Sacred Heart Health Services

“Julie Lautt, Sr. Debra Kolecka and Douglas Ekeren have a business relationship.”

“The sole member of the organization is Avera Health, a nonprofit corporation organized and existing under the laws of the state of South Dakota and exempt under 501(c)(3) of the Internal Revenue Code of 1986, as amended.”

“Avera Health, as the sole member, has the power to appoint and remove, with or without cause, members of the board of directors.”

“Avera Health, as the sole member, has the following rights as the Member. 1) To approve the adoption, amendment or repeal of the statements of philosophy, mission and values of Corporation; 2) To initiate the adoption, amendment or repeal of any provision of the Articles of Incorporation or Bylaws of Corporation, and to give final approval of any such action with respect thereto; 3) To approve and act upon the alienation of real property and precious artifacts under the canonical stewardship of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota ("Presentation Sisters") or the Benedictine Sisters of Sacred Heart Monastery ("Benedictine Sisters"), pursuant to the policies established by the Member; 4) To approve any plan of merger, consolidation or dissolution of the Corporation, or the divestiture of a sponsored work or ministry associated with the Corporation; 5) To approve the creation of new sponsored works or ministries to be conducted by or under the authority of the Corporation; 6) To appoint and remove, with or without cause, the Board of Directors of the Corporation. 7) To appoint and/or remove, with or without cause, the President and Chief Executive Officer of the Corporation. 8) To approve operating/capital budgets and strategic plans of the Corporation. 9) To approve expenditures outside of operating and capital budgets exceeding defined thresholds according to policy which may be adopted from time to time by the Member. 10) To approve acquisitions, sales and leases, according to policy which may be adopted from time to time by the Member. 11) To establish and maintain employee benefit programs. 12) To establish and maintain insurance programs. 13) To approve major community fund drives. 14) To approve the appointment of auditors. 15) To adopt policies designed to effectuate the reserved powers of the Member.”

“The Form 990 is prepared and reviewed by an independent accounting firm. The Form 990 is then reviewed by the Avera Health VP of Financial Reporting and Tax Manager. After initial internal review, the Form 990 is made available to various members of Avera Health Executive Management, including the Avera Health CFO, President/CEO and COO. In addition, the Form 990 is made available to the Facility CEO, other Operation Finance Leaders and the Facility Board members.”

“The conflict of interest policy covers board members, officers and key employees. At each board meeting, a request is made for all Board members to disclose any potential conflict of interest pertaining to any item listed on the agenda or pertaining to any potential item that could be discussed during the course of the meeting. The declaration of conflict of interest is recorded in the meeting minutes. The board makes a determination of whether there is a conflict of interest and if so, implements the procedure for evaluating the issue or transaction involved. The board member or officer with the conflict must refrain from voting. A statement of conflict of interest disclosure is made on an annual basis by officers and board members. The information is maintained in a database and a report is provided to the Board.”

“The CEO and CFO-Avera Health was compensated by Avera Health System. Annually the Compensation Committee of Avera Health, which is comprised of six (6) System Members appointed by the Religious Orders, meets with an independent consultant regarding fair market value of officers and key employees. The Compensation Committee approves all salaries based on comparable data and documents the basis for their decision in meeting minutes. Depending on the individuals's role with the organization, some officers and key employees are compensated by Avera Sacred Heart.”

“The organization's governing documents and conflict of interest policy are not made available to the general public. The Organization's financial statements are attached to the Form 990 per IRS instructions and therefore available to the general public.”

“There is no written policy or procedure. In the event of any such proposed transaction, the board or a committee with delegated authority reviews all materials, valuations and operational aspects for any proposed transaction. Such transaction would be evaluated in accordance with the exempt status of the organization and its applicable purposes. Any transaction also would be approved by the board and the member.”

“Purchased Services: Program service expenses 8,073,275. Management and general expenses 720,664. Fundraising expenses 0. Total expenses 8,793,939. Medical Professional Fees: Program service expenses 3,598,286. Management and general expenses 598,691. Fundraising expenses 0. Total expenses 4,196,977. Repairs & Maintenance: Program service expenses 3,499,817. Management and general expenses 29,984. Fundraising expenses 113. Total expenses 3,529,914. Centralized Services: Program service expenses 4,921,298. Management and general expenses 6,540,050. Fundraising expenses 0. Total expenses 11,461,348.”

“Change in Interest in Avera Foundation 1,731,303. Equity Transfers 154,946.”

“The Audit Committee of Avera Health, parent organization, selects the auditor and reviews the audited financial statements for Avera Health, which includes Sacred Heart Health Services.”

“The issue price includes the filing organization's share of the entire bond issue, which was issued to Avera Health on behalf of the Avera Obligated Group. The Avera Obligated Group consists of Avera Health, Avera McKennan, Avera St. Luke's, Avera Queen of Peace, Avera Marshall, Avera St. Mary's, Avera St. Anthony's, Avera St. Benedict, Avera Holy Family, Avera Tyler, Avera Granite Falls, Avera Gettysburg, Avera at Home, and Sacred Heart Health Services. In accordance with IRS instructions, information related to the tax exempt bond reporting is being reported on Avera Health's tax return (EIN 46-0422673).”