

Long term investment, debtors, & Deposits (312,500)

Sale proceeds on Fixed Assets 357,143

Capital grant from Ministry -

(14,460,314)

Cash flow from financinq activities

Capital grant Received from treasury 49,400,000

Payment of staff Loan (1,300,000)

Recovery of Staff Loan 275,000

Fixed Deposit withdrawals 2,500,000

Interest Received 108,440 50,983,440

Net Increase in cash flows within the year 11,584,918

Cash & cash equivalents at the beginning of the period 4,946,554

Cash & cash equivalents at the end of the period 16,531,472


31

2009

ACTUAL ACTUAL

NOTE : 03

2008 2009

LONG TERM INVEST, DEBTORS, DEPOSITS

3201 Long term Investment

- -

3203 Deposit with Electricity

332,500 645,000

332,500 645,000

NOTE : 04

SHORT TERM INVESTMENT

3401 Short term Investment

2,500,000 -

2,500,000 -

NOTE : 05

DEBTORS RECEIVABLES & DEPOSITS

3501-3512 Course fee Recivable (Schedule : 4A)

1,723,495 1,390, 597

3504 Receivable on Programme Fee-Out Side

1,685,299 1,547,886

3513 Receivable on Printing Service

118,304 163,926

4012 Food supply Control A/C

- -

Other Deposit – (Shedule 4B)

5,000 5,000

3402 Advances to Contractors

812,604 23,998,252

3403 Deposit with Suppliers

237,460 237,460

3516 Hostel Fee receivable

- -

3520 House rent receivable

159,055 584,462

3521 Receivable on sales of publication

- -

3522 Library fee & Exam fee

- -

3524 Staff food supply control A/C

54,358 53,753

3525 Receivable on food supply to Co-op inspectors 130,896 130,896

3527 Festival advance receivable

1,500 39,000

3523 Advance to suppliers

36,173 -

3532 Advance to staff

140,389 241,856

3539 Vat

6,692,548 9,382,996

3540 WHT Payment

126,705 218,339

3514 Receivables on Other service

- 262,487

3607 Petty Cash

2,000 -

3535 Transfer of Funds to other accounts

547,088 141,778

3543 Distress Loan - staff

- 1,025,000

3544 Receivable Interest on Distress Loan

- 131

3545 Cheque Return control A/c

55,645 87,000

Less: Provision for bad debts

(986,640) (210,857)

11,541,881 39,299,967

NOTE : 06

Stock

3301 Stationery stock

79,172 224,852

3302 Printing Material stock

- 140,872

3303 Building Material

- 26,170

3304 Audio visual

- 2,108

3305 Sundry stock

78,960 68,432

3306 Electrical Items

- -

158,132 462,434


32

2009

ACTUAL 2008

ACTUAL 2009

NOTE : 07

Rs Rs

CASH AT BANK (People’s Bank Katugastota) Hostal 0089 1001-72649555

2,039,372 2,392,262

Examination 0089 165 000304 8

3,996 3,996

Publication 0089 1001-92649564

170,401 468,272

Training & Education 0089-1001-32648143

1,282,065 1,372,378

Productivity Account 089-1001- 38092-967

828,760 1,350,422

Government 0089-1001-92648140

- 10,697,684

Service Charge Account 089-100150002158

621,960 246,458

4,946,554 16,531,472

NOTE : 08

CAPITAL

Balance on 01.01.2001

233,254,215 233,254,215

233,254,215 233,254,215

NOTE : 09 ACCUMULATED PROFIT/(LOSS)

Balance as at 01st of January

(54,661,586) (59,274,351)

Add/Less : Prior Year adjustments Audit fee

- 81,637

Others – Addition

- 2,484,365

Others – Deduction

(468,386) (912,322)

(468,386) 1,653,680

Accumulated profit after prior year adjustment

(55,129,971) (57,620,671)

Add : Surplus/ (Defecit)

(4,144,380) (6,172,633)

(4,144,380) (6,172,633)

(59,274,351) (63,793,304)


33

2009

ACTUAL 2008

ACTUAL 2009

NOTE : 10

Rs Rs

CAPITAL GRANTS FROM TREASURY

Balance on 01.01

192,778,075 212,278,075

Add : Adjustment

- -

192,778,075 212,278,075

Add: Received for the Year

19,500,000 49,400,000

212,278,075 261,678,075

Less : Depreciation of Assets purchased from capital grants - -

212,278,075 261,678,075

NOTE : 11

CAPITAL GRANTS FROM MINISTRY

Balance on 01.01.2002

2,656,050 4,491,392

Add : Received for the Year

2,200,000 -

4,856,050 4,491,392

Less : Depreciation of Assets purchased from capital grants (364,658) (550,000)

