Akron General Health System

“In 2015, the cleveland clinic foundation became the sole member of akron general health system. The akron general health system's code of regulations was revised and includes the following significant changes - formerly, the number of the members of the governing body consisted of "no fewer than nine (9) and no more than nineteen (19) persons". The number of members has been revised as not to exceed thirty (30).; formerly, the code of regulations described a number of specific standing committees including an executive committee, and a finance and audit committee. The revised version describes only an executive committee and includes, as did the prior version, the board's power to designate other committees; formerly, the code of regulations contained the reporting organization's conflict of interest policy and procedure. The revised code of regulations specifies that reporting organization's board of directors will evaluate all conflicts of interest in accordance with the cleveland clinic foundation's conflicts of interest policy and procedure. The procedure is described in the reporting organization's response to question 12c, section b, part vi, form 990 in schedule o; and formerly, the code of regulations described a number of specific standing committees including an executive committee, and a compensation committee. The revised version describes only an executive committee and includes, as did the prior version, the board's power to designate other committees.”

“Akron general health system is an ohio nonprofit and an organization recognized as exempt from federal income taxes under internal revenue code section 501(c)(3). As such it has no shareholders. In 2015, the cleveland clinic foundation became the sole member of akron general health system. The cleveland clinic foundation is an ohio nonprofit and an organization recognized as exempt from federal income taxes under internal revenue code section 501(c)(3). The cleveland clinic foundation is not a private foundation.”

“The cleveland clinic foundation, the sole member of the reporting organization, has the power to appoint unilaterally, 1/3 of the members of akron general health system's governing body, and retains approval over nominees to the remaining 2/3 of that body.”

“With respect to the reporting organization, the cleveland clinic foundation has reserved all authority over the following matters - approval of the annual operating and capital budgets; incurrence of debt in excess of $100,000; creation of new subsidiaries; acquisition or transfer of any interest in real estate; expenditures of non-budgeted items in excess of $100,000 and costs of budgeted items exceeding the amount budgeted by $100,000 or more; approval of capital, financial and strategic plans; the conflict of interest policy and procedure; and the approval of any corporate plan of dissolution.”

“The form 990 is reviewed by experienced and qualified members of the finance division tax department. Prior to filing, key sections of the form are reviewed with experienced and qualified members of the law department. The entire return is also reviewed with the cfo, the audit committee chairperson and the audit committee vice chairperson. The paid preparer (a big 4 public accounting firm) conducts an in depth review of the form. Upon confirmation of successful e-filing from the irs, a copy of the final e-filed return will be made available to appropriate members of the governing body.”

“Akron general health system is an affiliate of the cleveland clinic foundation ("ccf"). It is subject to that organization's conflict of interest ("coi") policy. Ccf has adopted a coi policy consistent with the model irs coi policy. It applies to directors, officers and trustees of ccf and all its affiliates, both exempt and taxable. Under the board of directors policies and procedures for dealing with conflict of interest issues (the policy), a director, officer or trustee who has a conflict of interest with respect to a proposed contract, transaction, or arrangement must refrain from voting on any matter relating to the contract, transaction, or arrangement. In addition, the directors, officers and trustees must annually disclose any interests as defined in the policy that may be considered a potential conflict of interest. Failure to timely reply is to be addressed by the committee under the policy. The directors, officers and trustees have a continuing obligation to notify the chief governance officer at any time during the year if any of their disclosures change or if a new disclosure is required under the policy. The board of conflict of interest committee (the committee) meets at least four times a year and reviews the disclosures, any proposed arrangements that may involve a potential conflict of interest, and documents its conclusions. Under the policy, the interested persons may attend a meeting at the discretion of the board of directors, or the committee, to provide information or answer questions, but such persons may not be present during final consideration or voting on the contract, transaction or arrangement.”

“In accordance with its executive compensation policy, the reporting organization follows a process for determining compensation of the organization's chief executive officer (ceo) and other top management personnel that is modeled after the requirements found in internal revenue code section 4958 for establishing the presumption of reasonable compensation. The process calls for recommendations - developed by an independent compensation consultant, based on comparable market data from published surveys and the forms 990 of comparable organizations - that are within the range of the total compensation and benefits of similarly situated persons at similarly situated organizations. These recommendations are reviewed by the compensation committee of the reporting organization's board of directors. The compensation committee is comprised of independent persons and the deliberations are documented, contemporaneously, in the committee's minutes. With the exception of the ceo, the compensation for top management was reviewed for reasonableness using this process in 2014. The compensation committee and board leadership, requested that executive compensation review be deferred until 2016, and therefore, no adjustments to compensation were made in 2015. During 2014, the ceo's contract was prepared for renewal using the process described above. In january 2015, the board approved the recommendation of the compensation committee and executed a new three-year agreement with the ceo.”

“The reporting organization is a member of the cleveland clinic foundation (ccf). Ccf makes certain of its key documents available to the public on its website, www.clevelandclinic.org, under the "about cleveland clinic" section. In this section, the financial statements, annual report, community benefit report, ccf's conflict of interest policy, and corporate compliance policies are available.”

“Consulting services: program service expenses 556,604. Management and general expenses 0. Fundraising expenses 0. Total expenses 556,604. Professional fees: program service expenses 100,424. Management and general expenses 0. Fundraising expenses 0. Total expenses 100,424. Physician retention: program service expenses 19,783. Management and general expenses 0. Fundraising expenses 0. Total expenses 19,783. Marketing: program service expenses 240,839. Management and general expenses 0. Fundraising expenses 0. Total expenses 240,839. Miscellaneous: program service expenses 382,240. Management and general expenses 0. Fundraising expenses 0. Total expenses 382,240.”

“Transfers from/(to) affiliated organizations 16,602,847. Book/tax difference on partnerships -1,399.”

“On november 1, 2015, the cleveland clinic foundation became the sole member of akron general health system. Akron general health system, and its subsidiaries, were included in the cleveland clinic foundation's audited financial statements for the year ended december 31st, 2015. Consequently, the oversight process for the audited financial statements was conducted by the cleveland clinic foundation.”