Arkansas Children'S Hospital

“The board of directors may delegate such of its powers as it deems necessary or advisable to committees of the board; provided, however, that no committee of the board shall have the authority to: (i) authorize distributions; (ii) elect, appoint or remove directors or fill vacancies on the board or any of its committees; (iii) adopt, amend or repeal the articles of incorporation or bylaws; or (iv) appoint or elect the president and chief executive officer of the corporation. Any committee may exercise such of the board's authority as is granted by the board of directors, subject to the restrictions contained in the corporation's articles of incorporation or the bylaws. The following listed persons were employees of the university of arkansas for medical sciences (uams) during the tax year: karen farst, m.d., steve schexnayder, m.d., and gregory sharp, m.d. Each was compensated by ach via its contract with uams.”

“The following board members had a business relationship during the fiscal year: marcella doderer and phillip jett. Both served on the board of another company that is not affiliated with arkansas children's. The following officers had a business relationship during the fiscal year: marcella doderer and gena wingfield. Both served on the boards of the children's healthcare system and sacova insurance company, ltd., which are affiliated companies.”

“The hospital's svp/chief medical officer position is held by karen farst, m.d., who holds an appointment as section chief of children at risk at the university of arkansas for medical sciences. Although dr. Farst is an employee of uams, as cmo, she is also a key employee of ach. As a uams employee, the hospital reimburses uams for her role, which is to further develop and enhance patient/family centered rounds with an improved delivery of care and patient/family experience; to partner with the cno and others to focus on team care; to improve efficiency of care; to work closely with the chief quality officer; and to listen to medical staff and team members and foster change that will positively impact patient care.”

“The sole member of arkansas children's hospital is arkansas children's, inc.”

“Arkansas children's, inc., ach's sole member, has the reserved power to fix the size of the board of directors, and the governing board of any affiliate controlled by the corporation, and appoint and remove, with or without cause, the directors of the corporation, and members of the governing board of any affiliate controlled by the corporation.”

“Ach's articles of incorporation may be amended, and the bylaws may be altered, amended, or repealed and new bylaws may be adopted: (i) upon the approval of both the board and the sole member, if the amendment does not relate to the number of directors, the composition of the board, the term of office of directors, or the method or way in which directors are elected or selected; or (ii) by the member.”

“Hospital management reviews the draft form 990 and reconciles it to the hospital's internal financials and consolidated audit report. The draft is also reviewed in detail with the vp of financial operations of arkansas children's, inc. The reviewed draft of the form 990 is provided to the planning & development committee by hospital management. If the review by the committee results in revisions to the form 990, those revisions are made. The form 990 to be filed is then provided to the entire board prior to filing.”

“The hospital has a board of directors conflict of interest policy that is issued to and reviewed with all new board members during their board orientation. In addition, the internal general counsel or the system compliance officer will periodically review the policy with the full board during a regular board meeting. A director shall disclose in writing to the board of directors any actual or potential conflict of interest when the situation develops, including the facts that make it an actual or potential conflict. Each director shall sign an initial conflict of interest disclosure statement upon election to the board of directors. Each director also shall sign an annual conflict of interest disclosure statement. If an actual or potential conflict of interest develops after the director's initial and annual statements are signed, the director shall immediately sign a new disclosure statement to address the new situation or transaction. Conflict of interest disclosure statements or declared conflicts will be reviewed by the director board officers. Review will result in one of the following actions by majority vote: (1) determined not to be a conflict; (2) conflict is accepted; or (3) conflict is not accepted and the director will need to abstain from participation in certain votes. Conflict disclosures, facts and actions will be documented in the appropriate committee or board minutes. A director with a conflict of interest will not participate in deliberations or vote by the board of directors, or committee thereof, on the matter giving rise to the conflict. He or she may present relevant information about the matter and also may respond to requests for facts needed by the board to reach an informed decision. After any discussion, the interested director shall either abstain from vote or recuse completely and be absent during further deliberations and action on the matter, as determined by the director board officers of the entity.”