4,491,392 3,941,392


34

2009

ACTUAL 2008

ACTUAL 2009

Rs Rs NOTE : 12

CREDITORS & ACCRUED EXPENCES 4001 Telecommunications

56,061 70,426

4002 Water

57,718 -

4003 Electricity

12,223 -

4004 Lecture Fees

130,000 117,957

4005 Other accrued expences

34,326 183,092

4008 Subsistance Control A/c

6,630 -

4015 Govt. Audit fee payable

200,000 50,000

4016 Payable to Treasury

92,343 49,182

4018 Advance receivaed for programme - Outside

88,125 163,154

4019 Security Services

- 116,946

4020 Janitorial Services

- 121,366

4021 Laundry Services

- -

4022 Building Constructors

867 49,823

Received in Advance as per (Schedule : 10A)

609,600 530,890

4027 Payable to suppliers

286,717 -

4028 E.P.F. Payable

824 -

4030 Food supply control A/c Ruchira

(70,554) (70,554)

4031 With holding tax

58,552 17,516

4033 Salary Control A/c

390 -

4034 Tsunami Project

13,784 -

4035 Salary control A/c Casual

29,720 35,599

4036 Food supplies Control A/c – Vipula Caterers

75,945 -

4039 Tsunami Project – stage ii

461,020 -

4038 Gamidiriya Programme

79,950 -

4040 Refundable course fee

- 11,600

4041 Productivity Control A/c

3,462,438 1,164,908

4044 Vincy Cateres

141,135 100,462

4043 VAT Receipt

2,762,846 2,642,516

3903 Tender Deposit

339,521 562,001

4046 Shan Rest

181,715 -

4047 Food Supply control A/C – candy corner

- 22,470

4048 Food Supply control A/C – Ruchira

- 399,782

4049 Fuel bill payable

- 35,862

9,111,904 6,375,007


35

2009

ACTUAL 2008

ACTUAL 2009

NOTE : 13

Rs Rs

RECURRENT GRANTS (CODE : 11)

1021 From Treasuary

19,680,000 21,470,211

1020 From Ministry

- -

1044 From Co-operative fund

- -

19,680,000 21,470,211

NOTE : 14 OTHER INCOME GENERATED FROM (CODE: 11)

1001 -1011 Course fee – Shedule 12 -A

5,619,449 5,312,246

1013 Hostal Fee

103,410 537,750

1012 Room Charges

4,733,425 4,008,062

1014 Lecture hall Fee

1,233,236 1,260,500

1015 House Rent

320,405 323,948

1017 Sales of Publications

55,193 116,234

1018 Service Charges

1,730,750 1,158,914

1023 Printing Service

155,285 271,698

1024 Library fees

52,783 27,800

1025 Exam fees

326,806 254,056

1026 Fixed Deposit interest

- 73,797

1027 Interest on staff Loan

- 34,775

1035 Non Rufundable Tender Deposit

7,500 62,205

1036 Profit on sale of fixed Assets

648,416 357,143

Miscellanious income – (Shedule 12-B)

981,250 1,079,701

1043 Commission on food supply

1,284,315 972,492

17,252,223 15,851,319


36

2009

NOTE : 15

ACTUAL 2008

ACTUAL 2009

Rs Rs

PERSONNEL EMOLUMENTS (CODE : 01)

101 Salaries & Wages

11,891,652 12,993,145

151 Lecture Fees

1,527,375 1,085,563

103 Over Time

986,045 940,947

104 Allowance

678,154 753,334

105 E.P.F. (Institution Contribution)

1,175,710 1,344,706

106 E.T.F. Contribution

235,142 268,941

153 Exam Supervision fees

40,500 50,500

154 Course Cordination fee

85,300 62,500

110 allowance of Board of Maígement

45,000 33,000

112 Holiday pay & Others

58,138 87,969

155 Question Paper

51,775 49,000

156 Paper Marking fee

99,348 73,715

117 Bonus, Medical & Gratuity

- -

118 Gratiuty Payment

281,054 465,251

119 Pension fund

380,168 236,765

17,535,359 18,445,338

NOTE : 16

TRAVELLING EXPENCES (CODE: 02)

201 Domestic Travelling

291,627 371,712

202 Foreign Travelling

250,547 251,645

542,174 623,357


37

2009

ACTUAL 2008

ACTUAL 2009

NOTE : 17

Rs Rs

SUPPLIES & OFFICE REQUISITION (CODE : 03)

