Ke Ali I Pauahi Foundation

“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 of kamehameha schools (a related organization). This member is therefore not considered independent for purposes of this specific test. Part vi, line 2 bishop holdings corporation: corbett kalama, micah kane, robert nobriga & lance wilhelm (business relationship - bishop holdings corporation is a subsidiary of parent organization kamehameha schools and these individuals served with others on the board) kamehameha investment corporation: corbett kalama, micah kane, robert nobriga & lance wilhelm (business relationship - kamehameha investment corporation is a 2nd tier subsidiary of kamehameha schools and these individuals served with others on the board) pauahi management corporation: corbett kalama, micah kane, robert nobriga, & lance wilhelm (business relationship - pauahi management corporation is a 2nd tier subsidiary of kamehameha schools and these individuals served with others on the board)”

“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; (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. 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 department. 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.”

“No officers of the pauahi foundation receive compensation from the pauahi foundation and the board members do not receive compensation from the pauahi foundation. The executive director is an employee of kamehameha schools (a related organization) and their compensation is administered through kamehameha schools which includes a review and approval process that is evaluated based on a report of comparability data prepared by an independent expert. The vice president received compenstion directly from the foundation in his capacity as an employee of the organization prior to his becoming an officer. While serving in his capacity as vice president, his compensation was received from a related organization, and was administered through kamehameha schools via an annual merit process based on performance and within established pay guidelines. Kapf pays kamehameha schools an administrative fee for their services to kapf. 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.”

“Other changes in net assets: transfer of net assets 1,046,419 change in beneficial interest in crt (25,000) ---------- total other changes in net asset 1,021,419”