Lighthouse Electric Cooperative Inc

“The 2024 form 990 was amended to remove the checkbox on part vi, line 2 as well as the disclosure stating that there was a business relationship between ron graves and former director john dunlap during 2024. The checkbox and disclosure were applicable for the 2023 form 990, but were no longer applicable for 2024 since former director, john dunlap, was not a director for any part of 2024.”

“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 directors. Elections are done on a one member one vote basis.”

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

“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 presented a copy of the form 990 to the board for discussion and review prior to filing. The discussion and review occurred at the board meeting immediately after filing the form 990.”

“The board of directors perform an annual review and utilize internal resources when determining and approving compensation for the general manager. Other than the general manager, the cooperative did not have any employees meeting the definition of officer or key employee. Therefore, and pursuant to form 990 instructions, line 15b has been answered "no".”

“The cooperative will provide a complete copy of its governing documents and audited financial statements to any member who requests a copy of any such documents. Annually, the cooperative provides a copy of the audited balance sheet and income statement to the members of the cooperative with the annual report.”

“In order to provide retirement benefits to its employees, the cooperative has established a defined contribution plan under section 401(k) of the internal revenue code. Employer contributions to the plan are made pursuant to the plan document. Additionally, the cooperative participates in a multi-employer defined benefit plan. Contributions to this plan are based on the full funding limitation of such plan. Employer contributions for both plans are available to participating employees, including officers, meeting the eligibility requirements of such plans. The cooperative also provides health and life insurance to all employees, through a qualified plan. The amounts reported on part vii, column (f) for officers is comprised of actuarial increase in the defined benefit plan, the total amount contributed by the cooperative to the defined contribution plan and insurance paid on behalf of and for their benefit.”

“The board of directors consider the general manager to be both the top management official and the top financial official. Therefore, only the general manager is listed as an employee officer.”

“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 organization to its members.”

“The cooperative annually provides each director who served on the board during the year a questionnaire. The completed questionnaires are used to complete the applicable questions on the form 990 pertaining to business relationships among directors, officers, and key employees, as well as to determine if there are any transactions which must be reported in detail on schedule l - "transactions with interested persons". If the cooperative was unable to obtain a completed questionnaire, the cooperative relied upon the completed information for the prior year. Paul schact and dean yarbrough left during 2024; therefore, their prior year questionnaires were relied upon while preparing the return. There were no known changes.”

“Although the cooperative is no longer a rural utilities service (rus) borrower, its accounting records 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 are 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.”

“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 total wages accrued and/or paid: total per lines 5-7 $ 3,313,145 less: director fees reported on forms 1099-nec (196,233) less: employee officer benefits included in line 5 (66,543) plus: salaries and wages capitalized directly to plant 926,847 plus: salaries and wages capitalized/expensed indirectly through clearing and other accounts 525,064 total wages accrued and/or paid $ 4,502,280”

“Administrative and general expense is comprised of the following: administrative & general salaries, benefits, & other $ 1,308,141 office supplies 70,740 outside services 186,167 injuries & damages 99,017 directors 296,387 utility commission 59,334 miscellaneous general 159,664 advertising 15,803 annual & district meetings 83,104 capital credit allocation 18,136 uniforms - employees 50,388 maintenance of general plant 50,779 total admin & general exp per financial statements $ 2,397,660 add: reclass of donations to part ix, line 1 25 less: reclass of director fees to part ix, line 5 (196,233) less: reclass of labor to part ix, lines 5 & 7 (1,018,089) less: reclass of benefits to part ix, lines 8-10 (478,619) total admin & general exp per form 990, part ix $ 704,744”

“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.”

“Patronage capital allocated or to be allocated 2,246,923. Patronage capital retired - total -1,011,924. Net change in other equities 14,600.”

“The board as a whole is responsible for overseeing the audit and selecting the cpa who will perform the audit. Procedural changes did not occur during the year.”