301 Stationary & Office Requisition

644,355 606,705

302 Fuel & Lubricants

1,404,183 1,181,784

303 Printing Materials

682,932 203,561

304 Newspapers & Periodicales

94,870 62,550

306 Diets

458,333 365,632

307 Mechanical & Electrical goods

11,720 13,810

308 Video cassete & Others

292 430

310 Others

479,089 405,291

312 Fuel for hiring bus

- 56,981

3,775,773 2,896,742

NOTE : 18

MAINTENANCE EXPENCES (CODE : 04)

401 Vehicle

1,041,964 771,138

402 Plant, Machinary & Equipment

454,874 207,521

403 Building & Structures

318043 496,347

404 Furniture

- 1,200

405 Computers & Others

- 20,550

406 Motor Vehicle License & Insurance

23,233 189,568

1,838,114 1,686,323


38

2009

ACTUAL 2008

ACTUAL 2009

NOTE : 19

Rs Rs

CONTRACTUAL SERVICES (CODE : 05)

501 Transpotation

160,835 43,626

502 Telecommunications

784,413 870,986

503 Postal Charges

245,515 159,067

504 Electricity

2,104,953 1,719,296

505 Water

834,251 761,827

508 Audit Fee

50,000 50,000

510 Advertisement/Publicity

251,663 455,223

512 Security Services

1,195,670 1,456,635

513 Janitorial Services

1,572,005 1,475,174

514 Laundry Services & Linen

120,324 63,664

515 Gardening

158,125 77,900

516 Insuarance

104,972 -

517 Translations

41,978 15,023

520 Staff Training (Local/ Foreign)

55,500 123,985

521 Subcription & Membership fees

7,590 808,285

522 Registration fee

- -

523 Other Expenses

372,659 196,199

524 Printing – Printing Section

45,933 30,899

525 Printing Charges – Audio Visual

22,100 24,927

526 Stamp Charges

2,115 2,140

527 Vat Payment

- -

529 Co-operative officer‟s Training

634,789

8,130,603 8,969,645

NOTE : 20

OTHER EXPENCES (CODE : 06)

601 & 602 Legal fees & Donation

15,636 106,160

607 Entertainment

545,883 615,827

703 Bank Charges

27,154 33,644

705 Loan interest of Staff

34,322 18,947

608 Productivity awarding programme

- 134,446

609 Implimentation of office Language

- 11,375

707 Nation build tax

- 381,986

709 Provision for bad debts

- 210,857

622,995 1,513,243


39

2009

Shedule : 4-A

ACTUAL 2008

ACTUAL 2009

Course Fee Rceivable

Rs Rs

3507 NMIT IT Diploma Course fee

710,000 -

3508 NICD IT Diploma

73,000 66,745

3509 Diploma in buisness management (education & training A/C) 312,000 -

3512 Degree Programme

35,000 -

3501 Diploma in Co-operative

258,345 279,699

3502 Co-operative Certificate course

261,800 712,310

3503 Workshop

54,750 60,750

3506 Short term Other Courses

- 232,117

3522 Library fees & exam fees

18,600 30,099

3511 Course fee receivable for English course

- 8,875

1,723,495 1,390,597

Shedule : 4-B

Deposit

3536 Tender deposit

5,000

5,000

Security deposit

- -

5,000

5,000

Shedule : 10-A

Course fee Received in Advance

4023 Diploma Courses in Co-operative

467,600 190,226

4024 Work shop

120,000 291,790

4025 Others Courses

22,000 48,875

609,600 530,890


40

2009

Shedule : 12-A

ACTUAL

2008

Rs

ACTUAL

2009

Rs

Course Fee Income

1002 NICD IT Diploma

495,000 637,912

1004 Certificate in English

- 88,125

1001 Higher Diploma – Co-operative

1,570,622 1,319,203

1007 Certificate Courses - Co-operative

1,026,650 691,170

1009 Short Term Courses - IT

411,745 318,000

1008 Short Term Courses – Workshop

1,132,504 1,349,427

1010 Short Term Courses – Others

982,928 676,296

1011 N/E Co-op officer‟s Training 09/10

- 232,113

5,619,449 5,312,246

Shedule : 12-B

Miscellanious Income

1016 Income from Garden

400 46,226

1034 Hostel manager fee

165,475 101,550

1038 Photocopy chargers

1,548 65,619

1040 Hire of Equipment

13,700 8,400

1041Other Supplies

448,329 445,600

1045 Registration of supplies

34,485 63,349

1046 Photograph Income

20,975 15,117

1047 Fines

788 11,383

1044 Water Bottle

292,501 202,780

1048 Book Binding

3,050 6,040

1051 Miscelanious Income

- 1,120

1056 Income from bus

- 112,068

1061 Additional income

- 450

981,250 1,079,701


41

2009

Note ( 02

PROPERTY,PLANT & EQUIPMENT - 2009

Cost/Valuation Balance As

01.01.2009

Prior Year Balance After

Adjustments

Additions

during the year Adjustments

ACTUAL 2009

RS Additions Deductions

Land 133,226,351 - - 133,226,351 788,951 - 134,015,302

Building & Structures 161,807,842 - - 161,807,842 490,270 (3,903,988.78) 158,394,123

