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TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or 990-EZ or to provide any additional information.
Attach to Form 990 or 990-EZ.
Information about Schedule O (Form 990 or 990-EZ) and its instructions is atwww.irs.gov/form990.
OMB No. 1545-0047
2014
Open to Public
Inspection
Inspection
Name of the organization
SOUTH CENTRAL INDIANA RURAL
ELECTRIC MEMBERSHIP CORPORATION
ELECTRIC MEMBERSHIP CORPORATION
Employer identification number
35-6043583
35-6043583
| Return Reference | Explanation |
|---|---|
| FORM 990, PART I, LINES 15 & 17 | THE COOPERATIVE PREVIOUSLY INCLUDED ALL LABOR AND BENEFIT COSTS FOR SCI SERVICES LLC (A DISREGARDED ENTITY) AS COMPONENTS OF OTHER FUNCTIONAL EXPENSES USED FOR NORMAL FINANCIAL REPORTING. HOWEVER, FOR THE 2014 CALENDAR YEAR, THE COOPERATIVE BEGAN INCLUDING THE LABOR AND BENEFITS COSTS FOR THE DISREGARDED ENTITY WITH ALL LABOR AND BENEFIT COSTS OF THE COOPERATIVE AND EXPENSED TO THE INCOME STATEMENT FOR FORM 990 REPORTING PURPOSES. TO INCREASE CONSISTENCY, LABOR AND BENEFIT COSTS OF $2,176,838 WERE RECLASSIFIED FROM LINE 17 "OTHER EXPENSES" RESULTING IN A COMPARATIVE LINE 15 TOTAL OF $10,365,520. |
| FORM 990, PART VI, SECTION A, LINE 4 | ARTICLE 1 AND III WERE AMENDED TO STATE THAT MEMBERSHIP FEES ARE NO LONGER CHARGED TO MEMBERS. |
| FORM 990, PART VI, SECTION A, LINE 6 | THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. |
| FORM 990, PART VI, SECTION A, LINE 7A | MEMBERS HAVE THE OPPORTUNITY TO VOTE AND ELECT THEIR OWN MEMBER REPRESENTATIVE ON THE BOARD OF DIRECTORS. EACH ELIGIBLE MEMBER IS ENTITLED TO ONE VOTE. |
| FORM 990, PART VI, SECTION A, LINE 7B | THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE. 1. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE; 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION; 3. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; AND 4. AMENDMENT TO THE ARTICLES OF INCORPORATION. |
| FORM 990, PART VI, SECTION B, LINE 11 | THE VICE PRESIDENT OF CORPORATE SERVICES REVIEWED THE FORM 990 IN ITS ENTIRETY WITH THE GOVERNING BOARD. THE REVIEW WAS CONDUCTED PRIOR TO THE SUBMISSION OF THE FORM WITH THE IRS. |
| FORM 990, PART VI, SECTION B, LINE 12C | A SURVEY IS DISTRIBUTED TO ALL THE RELEVENT PARTIES ANNUALLY WHICH ASKS ABOUT ANY RELATIONSHIPS AND CONFLICTS OF INTEREST. IT IS THE DUTY OF THE BOARD MEMBER TO DISCLOSE ANY CONFLICTS OF INTEREST. A BOARD MEMBER WITH A CONFLICT OF INTEREST MUST RECUSE HIMSELF FROM ANY DISCUSSION OR VOTING ON ISSUES THAT ARISE AS A RESULT OF THAT CONFLICT. |
| FORM 990, PART VI, SECTION B, LINE 15 | THE CEO AND ALL EMPLOYEE COMPENSATION PACKAGES ARE DETERMINED BY USING COMPARABILITY DATA FOR SIMILAR POSITIONS. THIS DATA IS THEN REVIEWED AND APPROVED BY THE BOARD OF DIRECTORS, WITH CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION OF THE DECISION. |
| FORM 990, PART VI, SECTION C, LINE 19 | OTHER THAN THE FORM 990, NO DOCUMENTS ARE MADE AVAILABLE TO THE PUBLIC. CURRENT MEMBERS MAY SUBMIT A WRITTEN REQUEST FOR AN EXAMINATION OF THE BOOKS AND RECORDS OF THE COOPERATIVE WHICH ARE LIMITED TO MEETING MINUTES AND FINANCIAL STATEMENTS. ADDITIONALLY, MEMBERS RECEIVE COPIES OF THE BYLAWS AT THE TIME THEY BECOME MEMBERS. |
| FORM 990, PART VI, LINE 16A | THE COOPERATIVE HAS A MINORITY INTEREST IN TWO MULTI-MEMBER LIMITED LIABILITY COMPANIES THAT ARE TAXED AS PARTNERSHIPS. THE SERVICES PROVIDED BY THESE ENTITIES ARE ADMINISTRATIVE IN NATURE AND RELATED TO THE COOPERATIVE'S EXEMPT PURPOSES. THE INVESTMENTS ARE INSIGNIFICANT COMPARED TO THE OVERALL OPERATIONS OF THE COOPERATIVE BUT ARE REVIEWED ANNUALLY WHEN CALCUTING THE MEMBER/ NON-MEMBER INCOME TESTS FOR REMAINING EXEMPT UNDER SECTION 501(C)(12) OF THE INTERNAL REVENUE CODE. |
| FORM 990, PART VII, COLUMN F | IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, THE COOPERATIVE HAS ESTABLISHED A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNATL REVENUE CODE. 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 ALL PARTICIPATING EMPLOYEES MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS, INCLUDING EMPLOYEE OFFICERS, KEY EMPLOYEES, AND HIGHLY COMPENSATED EMPLOYEES. THE COOPERATIVE ALSO PROVIDES HEALTH INSURANCE TO ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR EMPLOYEE OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES ARE COMPROMISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN, AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. |
