ADDITIONAL INFORMATION

The primary purpose of our examination was to formulate an opinion
on the balance sheet. The additional information presented in
the following pages was prepared on the basis of audit procedures
applied in our examination of the balance sheet. This information,
while not necessary for the presentation of the balance sheet, is,
in our opinion, fairly stated in all material respects when con-
sidered in relation to the balance sheet.

In June 1961, REA approved a loan of $60,225,000 to Hoosier Cooperative Energy, Inc., Osgood, Indiana. In April 1962, the loan was transferred from Hoosier Cooperative Energy, Inc., to the Indiana Statewide Rural Electric Cooperative, Inc., Indianapolis, Indiana. An additional loan of $11,150,000 was approved in 1965, and $29,055,000 in 1968. Loans approved to date total $100,430,000. The first advance of loan funds was made in 1965.

The Hoosier Energy Division was authorized as a legal division of Indiana Statewide Rural Electric Cooperative, Inc., by Article IX of its bylaws. The authority and responsibility for operation, construction and administration was vested in the Operating Committee. Members of Indiana Statewide R.E.C., Inc., who receive or who have contracted to purchase electric energy from that corporation shall be entitled to representation in the operating committee. The code of regulations adopted by the Indiana Statewide requires that all of the operations of the Hoosier Energy Division should be reflected in a system of accounting separate, apart and distinct from all other accounting and operation of Indiana Statewide Rural Electric Cooperative, Inc., but as a part thereof.

The construction program started in 1965. All transactions to date have related to constructing the electric generation plant and transmission system in order to serve the member distribution cooperatives.

Organizational and legal fees incurred by Statewide were recorded on the books of loosier Energy Cooperative, Inc.

BALANCE SHEET COMENTS

Assets and Other Debits

Utility plant under construction

The following summary shows the detail of the plant under construction:

Constructed started in 1965. At the audit date the generating plant was substantially completed. Over fifty contracts of various types had been let. A plant operating crew of thirty-three persons had been recruited and were being trained. We examined the accounts on a test-check basis and found them generally correct.

The cost paid to landowners for easements to December 1968, was $2,601,513.72. The cost of obtaining the easements to that date was $1,580,729.21. Of the latter amount, the sum of $1,218,178.72 had been paid for the services of Hoosier Acquisition Service, Inc. made a test-check of 10 percent of the payments for easements and procurement costs to determine that they were properly supported.

We