3 Takeaways of Accounting Conference
May 5, 2017
When it comes to managing risk and dealing with change, cooperatives take a unique approach, Mike Williams told more than 85 electric co-op accounting professionals in Austin for the Texas Electric Cooperative Accounting Conference from April 26–28. It's what makes TEC's president and CEO proud to work in the co-op world.
"We know why we're here, and what our purpose is: to make a difference in our members' lives," Williams said. "We're not in the business of making money, so if it's distributed generation, or if it's coal plants, gas plants or batteries, we just don't care. All we really are focused on—our real purpose—is improving the quality of our folks' lives in our communities."
With that approach in mind, here are three takeaways from the conference:
1. DISTRIBUTED GENERATION IS TAKING ROOT. "When you look at electric cooperatives and their interest in solar, it's changed rapidly and significantly just in the last few years," said Taylor Gunn, an economist with CoBank who displayed National Rural Electric Cooperative Association survey data showing distribution co-ops moving quickly to mitigate the incursion of rooftop solar by changing rate structures and implementing community solutions. Lynn Midgette, CFO at Bandera EC, called it a "paradigm shift" for accounting practices.
2. CYBERSECURITY MUST BE A PRIORITY. Slade Griffin, a cybersecurity expert, showed just how easily criminals have penetrated the financial systems of major corporations, making off with credit card and other personal information. Co-ops must take seriously the threat of cybercrime to ensure that the information of their members and employees is protected, he said.
3. CO-OPS SHOULD HAVE POLICIES IN PLACE BEFORE THE UNEXPECTED OCCURS. Financial fraud, natural disasters, tax audits and members declaring bankruptcy all are scenarios that co-ops should be prepared to tackle through accounting policies that respond with proper documentation, adequate training, and equal treatment of members and employees. Simple quarterly training can be enough to stave off internal fraud, said Steve Dawson, a fraud examiner. "They'll say, 'If I thought I was going to get caught, I probably wouldn't have done it,' " Dawson said. "Boom. Increasing the perception of detection through training."