Plant, Machenary & Equi: 34,800,321 - (3,815) 34,796,506 1,763,296 - 36,559,801

Vehicles 7,369,492 - - 7,369,492 - (696,161.00) 6,673,331

Furnitures 7,841,979 - - 7,841,979 104,000 - 7,945,979

Library Books 1,924,206 - - 1,924,206 66,391 - 1,990,597

Curtain & Others 2,564,200 - - 2,564,200 947,945 - 3,512,145

Total 349,534,392 - (3,815) 349,530,577 4,160,852 (4,600,150) 349,091,279

Accumulated Depreciation Balance As at

01.01.2009

Prior Year Adjustments Balance After

Prior Year

Adjustments

Additions


ACTUAL 2009


Building & Structures 23,448,241 - - 23,448,241 3,934,112 - 27,382,353

Plant, Machenary & Equipment 22,568,924 - (157) 22,568,767 3,956,738 - 26,525,505

Vehicles 5,534,149 - - 5,534,149 550,000 (696,161.00) 5,387,988

Furnitures 4,248,310 - - 4,248,310 794,715 - 5,043,024

Library Books 1,806,006 - - 1,806,006 45,002 - 1,851,008

Curtain & Others 1,886,011 - - 1,886,011 593,009 - 2,479,020

Total 59,491,641 - (157) 59,491,484 9,873,575 (696,161) 68,668,898

Gross Book Value 349,534,392 - (3,815) 349,530,577 349,091,279

Accumulated Depreciation 59,491,641 (157) 59,491,484 68,668,898

Net Book Value 290,042,751 (3,658) 290,039,093 280,422,381

Capital work-in-Progress Contract No: Balance As at

01.01.2009

Prior Year Adjustments Balance After

Prior Year

Adjustments

Additions


ACTUAL 2009


NICD/2/2/6/6-Multipurpose Building 18,804,517 - - 18,804,517 8,091,900 5,548,789 32,445,206

2/2/6/20- Auditorium 75,218,320 - - 75,218,320 150,000 (1,437,523) 73,930,797

Renovation of coridor F-G hostel 1,644,800 1,644,800 - (1,644,800) 0

95,667,638 - - 95,667,638 8,241,900 2,466,466 106,376,003

Carrying Value 385,710,389 (3,658) 385,706,731 2,466,466 386,798,385


42

2009

NOTES TO THE ACCOUNTS AS AT 31ST DECEMBER 2009 NOTE : 01

ACCOUNTING POLICIES

1.1 General Accounting Policies

1.1 a. Accounting Conventions

The Financial statements of the Institute comprise Balance Sheet, Income & Expenditure

Account, Cash Flow statement, Accounting Policies and Notes to the Accounts. The financial

statements of the Institute are prepared on the historical cost basis and in accordance with

generally accepted Accounting Principles & Sri Lanka Accounting Standards issued by the

Institute of Chartered Accountants of Sri Lanka. These principles and standards apply

consistently.

1.1. b. Format of Accounts

The Financial Statements are presented in accordance with the format issued by the Institute

of Chartered Accountants of Sri Lanka. Previous year figures and phrases are re-arranged

wherever necessary to conform to the current year's presentation.

1.1. c. Post Balance Sheet Events

All material events occurring after the Balance Sheet date are considered and where necessary

adjustments and disclosures are made in the Financial Statements.

1.2 ASSETS AND BASES OF THEIR VALUATION

1.2 a. Property, Plant & Equipment

The cost of Property, Plant & Equipment is the cost of purchased or constructed value

together with any incidental expenses thereon. These are accounted at cost or revalued

amount less accumulated depreciation, which is provided, on the bases specified below.

1.2 b. Depreciation

The provision for depreciation is calculated on the cost of Property, Plant & Equipment so as to

write off such cost over the estimated useful lifetime of the assets by equal annual

installments as follows.


43

2009

Asset Useful Lifetime

Building & Structures 40 years

Motor Vehicles 04 years

Furniture & Fittings 10 years

Books and Manuals 04 years

Plant & Machinery 05 years

Curtains & Others 03 years

Depreciation is provided for the fixed assets on periodical bases.

Expenditure made on t¾îformer provided by C.E.B. has been differed and write off the cost

over a period of 40 yeas.

