Pahcs II

“As the sole member of pahcs ii, cdh-delnor health system, a related tax-exempt organization, has broad authority to act on behalf of the governing body. Please see the narratives for part vi, lines 6, 7a and 7b for a description of such authority.”

“The sole member of PAHCS II is CDH-Delnor Health System, a related tax-exempt organization. CDH-Delnor Health System is now a wholly-owned subsidiary of Northwestern Memorial Health Care (NMHC). Management duties performed by CDH-Delnor Health System and/or NMHC include: operational, strategic, budgeting, and long-range planning duties, as well as finance, internal audit, human resources, treasury and marketing services. The individuals providing these services, including the CEO, CFO and other senior management, are employees of and compensated by either NMHC or CDH-Delnor Health System. PAHCS II pays a shared services fee to CDH-Delnor Health System.”

“Cdh-delnor health system, the sole member and parent organization of pahcs ii, has the power to elect or remove all of the directors of pahcs ii.”

“Certain decisions of the pahcs ii governing body are subject to approval by cdh-delnor health system, as the sole member. The member's authority includes the power to amend, alter, restate or repeal the bylaws of the corporation; to negotiate and execute contracts on behalf of the corporation; to adopt a plan of merger, consolidation or corporate reorganization involving the corporation; to adopt a plan of dissolution or liquidation of the corporation and distribution of its assets; and, to amend, alter, restate or repeal the articles of incorporation of the corporation. Actions by the board of directors requiring the approval of the sole member include: adoption of capital and operating budgets; adoption and execution of a strategic plan; and, authorization of a capital expenditure in excess of the limits established by the sole member from time to time.”

“Prior to filing, a draft of the completed form 990 is reviewed by outside tax advisers and internal management. After that review is complete, the form 990 is provided to the board of directors of cdh-delnor health system (sole member) for additional review and comment.”

“CDH-Delnor Health System, a wholly owned subsidiary of Northwestern Memorial Heath Care (NMHC), is the parent organization and the sole corporate member of the filing organization. In accordance with this organizational structure, interested persons of the filing organization are subject to the policies, processes and procedures of NMHC. Northwestern Memorial HealthCare (NMHC) maintains both a Conflict of Interest Policy and an Intermediate Sanctions Policy. These policies have been approved by its Board of Directors and apply to all entities, directors, officers, employees and transactions which take place within the NMHC system. The policies were written to assist board members and management with the identification of those transactions that warrant attention and consideration to ensure proper adherence to the tax laws impacting tax-exempt organizations. The conflict of interest policy requires completion of an annual certification which affirms that such person has received, read and understands the conflict of interest policy, has agreed to comply, has disclosed any matters required to be disclosed under the policy, and agrees to report any changes promptly to the Corporate Compliance & Integrity (CCI) department. Once the annual certifications are complete, the CCI department reviews the disclosures for compliance with the policy and escalates any that are of a nature that require potential further remediation to manage or eliminate the disclosed conflict.”

“CDH-Delnor Health System, a wholly owned subsidiary of Northwestern Memorial Heath Care (NMHC), is the parent organization and the sole corporate member of the filing organization. In accordance with this organizational structure, interested persons of the filing organization are subject to the policies and procedures of NMHC. Northwestern Memorial Healthcare Organization, NMHC, has established a Board-led executive compensation review and approval process for NMHC and all affiliates. This process for reviewing and approving executive compensation: is designed to qualify for the rebuttable presumption of reasonableness under the federal tax law intermediate sanctions rules and otherwise complies with IRS guidelines for tax-exempt organizations; is conducted by a separate subcommittee of the Board of Directors whose members are all disinterested, independent and non-paid; and evaluates the reasonableness of compensation annually based on compensation data gathered by external consultants from a peer group comprised of similarly situated healthcare organizations. In addition, a significant portion of compensation is at risk and is payable only upon achievement of substantial goals. The Board places a high priority on its ability to recruit and retain a strong leadership team to ensure we serve our mission and achieve our goals. The officers of Northwestern Memorial HealthCare also fulfill substantial officer and executive functions for NMHC's subsidiaries.”

“The compensation determination process described on line 15a also applies for the other officers and the key employee of the filing organization. The compensation of the assistant secretary is determined by the sole member organization's human resources department using a market-based analysis.”

“The corporation's governing documents, conflict of interest policy and financial statements are available upon request. The consolidated financial statements of Northwestern Memorial HealthCare and Subsidiaries are available on the Northwestern Medicine website. The financial statements are also available from the Illinois Attorney General's office as part of its Annual Community Benefits Report and through Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board.”

“Professional fees-Medical - Total Expense: 940072, Program Service Expense: 940072, Management and General Expenses: , Fundraising Expenses: ; Shared services fee - Total Expense: 549545, Program Service Expense: , Management and General Expenses: 549545, Fundraising Expenses: ; Temporary staffing - Total Expense: 43846, Program Service Expense: 8769, Management and General Expenses: 35077, Fundraising Expenses: ; Other purchased services - Total Expense: 67793, Program Service Expense: , Management and General Expenses: 67793, Fundraising Expenses: ;”

“Fund balance transfers to CDH-Delnor Health System - 490454; Purchase accounting valuation adjustment - -71089;”

“As described previously in Schedule O, the filing organization's sole member, CDH-Delnor Health System, was acquired by Northwestern Memorial HealthCare (NMHC) on 9/1/2014. As a result of that acquisition, the annual financial audit is now overseen by the NMHC Board of Directors' Audit Committee. The FY2015 Audit was conducted by the audit firm chosen by the Audit Committee of NMHC.”

“On September 1, 2014, CDH-Delnor Health System, sole member of the filing organization, became a wholly-owned subsidiary of Northwestern Memorial HealthCare (NMHC), pursuant to an affiliation agreement between NMHC and CDH-Delnor Health System. This affiliation positions NMHC, under the Northwestern Medicine brand, to create an integrated academic health delivery system that serves a broad community, offering patients access to leading-edge care closer to where they live and work. While CDH-Delnor Health System has become a wholly-owned subsidiary of NMHC, CDH-Delnor Health System continues to serve as the sole member of the filing organization with governance oversight and powers as described in the Form 990, Part VI narratives.”