Johnson County Community Care Corporation

“Texas Health Resources (THR) and its related organizations included in the THR healthcare system encourage employees to become involved in philanthropic endeavors in their communities. As a result, THR healthcare system employees who are serving as officers, board members, or key employees may, from time to time, also serve on the boards of various community organizations such as church boards, United Way, etc. There may be a business relationship as a result of multiple THR employees serving on the same community boards. THR employees serve as the corporate officers of each subsidiary organization. As THR system employees, all officers have a business relationship within the organizations of the THR healthcare system. THR also appoints system officers to the boards of various controlled joint ventures. As THR system employees, various officers of the organization may have a business relationship through serving on THR controlled joint venture boards.”

“The organization is not a member organization, however, the board of JCCC must be approved by THC.”

“The following actions require the approval of Texas Health Cleburne (THC) and Texas Health Resources (THR): (a) Election of the members of the Board of Trustees (b) Removal of a member of the Board of Trustees The following actions require the approval of THR: (a) Amendment, restatement or repeal of the Certificate or Bylaws of the Corporation (b) Sale, exchange, lease or other transfer of all or substantially all of the assets of the Corporation (c) Merger or consolidation of the Corporation (d) Dissolution of the Corporation. (e) Creation of affiliates or subsidiaries of the Corporation, and approval of their initial governing Documents. (f) Approval of the capital and operating budgets of the Corporation. (g) Incurrence of debt not otherwise included in the capital or operating budgets of the Corporation. (h) Any action which would adversely affect the religious or church practices or affiliation of the Corporation. (i) Voluntary winding up under Chapter 11. (j) Revocation of a voluntary decision to wind up under chapter 11.151 of the Texas Business Organization Code (BOC) (k) Cancellation of an event requiring winding up under Chapter 11.152 of the BOC (l) Reinstatement under Chapter 11.202 of the BOC (m) A distribution plan under Chapter 22.305 of the BOC (n) A plan of conversion under Chapter 11, Subchapter F of the BOC (o) A plan of exchange under Chapter 11, Subchapter F of the BOC.”

“The Texas Health Resources (THR) tax department staff prepares the Forms 990 for THR and all of its wholly controlled affiliates. In order to accurately prepare the returns, the tax staff works closely with various other departments to gather and review the information needed to complete the return. The departments involved in this process include, but are not limited to accounting, finance, treasury, human resources, payroll, legal, governance, and corporate compliance. The returns are then reviewed twice within the tax department before being given to the Financial Reporting department to review and to ensure that the financial information is accurate and up to date. All THR System Forms 990 are provided to members of the Audit and Compliance Committee of the THR Board, giving them an opportunity to review, comment and ask questions regarding the Forms 990. The tax department Sr. Director provides an overview presentation to the committee highlighting various areas of the Form 990. A resolution to approve all of the returns is voted upon at this meeting. Once the Audit and Compliance Committee has approved the returns, each return is then reviewed and signed by the Chief Accounting Officer and Assistant Secretary. The members of the governing Boards are provided a copy of the Form 990 for their respective entity after the Audit and Compliance Committee approval process and before the Form 990 is filed.”

“Texas Health Resources (THR) has adopted a Conflict of Interest Policy that applies to THR and all of its wholly owned or wholly controlled affiliates. During the first quarter of each fiscal year, a Duality and Conflict of Interest Statement Form is distributed by the THR Chief Compliance Officer to all board members, officers, contracted medical directors, employees with a title of manager or above, employed physicians, and certain committee members and other employees based upon function. All disclosed conflicts are reviewed by the THR Chief Compliance Officer. A report, listing each reported Duality of Interest or Conflict of Interest is given to both the Chair of the Governing body and the President of the Corporation with which the reporting person is affiliated. The THR Board of Trustees receives a report when the Annual Disclosure process is complete. Progressive corrective action is taken for any identified noncompliance which may include removal from a board or committee or physician/employee counseling if the person fails to provide the disclosure. In addition, THR monitors physician payments through a public database implemented by CMS. Management plans are executed as needed based upon disclosures. THR also educates the Boards and workforce annually through either a web based or live compliance training.”

“The organization does not make its governing documents or conflict of interest policy available to the public. The consolidated financial statements of Texas Health Resources (THR) are made available to the public on the website www.dacbond.com. Consolidated financial statements are posted to this website quarterly and the audited financial statements are posted annually. The financial statements of the wholly controlled affiliates of THR are not posted to the website nor are they generally made available to the public in any other manner.”

“Adjustment for Intercompany Transactions of a Controlled Group ($1,096) The intercompany adjustment eliminated the receivable/payable balance as of 12/31/2017 between Texas Health Resources (THR) and all wholly controlled tax exempt entities included in the THR Healthcare System. The adjustment includes 2017 activity as well as prior year accumulated activity. The THR Healthcare System records all related transactions through the intercompany Receivable/Payable accounts for each entity. The types of transactions recorded in the Intercompany accounts include management fees charged by the parent organization, services purchased between related organizations, supplies purchased by a centralized purchasing department, daily cash sweeps and similar transactions.”

“Texas Health Resources (THR) prepares consolidated financial statements with its related entities. The THR Board appoints an audit and compliance sub-committee that assumes responsibility for oversight of the consolidated audit for all related entities. The related entities do not have a separate audit committee, but abide by the THR committee's oversight. There has been no change during the year in the organizations oversight selection process.”