1.3 LIABILITIES AND PROVISION

1.3 a. Provision for Gratuity

Provision is made for the payment of retirement gratuities payable under the Gratuity Act No.

12 of 1983 in respect of all eligible employees, whose service periods are more than one year

at the Balance Sheet date.

Employees are eligible for Employee's Provident Fund contributions and Employee's Trust

Fund contributions in line with the respective statutes and regulations. The Institute

contributes 15% and 3% on Basic salaries of employees to EPF and ETF respectively.

1.3 b. Provisions for Bad Debtors

5 % provision has been made for Bad Debtors.

1.3 c. Other Liabilities

Provision has not been made for litigation of Employees and other parties in the Financial

Statements.

1.4 INCOME & EXPENDITURE ACCOUNT

1.4 a. Revenue Recognition

All Fees for services rendered are accounted on accrual basis

Fees for Diploma courses and other certificate courses are accounted on accrual

basis. (on periodical basis)


44

2009

1.4 b. Expenses

All expenses are accounted on accrual basis.

1.5 GOVERNMENT GRANTS

1.5. a. Capital Grants

Government grants received in the capital nature are treated as reserves in the statement of

Assets & Liabilities.

1.5 b. Recurrent Grants

These are treated as an Income in the year in which it was received, in the Income &

Expenditure Account.

Rs. 22,105,000 was received as recurrent grant from treasures in the year 2009, out of that B.

634,789 was allocated for training Programme. Therefore the above amount which was

allocated for short term management training programme was included under income from

short term courses (other)

In addition to the above Rs. 700,000/- also was received from People’s Bank for the Training

Programme. Out of that Rs. 408,210/- was spent for the 06 no of training programme

conducted during the year 2009, that amount also included under short term courses (other)

and remaining balance of Rs. 291,790/- which was unutilized has been mentioned under other

course fee received in advance.

1.6 Preparation and submission of financial Statements is the responsibility of the management of

the institute.

1.7 Balances of goods in the stores and printing press as at 31.12.2009 were calculated according

to “First in First out Method” while the balances of publications for sale/printing were valued

according to their cost.

1.8 Cash Flow Statement was prepared according to Indirect Method.

1.9 Legal action has been taken regarding the eviction of ex-employees from quarters occupied by

them, while ex-employees have filed 02 Cases against the institute.

1.10 No of employees of this institute as at 31st December 2009 is 42.


45

2009

Report of the Auditor General on the Financial Statements of the National Institute of

Co-operative Development for the year ended 31 December 2009 in terms of Section

14(2)(c) of the Finance Act, No. 38 of 1971

The audit of financial statements of the National Institute of Co-operative Development for the year

ended 31 December 2009 was carried out under my direction in pursuance of provisions in Article

154 (1) of the Constitution of the Democratic Socialist Republic of Sri Lanka read in conjunction with

Section 13(1) of the Finance Act, No.38 of 1971. My observations which I consider should be

published with the annual report of the Institute in terms of Section 14(2) (c) of the Finance Act

appear in this report. A detailed report in terms of Section 13(7) (a) of the Finance Act was issued on

20 August 2010.

1.2 Responsibility of the Management for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with Sri Lanka Accounting Standards. This responsibility includes; designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of

financial statements that are free from material misstatements, whether due to fraud or error;

selecting and applying appropriate accounting policies and making accounting estimates that are

reasonable in the circumstances.

1.3 Scope of Audit and Basis of Opinion

My responsibility is to express an opinion on these financial statements based on my audit. Audit

opinion, comments and findings in this report are based on review of the financial statements

presented to audit and substantive tests of samples of transactions. The scope and extent of such

review and tests were such as to enable as wide an audit coverage as possible within the

limitations of staff, other resources and time available to me. The audit was carried out in

accordance with Sri Lanka Auditing Standards to obtain reasonable assurance as to whether the

financial statements are free from material misstatements. The audit includes the examination on a

test basis of evidence supporting the amounts and disclosures in financial statements and

assessment of accounting principles used and significant estimates made by the management in

the preparation of financial statements as well as evaluating their overall presentation. I believe

that my audit provides a reasonable basis for my opinion. Sub-sections (3) and (4) of Section 13

of the finance Act, No. 38 of 1971 give discretionary powers to the Auditor General to determine

the scope and extent of the audit.


46

2009

2. Financial Statements

2.1 Opinion

In view of comments and observations appearing in this report, I am unable to express an opinion

on the financial statements of the National Institute of Co-operative Development for the year

ended 31 December 2009 presented for audit.

