South Central Indiana Rural

“The cooperative was formed by the members to provide electric service at cost on a cooperative basis.”

“Members have the opportunity to vote and elect their own member representative on the board of directors. Each eligible member is entitled to one vote.”

“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. Disposal of a substantial portion of the cooperative's assets 4. Amendment to the articles of incorporation”

“The cooperative has no committees with authority to act on behalf of the governing body. Therefore, and pursuant to form 990 instructions, the question has been answered "no".”

“Management presented a copy of the form 990 to the board for discussion and review prior to filing. The discussion and review was performed at the board meeting immediately before filing the form 990.”

“Annually, a survey is distributed to all the relevent parties which asks about any relationships and conflicts of interest. It is the duty of the board member to disclose any conflicts of interest. A board member with a conflict of interest must recuse himself from any discussion or voting on issues that arise as a result of that conflict.”

“The ceo and other employee officer's compensation packages are determined by using comparability data for similar positions. This data is then reviewed and approved by the board of directors, with contemporaneous substantiation of the deliberation of the decision.”

“A current copy of the bylaws and monthly board minutes are available on the cooperative's website at www.sciremc.com/board-directors. Additionally, current members may submit a request to review the cooperative's articles of incorporation, conflict of interest policy, and financial statements.”

“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. Employer contributions to the plan are made pursuant to the plan document. 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 and highly compensated employees, meeting the eligibility requirements of such plans. The cooperative also provides health insurance to all eligible employees through a qualified plan. The amounts reported on part vii, column (f) for the officers, key employees and highly compensated employees is comprised of actuarial increase in the defined benefit plan, the total amount contributed by the cooperative to the defined contribution plan, and insurance paid on behalf of and for their benefit.”

“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.”

“The cooperative maintains its books and records in accordance with policies prescribed or permitted by the united states department of agriculture rural utilities services (rus) and the indiana utility regulatory commission (iurc), although the cooperative is no longer regulated by these agencies. The applicable uniform system of accounts (usoa) followed by the cooperative does not record expenses in the general expense categories provided on part ix lines 1-23. The cooperative separately reports 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 are reported on line 24 under the expense categories required by the usoa.”

“Pursuant to the form 990 instructions, the amount of patronage dividends paid to the members (hereinafter referred to as "patrons") should be reported on part ix, line 4. 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 manner 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. 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 2024 calendar year. Because patronage dividends are 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 such amounts as an expense for form 990 reporting. Patronage dividends are not an expense for financial statements prepared in accordance with generally accepted accounting principles, however.”

“Salaries and wages are allocated to asset, liability, and expense accounts based on the accounting system described above. The following schedule reconciles amounts reported on lines 5-7 to total wages accrued and/or paid: total per lines 5-7 $11,091,791 less: directors fees and deferred compensation (152,448) less: officer and key employee benefits included in line 5 (592,374) plus: salaries and wages capitalized directly to plant 3,992,666 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 514,540 total wages accrued and/or paid $14,854,145”

“Administrative and general expense is comprised of the following: administrative & general salaries, benefits, & other $ 2,052,705 employee dues & membership 6,614 training & seminars 65,835 business meals 11,826 subscriptions 1,082 maintenance of office equipment 86,688 mileage 903 mobile phones 58,199 office supplies 828,364 utilities & monthly charges 900,752 outside services 272,292 insurance & regulatory fees 333,225 public relations 30,999 annual meeting 87,552 directors 193,004 maintenance of general plant 433,446 miscellaneous general expense 610,911 subsidiary expense 2,239,446 total admin & general expense per financial statements $ 8,213,843 less: reclass of labor to part ix, lines 5 & 7 (2,319,237) less: reclass of benefits to part ix, lines 8-10 (1,095,894) less: reclass of director fees to part ix, line 5 (152,448) total admin & general expense per form 990, part ix $ 4,646,264”

“Other expenses is comprised of the following: customer accounts $ 481,853 customer service and information 200,334 other deductions 4,563 merchandising expenses 1,222 total other expenses per form 990, part ix $ 687,972”

“Patronage capital allocated or to be allocated 12,309,185. Patronage capital retired - total -194,629. Patronage capital retired - discount 127,136. Other comprehensive income - post retirement benefits other than pensions -141,735. Net decrease in memberships -6,895.”

“The board of directors have assigned members to an audit committee to oversee the financial statement audit and select the independent financial statement auditor.”