Central Dupage Special Health Association

“As the sole member of central dupage special health association, northwestern memorial healthcare, 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.”

“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 determining executive compensation: (1) 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; (2) is conducted by a separate subcommittee of the Board of Directors whose members are all disinterested, independent and non-paid; (3) evaluates the reasonableness of compensation annually based on compensation data gathered by external consultants from a peer group comprised of similarly situated healthcare organizations; and (4) compensation decisions and support are recorded in the compensation committee meeting minutes. 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 above also applies for the other officers of the filing organization.”

“The parent organization of Central DuPage Special Health Association (CDSHA) is Northwestern Memorial HealthCare (NMHC). Beginning in 2017, all employees of CDSHA, the filing organization, became employees of NMHC and contracted back to CDSHA. Management services provided through NMHC by the former CDSHA employees include the hiring, firing and supervising personnel; planning and executing budgets and financial operations; and, supervising the exempt operations of the organization. The individuals listed as 'former highest compensated employees' in Part VII-A are the former CDSHA employees who are now NMHC employees but continue to provide services to CDSHA as contracted personnel.”

“Effective 9/1/18, CDH-Delnor Health System, the former sole member of the filing organization, merged into its sole member, Northwestern Memorial HealthCare (NMHC). NMHC became the sole member of the filing organization.”

“THE SOLE MEMBER OF CENTRAL DUPAGE SPECIAL HEALTH ASSOCIATION IS NORTHWESTERN MEMORIAL HEALTHCARE (NMHC), A RELATED TAX-EXEMPT ORGANIZATION. Management duties performed by 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 NMHC. CDSHA PAYS A SHARED SERVICES FEE TO NMHC.”

“Northwestern memorial healthcare, the sole member and parent organization, has the power to elect or remove the directors of central dupage special health association.”

“Certain decisions of the central dupage special health association (cdsha) governing body are subject to approval by northwestern memorial healthcare, as the sole member of cdsha. 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 northwestern memorial healthcare for additional review and comment.”

“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.”

“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.”

“The parent organization of Central DuPage Special Health Association (CDSHA) is Northwestern Memorial HealthCare (NMHC). Beginning in 2017, all employees of CDSHA, the filing organization, became employees of NMHC and contracted back CDSHA. The total staffing costs paid to NMHC is reported on line 11g as Contracted Personnel.”

“Shared services fee - Total Expense: 1020459, Program Service Expense: , Management and General Expenses: 1020459, Fundraising Expenses: ; Contracted personnel - Total Expense: 1232700, Program Service Expense: 1084776, Management and General Expenses: 147924, Fundraising Expenses: ; Delivery service - Total Expense: 75561, Program Service Expense: 75561, Management and General Expenses: , Fundraising Expenses: ;”

“The organization's cash reserves are invested in a pooled investment account maintained by northwestern memorial healthcare. The pooled account consists of cash, equity and debt securities that are publicly traded. Investments in equity securities with readily determinable fair values and all investments in debt securities are reported at fair value on the balance sheet of the filing organization. However, interest income and both realized and unrealized gains and losses from the pooled investments are not reported on the statement of revenue or reconciliation of net assets of the filing organization.”