2.2 Comments on Financial Statements

2.2.1 Presentation of Financial Statements

According to the Paragraph 6.5.1 of the Public Enterprises Department Circular No. PED 12

dated 02 June 2003, the financial statements of every year should be submitted for audit within

60 days after the close of the financial year. Nevertheless, the financial statements for the year

2009 had been submitted for audit only on 14 June 2010.

2.2.2 Accounting Deficiencies

Even though a sum of Rs. 9,873,575 had been shown in the note on Depreciation of Fixed

Assets as the depreciation on fixed assets for the year, it had been shown in the Income and

Expenditure Account as Rs. 9,323,575, thus resulting in an understatements of Rs. 550,000.

2.2.3 Accounts Receivable and Payable

The Institute had not taken action to recover debts amounting to Rs. 7,654,706 older than one

year and to settle the sum of Rs. 101,330 payable.

2.2.4 Lack of Evidence for Audit

The following items of account could not be satisfactorily vouched/verified due to the non-

rendition of the evidence indicated against each item.

Item Value

Rs.

Evidence not made Available

Fixed Assets 349,091,279 Register of Fixed Assets and Boards of Survey

Reports

Work-in-progress

(Adjustments during the year)

10,708,365 Detailed Schedules

Bank Balance

(Hostel Account)

2,392,262 Bank Reconciliation Statements for 01 July to 31

December 2009.

Debtors 39,299,967 Confirmation of Balances

Creditors 6,375,007 Confirmation of Balances

Land Produce Income 46,226 Reports of Income/Expenditure


47

2009

2.2.5 Non-compliance with Laws, Rules, Regulations and Management Decisions

The following non-compliances with laws, rules, regulations etc, were observed.

Reference to Laws, Rules

Regulations and Circulars

Non- compliances

(a) Financial Regulations of the

Republic of Sri Lanka

(i) Financial Regulation 134(3) The Internal audit had not been carried out and the reports

thereon had not been submitted to the Auditor General.

(ii) Financial Regulation 138 The Accountant had not certified that the amounts stated

in the payment vouchers totalling Rs. 6,433,890 had been

correct, were entered in the respective books and

complete in every respect.

(iii)Financial Regulation 371 Advances amounting to Rs.241,856 had not been settled

by the end of the year 2009 and that included a balance of

Rs. 55,000 relating to the preceding year.

(iv)Financial Regulation 395 (b) Even though the Bank Reconciliation Statements of each

Bank account should be prepared before 15 of the month

following and furnished to the Auditor General, it had not

been so done in respect of 07 Bank accounts of the

Institute.

(v)Financial Regulation 446(2) The receipts and payments in the cash book had not been

recorded daily in the chronological order and a staff

officer had not signed and certified that all entries and

cash balances were correct. The amounts had not been

totalled and balanced daily.

(vi)Financial Regulation 751 Even though an lnventory of Goods had been maintained

on Form General 44 in the year 2009, the particulars of

the goods of the Institute prior to that had not been

recorded therein.

(vii)Financial Regulation 754 The stock book had not been balanced at the end of each

financial year and the balance had not been carried

forward to the ensuing financial year.

(viii)Financial Regulation 756(1) A Board of Survey for the year 2009 had not been

appointed.


48

2009

(b) Treasury Circular No. 842 dated

19 December 1978

A Register of Fixed Assets conforming to the provisions

of the circular had not been maintained.

(c) Public Finance Circular No.

364(3) of 30 September 2002

Whenever Government institutions pay the Value Added

Tax to other institutions and individuals, if such tax paid

exceeds Rs. 25,000 per mensum a monthly report on each

such payment should be submitted to the Commissioner

General of Inland Revenue with copy to the Auditor

General, before the 15 of the month following. Action had

not been taken to submit such reports.

3. Financial and Operating Review

3.1 Financial Review

3.1.1 Financial Results

According to the financial statements presented, the operation of the Institute during the year

under review had resulted in a deficit of Rs.6,172,633 as compared with the corresponding

deficit of Rs.4,144,380 for the preceding year, thus indicating an increase of Rs. 2,028,253 in

the deficit.

3.2 Operating Review

3.2.1 Performance

(a) The progress of the courses conducted by the Institute as compared with the preceding year

is given below.

Course

2009 2008

Target Actual Actual

Number

of

Courses

Number of

Officers

participated

Number

of

Courses

Number of

Officers

participated

Number

of

Courses

Number of

Officers

participated

Permanent Training Courses 03 80 03 105 - -

Advanced Diploma Courses 10 195 07 144 09 158

Certificate Courses 11 235 03 73 04 110

Short Term Management

Development Courses 33 1290 01 39 10 193

Courses conducted at the requests

of external institutions - - 17 614 21 766

Courses conducted free of charge

for the Advancement of the Co-

operative Sector

- - 19 678 02 98

Total 57 1800 50 1653 46 1325


49

2009

The following observations are made in this regard.

