2012-11-13T15:08:55-06:00 2011-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2011-01-01 750696759 SOUTHWEST TEXAS ELECTRIC COOPERATIVE INC SOUT 3258532544 PO BOX 677 ELDORADO TX 769360677 WILLIAM W WHITTEN 3258532544 2012-11-05 1 Matt R Willis P00419741 8067473806 2012-11-05 2011 2016-02-24 21:20:13Z WILLIAM W WHITTEN PO BOX 677 ELDORADO TX 769360677 22879728 0 X WWW.SWTEC.COM X 1941 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 7 7 51 0 12414 11414 0 0 20613016 22525168 28783 28270 34653 32138 20676452 22585576 6827 11715 2568364 2770208 2077268 2204207 0 0 0 16023993 17599446 20676452 22585576 0 0 41074574 44596621 9501952 10352449 31572622 34244172 TO MAKE ELECTRIC ENERGY AVAILABLE TO ITS MEMBERS AT THE LOWEST COST CONSISTENT WITH SOUND ECONOMY AND GOOD MANAGEMENT. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 9,396 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 0 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 14 0 51 1 1 1 0 0 0 0 22029076 322843 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X WILLIAM WHITTEN 3258532544 101 E GILLIS ELDORADO TX 76936 STEVE WILLIAMS 4.00 X X 24200 0 0 JAMES OWENS 2.40 X X 21650 0 0 JERRY JOHNSON 2.30 X X 21630 0 0 EUGENE VINSON 3.00 X X 21725 0 0 BILLY GREEN 1.90 X 10562 0 0 SAM HENDERSON JR 2.30 X 10538 0 0 RICHARD S RUNGE 2.50 X 8981 0 0 PAT JACKSON 3.20 X 7267 0 0 WILLIAM WHITTEN 45.00 X 105210 0 26438 231763 0 26438 1 0 0 0 SUTTON SPECIALTY ELECTRIC 1941 N MAIN JUNCTION TX 76849 POWERLINE CONSTRUCTION 1029086 LAMBDA CONSTRUCTION 211 JESSES CIRCLE NEW BRAUNFELS TX 78132 SUBSTATION CONSTRUCTION 265002 2 ELECTRIC SALES 221000 20888726 20888726 PATRONAGE DIVIDENDS 221000 1636442 1636442 22525168 28270 28270 12221 0 12221 12221 12000 221 314069 294152 19917 7503 12414 22585576 22544671 12414 28491 X 11715 2770208 258201 1063169 219393 573533 89911 202855 1500457 PURCHASED POWER 13267595 DISTRIBUTION EXPENSE 1528903 ADMIN.& GENERAL 830693 UBIT 1387 267556 22585576 855256 779757 1544092 1928202 712827 750056 709293 759022 60289023 29488459 28976176 30800564 7249268 8690418 1027662 888602 41074574 44596621 1725587 1520289 741252 625108 6575676 7686204 459437 520848 9501952 10352449 X 10090 10615 0 0 31562532 34233557 31572622 34244172 41074574 44596621 X 0 2671550 X X 0 1 0 X 0 292772 292772 712692 590034 122658 58108483 28898425 29210058 1175076 1175076 30800564 CAPITAL TERM CERTIFICATES 505072 C PATRONAGE CAPITAL - NATIONAL RURAL UTILITIES FINANCE CORP 225383 C PATRONAGE CAPITAL - TEXAS ELECTRIC COOPERATIVE, INC 198314 C PATRONAGE CAPITAL - GOLDEN SPREAD ELECTRIC COOPERATIVE, INC. 7658468 C PATRONAGE CAPITAL - OTHERS 103181 C 8690418 CONSUMER DEPOSITS 122199 ACCRUED TAXES 125830 ACCRUED INTEREST 30000 OTHER CURRENT AND ACCRUED LIABILITIES 19976 ACCRUED EMPLOYEE COMPENSATED ABSENCES 222843 520848 22585576 22585576 0 2671550 2671550 2671550 22583576 0 22583576 2000 2000 22585576 19813368 0 19813368 2772208 2772208 22585576 Description of Uncertain Tax Positions Under FIN 48: Part X: ON JANUARY 1, 2009, THE COOPERATIVE ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. Part XI, Line 8 - Other Adjustments: NET INCREASE IN MEMBERSHIPS 525. PATRONAGE CAPITAL ASSIGNABLE 2,770,208. RETIREMENT OF PATRONAGE CAPITAL -99,885. GAIN ON RETIRED CAPITAL CREDITS 702. Total to Schedule D, Part XI, Line 8: 2,671,550. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 2,000. Part XIII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 2,000. PATRONAGE CAPITAL ASSIGNABLE 2,770,208. Part IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY IN ACCORDANCE WITH IRS INSTRUCTIONS SCHEDULE D, PART IX HAS BEEN LEFT BLANK. Part XIII, Line 4B FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY AND NOT AS AN EXPENSE. THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. HOWEVER, BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". PATRONAGE DIVIDENDS ARE ALLOCATED ON A PATRONAGE BASIS AND DONE SO PURSUANT TO A PRE-EXISTING OBLIGATION AS PROVIDED FOR IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. 