Memorial Health Services Group Return

“The following officers of MemorialCare Medical Foundation have a business relationship: Judy Shubin and Mark Schaefer.”

“The governing documents were revised to reflect that the board members of OCMMC and SMMC consolidated into one group of board members instead of having separate boards.”

“Memorial Health Services, a nonprofit corporation and tax-exempt public charity within the meaning of Section 501(c)(3) of the Internal Revenue Code, is the sole corporate member of each of Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, Saddleback Memorial Medical Center, and MemorialCare Medical Foundation.”

“Memorial Health Services, a nonprofit corporation and tax-exempt public charity within the meaning of Section 501(c)(3) of the Internal Revenue Code, is the sole member of each of the following organizations and has the right to elect the members of the governing body of each organization: Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, Saddleback Memorial Medical Center, and MemorialCare Medical Foundation.”

“Memorial Health Services, a nonprofit corporation and tax-exempt public charity within the meaning of Section 501(c)(3) of the Internal Revenue Code, is the sole member of each of the following organizations: Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, Saddleback Memorial Medical Center, and MemorialCare Medical Foundation. The governing documents of these organizations reserve to Memorial Health Services as the sole member the following powers: approval of any adoption, amendment or supplement to any mission, philosophy, or values statements; approval of any amendment to the governing documents, the election and removal of directors and selection, employment and removal of the chief executive officer; sale or other disposition of all or substantially all assets; any merger, consolidation, voluntary dissolution, acquisition of assets or membership of a health facility or entry into any partnership or joint venture with any third party; form a subsidiary or act as a general partner; purchase insurance or establish or operate a risk management program; retain independent accounting and auditing services; adopt annual operating and capital budgets; incur debt other than in the ordinary course of business or in connection with recruitment of physicians in accordance with Memorial Health Services policy; authorize any unbudgeted capital expenditure in excess of $1,000,000 and any other expenditure in excess of $5,000,000; and adopt any strategic long range or master plan or retain any consultants with respect thereto.”

“An independent accounting firm is engaged to assist with the preparation of this group Form 990. The chief financial officer of each organization, with assistance from other executives and including finance, legal, compliance and government relations, provide all the financial data and other information for the reporting period necessary to complete the Form 990. The chief financial officer and chief investment officer of Memorial Health Services, the sole member of each organization, then review the Form 990, with assistance from other executives as needed or appropriate. Finally, the Form 990 is provided to each member of the MemorialCare Health System board of directors for review prior to a meeting of the board of directors, so that any questions or concerns can be addressed at the meeting of the board and prior to filing.”

“Each director, officer, and key employee of each organization included in this group return is required to complete an annual survey that requires disclosure of actual or potential conflicts of interest and affirmation that the organization's conflict of interest policy has been read and understood. The results of the survey are reported to each organization's executive leadership and board of directors, and to the Governance Committee of the sole member's governing body. Questions and conflicts are evaluated in consultation with the organization's legal, compliance, and finance executives, and outside experts as necessary, so that conflicts may be appropriately managed and addressed in accordance with the California Nonprofit Corporation Law and the applicable principles governing tax exempt public charities. In addition, an annual notice is sent to each employee to remind employees of the organization's policy regarding the acceptance of gifts from vendors and others who do or seek to do business with the organization. Finally, each employee is required to attest annually that they have read and understood the organization's Code of Conduct.”

“The compensation of all executives holding the position of vice president or a higher (e.g., senior vice president or c-level officer), including the CEO, are reviewed annually by an independent consultant with expertise in assessing whether executive compensation is reasonable and consistent with fair market value, considering appropriate market data. The results of this review are presented to the Compensation Committee of the sole member's board of directors for consideration, and based upon this information, compensation (including any proposed changes to compensation) is approved only if the Compensation Committee, having considered the review and data presented by the independent expert consultant, determines that the compensation is reasonable and consistent with fair market value. Such determinations are reflected in the minutes of the meeting(s) of the Compensation Committee.”

“The organizations included in this group return do not make their governing documents (articles of incorporation, bylaws) available to the general public. However, the articles of incorporation are available from the California Secretary of State's office. The Research conflict of interest policy is posted on the organization's website at https://www.memorialcare.org/services/research-clinical-trials/conflict-inte rest-research-policy-250. The audited financial statements are available to the general public upon request. The organization's various policies governing conflicts, compliance and ethics are summarized in the organization's Code of Conduct, which is available to the general public upon request.”

“The following organizations included in this group return have invested in, contributed assets to, or participated in a joint venture or similar arrangement with a taxable entity during the year: Saddleback Memorial Medical Center and MemorialCare Medical Foundation.”

“The following organizations included in this group return are required to file Schedule B, Schedule of Contributors: Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, and Saddleback Memorial Medical Center.”

“The following organizations included in this group return engaged in lobbying activities: Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, Saddleback Memorial Medical Center, and MemorialCare Medical Foundation. See Schedule C, Part II.”

“Long Beach Memorial Medical Center and Saddleback Memorial Medical Center, both included in this group return, are the each the sole member of a nonprofit organization (Memorial Medical Center Foundation and Saddleback Medical Foundation, respectively)formed and maintained to further their respective exempt purposes, and these related nonprofit organizations held assets in endowment funds for the benefit of Long Beach Memorial Medical Center and Saddleback Memorial Medical Center, respectively.”

“Orange Coast Memorial Medical Center, an organization included in this group return, reported more than $15,000 of fundraising event gross income and contributions.”

“Three of the organizations included in this group return operated one or more hospitals: Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, and Saddleback Memorial Medical Center.”

“Each of Long Beach Memorial Medical Center, Orange Coast Memorial Medical Center, and Saddleback Memorial Medical Center have attached their audited financial statements to this group return.”

“The following organizations were parties to business transaction with a person or entity described in Lines a, b, and/or c (see Schedule L): Long Beach Memorial Medical Center, MemorialCare Medical Foundation.”

“The following organizations included in this group return owned 100% of the interests of at least one disregarded entity: Saddleback Memorial Medical Center and MemorialCare Medical Foundation.”

“The following organizations had unrelated business gross income of $1,000 or more during the year: Long Beach Memorial Medical Center, Saddleback Memorial Medical Center, Orange Coast Memorial Medical Center, and MemorialCare Medical Foundation.”

“The following organizations received payments in excess of $75 made partly as a contribution and partly for goods and services provided to the payer, and notified the payer of the value of the goods and services provided: Orange Coast Memorial Medical Center.”

“Investments in/Distributions from Program Related Investments -7,752,167. Book/Tax Difference on K-1 Investments 287,030.”

“The financial statements of the organizations included in this group return were audited on a consolidated basis together with the financial statements of their sole member, Memorial Health Services, by an independent audit firm selected by the Audit Committee of the board of directors of Memorial Health Services.”

“The following organization included in this group return was required to and did undergo an audit as set forth in the Single Audit Act and OMB Circular A-133 as a result of a federal award: Long Beach Memorial Medical Center.”