Harlem Children'S Zone Inc

“Line 11 - PROCESS USED TO REVIEW FORM 990 The Form 990 was prepared by a nationally renowned accounting firm in conjunction with the organization's financial department. A copy of the draft Form 990 was circulated to the Audit committee for discussion and comment. Each Audit committee Member was provided ample opportunity to comment on the information contained in the 990 prior to its filing with the Internal Revenue Service. The Audit committee will summarize its finding on the Form 990 to the full board of directors. Line 12 - ENFORCEMENT AND MONITORING OF CONFLICT OF INTEREST POLICY All employees are expected to use honesty, good judgement and high ethical standards in all professional dealings. All employees must avoid any actions that could create a conflict of interest or the appearance of such a conflict or reflect unfavorably on them or on harlem children's zone. An employee must disclose if she/he or an immediate family member has any potential conflict of interest such as a relationship to a third party vendor who seeks or has a business relationship to harlem children's zone. An employee's violation of this policy, especially a failure to represent accurately his or her connection or action on behalf of harlem children's zone and a third party will constitute grounds for disciplinary action, up to and including termination of employment. Line 15 - PROCESS FOR DETERMINING COMPENSATION The organization undertakes a thorough process to ensure that the executive compensation it pays to its top management official and all of its officers and key employees is reasonable given the market in which the organization operates. In relevant part, the Board of Directors has established a Compensation Committee of independent persons that have no personal interest in the proposed compensation agreement. The Compensation committee contracts with a compensation consultant to complete a market assessment and competitive position analysis for the organization's top executives. The compensation consultant utilizes comparability and benchmarking surveys to ensure that the organization compensates its executives commensurate with the market. The compensation committee will then set the compensation for the relevant executive and document the decision in board minutes.”

“Line 19 - AVAILABILITY OF DOCUMENTS TO THE PUBLIC The organization makes its Form 990 available to the public by retaining a copy at its place of business. The Form 990 is likewise published on the internet at www.guidestar.org. The organization posts its audited financial statements and Form 990 on its website, but its governing documents and conflict of interest policy are available upon request and provided at management's discretion.”

“line 7 - Realized Gains on Investments The investment income reported on Form 990, Part VIII, Line 7(d) represents both realized and unrealized gains on investments. Because the organization's investment portfolio is comprised entirely of alternative investments, a definitive breakout between realized and unrealized gains was unavailable.”

“Board of Trustees members Kenneth Langone, Geoffrey Canada, Mitch Kurz, and Stanley Druckenmiller sit on the Board of Trustees of both Harlem Children's Zone Promise Academies. Each trustee spends approximately 2 hours per week on Board matters for these related organizations.”

“OTHER PROGRAM SERVICE ACCOMPLISHMENTS HEAD START PROGRAM - AN EARLY CHILDHOOD EDUCATION PROGRAM THAT SERVES 57 THREE-TO-FIVE-YEAR-OLD CHILDREN, AND PREPARes THEM TO ENTER KINDERGARTEN READY TO LEARN. Finally, included within the program service expenditures reported in Part III, Lines 4a through 4d are amounts paid out as stipends/grants. HCZ provides stipends to middle and high-school students. The stipend system is a pre-employment model, introducing students to the typical workplace system where employees receive a financial reward for consistent, hard work. There are certain requirements that students need to satisfy to earn a stipend. The small stipend is also an incentive for the children to stay enrolled in the program even if they are being tempted by less-rigorous or risky alternatives for their out-of-school time. We strongly feel that the stipends are a valuable investment to keep children in the safe, enriching environment we have created, where they can get academic assistance and learn valuable life skills. HCZ also gives incoming college freshmen the choice of a laptop computer or a $1,000 scholarship to ensure that students start college in a strong position for success. In today's collegiate environment, access to a laptop is as important as having a pen or pencil once was, so we want to ensure each of our students has one for writing and research. If they already have a laptop computer, the $1,000 scholarship is also a huge help for students who will struggle to make ends meet while they are working toward their degree. Please see Schedule I for more information.”

“line 4 - LOBBYING DISCLOSURE The Harlem Children's Zone does not undertake any lobbying activities. President and CEO, Geoffrey Canada is a very prominent individual in the community and he may undertake advocacy efforts that have ancillary benefits to the Harlem Children's Zone. Mr. Canada's advocacy efforts, to the extent there are any, are undertaken at his own behest and are funded from his own personal finances; the Harlem Children's Zone does not subsidize those efforts.”