Ke Ali I Pauahi Foundation

“The 5-step process prior to the return being filed consists of the following: (1) the return is drafted by the third party tax return preparer and then reviewed by staff from the kamehameha schools tax department and the pauahi foundation; (2) the return is reviewed by the vp of legal, the evp of finance and the vp of communications at kamehameha schools; (3) the return is provided to the executive director at the pauahi foundation for review; (4) a meeting is arranged with the executive director, representatives from the kamehameha schools tax department, and the third party tax return preparer to review the return in more detail with the executive director; (5) the tax department, the tax return preparer and the executive director review the return in detail with the board of directors, who give final approval to file the return. Part vi, line 12c compliance is accomplished as follows: all action requiring the executive director's or board's approval must be submitted via an internal form request for action ('rfa'), that includes a section on conflict of interest review, which is to be conducted and signed by the legal deparment. Each year, the legal group sends a request to the board members and officers to complete an annual disclosure form in which they disclose their family members and organizations in which they are shareholders (other than publicly traded companies) or where they serve as an officer or director. Individuals are required to report any changes to their annual disclosure during the year to legal. The legal group then maintains a database of the disclosures and is responsible for conducting a conflict check to ensure compliance with the conflict of interest policy. Actual or appearances of conflicts of interest are determined by the board members or the executive director depending on the level at which the conflict occurs. A conflicted board member or officer must recuse him or herself from participation in the matter. Terms of conflicted transactions are completely and objectively reviewed for fairness and reasonableness by non-conflicted members.”

“The executive director's compensation is approved each year by the board of directors, who are all independent persons. As part of the approval process, the human resource division of kamehameha schools prepares an internal document (a request for approval, the 'rfa ') for the board's approval. The rfa includes a current compensation report with comparability data prepared by an independent expert, unless the requested compensation is within the comparability information provided by the expert from the previous year. The rfa also includes justification for the recommended compensation. The board then reviews the rfa, deliberates and makes a decision. The minutes of the board meeting and decisions are retained.”

“Other than the executive director, no other officers of the pauahi foundation receive compensation from the pauahi foundation and the board members do not receive compensation from the pauahi foundation. There are no key employees at the pauahi foundation who meet the definition of a disqualified person under irc sec. 4958. However, staff positions at the pauahi foundation have an internal grading system in which each grade has a compensation range that has been determined by comparability information evaluated by the human resource division of kamehameha schools and compensation must fall within the respective grade pay range.”

“The pauahi foundation's governing document, the articles of incorporation, is publicly available at the state government. The bylaws and conflict of interest policy are available upon request. The pauahi foundation's financial statements are included in the annual accounts of the trustees of the estate of bernice pauahi bishop dba kamehameha schools, which are submitted annually to the probate court in honolulu, hawaii and made available upon request.”

“The mission of the pauahi foundation is to support the mission of the kamehameha schools by seeking and developing new and diverse sources of income to support the ever-increasing educational needs and goals of people of hawaiian ancestry. Part vi, line 1a & b for purposes of determining independence with respect to the form 990 each member of the governing body must satisfy a three-part test. One such part provides that the member was not compensated as an officer or other employee of the organization or of a related organization. L."jack" wong was compensated as an officer, and lee ann delima and william pieper were compensated as employees of kamehameha schools (a related organization). These members are therefore not considered independent for purposes of this specific test. William pieper's compensation is not listed on form 990, part vii due to it falling below the reportable threshold. Part vi, line 2 bishop holdings corporation: janeen-ann olds & micah kane (business relationship - bishop holdings is a subsidiary of parent organization kamehameha schools and these individuals serve with others on the board) kamehameha investment corporation: janeen-ann olds & micah kane (business relationship - kamehameha investment corporation is a 2nd tier subsidiary of kamehameha schools and these individuals serve with others on the board) pauahi management corporation: janeen-ann olds & micah kane (business relationship - pauahi management corporation is a 2nd tier subsidiary of kamehameha schools and these individuals serve with others on the board)”

“Other changes in net assets: retirement plan related changes (98,951) change in beneficial interest in crt 6,400 ---------- total other changes in net asset (92,551)”