Associated Universities Inc.

“Associated universities, inc. Has its external audit firm review the draft form 990 prior to submitting it to the aui audit committee for review. On behalf of the aui board of trustees, the audit committee reviews the form 990 and reports the findings of its review to the full board. The final draft of the form 990 is made available to the aui board of trustees prior to submission to the internal revenue service (irs).”

“Associated universities, inc. Has a conflict of interest policy which addresses financial, research, and organizational disclosures designed to ensure that trustees, officers, and employees identify situations which compromise, or could give the appearance of compromising, their judgement in performing their duties. The conflict of interest policy requires trustees, officers and key management to execute annual written conflict of interest certifications for themselves and close family members. These written certifications are reviewed by the corporate secretary, and if required, adjudicated according to a written procedure. Conflicts of interest pertaining to non-key employees are subject to a separate identification and adjudication process.”

“Compensation levels involving the hiring, promotion, and salary adjustments for the aui president, officers, and research center directors are approved by aui's board of trustees based on recommendations from the aui president and aui compensation subcommittee. In all cases the salary recommendations are based on annual performance evaluations of the employee by their supervisor. The aui president and aui compensation subcommittee review third-party comparability data on salaries and benefits provided by similar nonprofit scientific research organizations. In the case of the aui president (ceo), the chair of the aui board of trustees, in consultation with the aui executive committee and aui compensation subcommittee, annually reviews the president's written self-evaluation and makes a recommendation for a salary adjustment to the board for approval. In the case of the officers and research center directors, the aui president annually reviews the performance of each officer and research center director, which is based on the individual's self-evaluation. Based on the performance appraisal, the aui president, in consultation with the aui compensation subcommittee, makes a recommendation for salary adjustments to the aui board of trustees. After reviewing the recommendations, the aui board of trustees approves salary adjustments for the aui president, officers, and research center directors, which are recorded in the minutes. In addition, after reviewing all compensation decisions, the aui board of trustees determines that the salaries and benefits to be received by the persons currently holding these positions are reasonable and do not constitute excessive benefit transactions as defined by section 4958 of the internal revenue code (irc).”

“Associated universities, inc. Responds to written requests for these documents on a case-by-case basis.”

“Changes in net assets: pension-related changes other than net periodic pension costs $ -3,838,479.”

“Oversight of audit there were no changes to the process for oversight of the financial statements audit.”

“Aui historically received funding from nsf for post-retirement benefits, chilean severance, accrued vacation and other miscellaneous liabilities (research centers liabilities) recognizing the expenses as reimbursed related to the nsf cooperative agreements and not recognize a corresponding liability and asset (accounts receivable) from nsf. In light of the new 10-year cooperative agreement, management has been in the process of negotiating with nsf during 2017 for the funding of the research centers liabilities, and discussing whether to use a fringe benefit pool to recognize these expenses and record their related liability. In the previous years, the financial statements of aui did not present the assets and liabilities of the research centers on the face of the statement of financial position. Management had previously determined that certain assets and liabilities related to the research centers necessary to carry out the agreements, including the research centers liabilities, qualified for right of offset or net presentation. Accordingly, prior year financial statements reported revenue earned from expenses incurred to operate under the agreements in the statement of activities, and disclosed those assets and liabilities related to the nature and amounts of those items noted above in the notes to the financial statements. In addition, the notes to the financial statements discussed that in the event of termination of the agreements a settlement for those costs would be negotiated with nsf. It is the opinion of auis new management that aui should report all assets (except for property and equipment owned by nsf) and liabilities of the research centers in its financial statements, and that these assets and liabilities do not qualify for right of offset or net presentation. As such, auis new management has corrected the accounting of the research centers by including the items noted above in auis financial statements in 2017. Management assessed the materiality of these corrections in the 2016 financial statements, assessing materiality both quantitatively and qualitatively, and concluded that the corrections were not material to the financial statements as a whole for the beginning balances for year ended september 30, 2017.”