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2005). In addition, the auditing report should state whether the assets and facilities of a co- operative are being properly managed and the operations of a cooperative are being conducted in accordance with cooperative principles (Government Gazette, 2005). All selected cooperatives had their books audited (either internally or externally) thereby revealing their willingness to promote good corporate governance. Internal auditing is an independent evaluation function established within an organisation to examine and evaluate its activities to improve the effectiveness of risk management, control and governance processes. External auditing, on the other hand, is a periodic examination of the books of account and records of a company conducted by an independent third party (an auditor) to evaluate the efficiency, economy and effectiveness of the company’s internal control systems and business activities (Jackson and Stent, 2007). External auditing promotes transparency and, hence, accountability to investors (Lyne, 2008).
According to Chorafas (2001), well-planned and properly structured auditing programmes are essential to effective risk management and adequate internal control systems for any organisation. In addition, effective internal and external audit programmes are a critical defence against fraud and provide vital information to the board of directors about the effectiveness of internal control systems (Chorafas, 2001). Auditing allows cooperatives to take account of their financial business transactions, how much stock they acquired, how much they sold and to rectify any errors detected. Seven of the selected cooperatives carry out internal auditing while only three cooperatives use external auditors. External auditing is done by Ithala Bank whilst internal auditing is done by extension officers. All the selected cooperatives mentioned that they are audited at least once a year.
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Table 4.11: Government assistance needed by selected cooperatives, KwaZulu-Natal, 2007.
Cooperative type
General
management and leadership
Production capacity
Financial
assistance and management
Marketing
Vegetable cooperative 1
- Skills training for management
-Farm implements, e.g., tractor
-Financial advice on investment
-Financial assistance for purchasing additional vegetable tunnel.
- Market research and development training
Vegetable cooperative 2
-Leadership and management training - Bookkeeping training for all members
-Farm implements provision, e.g., tractor and irrigation scheme
-Financial assistance for purchasing additional vegetable tunnel and pesticides.
- Market research and development training
Vegetable cooperative 3
- Leadership course for management
- Bookkeeping training for all members
-Crop production training, from planting to harvesting
- No assistance required
- Market research and development training
Vegetable cooperative 4
-Leadership training for all members
-Provision of farm equipment, e.g., tractor and irrigation scheme
-Vegetable
production and pest and disease control
-Financial
management and investment training -Financial assistance for diversification
- No assistance required (have had training).
Vegetable cooperative 5
- Leadership training for all members - Bookkeeping training for management - Conflict resolution training
-Post harvest monitoring of cooperatives by the KZNDAEA to ensure that cooperatives are operating well
- Financial assistance for diversification
- Market research and training
Beef cooperative
- Cattle maintenance and management
-Provision of farm equipment, e.g., tractor
- Financial assistance for daily operations
- No assistance required (have had training) Bakery
cooperative
- Bookkeeping training - Leadership and management training
-No assistance required
-Financial assistance to purchase baking equipment
- No assistance required
Poultry cooperative 1
-Skills training on poultry production for all cooperative members
- Bookkeeping training for all members -Poultry management training
-Provision of additional chicken runs
- Security for their chickens
-Financial advice and investment
- Financial assistance for growth
- Market research and development training
Poultry cooperative 2
- No assistance required -No assistance required
- Financial assistance for building more chicken runs
- No assistance required
Poultry cooperative 3
- Poultry management training
- Bookkeeping training for all members
-No assistance required
- Financial assistance for building more poultry pens
- Market research and development training
57 4.6.1 General management and leadership
Chairpersons of the five selected vegetable cooperatives indicated that they required training on the general leadership and management of their cooperative. The training is usually done by a FET College or KZNDAEA as extension support.
4.6.2 Production capacity
In terms of production, three of the five vegetable cooperatives required farm implements such as a tractor to till the land and an irrigation scheme in order to improve vegetable yields. The beef cooperative required a tractor to diversify into other enterprises such as vegetable production in order to generate funds required for daily operations. One poultry cooperative required support in the form of more poultry pens and security fencing for their enterprise. In addition, vegetable cooperative 3 required skills training on vegetable crop production from planting to harvesting. The chairperson of vegetable cooperative 5 stated that there was a need for post-harvest monitoring in order to evaluate if extension support was used effectively and efficiently. The chairperson for vegetable cooperative 4 stated that they required government to assist with pest and disease control for their vegetables.
4.6.3 Financial assistance and management
With regards to financial management, nine of the cooperative chairpersons stated that they required financial assistance for various purposes such as erecting more vegetable tunnels, more poultry pens for the poultry cooperatives, to finance daily operations, and financial and investment training. Three of the chairpersons stated that they required some education on financial management and investment since they wish to expand their businesses into other enterprises, such as post-harvest processing, to improve their performance.
4.6.4 Marketing
Cooperatives need to develop a plan to address how they will react to the various strategies that competitors may use to retain their business (Harris, 2007). Chairpersons of six selected cooperatives stated that they did not have access to education and training on marketing research and development, which includes finding information on choosing the best product the cooperative should invest in, finding the best place to sell their products, deciding on the
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best price to sell their produce and how the cooperative should go about promoting their product once it is available.
59 CHAPTER 5