Elwyn of Pennsylvania and Delaware

“The form 990 is internally prepared and sent to our external public accounting firm for review and compilation. The completed return is then sent back to the organization and is reviewed and approved by our audit committee, prior to filing.”

“The board of directors reviews the conflict of interest policy on a periodic basis. Board members complete conflict of interest forms on an annual basis. The completed forms are maintained by the assistant secretary of the board.”

“The governance committee of the board annually reviews the compensation of the president and his direct reports. Through analyses provided by independent consultants and comparable data, as known or learned about the industry, recommendations are made by the governance committee to the board of directors.”

“The organization's financial statements are available through public sources as a result of the tax-exempt bond financing. The organization does not make its governing documents and conflict of interest policy available to the public.”

“In an effort to provide complete transparency, the organization has listed its board chairman, timothy c. O'rourke, twice on form 990, part vii, section a. Mr. O'rourke is listed twice as he served the organization in two separate roles during the fiscal year ended june 30, 2018. As further described in schedule l, part iv, mr. O'rourke was asked by the board of directors to assist the organization as a consultant to help facilitate the transition between ceos. The organization compensated him for this service as detailed in schedule l, part iv and form 990, part vii, section a, line (2). Subsequent to the consulting engagement, mr. O'rourke rejoined the board of directors as chairman. Mr. O'rourke has received no compensation for his service as board chairman.”

“Purchased personnel services: program service expenses 16,658,200. Management and general expenses 215,559. Fundraising expenses 0. Total expenses 16,873,759. Family stipend: program service expenses 1,356,420. Management and general expenses 12,377. Fundraising expenses 0. Total expenses 1,368,797. Professional fees: program service expenses 1,831,239. Management and general expenses 2,812,127. Fundraising expenses 0. Total expenses 4,643,366. Dietary fees: program service expenses 119,579. Management and general expenses 0. Fundraising expenses 0. Total expenses 119,579. Sub-contract - mawa program: program service expenses 41,683,815. Management and general expenses 0. Fundraising expenses 0. Total expenses 41,683,815.”

“Change in additional minimum pension liability 7,334,136. Loss on extinguishment of debt -396,217. Impairment on assets held for sale -1,121,311. Settlement -1,000,000. Change in beneficial interest in elwyn foundation -1,212,328.”

“There has been no change in the process for oversight of the audit of the financial statements or the selection of an indepedent certified public accountant.”

“Elwyn restated its previously reported july 1, 2016 consolidated net assets and its previously reported consolidated financial statements as of and for the year ended june 30, 2017. The restatement of the consolidated financial statements followed an internal review of accounting practices and records which identified certain accounting errors in the calculation of depreciation, the expensing of certain long-term assets, the capitalization of certain period expenses, the recording of certain liabilities and related expenses, and revenue recognition. The impact of these errors resulted in an overstatement of july 1, 2016 consolidated net assets and an understatement of the 2017 consolidated changes in net assets. The effect of the restatements by financial statement line item is presented below. Assets estimated settlements due from third party payors, net: -$1,549,533 property and equipment, net: -$2,992,589 deferred reimbursement, net: -$608,994 liabilities accounts payable and accrued expenses: $10 deferred revenue and other liabilities: -$185,605 total impact to net assets: -$4,965,521”