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        <Explanation>THE INTERNAL REVENUE SERVICE HAS RULED THAT THE BOARD AND ITS AFFILIATES, EXCEPT FOR BLUEGRASS NEW DIRECTIONS, QUALIFY UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE AND, THEREFORE, ARE NOT SUBJECT TO TAX ON RELATED INCOME UNDER PRESENT INCOME TAX LAWS. THE COMPANY RECOGNIZES UNCERTAIN INCOME TAX POSITIONS USING THE "MORE-LIKELY-THAN-NOT" APPROACH AS DEFINED IN THE ACCOUNTING STANDARDS CODIFICATION. NO LIABILITY FOR UNCERTAIN TAX POSITIONS HAS BEEN RECORDED IN THE ACCOMPANYING FINANCIAL STATEMENTS. THE COMPANY'S 2008-2011 TAX YEARS REMAIN OPEN AND SUBJECT TO EXAMINATION.</Explanation>
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      <Form990ScheduleJPartII>
        <NamePerson>KEITH G SINCLAIR</NamePerson>
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        <BonusFilingOrg>0</BonusFilingOrg>
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      <Form990ScheduleJPartII>
        <NamePerson>MARK C HYATT</NamePerson>
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      <Form990ScheduleJPartII>
        <NamePerson>EDWARD W SHERTZ</NamePerson>
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      <Form990ScheduleJPartIII>
        <ReturnReference>PART I, LINE 4B</ReturnReference>
        <Explanation>THE RELATED ORGANIZATION, BLUEGRASS REGIONAL MENTAL HEATLH-MENTAL RETARDATION BOARD, INC., PARTICIPATES IN A NON-QUALIFIED RETIREMENT PLAN FOR KEY EMPLOYEES. THE PLAN WAS INITIATED IN 1995. KEY EMPLOYEES ARE VESTED AND ELIGIBLE FOR RECEIPT AND PAYMENT ACCORDING TO THE PLAN DOCUMENT. FOR THE CURRENT TAX YEAR, THERE WERE NO PAYMENTS FROM THE PLAN. THE PARTICIPANTS OF THE PLAN DURING THE YEAR WERE: SHANNON P. WARE TAMBARA A. NALLE DAVID PHELPS</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>SUPPLEMENTAL INFORMATION</Identifier>
        <ReturnReference>PART III</ReturnReference>
        <Explanation>THE ORGANIZATION HAS ADOPTED THE BLUEGRASS REGIONAL MENTAL HEALTH-MENTAL RETARDATION BOARD INC. EXECUTIVE BENEFIT PLAN (PLAN) UNDER WHICH THE EMPLOYER WILL DETERMINE ELIGIBLE EMPLOYEES TO PARTICIPATE.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>SUPPLEMENTAL INFORMATION</Identifier>
        <ReturnReference>PART III</ReturnReference>
        <Explanation>PART I, LINE 3: THE RELATED ORGANIZATION, BLUEGRASS REGIONAL MENTAL HEALTH-MENTAL RETARDATION BOARD, INC., PAYS THE COMPENSATION TO THE PRESIDENT/CEO AND CFO AND USES THE FOLLOWING METHODS TO DETERMINE THE COMPENSATION. COMPENSATION COMMITTEE FORM 990 OF OTHER ORGANIZATIONS WRITTEN EMPLOYMENT CONTRACT COMPENSATION SURVEY OR STUDY APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE</Explanation>
      </Form990ScheduleJPartIII>
    </IRS990ScheduleJ>
    <IRS990ScheduleO documentId="RetDoc1044400001">
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 11</ReturnReference>
        <Explanation>A DRAFT OF THE RETURN IS REVIEWED FIRST BY INTERNAL MANAGEMENT. AFTER INTERNAL MANAGEMENT HAS REVIEWED THE RETURN AND ANY CHANGES ARE MADE, A DRAFT IS MADE AVAILABLE FOR REVIEW AND PRESENTATION TO THE ORGANIZATION'S AUDIT/FINANCE COMMITTEE AND CFO. FINALLY, THE AUDIT/FINANCE COMMITTEE AND CFO MEET WITH THE INDEPENDENT TAX PREPARER TO REVIEW FORM 990 AND MAKE ANY FINAL CHANGES PRIOR TO ITS FILING. A DRAFT IS ALSO MADE AVAILABLE FOR THE BOARD OF DIRECTORS TO REVIEW.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 12C</ReturnReference>
