Easter Seals New York Inc.

“Neil Gala, a Board member for part of the year, and Kanti Gala have a family relationship.”

“Easter Seals New Hampshire, Inc., a New Hampshire voluntary corporation was the sole member of Easter Seals New York, Inc., acting through its governing processes, until August 31, 2015, the last day of the fiscal year. On August 31, 2015, Easter Seals New Hampshire, Inc. entered into an agreement with FEDCAP Rehabilitation Services, Inc., an unrelated entity, whereby Easter Seals New Hamphire, Inc. agreed to transfer its sole member interest in Easter Seals New York, Inc. to FEDCAP Rehabilitation Services, Inc. for no consideration.”

“Easter Seals New Hampshire, Inc., a New Hampshire voluntary corporation is the sole member of Easter Seals New York, Inc. The member shall select the Board of Directors of this Corporation and shall have the power to remove any director or officer of this Corporation, with or without cause.”

“The Easter Seals New Hampshire, Inc. Board of Directors Fiscal Committee reviews and approves long term borrowings up to $100,000 and recommends to the full Board of Directors for approval amounts in excess of $100,000. The Fiscal Committee is empowered to adopt all recommended resolutions and to take all other actions to affect such borrowings on behalf of the corporation and its Board of Directors.”

“The Form 990 is prepared by an independent outside accounting firm and presented to the Audit Committee of Easter Seals New Hampshire, the parent organization, for review before filing with the IRS.”

“Conflict of Interest/Pecuniary Benefit Transactions. A. Purpose. The purpose of the conflicts of interest policy is to protect the interest of Easter Seals New York when it is contemplating entering into a transaction or arrangement which may provide a pecuniary benefit to an officer, director, employee or consultant of the corporation. B. Definitions. (i) "Interested Person" means any director, officer, employee or consultant of the corporation who has a direct or indirect financial interest, as defined in (ii) below. (ii) "Financial Interest" means that the person has, directly or indirectly, through the person's own business, investments (other than that of publicly traded securities) or that of the person's spouse, parent or children, an ownership in any entity with which the corporation has or anticipates a transaction, or a potential ownership or investment interest in, or compensation arrangement (which includes direct and indirect remuneration as well as gifts or favors) with which the corporation is negotiating a transaction or arrangement. (iii) "Pecuniary Benefit Transaction" shall mean any financial transaction with an interested person which is determined by the Board of Directors to be in the best interest of the corporation. C. Procedures to be followed: (i) Duty to Disclose. In connection with any actual or possible conflict of interest or financial transaction which may benefit an interested person, the interested person shall disclose the existence of his or her financial interest and all material facts relating thereto to the Board of Directors and the Board of Directors shall act on such matter, whether or not the transaction would normally be considered by it, to determine if the transaction is a pecuniary benefit transaction or is prohibited as a conflict of interest. (ii) Determining Whether a Conflict of Interest Exists. After disclosure of the financial interest and all material facts relating thereto, and after any discussion thereof, the interested person shall leave the Board of Directors meeting while the financial interest and transaction are discussed and voted upon by the remaining members of the Board of Directors to decide if the matter is a conflict of interest or a pecuniary benefit transaction in the best interest of the corporation. The finding of the Board shall be recorded in the minutes of the meeting in detail. (iii) Further Investigation. The Chairman of the Board or President of the corporation shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement, or to determine additional facts needed by the Board in making its determination. (iv) Determination of Corporate Best Interest. In exercising due diligence, the Board of Directors or the disinterested person or committee shall determine whether the corporation can obtain a more advantageous transaction or arrangement with reasonable efforts involving a person or entity who is not an interested person. If a more advantageous transaction or arrangement is not reasonably attainable with a person who is not an interested person, the Board of Directors shall determine by a majority vote of the disinterested directors without the interested person present that the transaction is in the best interest of Easter Seals New York and for its own benefit and, if such determination is made, approve the transaction or arrangement as set forth in (ii) above. If it is determined that the transaction or arrangement does not meet these standards, it shall be disallowed as a conflict of interest and such finding shall be recorded.”

“Easter Seals New York, Inc. does not compensate its officers or top management officials. They are paid by a related organization, Easter Seals New Hampshire, Inc., the parent organization with oversight and responsibility for seven (7) nonprofit subsidiary entities: Easter Seals New York, Inc.; Easter Seals Maine, Inc.; Easter Seals Rhode Island, Inc.; Easter Seals Vermont, Inc.; Harbor Schools, Inc.; Manchester Alcoholism Rehabilitation Center; and Agency Realty, Inc. Easter Seals New Hampshire, Inc. has an Executive Compensation Committee that is made up of the former Chair of the Board of Directors and other Directors. It meets annually and reviews data on comparable not-for-profit executives of similar sized organizations in the geographical area in which we operate. That data is compiled from information gathered by the Senior Vice President for Human Resources and submitted to the Committee. The Committee meets independently to review the performance of the President, meets with the President to obtain his input, and then recommends compensation levels. It then submits its report to the entire Board of Directors which meets in executive session to review the process and the recommendations. The Committee also reviews the compensation of the highest level employees and provides input to the President in setting their compensation. Contemporaneous substantiation of the deliberation and decision is recorded.”

“Copies of the IRS Form 990 and the nonprofit status determination documents are available for public inspection at the New York and New Hampshire corporate offices by appointment.”

“Larry J. Gammon, President and CEO, was a participant in a deferred compensation 457(f) plan sponsored by Easter Seals New Hampshire, Inc. during periods from 2004 to 2014, all of which was reported on prior Forms 990. In 2014, Mr. Gammon reached the age at which his plan "vested," which meant he had to take the entire amount as income and pay taxes on it. The cumulative amount is required to be reported in its entirety again on the Form 990, Part VII and on Schedule J, in column F and as part of the compensation reported in Column B(iii), although the average year's compensation from this plan is $54,468.19.”

“During the fiscal year ended August 31, 2015, Easter Seals New York, Inc. performed an in-depth analysis of all current government payments from its grants and contracts. Based on this analysis, and in conjunction with the Form 990 instructions relative to payments from governmental units, Easter Seals New York, Inc. determined that a larger portion of its government funding should be reported as program service revenue. Accordingly, the respective revenue has been shown on Part VIII, Line 2a (Program Service Revenue) versus Line 1e (Government grants-contributions) on this year's Form 990.”

“Change in Fair Value of Interest Rate Swap -76,980. Capital Transfer from Affiliate 628,597. Decrease in Value of Beneficial Interest Trust -62,078. Loss from Discontinued Operations -63,854. Other Nonoperating Loss -111,114.”

“The audit process has not changed from the prior year.”