Dakota Electric Association

“All of the board members of the organization also serve as board members for the subsidiaries of the organization and thus have a business relationship.”

“The organization has members, all of which are in the same class with the same voting rights.”

“There are four districts and each district has three board members. All members vote on all four districts.”

“Members have the power to remove any director or officer if their actions cause substantial harm to the interests of the organization. Members also have the right to alter, amend, or repeal the bylaws if approved by majority of votes cast.”

“The cooperative does not have an executive committee with the authority to act on behalf of the full board of directors.”

“The board of directors was provided a copy of the form 990 for their review at a board meeting prior to filing.”

“Board members are covered under the conflict of interest policy. A director who believes that he/she may have a conflict of interest shall disclose the potential conflict and furnish adequate information to the board of directors concerning the conflict within 30 days of the onset of the potential conflict. The board of directors shall determine whether a conflict exists and the terms, if any, under which the conflict can be resolved. A director who believes that another director may have a conflict of interest shall state the basis of this belief to the board of directors. The board may request such director provide adequate information to establish that no conflict exists. Such director shall promptly provide this information to the board of directors, which shall determine whether a conflict exists and the terms, if any, under which the conflict can be resolved. Each board member signs a certification annually by july 1 to disclose any potential conflicts of interest. Every employee is covered by the code of ethics and business conduct policy, and are required to report any potential conflict of interest. Senior management, in conjunction with the human resources director, shall investigate any potential conflicts in a timely manner. Generally, the final authority for determining whether or not a violation of this policy occurred rests with the president & ceo or his/her designee. In those instances where the president & ceo is alleged to have a conflict, the final authority shall be the board of directors.”

“The board of directors serves as the compensation committee. The board often uses a salary survey or comparison of wages from other comparably sized electric cooperatives. The wage data may come from 990s of cooperatives of similar size or from the nreca compensation survey. Following year end, the board of directors deliberates as to whether or not safety, operations, reliability, and other factors were met. If these factors were met the board will award all or a portion of the "market pay" that had been withheld. The compensation approval process of the president/ceo last took place in april 2018. The compensation of the vice president of finance/cfo is determined by the ceo through a performance evaluation, as well as periodic area market salary comparisons. The performance evaluation last took place in may 2018. The periodic area market salary comparison last took place in march 2016. The hr department uses comparison wage data from surveys for all positions to determine appropriate market compensation, but the board does not vote on the compensation of other positions.”

“The financial statements are available to the public on the website or upon request.”

“Capital credits retired -3,238,787. Equity in earnings of subsidiary -158,851. Patronage dividends allocated 3,958,643. Unclaimed capital credits donated 179,000.”

“The cooperative's board of directors assumes responsibility for oversight of the audit of its financial statements and the selection of its independent accountant. This process has not changed from the prior year.”

“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.”