        <Explanation>EACH BOARD MEMBER SIGNS THE CONFLICT OF INTEREST STATEMENT ANNUALLY AND HAS A BRIEF OVERVIEW OF THE REQUIREMENT TO DISCLOSE. THE ORGANIZATION DOES NOT PERMIT MEMBERS TO HAVE A CONFLICT OF INTEREST. IF A BOARD MEMBER HAS A CONFLICT OF INTEREST THEY ARE ASKED TO RESIGN FROM THE BOARD. NEW BOARD MEMBERS HAVE AN ORIENTATION WHICH INCLUDES DETAILS OF THE POLICY. KEY EMPLOYEES ARE GIVEN A REVIEW OF THE POLICY ANNUALLY AND NEW KEY EMPLOYEES ARE EDUCATED ON THE POLICY IN A TWO DAY ORIENTATION.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION B, LINE 15</ReturnReference>
        <Explanation>COMPENSATION OF THE PRESIDENT/CEO IS REVIEWED AT INITIAL APPOINTMENT AND ANNUALLY THEREAFTER. INITIAL SALARIES ARE DETERMINED THROUGH THE USE OF NATIONWIDE SURVEYS WHICH INCLUDE THE STATE OF KENTUCKY AND OTHER NOT FOR PROFITS. THE BOARD OF DIRECTORS ARE GIVEN THIS INFORMATION TO REVIEW AND DISCUSS AND THEY DETERMINE THE SALARY OF THE PRESIDENT/CEO. FOR OTHER OFFICERS OR KEY EMPLOYEES, NATIONAL AND LOCAL SALARY INFORMATION IS REVIEWED BY THE HR DIRECTOR AND PRESIDENT/CEO IN DETERMINING SALARIES. IN ADDITION, WHEN BROAD SALARY ADJUSTMENTS ARE DEEMED NECESSARY IN ORDER TO BE IN LINE WITH LOCAL MARKETS, THE INFORMATION IS REVIEWED AND APPROVED BY THE BOARD OF DIRECTORS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VI, SECTION C, LINE 19</ReturnReference>
        <Explanation>AUDITED FINANCIAL STATEMENTS ARE SUBMITTED TO BOTH THE COMMONWEALTH OF KENTUCKY AS REQUIRED BY CONTRACT AND TO THE FEDERAL CLEARINGHOUSE AS REQUIRED. GOVERNING DOCUMENTS ARE AVAILABLE UPON REQUEST AT THE CORPORATE LOCATION.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>FORM 990, PART VII:</ReturnReference>
        <Explanation>THE INDIVIDUALS LISTED BELOW WORK MORE THAN 40 HOURS EACH WEEK ON AVERAGE WHEN THIS ORGANIZATION AND ALL RELATED ORGANIZATIONS ARE AGGREGATED. SHANNON WARE TAMBARA NALLE THE ORGANIZATION PAYING THE COMPENSATION PROVIDED THE INFORMATION FOR THE INDIVIDUALS ESTIMATED HOURS, COMPENSATION, AND BENEFITS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <ReturnReference>PART XII, LINE 2C:</ReturnReference>
        <Explanation>THE PROCESS HAS NOT CHANGED FROM PRIOR YEAR. BLUEGRASS OAKWOOD, INC. IS AUDITED AS PART OF THE BLUEGRASS REGIONAL MENTAL HEALTH-MENTAL RETARDATION BOARD, INC. CONSOLIDATED GROUP. BLUEGRASS OAKWOOD, INC. IS INCLUDED IN THE BLUEGRASS REGIONAL MENTAL HEALTH-MENTAL RETARDATION BOARD, INC. AND AFFILATES CONSOLIDATED FINANCIAL STATEMENTS. THE ORGANIZATION HAS AN AUDIT/FINANCE COMMITTEE THAT OVERSEES THE AUDIT OF THE FINANCIAL STATEMENTS AND THE SELECTION OF THE INDEPENDENT AUDITOR.</Explanation>
      </GeneralExplanation>
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          <BusinessNameLine1>AQUEDUCT PLACE INC</BusinessNameLine1>
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          <AddressLine1>1351 NEWTOWN PIKE BUILDING 1</AddressLine1>
          <City>LEXINGTON</City>
          <State>KY</State>
          <ZIPCode>405111277</ZIPCode>
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          <AddressLine1>1351 NEWTOWN PIKE BUILDING 1</AddressLine1>
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          <AddressLine1>1351 NEWTOWN PIKE BUILDING 1</AddressLine1>
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          <AddressLine1>1351 NEWTOWN PIKE BUILDING 1</AddressLine1>
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          <AddressLine1>1351 NEWTOWN PIKE BUILDING 1</AddressLine1>
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          <State>KY</State>
          <ZIPCode>405111277</ZIPCode>
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