Somerset Community Hospital

“The sole member is the exempt entity upmc.”

“During the integration period or such longer period as specifically indicated below, the following actions will require approval of the somerset board and upmc, and neither upmc nor the somerset board shall have the authority individually to undertake any of the following actions without such joint approval: (a) approval of operating and capital budgets of somerset and the somerset entities. (b) approval of plans for application and use of the capital expenditures and programmatic enhancement commitment in accordance with sections 3.3.1 through 3.3.3 of the integration agreement. (c) approval of strategic plans for somerset. (d) entering into new, or materially changing any existing, joint venture arrangements specifically of somerset or the somerset entities. (e) approval of selection of the somerset president/senior executive, and approval of removal and compensation terms. (f) approval of the terms of any management arrangements of any somerset entity with an unrelated third party. (g) during the five-year period following the closing. Any material changes to somersets clinical programs. (h) any change in the corporate structure of somerset or any somerset entity. (i) the sale, lease, transfer or joint venture, whether within the system or external thereto, involving substantially all of the assets or business or significant product lines of somerset or any somerset entity, except for upmc somersets outpatient rehabilitation, home health, hospice, and durable medical equipment lines of service and businesses that will be integrated into the upmc systems operations as set forth in sections 12.4 through 12.7 of the integration agreement. (j) the merger, consolidation, divestiture or dissolution of somerset or any of its subsidiaries. (k) during the five-year period following the closing, the determination that somerset or any somerset entity will no longer be licensed or operated as currently licensed or operated. (l) any amendment of the articles of incorporation or the bylaws of somerset or any somerset entity. (m) sale of any real estate of or by somerset or any somerset entity.”

“Upmc somerset has a cpa firm prepare its form 990. The return is completed in draft form and reviewed by management of the organization. The return is then finalized and the board is provided a copy of the form 990 before it is filed.”

“Upmc requires all of its key employees and non-employed personnel to comply with its conflict of interest policies when they engage in upmc-related business. People covered by the policies include: -upmc entity board members, board committee members, and corporate officers -upmc physicians and non-physician employees who hold a position of influence -non-employed members of the upmc medical staff who hold a position of influence of trust -individuals conducting clinical research at upmc, whether or not they are employed by upmc. These people are required to complete a questionnaire at least annually. An electronic form has been developed to capture the data from the questionnaire and to monitor completion. The information, along with other data, is used to capture individual and institutional relationships so that potential conflicts of interest can be identified. If a potential conflict is identified regarding a specific upmc activity the corporate compliance department, with the assistance of the legal department, evaluate the activity in relation to the potential conflict. If a perceived or actual conflict is determined to exist and a decision is made to proceed with the activity, a written plan designed to prevent the conflict from influencing decisions related to the activity is developed. The process is ultimately overseen by a conflict of interest committee of the upmc board of directors on behalf of all upmc subsidiaries, including upmc somerset.”

“Upmc has established a rigorous compensation review process for its top executives which includes review by its executive compensation committee in a process intended to satisfy the "rebuttable presumption of reasonableness" set forth in the regulations to sections 4958 of the internal revenue code. Upmc gives authority to those executives to establish the compensation of executives of other subsidiaries and business units, including those of upmc somerset.”

“Upmc's public website (www.upmc.com) makes its financial results, conflict of interest process, and various information about governance and oversight available to the public. Additional information may be supplied upon specific request for data not posted to the website.”

“Transfers to exempt affiliates -12,906,634. Change in interest of temp restricted net assets of foundation -2,183. Upmc capital commitment 41,260,442. Net assets released from restriction 33,557.”

“An external audit is completed at a consolidated upmc system level only, including upmc and all taxable and tax-exempt subsidiaries. The entire system's financial statements, which includes all subordinate members of the upmc group, are posted on the upmc website. (www.upmc.com) the financial statement audit during the 990 filing period is for the calendar year ended december 31, 2019. Upmc has an audit committee that is established to assist the board of directors in fulfilling its oversight responsibilities by monitoring upmc consolidated financial reports and other financial information provided by upmc to governmental bodies, the public or other external entities. The upmc's system of internal controls regarding finance, accounting, legal compliance and ethics that management and the board have established and upmc's internal auditing, accounting and financial reporting processes also provided oversight.”