South Mississippi Electric Power Association

“The board of directors of cooperative energy consists of 2 directors from each of the 11 member nonprofit distribution cooperatives that own cooperative energy, plus 2 at-large directors who also serve on the board of directors of the member cooperative for a total of 24 directors. Eleven directors serving on coperative energy's board of directors are general manager of member coperative. Thus the general manager and director from each member cooperative have a business relationship with each other while serving as directors for cooperative energy.”

“See response to part vi section a question 2 above.”

“See response to part vi section a question 2 above.”

“See response to part vi section a question 2 above.”

“A copy of the 2017 form 990 was reviewed with the budget and finance committee and reported to the board of directors. On the budget and finance committee's recommendation, the board authorized the execution and filing of the return.”

“Conflict of interest policy enforcement - directors, officers, and key employees annually complete, and sign, a questionaire relative to independence, business relationships, etc.”

“Cooperative energy uses several means to inform management and the board of market changes in compensation so as to offer competitive pay to technical and managerial employees. In 2015, cooperative energy participated in a survey by old dominion electric cooperative which covered the ceo and top management positions. That survey was shared with the board. In 2016, the job descriptions of all salaried positions were updated and evaluated in conjunction with an outside electric industry consultant. Part of that review included comparing salary grades with market in the industry. Using the surveys, the board sets the ceo's salary. The ceo sets top management's salaries subject to the payroll budget as approved by the budget and finance committee and the board. Approval of the payroll portion of the budget is part of the budget approval process, and documented in the budget and finance committee minutes and board approval documented in the minutes.”

“Receptionists have been informed that the form 990 will be made available. A form is utilized for parties requesting a copy of the form 990. This form advises requesting parties that photocopies will be made available upon receipt of copying fees (also specified in the request form). Financial statements are available on the organization's website.”

“Other changes in net assets 14,936,314.”

“Excess of revenues over expenses, or net margin of $20,085,000, is allocated to the 11 member cooperatives based on sales. This is only an allocation of patronage capital. No actual payment is made to the members. This allocation of patronage capital is shown as a functional expense in part ix, number 4, per form 990 instructions effective for 2017 reporting. Cooperative energy does not include this allocation of patronage capital as an expense for financial reporting. During 2017, patronage capital amounting to $5,148,686 was retired.”

“There were no changes in the process for the 2017 tax year.”