(i) Out of the 33 Short-term Management Development Course expected for the year under

review 32 courses had not been conducted and only 39 had participated as against the

1290 expected.

(ii) Seventeen courses had been conducted at the request of external institutions while 19

courses had been conducted free of charge for the Advancement of the Co-operative

sector.

(iii) Out of the 11 expected Certificate Courses 08 Courses had not been conducted and only

73 had participated as against the 235 expected.

(b) The income received from the courses conducted by the Institute in the year under review as

compared with the preceding year is given below.

2009 2008

Expected

Rs.

Actual

Rs.

Actual

Rs.

Permanent Training Courses 972"500 89"333 -

Advanced Diploma Courses 2"526"666 1"746"264 2"065"622

Certificate Courses 2"467"500 691"170 1"026"650

Short term Management Development Courses 3"962"000 1"431"444 2"527"177

9"928"666 3"958"211 5"619"449

The following observations are made in this connection.

i. Even though the expected overall course income for the year amounted to Rs. 9,928,666 the

receipts amounted to Rs. 3,958,211 or 40 per cent only.

ii. The course income for the year under review as compared with the preceding year had

decreased by Rs. 1,661,238 or 30 per cent.

(c) Increase in Expenditure and Capital Erosion

The details of the increase of expenditure of the institute from 2005 to 2009 and the decrease of

income relatively and the resulting in capital erosion are given below.


50

2009

2005

Rs.M.

2006

Rs.M.

2007

Rs.M.

2008

Rs.M.

2009

Rs.M.

Total

Rs.M.

Profit/(Loss) according to

the Income and

Expenditure Account ^9'90& ^8'88& ^7'61& ^4'14& ^6'17& ^36'70&

Less : Depreciation 8'08 7'72 6'58 8'63 9'32 40'33

Profit/ (Loss) before

making adjustements for

Recurrent Grants ^1'82& ^1'16& ^1'03& ^4'49& ^3'15& ^3'63&

Less : Recurrent Grants ^6'75& ^8'65& ^13'65& ^19'68& ^21'47& ^70'20&

Deficit after adjustments

for Recurrent Grants ^8'57& ^9'81& ^14'68& ^15'19& ^18'32& ^66'57&

Other Income

Total Expenditure 8'65 10'12 14'41 17'25 15'85 66'28

(except depreciation) ^17'22& ^19'93& ^29'09& ^32'44& ^34'17& ^132'85&

Capital Erosion ^8'57& ^9'81& ^14'68& ^15'19& ^18'32& ^66'57&


(i) The total expenditure of the Institute from 2005 to 2009 aggregated to Rs.132.85 million

and the total of the other income aggregated to Rs.66.28 million. The expenditure over

income amounted to Rs.66.57 million and the income had not increased in relation to the

increase in expenditure of the Institute.

(ii) Capital improvement of Rs.3.63 million had taken place in the Institute during the 5 years

from 2005 to 2009. If the recurrent grants amounting to Rs.70.20 million received during

the above 5 years had not been received by the Institute the capital erosion would be

Rs.66.57 million. Hence, an uncertainly in the going concern of the Institute is observed.

3.2.2 Identified Losses

The Institute had to pay a penalty of Rs. 32,362 to the National Water Supply and Drainage

Board during the year under review due to the delay in settlement of water bills.

(a) The Institute had to pay a penalty of Rs.18,838 due to the failure in remitting the Value

Added Tax in respect of the first quarter of the year under review to the commissioner

General of Inland Revenue on due date.

(b) The Institute had to pay a penalty of Rs.20,121 during the year under review due to the

delay in settlement of water bills to the National Water supply and Drainage Board.


51

2009

3.2.3 Contract Administration

(a) Constructions of the Auditorium

The contract for the construction of the Auditorium had been awarded in August 2001 at an

estimate of Rs. 44.5 million to relevant construction company (excluding the Goods and

Services Tax).


(i) The construction works had been stopped halfway due to the collapse of the roof on 14

February 2005 while it was being constructed. The construction works had not been

commenced even up to 31 December 2009 due to various reasons.

(ii) The new estimate for the completion of construction furnished by the Institute of

Construction Training and Development in the year 2007 amounted to Rs.134.5 million

and the cabinet memorandum submitted for the commencement of construction had been

approved by the Cabinet of Ministers in December 2009. Even though a mobilization

advance amounting to Rs.26.4 million inclusive of the value Added Tax had been paid to

the Institute of construction Training and Development in addition to the sum of

Rs.150,000 and Rs. 22,500 for Value Added Tax paid to that Institute for the preparation

of the estimates.

