Community Nursing Service of Dupage County

“As of 12/31/2020, the sole member of Community Nursing Service of DuPage County (CNS) became Central DuPage Hospital Association (CDH), a related tax-exempt organization. CDH is itself wholly controlled by Northwestern Memorial HealthCare (NMHC), a related tax-exempt organization, which was the prior sole corporate member of CNS. CDH, as sole corporate member of CNS and through the ultimate control exercised by NMHC, 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.”

“Central DuPage Hospital Association (CDH) became the sole corporate member of CNS, the filing organization, during the tax year. Northwestern Memorial Heath Care (NMHC) is the parent organization and the sole corporate member of CDH. Interested persons of the filing organization are subject to the policies and procedures of NMHC, in its role as the parent organization of the health system. Northwestern Memorial HealthCare, 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 compensation of the former key employee is determined by the parent organization's Human Resources department using a market-based analysis.”

“As of 12/31/2020, the sole member of Community Nursing Service of DuPage County (CNS) is now Central DuPage Hospital Association (CDH), a related organization and an organization whose sole member is Northwestern Memorial HealthCare (NMHC), the previous sole member of CNS. NMHC continues to provide support services throughout the Northwestern Medicine health system and does so directly and indirectly through CDH on behalf of CNS. Staff providing management services to the filing organization are employees of NMHC. During the tax year, NMHC staff provided services related to the winding down process, including supervision of the collection of accounts receivable.”

“Community Nursing Service of DuPage County (CNS) filed Articles of Amendment as of 12/31/2020, replacing Northwestern Memorial HealthCare (NMHC) with Central DuPage Hospital Association (CDH) as the sole corporate member of CNS. NMHC remains the sole corporate member of CDH and ultimately controls CNS as the overall health system parent corporation.”

“As of 12/31/2020, the sole member of Community Nursing Service of DuPage County (CNS) is now Central DuPage Hospital Association (CDH), a related organization and an organization whose sole member is Northwestern Memorial HealthCare (NMHC), the previous sole member of CNS. NMHC, as the ultimate member and parent organization, continues to provide support services on behalf of CNS. Management duties performed by NMHC include: operational, finance, and treasury services. The individuals providing these services, including the CEO, CFO and other senior management, are employees of and compensated by NMHC.”

“Central DuPage Hospital Association (CDH), the sole member and parent organization of Community Nursing Service of DuPage County (CNS), has the power to elect or remove all of the directors of Community Nursing Service of DuPage County. Additionally, further oversight is exercised by Northwestern Memorial HealthCare as the ultimate parent of the health system entities and sole corporate member of CDH.”

“Certain decisions of the Community Nursing Service of DuPage County (CNS) governing body are subject to approval by Central DuPage Hospital Association (CDH), as the sole member of CNS. 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. Decisions of CDH may also be subject to approval by Northwestern Memorial HealthCare (NMHC), as the sole corporate member and parent of CDH.”

“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 officers and directors of the filing organization for additional review and comment.”

“Central DuPage Hospital Association (CDH) became the sole corporate member of CNS, the filing organization, during the tax year. Northwestern Memorial Heath Care (NMHC) is the parent organization and the sole corporate member of CDH. In accordance with this organizational structure, interested persons of both CNS, filing organization, and CDH, its sole member, 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 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.”