Kishwaukee Community Hospital

“Kishhealth system is the sole member of kishwaukee hospital.”

“As the sole member and parent organization of kishwaukee hospital, kishhealth system has the right to approve the election of members of the hospital's governing board, per the hospital's bylaws.”

“Kishhealth system (khs) serves as the sole member and parent organization of kishwaukee hospital (kh). Per the bylaws, with respect to the governance of kh, the following powers shall be reserved to the sole corporate member. Per the bylaws, with respect to the governance of kh, the following powers shall be reserved to the sole corporate member: a. Electing the members of the kh board b. Approving, evaluating and/or removing the president and ceo and reviewing and approving the employment contract of the president and ceo and establishing compensation for such office c. Approving the strategic plan for kh d. Approving the disposition of any assets other than in the ordinary course of business for kh e. Approving any change in membership of kh f. Approving the adoption of and amendments to the organizational documents, including the articles of incorporation and bylaws of kh g. Approving a plan of merger or a plan of consolidation of kh or establishing a new subsidiary or sister entity h. Approving a plan for the distribution of the assets of kh i. Initiating, taking any and all actions, and exercising all approval rights of the directors pursuant to the applicable medical staff bylaws j. Implementing and monitoring kh operational quality improvement policies and programs k. Accepting gifts, grants, bequests and donations on behalf of kh l. Approval of the annual operating and capital budgets for kh m. Exercising any rights that kh has as a shareholder or member of any subsidiary entity n. Approving any affiliations of kh o. Approving and/or determining (i) the creation of new health services to be provided and the location of such health services and (ii) the discontinuance of any health service p. Authorizing the sale, lease, exchange or mortgage of all or substantially all of the property or assets of kh q. Authorizing the voluntary dissolution of kh, or revoking the proceedings thereof r. Requiring minutes of meetings, financial records, and such other information as may be necessary to properly evaluate the performance of kh s. Initiating action to remove or reinstate a director when, in the opinion of the khs board, it is in the best interests of khs or kh. Any action to remove or reinstate shall require a majority vote of those khs directors then in office present and voting at a meeting of the khs board at which a quorum is present. In any action(s) to remove taken by the khs board, the director in question shall be advised at least twenty (20) days prior to the meeting that the action will be considered and shall be given the opportunity to make a statement, present witnesses on his/her behalf and question those presenting reasons for his/her removal. All actions to remove shall be taken in closed sessions of the khs board and t. Transferring money or property among kh, khs and/or one or more subsidiary corporations and transferring money or property from a subsidiary corporation, including requiring the directors, officers, or trustees of any subsidiary corporation to transfer money or other property to khs. Subject to the powers of the board of directors of each subsidiary corporation, the khs board may initiate and take the foregoing actions on behalf of khs and the subsidiary corporations.”

“A draft copy of form 990 is provided to the governing body (board of directors) and the goverance committee for review by the return preparer prior to filing. The organization's ceo, cfo, and other members of the accounting department are also provided a copy of the return for their review. The chair of the audit committee and the audit committee members are also provided draft copies and review. If changes are necessary, they are reported to the return preparer and incorporated into the final return.”

“Individuals covered by the organization's conflict of interest policy and considered interested persons, include members of the board of directors of any entity within the health system, kishhealth system officers, any committee member, any individual with ultimate responsibility for implementing board decisions or supervising the management, administration, or operation of the organization, and immediate family members of those listed. It is the duty of these interested persons to self-disclose any conflicts of interest. Conflicts of interest are investigated by appointed members of the kishhealth system governance committee on an ongoing basis. If it is determined that an individual failed to disclose an actual or possible conflict of interest, it shall inform the individual of such a belief and afford him an opportunity to explain. After said explanation, the board shall take appropriate disciplinary and corrective action as deemed necessary. An interested person deemed to have a conflict must not be present during discussion or votes related to the transaction. The conflict of interest policy is reviewed by the board annually and updated as needed.”

“Kishwaukee hospital is not directly involved in determining the compensation of the ceo, executive director, or top management, as the individuals are employed through kishhealth system. Kishhealth system does comply with the requirements noted above. Through the oversight of the board of directors executive compensation committee, the kishhealth system executive total compensation program will be competitively positioned in the market place of relevant organizations and fall within the safe harbor guidelines established by the intermediate sanctions rules. The executive compensation committee is made up of three members of the board of directors who meet the board approved definition of independent directors. Annually the executive compensation committee contracts with sullivan, cotter and associates, an independent human resources consulting firm to provide the committee analysis and comparability data. Using the supplied data the compensation committee approves each executive's total cash compensation and provides contemporaneous substantiation of the deliberation and decision. Total cash compensation is defined as the sum of base salaries plus incentive awards. Based on the comparability data and the performance of each executive in meeting goals and strategic objectives, the executive compensation committee approves increases and incentive awards for each executive within the guidelines established. The executive compensation committee reports on all compensation matters to the full board of directors.”

“The organization's governing documents, conflict of interest policy and financial statements are available upon request.”

“Purchased personnel: program service expenses 322,431. Management and general expenses 0. Fundraising expenses 0. Total expenses 322,431. Other contracted services: program service expenses 3,803,026. Management and general expenses 246,743. Fundraising expenses 0. Total expenses 4,049,769. Other consulting: program service expenses 16,496. Management and general expenses 286,173. Fundraising expenses 0. Total expenses 302,669. Service contracts: program service expenses 695,448. Management and general expenses 0. Fundraising expenses 0. Total expenses 695,448. Lab fees: program service expenses 943,340. Management and general expenses 0. Fundraising expenses 0. Total expenses 943,340. Physician fees: program service expenses 9,611,630. Management and general expenses 0. Fundraising expenses 0. Total expenses 9,611,630. Physician recruitment: program service expenses 974,898. Management and general expenses 0. Fundraising expenses 0. Total expenses 974,898. Collection fees: program service expenses 25,758. Management and general expenses 816,010. Fundraising expenses 0. Total expenses 841,768. Medical director fees: program service expenses 1,065,069. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,065,069.”

“Change of interest in net assets of kishhealth foundation -548,057. Book/tax differences in k-1 passthrough entities -27,934. Other adjustments -116,832. Liabilities grouped with expenses on financial statement -34,372. Equity adjustment -332,539.”

“No changes in this process were made during the tax year. The organization maintains an independent audit committee which is responsible for oversight of the audited financial statements. This committee is also responsible for the selection of the independent auditor. Members of the audit committee are also members of the kishhealth system board of directors. Kishealth system is the parent corporation of kishwaukee hospital.”