(b) Modernization of the Playground

The following matters were revealed in this connection.

(i) Even though work was scheduled for commencement on an agreement dated 06

November 2009 for Rs. 516,988 based on the estimate of the Engineer, the estimate had

been revised again due to defects in the preparaion. An agreement had been entered

subsequently with the contractor for a sum of Rs. 527,831.

(ii) According to the above agreement, the contractor had agreed to complete 06 items within

one month. Nevertheless, the estimate had been revised after completion of 03 items of

the estimate.

(iii) A sum of Rs.442,357 had been paid after the completion of the 03 items of work referred

to in the above paragraph. Since the money availabe was not adequate for the completion

of the balance work, 02 items of work had been completed for Rs. 121,101 by utilizing 10

per cent of revised agreed amount. As such the item of work for the prevention of soil

erosion had to be omitted.


52

2009

(iv) Correct estimates had not been prepared for the work and as such expenditure incurred on

certain items had exceeded the estimates while the estimated amount had not been spent

on certain other items as shown below.

Item Estimated

Amount

Amount

Spent

(Under)/Over

Expenditure

Rs. Rs. Rs.

1. Concreting the drain surface 13,687 18,288 4,599

1. Construction of a parapet wall around the Sports

Pavillian

91,785 76,548 (15,237)

2. Fixing a PVC coated Net around the playground 253,727 347,522 93,795

3.2.4 Recovery of Rent of Official Quarters

The following deficiencies relating to the recovery of rent were observed.

i. Official quarters allocated to the Director had not been occupied during the period

October 2008 to 28 September 2009 while the official quarters allocated to the Registrar

had not been occupied from September 2009 to date of audit in July 2010.No rent had

been recovered and those had become unused assets.

ii. Goods belonging to another institution had been stored in one of the official quarters and

as such it could not be occupied.

iii. Five official quarters remained unoccupied.

iv. An officer who is not an officer of the Institute is occupying one of the official quarters

and rent on that could not be recovered as a Court case had been filed for evicting him.

3.2.5 Idling and Underutilized Assets

The Swift-300DX Offset Printing Machine, Super Fax D x 8,200 Printing Machine and the

Gestetner 4130 Duplicating Machine remained without being used. Idle period and the value of

those machines were not made available to audit.

3.2.6 Bank Reconciliation Statements

A large number of unreconciled items and items not set off over long periods had been shown in

the Bank Reconciliation Statements. Even though action should be taken to investigate and

make necessary adjustmets in the cash book in connection with cheques issued but not

presented, cheques deposited but not realised, errors made by the Bank, charges made by the

Banks and such other differences appearing in Bank Reconciliation Statements, several

differences including cash in bank balance existing from the year 2002 had been included in the

Bank Reconciliation Statements without taking action to settle them.


53

2009

3.2.7 Income from the Land of the Institute

The following matters were observed.

(a) The Director General had appointed a Committee in May 2009 for the proper utilization of

the income of land of the Institutte. The sale of the produce of the land at a reasonable price

to the staff had been approved and sold accordingly. The sales income had increased from

Rs. 400 in the preceding year to Rs. 46,226 in the year.

(b) It was observed that such situation was due the lack of a proper control in the preceding

years on the collection of income from the land. It is observed that the following

shortcomings need to be rectified in this connection.

(i) Lack of a census of the source of produce.

(ii) Non-maintenance of the Register of Land Produce

(iii) Lack of a clear procedure for harvest and sale of the crops

(iv) Preparation of an Income and Expenditure account for the produce of the land.

3.2.8 Cadre

The approved cadre of the Institute stood at 59 while the actual cadre stood at 40, thus resulting

in 19 vacancies. Even though approval in terms of Financial Regulation 71 had been granted for

filling the vacancies, no action had been taken thereon.

3.2.9 Budgetary Control

Significant variances were observed between the estimated and the actual expenditure of the

Institute, thus indicating that the budget had not been made use of as an effective instrument of

management control.

4. Systems and Controls

Deficiencies observed during the course of audit were brought to the notice of the Chairman of

the Institute from time to time. Special attention is needed in respect of the following areas of

control.

(a) Management and Utilization of Assets

(b) Recovery of Loans

(c) Budgetary Control

(d) Staff Vacancies

(e) Preparation of Bank Reconciliation Statements

H.A.S. Samaraweera

Acting Auditor General

Documents

National Institute of Co -operative Development – ANNUAL ......06. Brining the efficiency and the quality of co-operative organizations to a higher level. 07. Introducing and carrying