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 the 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 2019 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 2018, 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 2019, the cooperative's compensation consultant updated the salaried plan ranges based on market data and also conducted a competitive analysis on the hourly skilled positions. Using the old dominion survey, the board sets the ceo's salary. The cooperative's compensation consultant also updated salary ranges for all in top management and, based upon that market information and the consultant's recommendations, salaries for top management were set and approved by the budget and finance committee and the board of directors.”

“Receptionists have been informed that the form 990 will be made available. Financial statements are available on the organization's website.”

“Other changes in net assets 15,503,069.”

“Excess of revenues over expenses, or net margin of $20,000,000, 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 2019 reporting. Cooperative energy does not include this allocation of patronage capital as an expense for financial reporting. During 2019, patronage capital amounting to $4,496,931 was retired.”

“There were no changes in the process for the 2019 tax year.”