| FORM 990, PART VIII, LINE 2B | 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. |
| FORM 990, PART IX | THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE POLICIES AND PROCEDURES PRESCRIBED OR PERMITTED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE RURAL UTILITIES SERVICES (RUS) AND THE INDIANA UTILITY REGULATORY COMMISSION (IURC). ALTHOUGH THE COOPERATIVE IS NO LONGER REGULATED BY THESE AGNECIES, IT FOLLOWS THE APPLICABLE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED FOR BORROWERS OF THE RUS AND AS MAY BE MODIFIED FROM TIME TO TIME BY THE IURC. THE UNIFORM SYSTEM OF ACCOUNTS 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 ITS ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1 - 23 ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE UNIFORM SYSTEM OF ACCOUNTS. |
| FORM 990, PART IX, LINES 5-7 | 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 $ 7,103,985 LESS DIRECTORS FEES REPORTED ON 1099-MISC (218,635) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (276,359) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,089,246 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED IDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 291,076 TOTAL WAGES ACCRUED AND OR PAID $ 7,989,313 |
| FORM 990, PART IX, LINE 24 | ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OFFICE AND SUPPLIES $ 320,201 EMPLOYEE DUES & MEMBERSHIP 11,444 TRAINING & SEMINARS 136,337 BUSINESS MEALS 2,819 SUBSCRIPTIONS 2,964 MAINTENANCE OF OFFICE EQUIPMENT 18,951 MILEAGE 4,896 TELEPHONE EXPENSE 41,258 UTILITIES & MONTHLY CHARGES 734,566 OUTSIDE SERVICES EMPLOYED 241,835 INSURANCE & REGULATORY EXPENSE 260,515 PUBLIC RELATIONS 39,657 ANNUAL MEETING EXPENSE 99,763 DIRECTOR EXPENSE 61,836 MAINTENANCE OF GENERAL PLANT 312,498 MISCELLANEOUS GENERAL EXPENSE 286,020 SCI SERVICES GENERAL & ADMIN EXPENSES 918,354 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 3,493,914 |
| FORM 990, PART IX, LINE 4 | PURSUANT TO THE FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS MEMBERS 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 MEMBERS. 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 MEMBERS, 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 AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS MEMBERS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE MEMBERS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY MEMBER SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2014 CALENDAR YEAR. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2014 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. |
| FORM 990, PART IX, LINE 24E | ALL OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: CUSTOMER ACCOUNTS EXPENSE $ 430,416 OTHER DEDUCTIONS 1,996 SECURITY - COST OF SALES 209,350 MERCHANDISING - INSTALLATION COSTS 165,333 TOTAL ALL OTHER EXPENSES PER FORM 990 $ 807,095 |
| FORM 990, PART X, LINES 30 AND 32 | THE COOPERATIVE HAS DETERMINED THAT MEMBERSHIP FEES RECEIVED FROM THE MEMBERS SHOULD BE INCLUDED ON PART X, LINE 30 AS "CAPITAL STOCK" FOR 2014. TO INCREASE CONSISTENCY, THE MEMBERSHIP FEES AS OF DECEMBER 31, 2013 HAVE BEEN RECLASSIFIED FROM LINE 32 TO LINE 30. |
| FORM 990, PART X, LINES 12 AND 13 | THE COOPERATIVE HAS DETERMINED THAT PATRONAGE CAPITAL AND OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS SHOULD BE INCLUDED ON PART X, LINE 13 AS "INVESTMENTS - PROGRAM RELATED" FOR 2014. TO INCREASE CONSISTENCY, SUCH INVESTMENTS AS OF DECEMBER 31, 2013 HAVE BEEN RECLASSIFIED FROM LINE 12 TO LINE 13. |
| FORM 990, PART X, LINES 2 AND 12 | THE COOPERATIVE HAS DETERMINED THAT INVESTMENTS IN MONEY MARKET FUNDS SHOULD BE INCLUDED ON PART X, LINE 2 AS "SAVINGS AND TEMPORARY CASH INVESTMENTS" FOR 2014. TO INCREASE CONSISTENCY, SUCH INVESTMENTS AS OF DECEMBER 31, 2013 HAVE BEEN RECLASSIFIED FROM LINE 12 TO LINE 2. |
| FORM 990, PART XI, LINE 9: | NET DECREASE IN MEMBERSHIPS -13,355. OTHER COMPREHENSIVE INCOME - POST RETIREMENT BENEFITS OTHER THAN PENSIONS 263,171. PATRONAGE CAPITAL ASSIGNABLE 3,621,371. PATRONAGE CAPITAL RETIRED - TOTAL -100,148. PATRONAGE CAPITAL RETIRED - DISCOUNT 37,101. |
| FORM 990, PART XII, LINE 2 | THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2014
Additional Data
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