Tennessee Valley Authority

“Cherokee Electric Cooperative is a not-for-profit membership organization whose members have identical voting rights and are assigned margins in accordance with the organization's bylaws.”

“Cherokee Electric Cooperative's governing body consists of seven directors that are elected by the membership of the cooperative. Each director serves a three year term and represents a certain district within the territory served by the cooperative. The terms are staggered in order for the cooperative to only have two or three directors up for election in any one year.”

“The membership must approve decisions that involve substantial transfers of cooperative assets, amendments to the cooperative's bylaws, as well as other decisions requiring approval of the membership by law, the articles of incorporation, and/or the cooperative's bylaws.”

“The Form 990 was reviewed extensively by the Chief Financial Officer and the General Manager before the return was filed. The Chief Financial Officer attended a board meeting and presented the Form 990 before it was filed. Each board member was given a hard copy of the return to review as it was discussed by the Chief Financial Officer.”

“Management regularly monitors the compliance with the conflict of interest policy. The directors are required to disclose any conflicts of interest on a questionnaire when they run for office.”

“The General Manager/CEO's compensation is based on a contract approved by the board of directors. The other officers' compensations are calculated based on a statewide wage and salary guide and is approved by the board of directors.”

“Bylaws are offered to all new members; all other documents are available at any time upon request.”

“These documents are available upon request at the Cooperative's office in Centre, Alabama.”

“Patronage allocation - margins assigned/allocated to members 5,570,876. Increase in memberships 1,030. Actuarial adjustment of calculation of gain 5,335,967.”

“The instructions to the Form 990 indicate that organizations exempt under Section 501(c)(12) should report "patronage dividends paid" to their members in Part IX, Line 4 of the Form 990. Cherokee Electric Cooperative has interpreted the words "patronage dividends paid" in the instructions to mean margins that are assigned or assignable to the members. Cherokee Electric Cooperative assigns the net margins to its members each year. The amount listed in Part IX, Line 4 represents the net margins assigned to the members for the fiscal year.”