Sparrow Carson Hospital

“Carson city hospital (cch) is organized on a membership basis. There are two classes of members: class a membership consists of the original directors of cch, excluding those directors who are elected or appointed by the class b member; the class b member is sparrow health system (sparrow), an unrelated michigan nonprofit corporation. Other than sparrow, there shall be no additional class b membership interests without the consent of sparrow.”

“Class a members each have one vote for purposes of voting by members; the number of votes held by the class b member (sparrow) is proportionate to the sparrow percentage interest multiplied by the votes held in the aggregate by both class a and class b members. At the annual meeting of the members, the class a members elect 9 directors of the board of directors by majority vote of the class a members, and the class b member (sparrow) elects a number of directors of the board of directors that is consistent with the current sparrow percentage interest.”

“The following activities require the affirmative vote of the class b member (sparrow): 1. Amendments to the articles of incorporation and the bylaws; 2. The dissolution, merger, sale, sale of substantially all of the assets, lease, or transfer of control; 3. The sale of a majority ownership interest in cch; 4. The publicly recognized "affiliation" with any organization other than the class b member (sparrow); 5. Approval of cch's annual operating budget, when such budget reflects a total margin of less than 2% of net revenue; 6. Approval of cch's annual capital budget, when such budget anticipates an additional capital contribution from the class b member (sparrow) beyond its original capital contribution; 7. The incurrence of any debt obligation in the aggregate greater than $500,000; 8. The approval of capital expenditures in excess of $500,000 (except as to replace equipment); and 9. Any action that allows or facilitates the creation of a new class of members or creation of a membership interest in cch.”

“The form 990 is reviewed in detail by the organization's management. A board meeting is held with our tax advisors where a copy of the full form 990, including all applicable schedules, is provided to each member of the governing body for review before the return is filed with the irs. The board is given a summary of key points regarding the form 990, and is allowed to ask any questions they may have once all board members have reviewed the return, it is then submitted to the irs.”

“Conflict of interest questionnaires are distributed to all officers, directors, and key employees to determine whether any potential conflicts of interest exist on an annual basis. The hospital executive committee, which includes the president of the board of directors, discusses the conflict of interest questionnaires to determine whether an actual conflict exists. If a conflict is determined to exist, the person with the conflict is recused from taking part in any decisions concerning the conflicting issue.”

“The organization's board of directors annually reviews and approves the compensation for the organization's president/ceo. The board president/ceo is removed form the board discussions to prevent him from discussing and determining his own compensation. The board of directors uses compensation studies and wage surveys in determining the amount of compensation for the ceo, and their discussions are documented in the board meeting minutes. Compensation for the current year is discussed and approved in the previous year during the budget approval process. The 2012 compensation was reviewed and approved during november/december 2011 during the annual budgeting process. The 2013 compensation was reviewed and approved during november/december 2012 during the annual budgeting process. The organization's board of directors annually reviews and approves the compensation for all positions, including other officers and key employees. The board of directors uses compensation studies and wage surveys in determining the amount of compensation for all positions, and their discussions are documented in the board meeting minutes. The 2013 compensation was reviewed and approved at the end of 2012 during the annual budgeting process.”

“An organization's governing documents and conflict of interest policy are not required disclosures pursuant to internal revenue code (irc) section 6104. These documents are not available to the public at this time. As a hospital, the organization's audited financial statements are made available to the public as an attachment to its form 990, which is a required disclosure pursuant to internal revenue code (irc) section 6104.”

“The executive committee of the board shall consist of the chairperson of the board, the president, the vice-chairperson, the secretary/treasurer and the medical director a sixth member shall be appointed by the chairperson and chosen form one of the class b members of the board the chairperson shall appoint replacements when necessary a majority of the executive committee shall constitute a quorum it shall have the authority to transact all regular business of the hospital during the interval between meetings of the board of directors the committee shall make a full report of its actions, if any, at the next regualr meeting of the board meetings of the committee may beheld at any time on call by the chairperso of the board.”

“Change in pension liability 534,823. Prior period adjustment 40,906. Transfer of capital to fund the foundation -73,590.”

“The audit process has not changed since the prior year.”