TIN:
SCHEDULE O
(Form 990)
Department of the Treasury
Internal Revenue Service
(Form 990)
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.
Go to www.irs.gov/Form990 for the latest information.
OMB No. 1545-0047
2021
Open to Public
Inspection
Inspection
Name of the organization
BUTLER RURAL ELECTRIC COOPERATIVE
ASSOCIATION INC
ASSOCIATION INC
Employer identification number
48-0157067
48-0157067
| Return Reference | Explanation |
|---|---|
| FORM 990, PART I, LINE 19: | IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET LOSS OF $136,724, WHICH IS THE EFFECT OF EQUITY METHOD INCOME/LOSS FROM THE SUBSIDIARY. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: (A) - NET INCOME ON PAGE 1, PART I, LINE 19 $ (136,724) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 928,915 (C) - EQUITY METHOD INCOME/LOSS FROM SUBSIDIARY 136,724 TOTAL 2022 NET MARGIN PER FINANCIAL STATEMENTS (A + B + C) $ 928,915 |
| FORM 990, PART I, LINE 15: | ON THE 2022 FORM 990, PART I, LINE 15, THE COOPERATIVE SEPARATELY STATED SALARIES AND WAGES, EMPLOYEE BENEFITS, AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS ACCOUNTING SYSTEM. ON THE 2021 RETURN, THE COOPERATIVE DID NOT SEPARATELY STATE THESE EXPENSES. THE 2021 RETURN IS COMPLETE AND ACCURATE, BUT THE COOPERATIVE BELIEVES BY SEPARATELY STATING THESE EXPENSES ON THE 2022 RETURN A READER OF THE FORM 990 WILL BE MORE INFORMED. FUTURE YEARS RETURNS FILED BY THE COOPERATIVE WILL SEPARATELY STATE SALARIES AND WAGES, EMPLOYEE BENEFITS, AND PAYROLL TAXES, MAKING THE COMPARISON ON PAGE 1 MORE MEANINGFUL. |
| FORM 990, PART I, LINE 14: | ON THE 2022 FORM 990, PART I, LINE 14, THE COOPERATIVE SEPARATELY STATED THE PATRONAGE CAPITAL ASSIGNED. ON THE 2021 RETURN, THE COOPERATIVE DID NOT SEPARATELY STATE THESE EXPENSES. THE 2021 RETURN IS COMPLETE AND ACCURATE, BUT THE COOPERATIVE BELIEVES BY SEPARATELY STATING THESE EXPENSES ON THE 2022 RETURN A READER OF THE FORM 990 WILL BE MORE INFORMED. FUTURE YEARS RETURNS FILED BY THE COOPERATIVE WILL SEPARATELY STATE THE PATRONAGE CAPITAL ASSIGNED MAKING THE COMPARISON ON PAGE 1 MORE MEANINGFUL. |
| FORM 990, PART VI, SECTION A, LINE 1A | THE COOPERATIVE HAS 7 BOARD MEMBERS; ALL 7 ARE ALLOWED TO VOTE. |
| FORM 990, PART VI, SECTION A, LINE 4 | DURING THE YEAR, THE COOPERATIVE'S BYLAWS WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES: ARTICLE X, SECTION 4. FISCAL YEAR, WAS AMENDED TO STATE "THE FISCAL YEAR OF THE COOPERATIVE SHALL BEGIN ON THE 1ST DAY OF JANUARY AND END ON THE 31ST DAY OF DECEMBER." |
| 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 TRUSTEES. 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. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION 5. AMENDMENT TO THE BYLAWS |
| FORM 990, PART VI, SECTION B, LINE 11B | MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE FILING THE FORM 990. |
| FORM 990, PART VI, SECTION B, LINE 12C | ON AN ANNUAL BASIS, THE THE BOARD OF DIRECTORS AND EMPLOYEES REVIEW THE CONFLICT OF INTEREST POLICY. DIRECTORS AND EMPLOYEE OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. |
| FORM 990, PART VI, SECTION B, LINE 15 | THE BOARD OF DIRECTORS USE THE EXPERTISE OF A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES. THE BOARD AND THE GENERAL MANAGER USE THE EXPERTISE OF A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT 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 SUMMARIZED COPY OF THE FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. THE BYLAWS CAN ALSO BE FOUND ON THE COOPERATIVE'S WEBSITE. |
| FORM 990, PART VII, COLUMN F: | IN ORDER TO PROVIDE RETIREMENT BENEFITS TO 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 AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER AND HIGHLY COMPENSATED EMPLOYEES 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. |
| 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: | ALTHOUGH THE COOPERATIVE IS NO LONGER A RURAL UTILITY 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. |
| 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 2,282,610 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (43,500) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (202,712) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 76,660 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,053,413 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 456,364 TOTAL WAGES ACCRUED AND/OR PAID $ 3,622,835 |
| FORM 990, PART IX, LINE 4: | 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 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 2022 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. |
| FORM 990, PART IX, LINE 24E: | OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 212,643 POWER PRODUCTION EXPENSE 111,377 TRANSMISSION 483 SALES EXPENSE AND OTHER 50,673 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 375,176 |
| FORM 990, PART XI, LINE 9: | PATRONAGE CAPITAL ASSIGNABLE 928,915. EQUITY METHOD INCOME/(LOSS) FROM SUBSIDIARY 136,724. UNCLAIMED CAPITAL CREDIT RETAINED PER STATE LAW 77,085. PATRONAGE CAPITAL RETIRED - DISCOUNT 37,535. PATRONAGE CAPITAL RETIRED - TOTAL -83,294. |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990) 2021
Additional Data
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