Choctaw Electric Cooperative Inc

“During 2024, the cooperative made amendments to its bylaws. These included: section 4.10 compensation; expense; indemnification, has been revised in paragraph one to say, "no trustee shall receive compensation from any other business associated with the cooperative, except compensation from western farmers electric cooperative." it has also been revised in paragraph four to say, "upon leaving the board of trustees, a former trustee or close relative of a former trustee, shall not be allowed to be awarded contracts or receive any financial compensation from the cooperative for a period of five years."”

“The cooperative was formed by the members to provide electric service at cost on a cooperative basis.”

“The members of the cooperative vote on the board of trustees. Elections are done on a one member one vote basis.”

“The following acts require approval of the members of the cooperative: 1. Amendments to the articles of incorporation 2. Amendments to the bylaws 3. Disposal of substantial portion of the cooperative's assets 4. Dissolution/liquidation of the cooperative 5. Merger or consolidation of the cooperative with another organization”

“The cooperative has no committees with authority to act on behalf of the governing body. Therefore, and pursuant to form 990 instructions, the question has been answered "no".”

“Management reviewed and then provided a copy of the form 990 to the board for discussion and review before filing the form 990.”

“The board of trustees and officers are required to review and be familiar with the policies outlined in the cooperative's conflict of interest policy. The board of trustees and officers are required to disclose any action or situation that might violate the policy to the full board of trustees as soon as possible. The conflict of interest policy is reviewed on an annual basis.”

“The board of trustees assess performance and use a compensation survey when determining the compensation of the ceo. The survey shows comparative salaries for general managers from cooperatives located in oklahoma. The ceo assesses performance and uses a compensation survey when determining the compensation of the organization's other employee officers or key employees, if any. The survey includes comparative salaries from similar cooperatives throughout oklahoma.”

“The cooperative will provide a copy of its governing documents, conflict of interest policy, and audited financial statements to any member who submits a request in writing for a copy of such document. Annually the cooperative provides a copy of the audited balance sheet and income statement to the members of the cooperative with the annual report. The annual report, bylaws and audit report can be found on the cooperative's website.”

“In order to provide retirement benefits to its employees the cooperative participates in a multi-employer defined benefit plan. Contributions to this plan are based on the full funding limiation of the plan. Employer contributions are available to participating employees, including employee officers and highly compensated employees, meeting the eligibility requirements of the plan. The cooperative also provides health benefits to all eligible employees through a self-insurance plan. The amounts reported on part vii, column (f) for employee officers and highly compensated employees are comprised of the actuarial increase in the defined benefit pension plan and the insurance premium values for contributions made to the self-insurance plan on behalf of and for their benefit.”

“Patronage dividends result from the purchase of wholesale power from a generation & transmission cooperative. Patronage dividends also result from the payment of interest from cooperative banks and the purchase of supplies and services from other cooperative organizations. The expenses associated with purchases from and payments to such cooperative organizations are a direct component of cost of the electric service provided by the cooperative to its members.”

“The accounting records of the cooperative are maintained in accordance with the rus uniform system of accounts (usoa) prescribed for rus electric borrowers. The usoa does not record expenses in the general expense categories provided on part ix lines 1-23. The cooperative separately reports salaries and wages, employee benefits and payroll taxes that will be allocated in accordance with their accounting system, but other expenses that are described in lines 1-23 are reported on line 24 under the expense categories required by the usoa.”

“Administrative and general expenses is comprised of the following: administrative & general salaries, benefits, & other $ 960,463 employee pension and benefit 3,288 management & training 209,105 dues & subscriptions 167,809 office supplies 50,857 lease payment 11,909 utilities and monthly charges 147,961 outside services employed 400,956 insurance 107,646 annual meeting 54,727 trustees 83,414 maintenance of general plant 85,476 miscellaneous general 32,813 total admin & general exp per financial statements $ 2,316,424 less: reclass of trustee fees to part ix, line 5 (54,889) less: reclass of labor to part ix, lines 5 & 7 (811,502) less: reclass of benefits to part ix, lines 8-10 (447,096) total admin & general expense per form 990, part ix $ 1,002,937”

“Salaries and wages are allocated to asset, liability, and expense accounts based on the accounting system described above. The following schedule reconciles amounts reported on lines 5-7 to the total wages accrued and/or paid: total per lines 5-7 $ 4,291,735 less: trustee fees reported on forms 1099-nec (54,889) less: employee officer benefits included in line 5 (129,649) plus: salaries and wages capitalized directly to plant 1,132,007 plus: salaries and wages capitalized/expensed indirectly through clearing & other accounts 375,276 total wages accrued and/or paid $ 5,614,480”

“Pursuant to the form 990 instructions, the amount of patronage dividends paid to the members (hereinafter referred to as "patrons") should be reported on part ix, line 4. The phrase "patronage dividends paid" refers to the process, subsequent to year-end, by which the cooperative allocates patronage capital to and, therefore, operates at cost with its patrons. The cooperative's tax exempt purpose is to provide electricity to its patrons and to do so on a cooperative basis. Tax law defines "operating on a cooperative basis" as subordination of capital, democratic control, and operation at cost. The cooperative operates at cost through the allocation of true patronage dividends (also referred to as allocations of patronage capital) to its patrons. Patronage dividends are considered paid if the allocation is made (1) pursuant to a pre-existing obligation, (2) from the margins produced from the transactions done with or for patrons, and (3) in a fair and equitable manner on the basis of patronage (i.e. Purchases). Additionally, the allocation of patronage dividends should be made within a reasonable time period after the close of the cooperative's year-end of december 31. Each one of these requirements for a true patronage dividend is provided for in the non-profit operation article of the cooperative's bylaws. The amount reported on part ix, line 4 represents the amount of patronage capital that is either allocated or to be allocated to the patrons resulting from their purchase of electricity from the cooperative for the 2024 calendar year. Because patronage dividends are the process by which the cooperative operates at cost with its patrons and thereby a key component to accomplishing its exempt purpose, the cooperative has reported such amounts as an expense for form 990 reporting. Patronage dividends are not an expense for financial statements prepared in accordance with generally accepted accounting principles, however.”

“All grants, sponsorships, and/or donations are made to non-profit and civic organizations, and are intended to improve the communities in which our members reside. Each grant, sponsorship, and/or donation made during the year was below the reporting threshold of schedule i, part ii.”

“Net change in memberships 985. Other comprehensive income - provision for pension & benefits -816,926. Patronage capital allocated or to be allocated 7,367,148. Patronage capital retired - total -2,277,723. Patronage capital retired - unclaimed 875,761. Donated capital 775.”

“The board as a whole is responsible for overseeing the financial statement audit and selecting the independent financial statement auditor. Procedural changes did not occur during the year.”