Minnesota Valley Electric Cooperative

“The organization is a member owned cooperative.”

“There is one class of membership and members elect the board of directors.”

“The members vote on significant issues at the annual membership meetings. Each member has one vote per issue.”

“There are no committees with authority to act on behalf of the board of directors.”

“The 990 was given to each director and the general manager for review prior to filing with the irs. The review was conducted individually.”

“Conflicts of interest are disclosed annually by the board of directors. Monitoring occurs throughout the year through the normal review/processing of cash disbursements; reviewing of monthly financial statements; with the employee annual review process; and through adherence to the company policy on business ethics/conflict of interest. Annual disclosures are reviewed by the vice president of finance.”

“General manager - compensation was determined and approved by the board. Other officers & key employees - annual performance reviews are completed along with wage and salary adjustments. Pay tables are adjusted from time to time based on market conditions. An outside consultant was used to establish the initial pay plan. The cooperative follows employee policy #e-08 regarding compensation practices for non-union personnel. The union personnel compensation is based on the collective bargaining agreement.”

“The organization's public inspection copy of form 990 is available upon request.”

“Documents are provided upon request.”

“Included in part vii, section a, line 1a, column f, is the estimated annual increase in the actuarial value of the defined benefit plan. This amount is an estimate of the increase of the value of the plan and is not a current year expense of the cooperative. Current year contributions into the defined benefit plan are a current year expense and are included in part ix as such. Current year contribution amounts are included in the estimated annual increase in the actuarial value of the defined benefit plan.”

“The cooperative's policy regarding participation in joint ventures is not written. However, the cooperative performs an 85% test on an annual basis to ensure that it maintains its tax exempt status, and the other joint venture member is also a cooperative. Additionally, the joint venture arrangement is reviewed and monitored by the board of directors.”

“As required by form 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.”

“Equity capital credits retired -1,378,740. Allocated capital credits 3,696,157. Partnership income - book vs. Tax d 108,693. Llc adjustment -41,546.”

“Oversight process of the audit and selection process of the independent auditors has not changed from the prior year.”