“Compensation for any ach executive or senior officer (president; executive vice president; senior vice president) who is not a contracted uams employee is reviewed by the arkansas children's human resources and compensation committee which is established through the bylaws of arkansas children's, inc. The committee has the full authority and specific responsibility for reviewing and approving executive compensation practices as it relates to base salary, incentive compensation and total remuneration targets. The committee has specific responsibility for determining compensation for the health system president/ceo and for approval of recommendations made by the ceo for positions deemed as "disqualified persons" under section 4958 of the code. The policies and programs reviewed and approved by the committee shall be designed to ensure that the corporation and its affiliates remain competitive and reasonable relative to the compensation and total remuneration of similarly situated health systems locally and nationally, and to permit the corporation and such affiliates to attract and retain superior executives in furtherance of the corporation's and affiliates purposes. In its process, the committee shall obtain and must rely upon appropriate data as to comparability prior to making its determination of reasonableness with respect to the compensation arrangements of disqualified persons. Appropriate data includes, but is not limited to, compensation levels paid by similarly situated organizations, both taxable and tax-exempt, for functionally comparable positions, current compensation surveys compiled by independent firms; the committee may rely upon opinions of qualified legal, accounting, valuation and executive compensation experts. Contemporaneously with making its determination of reasonableness with respect to the compensation arrangement of the ceo and disqualified persons, the committee shall document in its minutes the basis for its decisions. A verbal report is provided to the board by the chair of the committee. Minutes are available for review upon board member request to the board chair.”

“The hospital's governing documents, conflict of interest policy and financial statements are available to the public upon request as required.”

“Physicians' remuneration: program service expenses 110,994,445. Management and general expenses 0. Fundraising expenses 0. Total expenses 110,994,445. Testing: program service expenses 4,843,850. Management and general expenses 5,280. Fundraising expenses 0. Total expenses 4,849,130. Repairs & maintenance: program service expenses 7,130,265. Management and general expenses 168,283. Fundraising expenses 0. Total expenses 7,298,548. Other fees for service: program service expenses 14,271,452. Management and general expenses 18,006,701. Fundraising expenses 0. Total expenses 32,278,153.”

“Transfer of funds between ach & ac -1,846,083. Transfer of funds between ach & accn -675,000. Transfer of assets between ach & acf 25,000. Transfer of funds between ach & sacova -500,000.”

“It is part of the reserved powers of arkansas children's, inc. To retain, oversee and terminate independent external auditors to audit the financial statements of ach or of any affiliate. One of the standing committees of arkansas children's, the financial planning and oversight committee, shall undertake the following duties in the areas of finance and audits: (i) causing to be prepared, and submit to the board of directors at its last meeting before the end of the fiscal year, the capital and operating budgets of the corporation, as well as the capital and operating budgets of affiliates; (ii) examining the monthly financial reports of the health system; (iii) reviewing the internal auditing functions of the health system; (iv) engaging an external audit firm, subject to approval by the board of directors; (v) reviewing with the independent auditor the scope and planning of the audit prior to the commencement of the audit, as well as upon completion of the audit, reviewing and discussing with the independent auditor any material risks or weaknesses in internal controls identified by the auditor, any restrictions on the scope of the auditor's activities or access to requested information, any significant disagreements between the auditor and management, and the adequacy of the health system's accounting and financial reporting processes; (vi) annually considering the performance and independence of the independent auditor; (vii) reviewing and reporting to the board on the annual audited financial statement of the health system certified by the corporation's certified public accountants, together with such certified public accountants' management letter to the corporation which the committee shall review and report on to the board of directors; (viii) suggesting means to improve fiscal accountability and internal audit procedures for those areas identified as requiring improvement; (ix) providing oversight for the health system's corporate compliance program, including corporate ethics and compliance with legal and regulatory requirements; and (x) reporting on the financial planning and oversight committee's activities to the full board.”

“The consolidated organization is required to undergo an audit as set forth in the single audit act and omb circular a-133 and did undergo that required audit.”