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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
THE VICTORY ELECTRIC COOPERATIVE ASSOCIATION INC
Employer identification number
48-0499309
48-0499309
| Return Reference | Explanation |
|---|---|
| FORM 990, PART VI, SECTION A, LINE 2 | JIM IMEL (DIRECTOR), SHANE LAWS (CEO) AND KENNY WEHKAMP (BOARD PRESIDENT) HAVE A BUSINESSS RELATIONSHIP. ALL 3 SERVE ON THE BOARD OF SUNFLOWER ELECTRIC POWER CORPORATION (SEPC) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. SHANE LAWS (CEO) AND KENNY WEHKAMP (BOARD PRESIDENT) HAVE A BUSINESSS RELATIONSHIP. BOTH SERVE ON THE BOARD OF MID-KANSAS ELECTRIC COMPANY, LLC (MKEC) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. |
| FORM 990, PART VI, SECTION A, LINE 4 | ARTICLE IV, SECTION 4 OF THE BY-LAWS WAS AMENDED TO UPDATE THE QUALIFICATIONS REQUIRED TO BE A DIRECTOR OF THE COOPERATIVE. |
| 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 | THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. |
| 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; 4. THE AMENDMENT TO THE COOPERATIVES ARTICLES OF INCORPORATION; 5. THE AMENDMENT TO THE COOPERATIVES BYLAWS. |
| FORM 990, PART VI, SECTION A, LINE 8B | FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. WHEN THIS OCCURS MANAGEMENT AND OTHERS IN ATTENDANCE ARE REMOVED FROM THE MEETING ROOM. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. HOWEVER, ACTIONS TAKEN BY THE BOARD AFTER EXECUTIVE SESSIONS ARE ADJOURNED ARE FULLY DOCUMENTED IN THE WRITTEN MINUTES. |
| FORM 990, PART VI, SECTION B, LINE 11 | AFTER THE RETURN HAS BEEN FILED MANAGEMENT WILL PRESENT A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW. |
| FORM 990, PART VI, SECTION B, LINE 12C | ANNUAL REVIEW OF ALL AFFECTED PARTIES AND ANY CONFLICT IS REPORTED TO THE CEO AND BOARD PRESIDENT. |
| FORM 990, PART VI, SECTION B, LINE 15 | THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, THE FORM 990 OF OTHER COOPERATIVES AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN KANSAS AND THE NATION. THE BOARD AND GENERAL MANAGER USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT KANSAS AND THE NATION. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY THE COOPERATIVE PROVIDES A COPY OF THE UNAUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. FINALLY, THE ANNUAL REPORT AND BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE. |
| FORM 990, PART VI, LINE 1 | THE COOPERATIVE HAS 12 BOARD MEMBERS; ALL 12 ARE ALLOWED TO VOTE, HOWEVER THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE. |
| 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 INTERNAL REVENUE CODE. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES CONTRIBUTIONS BASED UPON A MATCHING OF EMPLOYEE'S PARTICIPCATION OF UP 2% OF A PARTICIPATING EMPLOYEE'S ANNUAL COMPENSATION. ADDITIONALLY 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 OFFICERS, MEETING THE ELIGIBILITY REQUIREMENTS OF THE PLAN. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER IS COMPRISED OF THE TOTAL AMOUNT CONTRIBUTED TO THE PENSION PLANS AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER. |
| FORM 990, PART VIII, LINE 2 | 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 WITH THE UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY RUS ELECTRIC BORROWERS. 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 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 UNIFORM SYSTEM OF ACCOUNTS. |
| FORM 990, PART IX, LINE 24 | THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24. OFFICE SUPPLIES EXPENSE $ 153,605 MISCELLANEOUS GENERAL EXPENSE 5,757 OTHER INSURANCE 75,416 MAINTENANCE OF GENERAL PLANT 118,471 REGULATORY COMMISSION EXPENSE 59,972 MEMBER MEETING EXPENSE 216,384 ADVERTISING EXPENSE 23,880 NONOPERATING EXPENSES - ELECTRICIAN AND INTERNET 1,961,097 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $2,614,582 |
| FORM 990, PART IX, LINES 5-7 | RECONCILIATION OF WAGES PER RETURN TO TOTAL WAGES ACCRUED AND/OR PAID. 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 $3,175,824 LESS DIRECTORS FEES REPORTED ON 1099-MISC (319,696) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (88,655) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 118,192 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,068,735 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 858,722 TOTAL WAGES ACCRUED AND/OR PAID $5,813,122 |
| FORM 990, PART IX, LINE 4 | THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE THAT 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 BASIS 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 XI, LINE 9: | GAIN/(LOSS) ON RETIRED CAPITAL CREDITS -37. PATRONAGE CAPITAL RETIRED -54,011. PATRONAGE CAPITAL ASSIGNABLE 9,140,792. |
| FORM 990, PART XII, LINE 2C | THE BOARD OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND TO RECOMMEND TO THE BOARD AN INDEPENDENT CPA FIRM TO PERFORM THE AUDIT. |
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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