Federated Rural Electric

“The continued growth and development of the federated broadband division required that the bylaws be updated to allow broadband to operate on a cooperative basis. The amendment included language to define a member as one taking delivery of electric energy while a patron (who could receive patronage capital) was defined as receiving electric energy and other cooperative services. A "cooperative service" was defined as a like kind good or services provided by the cooperative, as determined by the cooperative's board of directors. The amended bylaws were adopted august 1, 2024.”

“The cooperative is a member owned cooperative.”

“Each member of the cooperative has one vote in elections of board members. The membership of the cooperative also votes on changes to the by-laws.”

“Mergers, dissolution, and bylaw changes must be approved by members of the cooperative.”

“There are no committees with authority to act on behalf of the governing body. All committees bring recommendations to the board of directors.”

“It is the cooperative's policy that the board of directors review the form 990 filed on the organization's behalf before it is filed with the irs. Each board member individually signs a document stating they have reviewed the 990. After the 990 is filled with the irs, each board member received a complete copy of the filed document in their monthly board report. The report is delivered electronically.”

“Directors, officers, and members of management must annually complete and sign the conflict of interest certification and disclosure form and deliver it to the general manager. In addition, if an official discovers any information that could impact another official's compliance with the policy, they must disclose the information to the general manager immediately. Potential conflicts of interest are reviewed by the board of directors. If the board determines that a director does not comply with the policy then they must provide the director an opportunity to comply with the policy within thirty days. If the director does not comply then the board must sanction, disqualify, and/or remove the director as allowed by law. The cooperative's legal counsel must annually review this policy with all officials.”

“The board of directors makes annual recommendations regarding the general manager's performance and compensation. Compensation surveys and comparability data are used to ensure the general manager's compensation is reasonable. In 2024, the cooperative conducted an additional compensation study that also reviewed compensation for the cfo/office manager. For the cfo/office manager and all nonunion employees, the general manager makes a recommendation to the board which the board approves.”

“A new member packet which includes the statement of nondiscrimination and information about the availability of the articles of incorporation and the bylaws is mailed to each new member. The bylaws and articles are available upon request and are published on our website. Federated rural electric publishes a summary report from the full audit report prior to the annual meeting. This report is contained in the monthly news letter, "connections," mailed to each member of record. In addition, the full audit report and conflict of interest policy are available upon request at the cooperatives' corporate offices. The public inspection copy of form 990 is available at guidestar.org or by contacting the cooperative.”

“The labor, pension, and payroll taxes reported on lines 6-10 are included in distribution expense, administrative & general expense, and customer expense. Therefore, labor, pension, and payroll, taxes are shown as a reduction to other expenses on line 24e.”

“Patronage dividends paid: as required by 990 instructions, form 990, part ix, line 4 (benefits paid to or for members) includes patronage dividends paid. This amount is an expense for purposes of form 990, but is not recognized as an expense under g.a.a.p. Reporting requirements, which are used for book income. The result is a book to tax difference which is disclosed on part xi and on schedule d, parts xi and xiii. In reference to part ix, line 4, the cooperative has interpreted "patronage dividends paid" as capital credits allocated to members under the preexisting obligations pursuant to the bylaws of the cooperative.”

“Retired capital credits -1,228,227. Partnership book to tax difference 103,399. Allocation of capital credits 1,908,233.”

“The full board of direcotrs assumes responsibility for the oversight of the audit and selection of the independent auditor.”