Androscoggin Valley Hospital Inc.

“Effective April 1, 2016, North Country Healthcare (NCH) became the Sole Member of Androscoggin Valley Hospital.”

“In accordance with the Affiliation Agreement with North Country Healthcare, each Hospital's charter and bylaws were amended to effect the establishment of NCH as the sole member and to create a shared governance structure between the Board of Directors of NCH and the Boards of each Hospital. Each Hospital continues to maintain its own Board of Directors (Corporation Board) that is distinct from the NCH Board of Directors. However, the Bylaws of NCH and each Hospital identify certain "Major matters" (divided into organizational and operational matters) that require initiation and/or authorization by a majority of the NCH Board. Members of the Hospital Boards are nominated exclusively by the Hospitals. However, the election of any such director must be approved by both the Hospital Board and the NCH Board. Some examples of other organizational "Major matters" requiring the initiation and/or approval of the NCH Board include amendments to by-laws, election of officers, dissolution of a Hospital, merger decisions and hiring/termination of Hospital Presidents. Examples of operational "Major matters" requiring the initiation and/or approval of the NCH Board include approval of annual capital and operating budgets, adoption of compensation and benefit programs, approval of information technology systems, financial systems and auditors, plus approval of any major changes to clinical services offered. The Chief Executive Officer position at each of the Hospitals has been changed to a President position. As with Board members, each Hospital President must be nominated at the Hospital level and then approved by both the Hospital Board and the NCH Board. This position reports to both the applicable Hospital Board and the Chief Executive Officer of NCH. The Chief Financial Officer of each of the Hospitals will remain an appointed position by the President, but this individual will also report to the President/Chief Financial Officer of NCH.”

“See narrative provided for Form 990, Part VI, Line 7a.”

“The current year Form 990 was provided to the Organization's Board of Directors or Finance Committee prior to submission.”

“The Senior Director of Administrative and Revenue Cycle Services along with the Controller review on an on-going basis all transactions that could potentially violate our conflict of interest policy. In addition, all Board members and key employees sign a Conflict of Interest Statement each year. The first item on every Board Agenda is "Call to Order, Declaration of Potential Conflicts of Interest and Confidentiality Reminder."”

“AVH retained AON Hewett to provide information relative to CEO compensation. AON Hewett's business is to provide independent advice to management and Board of Directors concerning compensation and benefit programs for, among others, executive managers. In the study that they performed for Androscoggin Valley Hospital, they provided an opinion which is intended to be an expert opinion that can be relied upon by the Compensation Committee of NorthCare and the Board of Directors for up to one year. In addition, AVH also relies on compensation survey information obtained from a regional firm for information relative to all of its Senior Managers so that all compensation at the senior level has been viewed in a reliable and comparable manner that would meet the spirit implied with the IRS intermediate sanction regulations.”

“The Organization does not make its governing documents or conflict of interest policy available for public inspection. The Organization does make its financial statements available for public inspection upon request.”

“As of 10/11/17, the Hospital has added gastrointestinal (GI) services as an additional program service.”

“Purchased Services: Program service expenses 2,681,529. Management and general expenses 297,948. Fundraising expenses 0. Total expenses 2,979,477. Contract Labor: Program service expenses 6,663,435. Management and general expenses 740,382. Fundraising expenses 0. Total expenses 7,403,817.”

“Section 1.263(a)-3(n) Election: Androscoggin Valley Hospital 59 Page Hill Road Berlin, NH 03570 EIN 02-0280367 Androscoggin Valley Hospital is electing to capitalize repair and maintenance costs under Regulation Section 1.263(a)-3(n).”