Illinois Rural Electric Cooperative

“The cooperative contracts with sands road consulting co. For management services. Its principal consultant, bruce giffin, provides those services. That individual has forty-five years experience in the management of investor owned utilities and electric cooperatives. Illinois electric cooperative paid sands road consulting $406,000 for management services in 2019.”

“The cooperative has two classes of members. Class a members, electric members, have voting rights, class b members internet members, do not have voting rights.”

“Each customer who receives electric service is a class a member. These members elect the members of the board of directors and approve significant decisions of the cooperative.”

“The cooperative has one class of membership that must vote on changes to the bylaws, articles of incorporation, and sale of substantially all of the cooperative's assets.”

“Each member of the board of directors will be provided an electronic copy of the return prior to its filing. The board's management consultant conducted a review of the return, including verifying financial and other information against internal information.”

“Counsel reviews policy annually with the board and senior management. The board's management consultant reviews it annually with the employees. Determinations for the board are at the board level, the board's management consultant at the board level and all other employees at the board's management consultant level. Restrictions on the board in the instance of a conflict of interest does not allow them to vote on the matter and employees are prohibited from having conflicts of interest.”

“The board of directors has a contract with sands road consulting co., inc., (src) for management services. The fee schedule in the contract pays src an amount comparable with the total costs of compensation for a cooperative manager as reported in benchmark data from the national rural electric cooperative association and the association of illinois electric cooperatives. The process is documented in the minutes of the board's meetings. The process of determining compensation for other key employees is carried out by the board's management consultant, using the same data sets as noted above. The process is documented in the minutes of board meetings and of board committee meetings. This process takes place annually.”

“The cooperative's governing documents, conflicts of interest policy, and financial statements are made available upon request and on our website www.e-co-op.com”

“Equity in earnings in subsidiary 26,927. Patronage retired -994,305. Change in other comprehensive income -18,445. Patronage dividends allocated 2,306,854.”

“The board of directors process for oversight of the audit and selection of an independent auditor has not changed in 2019.”

“The irs instructions state that patronage dividends paid by section 501(c)(12) organizations to their members should be reported on line 4. The organization has interpreted patronage dividends paid to mean patronage dividends allocated or to be allocated for the current year. Since this allocation is not an expense under generally accepted accounting principles (gaap), this has resulted in a reconciling item to net assets in part xi, on page 12 of the form 990.”