Villa Maria Inc.

“Villa maria is managed by franciscan ministries, inc., a professional property management company. Franciscan ministries, inc. Is related to the organization due to the fact that it is the sole member of villa maria. Franciscan ministries, inc. Has a project owner's and management agent's certification for multifamily housing projects with the u.s. Department of housing and urban development. Under this certification, hud has approved franciscan ministries, inc. To manage the villa maria community. The management contract encompasses the day to day operations of the project including, but not limited to, collection of rents, maintenance of facilities, supervision of staff, and ongoing support for both the owners and tenants as needed in order to establish a safe, sanitary and affordable environment. All of the officers, directors, trustees, key employees, and highest compensated employees listed in part vii are compensated by franciscan ministries, inc. And their compensation is listed in part vii.”

“Villa maria has one member which holds several reserved powers over villa maria. These reserved powers include, but are not limited to, the election of members of the governing body and election of officers, approval of certain financial expenditures in accordance with policy, and approval of budgets and strategic plans; these approvals are based on recommendations from the governing body.”

“See explanation for part vi, line 6.”

“See explanation for part vi, line 6.”

“Affiliates of franciscan ministries, inc. Use a multiple-level review process on all federal and state information and tax returns to ensure accurate and timely filing for all organizations. The audit firm prepares all 990's throughout the system, and works with the tax manager of wheaton franciscan healthcare/ franciscan ministries to gather and report the information needed. When complete, the return is first reviewed by the accounting manager, who focuses on the income statement and balance sheet items, and all schedules where transactions of this type might be reported. If discrepancies are found, the item will be corrected prior to the next step in the review process. Once cleared through accounting, a sampling of returns is provided to the tax department, and the tax manager and vice president of treasury and risk management focus their review on consistency of reporting between all returns, accuracy of tax-related information, and explanation and understanding of any outliers. Again, any problems or questions are investigated and corrected by working with the preparer. The tax department and audit firm, upon completion of all levels of review, will schedule an appointment with the cfo, who will perform a review prior to signing the return. Once signed, the return is cleared to provide to members of the board of directors. The parent organization, wheaton franciscan services, inc. Has designated that the finance and operations committee review the regional holding company return. This is a cursory review, where the 990 is explained at a high level by management representatives and any questions or concerns that the board have can be addressed. At a later date, and prior to e-filing, the full board is provided access to all 990's and 990-t's throughout the franciscan ministries system via an online portal.”

“The organization has a conflict of interest policy. Under that policy, if at any time, an officer or director becomes aware that the board may discuss or act upon any transaction or arrangement which may have any bearing of any kind upon, or may relate in any manner to, a financial interest of the individual , the financial interest must be disclosed. All associates of the organization must disclose a potential conflict of interest at the time it arises (or beforehand if not in existence at the time of hire). The disclosures are reviewed and a determination is made as to whether a conflict of interest exists and how it might be managed. Additionally, as part of an annual process, conflict of interest questions are sent out to all officers, directors, and other individuals in key positions using software designed to capture this information. The responses are analyzed in order to determine information on potential conflicts, as well as information on business and family relationships for purposes of answering certain questions on irs form 990. Responses to these questions are reviewed by the vice president of compliance and the manager of tax compliance, and follow up action, if any, are documented within the software. After an approximate 3 and again at 6 weeks, names of all non responders are compiled, and these individuals receive either an email or letter reminding them to complete the information. Responses to questions continue to be reviewed and documented throughout this time period. Approximately 1 month prior to the filing deadline of irs form 990, responses to date are compiled. Any response requiring disclosure is entered into the information return. The remaining non responder names are determined, and a letter, along with the actual conflict of interest policy, is sent to the chairperson of each board. The letter outlines the current non responders, as well as any officer or board member that has disclosed a financial interest that might pose a potential conflict of interest. Depending upon the nature of the financial interest and work done by the board, several actions may be considered the board member with a financial interest would need to voluntarily excuse him or herself from the deliberations and/or voting on such a matter; or, if necessary, the board would determine that the subject financial interest was an actual conflict of interest, in which case the board member would be informed by the board chairperson that he or she would not be allowed to vote in any such matters due to this real or perceived conflict of interest. Minutes of the board meeting would document this decision process, and reflect whatever action(s) are ultimately taken. The board chairperson is also required to discuss with non responders the repercussions of not responding, and require the board member to complete the annual conflict of interest disclosure questions before being allowed to continue in any board matters. If the board member refuses, the chairperson has the authority to determine the appropriate action, including, but not limited to prohibiting them from participating in deliberations, preventing them from voting, and/or removing them as a board member.”

“Affiliates of franciscan ministries, inc. Provide upon request certain documents including our financial statements, conflict of interest policy, and governing documents that support our tax-exempt status, including, but not limited to, articles of incorporation and bylaws. Requests for information are considered on a case-by-case basis, and this process is outlined in the public disclosure policy.”

“Wheaton franciscan healthcare and franciscan ministries are a controlled group of related healthcare and housing organizations. As such, many employees who are at the vice president level or above, or who are officers and/or directors of organizations where wheaton has common boards and other overlaps, spend significant time devoted to tasks not only for the filing organization, but also for related organizations. While there is no official time study tracking that is done, it is estimated that for each employee, tasks devoted to related organizations could approximate up to 80% of total hours.”

“Wheaton franciscan healthcare and franciscan ministries are part of a controlled group of health care and housing providers, controlled under a common parent organization wheaton franciscan services, inc. Some of these organizations are exempt through the catholic group ruling and other organizations have a stand-alone exemption (irs determination) letter. As such, these related affiliates have certain policies and procedures that were adopted at the parent level, but are applicable to the entire controlled group of organizations. All policy and procedure matters are handled in a manner to ensure that all activities are consistent with the organization's overall exempt purposes. Please see schedule r for a full listing of all related affiliate organizations.”

“The management company receives a copy of the audit. The cfo of franciscan ministries reviews the audit. If there are any material problems or concerns, the cfo contacts the regional director. It is the responsibility of the cfo to give final approval of the audit. When the audit is up for bid, the board discusses the relationship with the current auditors and makes a determination as to whether to maintain this relationship or change to a new auditing firm.”

“Under the constructive ownership rules of internal revenue code sections 958(a) and (b), the taxpayer is required to file forms 5471, information return of us persons with respect to certain foreign corporations, as a category 4 and/or 5 filer with respect to wheaton franciscan insurance company, fein #98-0691609. These filing requirements are or will be satisfied through the filing of forms 5471 with respect to the foreign corporation on the taxpayer behalf by the us taxpayers identified below who have the same filing requirement. Taxpayer name: wheaton franciscan services, inc. Address: 26 w171 roosevelt road, wheaton il 60187 fein number of us tax return with which form 5471 was filed: 36-3262111 irs service center where us tax return was or will be filed: e-filed”