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SEC to Release Independent Audit Report

Article was added on Friday, October 29, 2010

KINGSTREE, SC -- Santee Electric Cooperative, Inc. will release the report of an independent review of board and management practices on October 29, 2010.   Last August, the cooperative's board of trustees hired Charlotte law firm Smith and Christensen to conduct a comprehensive internal audit. The action was taken in response to questions raised by a group of Santee Electric members who sued the cooperative concerning corporate governance.

"We thought it was very important to open the door completely," explained Billy L. Morris, Jr., chairman of the cooperative's board of trustees. "The consumer-members of the cooperative have a right to know how it is being run."

Britt Smith and Aaron Christensen specialize in cooperative law and are widely regarded as two of the nation's foremost experts on cooperative governance.  As part of their investigation, they were encouraged to communicate with the member-plaintiffs in the lawsuit and to solicit input from the general public.

"Santee Electric placed no limitations on the firm's investigative authority," said Morris. "They were given complete access to all cooperative records and personnel, and they were asked to review all Santee Electric policies, practices and procedures, whether written or unwritten."

Smith and Christensen specifically reserved their right to withdraw from the engagement if they did not receive complete cooperation.

"We are not going to quibble about the facts," said Floyd Keels, the cooperative's president and chief executive officer. "We need to get the facts on the table so we can collectively decide what's best for the co-op," Keels said.

Keels expressed hope that the report might positively affect the pending litigation. "We take the lawsuit seriously. If Santee Electric can make changes to better serve the membership, we need to focus on those solutions."

After spending several weeks working on the investigation, including more than a week on site in Kingstree, cooperative leaders have been told the law firm is nearly finished with its report.

"We believe the board has done a good job," said Morris. "But if the review indicates changes need to be made to improve our processes, we'll adjust."

"As far as management is concerned, we're focused on finding the best outcome for the membership as a whole," said Keels. "That's our job."

The report will be made available on the cooperative's website, Members without access to the Internet will be able to obtain a copy at any of the cooperative's offices.

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