0 X ALL GRANTS, SPONSORSHIPS AND DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. BENEFITS PAID TO MEMBERS FORM 990, PART I, LINE 14 THE INSTRUCTIONS FOR THE 2011 FORM 990 CLARIFY THAT "BENEFITS PAID TO MEMBERS" SHOULD INCLUDE THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS PATRONS) OF SECTION 501(C)(12) COOPERATIVES. CONSISTENT WITH THIS CLARIFICATION IN THE INSTRUCTIONS, THE COOPERATIVE HAS REPORTED ON PART I, LINE 14 FOR THE CURRENT YEAR THE AMOUNT OF PATRONAGE DIVIDENDS PAID AND/OR ALLOCATED TO THE COOPERATIVE'S PATRONS FOR THE 2011 CALENDAR YEAR. SINCE PART I SUMMARIZES BOTH PRIOR AND CURRENT YEAR DATA, THE COOPERATIVE HAS CHOSEN TO ALSO REPORT ON PART I, LINE 14 FOR THE PRIOR YEAR THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE PATRONS FOR THE 2010 CALENDAR YEAR. BECAUSE THE INSTRUCTIONS FOR THE 2010 FORM 990 DID NOT PROVIDE FOR SUCH A CLARIFICATION, THE 2010 FORM 990 WAS NOT PREPARED IN THIS MANNER. HOWEVER, SINCE THE COOPERATIVE DID IN FACT ALLOCATE PATRONAGE DIVIDENDS TO ITS PATRONS FOR THE 2010 CALENDAR YEAR, IT BELIEVES THAT BOTH THE PRIOR YEAR AND CURRENT YEAR COLUMNS OF PART I SHOULD BE PREPARED CONSISTENTLY IN ORDER TO REFLECT THAT THE COOPERATIVE HAS A PRE-EXISTING OBLIGATION TO ALLOCATE, AND DOES ALLOCATE, PATRONAGE DIVIDENDS TO ITS PATRONS FOR EACH YEAR THAT IT OPERATES FOR THE BENEFIT OF THE PATRONS. Form 990, Part VI, Section A, line 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. Form 990, Part VI, Section A, line 7a THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. Form 990, Part VI, Section A, line 7b THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE. 1. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE. 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION. 3. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS. Form 990, Part VI, Section A, line 8b EXECUTIVE SESSION FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. WHEN THIS OCCURS MANAGEMENT AND OTHERS IN ATTENDANCE ARE REMOVED FROM THE MEETING ROOM. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. HOWEVER, ACTIONS TAKEN BY THE BOARD AFTER EXECUTIVE SESSIONS ARE ADJOURNED ARE FULLY DOCUMENTED IN THE WRITTEN MINUTES. Form 990, Part VI, Section B, line 11 MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION, REVIEW AND APPROVAL PRIOR TO FILING. Form 990, Part VI, Section B, line 12c COOPERATIVE'S LEGAL COUNSEL MUST ANNUALLY REVIEW THE CONFLICT OF INTEREST POLICY WITH ALL OFFICERS AND DIRECTORS. EACH OFFICER AND DIRECTOR MUST ANNUALLY COMPLETE AND SIGN THE CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM, WHICH IS ATTACHED TO THE CONFLICT OF INTEREST POLICY. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S OTHER OFFICERS OR KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES ANNUALLY A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY. BYLAWS ARE MAILED TO ALL MEMBERS AND THE COOPERATIVE'S CONFLICT OF INTEREST POLICY IS AVAILABLE UPON REQUEST. BENEFITS PAID TO MEMBERS FORM 990, PART IX, LINE 4 THE FORM 990 INSTRUCTIONS FOR THE CURRENT YEAR CLARIFIES THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS PATRONS) SHOULD BE REPORTED ON PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". THE PHRASE "PATRONAGE DIVIDENDS PAID" REFERS TO THE PROCESS, SUBSEQUENT TO YEAR-END, BY WHICH THE COOPERATIVE ALLOCATES PATRONAGE CAPITAL TO AND, THEREFORE, OPERATES AT COST WITH ITS PATRONS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS PATRONS AND TO DO SO ON A COOPERATIVE BASIS. TAX LAW DEFINES "OPERATING ON A COOPERATIVE BASIS" AS SUBORDINATION OF CAPITAL, DEMOCRATIC CONTROL, AND OPERATION AT COST. THE COOPERATIVE OPERATES AT COST THROUGH THE ALLOCATION OF TRUE PATRONAGE DIVIDENDS (ALSO REFERRED TO AS ALLOCATIONS OF PATRONAGE CAPITAL) TO ITS PATRONS. PATRONAGE DIVIDENDS ARE CONSIDERED PAID IF THE ALLOCATION IS MADE (1) PURSUANT TO A PRE-EXISTING OBLIGATION, (2) FROM THE MARGINS PRODUCED FROM THE TRANSACTIONS DONE WITH OR FOR PATRONS, AND (3) IN A FAIR AND EQUITABLE BASIS ON THE BASIS OF PATRONAGE (I.E. PURCHASES). ADDITIONALLY, THE ALLOCATION OF PATRONAGE DIVIDENDS SHOULD BE MADE WITHIN A REASONABLE TIME PERIOD AFTER THE CLOSE OF THE COOPERATIVE'S YEAR-END OF DECEMBER 31. EACH ONE OF THESE REQUIREMENTS FOR A TRUE PATRONAGE DIVIDEND IS PROVIDED FOR IN THE NON-PROFIT OPERATION ARTICLE OF THE COOPERATIVE'S BYLAWS AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS PATRONS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC POWER AND ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC POWER AND ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC POWER AND ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE PATRONS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH PATRON FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY PATRONS SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE PATRON IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE PATRON HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2011 CALENDAR YEAR. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC POWER AND ENERGY TO THE PATRONS AND ARE DONE PURSUANT TO THE OLBIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS PATRONS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS PATRONS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2011 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE PATRONS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S GAAP BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART I, LINE 19 IS THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: NET INCREASE IN MEMBERSHIPS 525. PATRONAGE CAPITAL ASSIGNABLE 2,770,208. RETIREMENT OF PATRONAGE CAPITAL -99,885. GAIN ON RETIRED CAPITAL CREDITS 702. Total to Form 990, Part XI, Line 5: 2,671,550. AUDIT COMMITTEE Form 990, Part XII, Line 2C THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE AUDIT AND SELECTING THE CPA WHO WILL PERFORM THE AUDIT. GENERAL MANAGER RESPONSIBILITIES Form 990, Part VII, Section A THE BOARD OF DIRECTORS CONSIDERS THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. TO PROVIDE DETAIL REGARDING OFFICER'S OTHER COMPENSATION Form 990, Part VII, Column F IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, THE COOPERATIVE HAS ESTABLISHED A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION UP TO 2% OF A PARTICIPATING EMPLOYEE'S SALARY. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. EMPLOYEES INCLUDING OFFICERS ARE REQUIRED TO PAY FOR PART OF THE INSURANCE THROUGH PAYROLL DEFERRALS. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER. PATRONAGE DIVIDENDS Form 990, Part VIII, Line 2B PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND THE PURCHASE OF SUPPLIES AND SERVICES FROM OTHER COOPERATIVE ORGANIZATIONS. THE EXPENSES ASSOCIATED WITH PURCHASES FROM AND PAYMENTS TO SUCH COOPERATIVE ORGANIZATIONS ARE A DIRECT COMPONENT OF COST OF THE ELECTRIC SERVICE PROVIDED BY THE COOPERATIVE TO ITS MEMBERS. TO PROVIDE DETAIL REGARDING OTHER EXPENSES Form 990, Part IX, Line 24E THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24E CONSUMER ACCOUNTS $ 249,536 MISCELLANEOUS OTHER EXPENSE 17,986 TRANSMISSION EXPENSE 34 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 267,556 ACCOUNTING SYSTEM Form 990, Part IX THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. THE UNIFORM SYSTEM OF ACCOUNTING DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE WILL BREAK OUT SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH THEIR ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1 - 23 WILL BE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE UNIFORM SYSTEM OF ACCOUNTS. RECONCILIATION OF WAGES PER RETURN TO FORM W-3 Form 990, Part IX, Lines 5-7 SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY, AND EXPENSE ACCOUNTS BASED ON THE ACCOUNTING SYSTEM DESCRIBED ABOVE. IN AN EFFORT TO EXPLAIN WHY THE AMOUNTS REPORTED ON LINES 5-7 DO NOT AGREE TO THE W-3 THE FOLLOWING RECONCILIATION IS PROVIDED. TOTAL PER LINES 5-7 $1,321,370 LESS DIRECTORS FEES REPORTED ON 1099-MISC (126,553) PLUS SALARIES AND WAGES ALLOCATED TO ASSET ACCOUNTS 882,746 LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (26,438) RECONCILIATION TO W-3 $2,051,125 BREAKDOWN OF EXPENSES INCLUDED IN ADMINISTRATIVE AND GENERAL Form 990, Part IX, Line 24 THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24. OFFICE SUPPLIES AND EXPENSE $121,957 OUTSIDE SERVICES EMPLOYED 174,823 INSURANCE 21,003 EMPLOYEE EDUCATION AND TRAINING 47,550 MAINTENANCE OF GENERAL PLANT 40,828 REGULATORY COMMISSION EXPENSE 44,942 MISCELLANEOUS GENERAL EXPENSE 379,590 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $830,693 GOVERNING BODY AND MANAGEMENT Form 990, Part VI, Section A, Line 1 THE COOPERATIVE HAS 7 BOARD MEMBERS; ALL 7 ARE ALLOWED TO VOTE, HOWEVER THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE.