2011-05-16T13:47:17-05:00 2010-06-30 BKD LLP 1201 Walnut Suite 1700 Kansas City MO 641062246 990 2009-07-01 440545280 Kansas City University of Medicine and Biosciences KANS 8162832000 1750 Independence Avenue Kansas City MO 64106 HOWARD D WEAVER DO 2011-05-16 true 8162216300 2009 2016-02-24 21:20:13Z HOWARD D WEAVER DO 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 80865034 false X WWW.KCUMB.EDU X 1916 MO KCUMB IS A COMMUNITY OF PROFESSIONALS COMMITTED TO EXCELLENCE IN THE EDUCATION OF HIGHLY QUALIFIED STUDENTS IN OSTEPATHIC MEDICINE, THE BIOSCIENCES, BIOETHICS AND HEALTH PROFESSIONS. 11 9 526 9 0 0 1328284 574275 43891528 46529325 -3988509 2779027 1096848 1128516 42328151 51011143 2087960 1423285 0 0 22824985 24255824 0 0 3176652 14885633 18695322 39798578 44374431 2529573 6636712 127964977 136196375 18737597 17264434 109227380 118931941 SEE SCHEDULE O false false 25750840 1134670 45390135 THE UNIVERSITY EDUCATES DOCTORS OF OSTEOPATHIC MEDICINE. OUR FOUR YEAR INTEGRATED CURRICULUM EMPHASIZES BOTH THE BASIC SCIENCES AND CLINICAL SKILLS. THE ACADEMIC PROGRAMS OFFERED ARE TAUGHT BY HIGHLY QUALIFIED FACULTY. 98% OF FACULTY HAS D.O., M.D. OR PH.D. DEGREES. THE UNIVERSITY AWARDS APPROXIMATELY 250 D.O. DEGREES EACH YEAR. 725885 13161 1761944 THE UNIVERSITY'S GRADUATE SCHOOL OFFERS MASTER'S LEVEL DEGREES IN BIOMEDICAL SCIENCES AND BIOETHICS. THE BIOMEDICAL SCIENCES PROGRAM INCLUDES BOTH A ONE YEAR DEGREE PROGRAM AND A TWO-YEAR DEGREE PROGRAM (RESEARCH TRACK). KCUMB IS THE ONLY UNIVERSITY IN THE REGION TO OFFER A GRADUATE -LEVEL DEGREE IN BIOETHICS. APPROXIMATELY 60 GRADUATE DEGREES ARE AWARDED EACH YEAR 3508693 275454 500512 THE UNIVERSITY HAS A STRONG COMMITMENT TO COMMUNITY SERVICE AND SOCIAL RESPONSIBILITY. THE UNIVERSITY PROVIDES SERVICES WHICH PROMOTES EDUCATION AND HEALTH IMPROVEMENT IN TARGETED AREAS. THIS ENDEAVOR IS ACCOMPLISHED BY THREE INITIATIVES - i) CLINICAL PRACTICE AT PHYSCIANS ASSOCIATES, ii) RESEARCH IN AREAS SUPPORTING THE MISSION OF THE UNIVERSITY, AND iii) SCORE 1 FOR HEALTH. 29985418 true true false false false false false false true true false true true false true false false false false false false true true true false true true false false true true true false false false false false true true true false true 258 0 true 526 true false true VI CJ false false false false false false false 11 9 true false true true false false false true true false false true true true true true true true true false MO X FRED CORNWELL 8162832306 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 WILLIAM M DANA JR 1.0 X 0 0 0 DERON L CHERRY 1.0 X 0 0 0 CHERYL K DILLARD 1.0 X 0 0 0 PAUL W DYBEDAL DO 1.0 X 0 0 0 KESTER J NEDD DO 1.0 X 0 0 0 ROSHANN S PARRIS 1.0 X 0 0 0 CYNTHIA MORRIS DO 1.0 X 0 0 0 TERRENCE P DUNN 1.0 X 0 0 0 CARLA C DURYEE 1.0 X 0 0 0 FREDERICK G FLYNN DO 1.0 X 0 0 0 T NELSON MANN 1.0 X X 0 0 0 DARWIN J STRICTLAND DO 1.0 X X 0 0 0 HOWARD D WEAVER DO 40.0 X X 0 0 0 KAREN L PLETZ 40.0 X X 1329613 0 36563 RICHARD K HOFFINE 40.0 X 601046 0 46105 DOUGLAS C DALZELL 40.0 X 524664 0 35177 MARY PAT WOHLFORD WESSELS 40.0 X 276275 0 39910 DARIN L HAUG DO 40.0 X 544885 0 61228 VERGIL J GUILLORY 40.0 X 234753 0 45361 LINDA FALK 40.0 X 0 0 0 SUSAN STANTON 40.0 X 0 0 0 FRED CORNWELL 40.0 X 0 0 0 DENISE K KAISER 40.0 X 160059 0 25068 SHERYL L LUSTER 40.0 X 169041 0 38790 LEANN K CARLTON 40.0 X 107476 0 29832 STEPHEN J PHIPPS 40.0 X 122987 0 22167 JAMES E PARK 40.0 X 105263 0 30359 BECKY G TALKEN 40.0 X 137742 0 35635 DAWN M ROHRS 40.0 X 120046 0 31563 VICKIE S KEENEY 40.0 X 94349 0 18656 CONNIE J BOYD 40.0 X 109932 0 10244 BRIAN T REESE 40.0 X 90455 0 17908 G MICHAEL JOHNSTON 40.0 X 224902 0 46571 JOSEPH M YASSO JR 40.0 X 214933 0 45295 JOHN DOUGHERTY 40.0 X 304007 0 35632 NEHAD EL-SAWI 40.0 X 218610 0 31474 KEVIN D TREFFER 40.0 X 201811 0 42783 5892849 0 726321 39 false true false BARRY SEWARD CONSULTING 123960 BRYAN CAVE LLP LEGAL 611172 NEVISU SERIG PALMER ARCH CONSTRUCTION 399951 LATHROP GAGE LC LEGAL 373602 BORDNER ROOFING INC CONSTRUCTION 257101 6 29950 194934 349391 574275 NET PATIENT REVENUE 621110 1679454 1679454 STUDENT FEES & REV 611600 44784263 44784263 STUDENT LOAN INTEREST 611600 65608 65608 46529325 1022585 1022585 0 0 5250 0 5250 5250 5250 31489533 120800 29708697 145194 1780836 -24394 1756442 1756442 0 0 0 CAFETERIA & VENDING 611710 117753 117753 MISC SCHOOL INCOME 611710 505001 505001 DRUG STUDY 900099 500512 500512 1123266 51011143 47652591 0 2784277 743955 743955 679330 679330 0 0 4132005 1141150 2819912 170943 93779 41000 52779 15269428 13210603 997491 1061334 1441133 1147344 203189 90600 2103581 1742348 185354 175879 1215898 921443 206293 88162 0 4618627 4618627 102968 76196 20594 6178 0 0 215196 215196 1860330 1357957 248890 253483 446253 295125 9625 141503 1098055 755970 118642 223443 0 0 1480781 1183335 228648 68798 581574 360239 108497 112838 0 0 358938 358938 0 2288048 1969692 244889 73467 611901 433621 173858 4422 EDUCATION 1982173 1961968 17571 2634 PUBLIC RELATIONS 127547 55964 358 71225 DUES & SUBSCRIPTIONS 847413 689812 136728 20873 STUDENT FUNCTIONS 952524 464516 79008 409000 MISCELLANEOUS 1122994 753850 220053 149091 44374431 29985418 11212361 3176652 28460913 26617516 1064928 679531 224092 592361 47219 42089 999974 1008111 62695973 23157334 37922129 39538639 43969459 48397798 11544405 13623353 2230245 2319050 1501613 3377927 127964977 136196375 5750970 5919503 2062950 1465166 7255000 7055000 3668677 2824765 18737597 17264434 X 100739454 110889107 4007980 3382045 4479946 4660789 109227380 118931941 127964977 136196375 X false true true X true true X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 6707764 144616 473336 389159 18803 6917754 5646082 2047660 -833509 138226 14243 6707764 0.31000 0.69000 0.00000 false false 1024317 1024317 44129109 13763234 30365875 9406004 9394100 11904 8136543 0 8136543 39538639 HEDGE FUNDS 13623353 F 13623353 0 REFUNDABLE GOVT LOAN PROGRAMS 2732355 CRAT PAYABLE 92410 2824765 ENDOWNMENT FUNDS SCHEDULE D, PART V, LINE 4 THE ENDOWMENT FUND IS USED PRIMARILY FOR STUDENT SCHOLARSHIPS AND STUDENT LOANS. WHILE SCHEDULE D, PART V, LINE 1D SHOWS THAT NOTHING WAS DISTRIBUTED OUT OF THE ENDOWMENT FUND DURING THE ORGANIZATION'S FISCAL YEAR FOR SCHOLARSHIPS AND LOANS, THIS IS BECAUSE THE ORGANIZATION FUNDED THOSE AMOUNTS OUT OF ITS OPERATING BUDGET TO PRESERVE THE CORPUS OF THE ENDOWMENT FUND AND ALLOW IT TO GROW FOR FUTURE USE. AS DISCLOSED ON SCHEDULE I, PART III, THE ORGANIZATION FUNDED 106 SCHOLARSHIPS IN THE AGGREGATE AMOUNT OF $679,330 OUT OF ITS OPERATING REVENUE. UNCERTAIN TAX POSITIONS DISCLOSURE SCHEDULE D, PART X, LINE 2 MANAGEMENT HAS EVALUATED THEIR INCOME TAX POSITIONS UNDER THE GUIDANCE INCLUDED IN ASC 740. BASED ON THEIR REVIEW, MANAGEMENT HAS NOT IDENTIFIED ANY MATERIAL UNCERTAIN TAX POSITIONS TO BE RECORDED OR DISCLOSED IN THE FINANCIAL STATEMENTS. true true true THE FOLLOWING LANGUAGE IS USED IN OUR UNIVERSITY CATALOG, ADMISSION MATERIAL, AND ON THE ADMISSIONS WEBSITE: KCUMB IS COMMITTED TO PROVIDING AN ACADEMIC AND EMPLOYMENT ENVIRONMENT IN WHICH STUDENTS AND EMPLOYEES ARE TREATED WITH COURTESY, RESPECT AND DIGNITY. IT IS THE POLICY OF THE UNIVERSITY THAT NO STUDENT SHALL, BECAUSE OF GENDER, RACE, COLOR, CREED, HANDICAP OR NATIONAL ORIGIN, BE EXCLUDED FROM PARTICIPATION IN, BE DENIED THE BENEFIT OF OR BE SUBJECT TO DISCRIMINATION IN ANY PROGRAM SPONSORED BY THE UNIVERSITY. INQUIRIE REGARDING COMPLIANCE MUST BE DIRECTED TO THE EXECUTIVE VICE PRESIDENT FOR INSTITUTIONAL DEVELOPMENT, AND EXECUTIVE DEAN, GRADUATE STUDIES, W IS THE COORDINATOR OF THE UNIVERSITYS NON-DISCRIMINATION PROGRAM. true true true true false false false false false false false false true false THE ORGANIZATION RECEIVES GOVERNMENT GRANTS TO FURTHER ITS EXPEMT PURPOSE. true Central America and the Caribbean SEE PART IV Central America and the Caribbean Program Services SEE PART IV 47717 47717 ACTIVITES PER REGION SCHEDULE F, PART I, LINE 3 ACTIVITY #1: (A) CENTRAL AMERICA/CARIBBEAN (B) N/A (C) N/A (D) PASSIVE INVESTMENTS (E) N/A (F) N/A NOTHING IS DISCLOSED UNDER COLUMNS B, C, E, & F BECAUSE THE INSTRUCTIONS ONLY REQUIRE REPORTING FOR COLUMNS A & D. THE PASSIVE INVESTMENT ACTIVITY REFERRED TO ABOVE IS THE HEDGE FUND INVESTMENT THAT IS DISCLOSED ON FORM 990, PART V, LINE 4B; ATTACHMENT 2; AND SCHEDULE D, PART VII. ACTIVITY #2: THE UNIVERSITY SUPPORTS AND PARTNERS WITH DOCARE INTERNATIONAL, A MEDICAL OUTREACH ORGANIZATION, TO PROVIDE HEALTHCARE TO INDIGENT AND ISOLATED PEOPLE IN REMOTE AREAS AROUND THE WORLD. IN DOING SO, THE UNIVERSITY PROVIDES FUNDING FOR FACULTY, STAFF, AND STUDENTS TO TRAVEL TO GUATEMALA, ONE OF DOCARE'S ESTABLISHED LOCATIONS. THE UNIVERSITY ALSO FUNDS NECESSARY MEDICAL SUPPLIES FOR THE PROVISION OF CARE. THE FACULTY, STAFF, AND STUDENTS PROVIDE HEALTHCARE AND EDUCATION TO THE IMPOVERISHED PEOPLE IN THIS AREA. IN ADDITION, OUR STUDENTS BENEFIT FROM THE CLINICAL EDUCATION THEY RECEIVE DURING THIS MISSION TRIP. THE UNIVERSITY ALSO PROVIDES EDUCATIONAL OPPORTUNITIES FOR THE INSTRUCTION OF ITS MEDICAL STUDENTS BY THE CLINICAL FACULTY AND PHYSICIANS LICENSED IN THE DOMINICAN REPUBLIC, TO PROVIDE HEALTH SCREENING FOR PATIENTS RESIDING IN AND AROUND GUERRA, DOMINICAN REPUBLIC. THIS IS A COOPERATIVE EFFORT BETWEEN THE UNIVERSITY, THE MINISTRY OF HEALTH OF THE DOMINICAN REPUBLIC AND THE KANSAS CITY ROYALS BASEBALL ORGANIZATION. true SCORE 1 FOR HEALTH 1750 INDEPENDENCE AVE KC MO 64106 203773804 501(C)(3) 275454 GENERAL OPERATIONS ART COUNCIL OF METRO 906 GRAND KC MO 64105 431840674 501(C)(3) 15000 GENERAL OPERATIONS BENEDICTINE COLLEGE 1020 N 2ND ST ATCHINSON KS 66002 480777079 501(C)(3) 20000 GENERAL OPERATIONS GREATER KC CHAMBER OF COMMERCE 30 W PERSHING ROAD KC MO 64105 440196840 501(C)(6) 42000 GENERAL OPERATIONS KANSAS CITY AREA DEV COUNCIL 1055 BROADWAY KC MO 64105 431852671 501(C)(6) 35000 GENERAL OPERATIONS LYRIC OPERA 1215 W 57TH TERR KC MO 64113 440626124 501(C)(3) 50000 GENERAL OPERATIONS STARLIGHT THEATER 4600 STARLIGHT RD KC MO 64130 440552079 501(C)(3) 52500 GENERAL OPERATIONS UNITED WAY 1080 WASHINGTON KC MO 64105 440545812 501(C)(3) 75800 GENERAL OPERATIONS GREATER KC COMMUITY FOUNDATION 30 W PERSHING ROAD KC MO 64108 431552398 501(C)(3) 6000 GENERAL OPERATIONS SWOPE HEALTH FOUNDATION 3801 BLUE PARKWAY KC MO 64103 431497518 501(C)(3) 10000 GENERAL OPERATIONS NEWHOUSE PO BOX 240019 KC MO 64124 430962293 501(C)(3) 15000 GENERAL OPERATIONS JEWISH COMMUNITY 5801 W 115TH OVERLAND PARK KS 66211 436049281 501(C)(3) 30000 GENERAL OPERATIONS CENTER FOR PRACTICAL 1111 MAIN STREET KC MO 64105 480985815 501(C)(3) 25000 GENERAL OPERATIONS AMERICAN HEART ASSOCATION PO BOX 4002902 DES MOINES IA 50318 135613797 501(C)(3) 10000 GENERAL OPERATIONS BOY & GIRLS CLUB 6301 ROCKHILL RD KC MO 64131 436072065 501(C)(3) 10000 GENERAL OPERATIONS TMC CHARITABEL FOUNDATION 2310 HOLMES KC MO 64108 431194064 501(C)(3) 25000 GENERAL OPERATIONS 14 2 SCHOLARSHIPS 106 679330 MONITORING OF GRANTS SCHEDULE I, PART I, LINE 2 Grants given to other organizations are to further education, healthcare and economic development in the areas surrounding the Organization. All grants are given to organizations with boards consisting of civic, philanthropic and business leaders who monitor the use of grants and ensure they're used for proper purposes. Scholarships to students are applied directly towards the students accounts to offset tuition costs to ensure that scholarships are used only for student educational purposes. X X X true true X X X X X false true false false false false false false false RICHARD K HOFFINE 362047 0 198065 0 40934 0 24500 0 21605 647151 0 0 0 DOUGLAS C DALZELL 279103 0 168141 0 77420 0 24500 0 10677 0 559841 0 0 0 MARY PAT WOHLFORD WESSELS 221742 0 44524 0 10009 0 28910 0 11000 0 316185 0 0 0 DARIN L HAUG DO 330038 0 197759 0 17088 0 37340 0 23888 0 606113 0 0 0 G MICHAEL JOHNSTON 221729 0 0 0 3173 0 22455 0 24116 0 271473 0 0 0 JOSEPH M YASSO JR 212399 0 0 0 2534 0 21424 0 23871 0 260228 0 0 0 JOHN DOUGHERTY 302340 0 0 0 1667 0 11827 0 23805 0 339639 0 0 0 NEHAD EL-SAWI 212602 0 0 0 6008 0 21362 0 10112 0 250084 0 0 0 KAREN L PLETZ 550645 0 684127 0 94841 0 24500 0 12063 0 1366176 0 0 0 VERGIL J GUILLORY 233949 0 0 0 804 0 23395 0 21966 0 280114 0 0 0 DENISE K KAISER 160059 0 0 0 0 0 15852 0 9216 0 185127 0 0 0 SHERYL L LUSTER 169041 0 0 0 0 0 16412 0 22378 0 207831 0 0 0 BECKY G TALKEN 137302 0 0 0 440 0 13540 0 22095 0 173377 0 0 0 DAWN M ROHRS 120046 0 0 0 0 0 12005 0 19558 0 151609 0 0 0 KEVIN D TREFFER 201194 0 0 0 617 0 19470 0 23313 0 244594 0 0 0 EXPENSE REIMBURSEMENT SCHEDULE J, PART I, LINE 1 Karen L. Pletz received first-class travel, travel for companions, and health or social club dues. First class travel is not required to be included on the W-2. Companion travel and the health or social club dues were included as taxable compensation on her W-2. Douglas C. Dalzell, Richard K. Hoffine, and Darin L. Haug, D.O. received health or social club dues which were included as taxable compensation on their W-2's. SUBSTANTIATION OF EXPENSES SCHEDULE J, PART I, LINE 2 The Organization does require substantiation before expenses were reimbursed but as set forth in Schedule L certain expenses of the CEO were reimbursed because the reports were falsified. CEO COMPENSATION SCHEDULE J, PART I, LINE 3 As discussed in Schedule L and in Part VI, Line 15, the Organization did follow the rebuttable presumption and certain other procedures in setting the CEO's compensation, including the items checked on Line 3, but the Organization has since learned that the comparability data in the compensation consultant's report may have been based, in part, on misrepresentations made by the CEO to the compensation consultant. SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN SCHEDULE J, PART I, LINE 4B KAREN L. PLETZ $56,768 RICHARD K. HOFFINE $51,232 MARY PAT WOHLFORD WESSELS $20,000 DARIN L. HAUG DO $20,000 SEE SCHEDULE O SEE SCHEDULE O SEE SCHEDULE O ORGANIZATION'S MISSION FORM 990, PART III, LINE 1 KCUMB IS A COMMUNITY OF PROFESSIONALS COMMITTED TO EXCELLENCE IN THE EDUCATION OF HIGHLY QUALIFIED STUDENTS IN OSTEOPATHIC MEDICINE, THE BIOSCIENCES, BIOETHICS AND HEALTH PROFESSIONS. THROUGH LIFE-LONG LEARNING, RESEARCH AND SERVICE, KCUMB CHALLENGES FACULTY, STAFF, STUDENTS AND ALUMNI TO IMPROVE THE WELL BEING OF THE DIVERSE COMMUNITY IT SERVES. FAMILY OR BUSINESS RELATIONSHIPS FORM 990, PART VI, SECTION A, LINE 2 KAREN L. PLETZ AND TERRENCE P. DUNN HAVE A BUSINESS RELATIONSHIP. THEY BOTH SERVE AS DIRECTORS FOR KANSAS CITY SOUTHERN, A PUBLICLY TRADED COMPANY. KAREN L. PLETZ AND DOUGLAS C. DALZELL HAD A BUSINESS RELATIONSHIP. DOUGLAS C. DALZELL AND STEPHEN PHIPPS HAD A BUSINESS RELATIONSHIP. MATERIAL DIVERSION OF ORGANIZATIONS ASSETS FORM 990, PART VI, SECTION A, LINE 5 AS REPORTED IN SCHEDULE L, THE ORGANIZATION BELIEVES THAT THERE HAS BEEN A MATERIAL DIVERSION OF THE ORGANIZATION'S ASSETS BY THE CEO, KAREN PLETZ. THE ORGANIZATION IS TREATING THE EXCESS BENEFIT TRANSACTIONS REPORTED IN SCHEDULE L AS A MATERIAL DIVERSION. AS DISCLOSED ON SCHEDULE L, THE ORGANIZATION HAS FILED A LAWSUIT AGAINST THE CEO TO RECOVER THE DIVERTED ASSETS. SIGNIFICANT CHANGES TO ORGANIZATIONAL DOCUMENTS FORM 990, PART VI, SECTION A, LINE 4 SUMMARY OF SIGNIFICANT CHANGES TO THE ARTICLES OF INCORPORATION. THE BOARD AMENDED AND RESTATED ITS ARTICLES OF INCORPORATION ON MAY 6, 2010 TO UPDATE THEM WITH CURRENT BEST PRACTICES AND ORGANIZATIONAL LANGUAGE. IN ADDITION, THE UNIVERSITY'S ARTICLES OF INCORPORATION NOW PROVIDE FOR A RANGE IN THE PERMISSIBLE NUMBER OF TRUSTEES ON THE BOARD TO ALLOW FLEXIBILITY FOR ITS MEMBERSHIP AND PROVIDE FOR INDEMNIFICATION OF THE UNIVERSITY'S OFFICERS AND TRUSTEES. SIGNIFICANT CHANGES TO THE BYLAWS. THE BOARD AMENDED THE BYLAWS TWO TIMES DURING FYE 6/30/10, AS SUMMARIZED BELOW. SUMMARY OF SIGNIFICANT APRIL 20, 2010 AMENDMENTS - BOARD MEETINGS WILL BE HELD THREE TIMES EACH YEAR. THE FREQUENCY OF BOARD MEETINGS WAS PREVIOUSLY UNSPECIFIED. - THE COMMITTEE STRUCTURE SET FORTH IN THE BYLAWS WAS REVISED TO BE CONSISTENT WITH THE NEW COMMITTEE STRUCTURE ADOPTED BY THE BOARD. IN ADDITION, THE RESPONSIBILITIES OF EACH OF THE COMMITTEES WERE REVISED TO CONFORM TO THE NEW COMMITTEE STRUCTURE. - THE AUDIT COMMITTEE WAS ESTABLISHED AS AN INDEPENDENT COMMITTEE FROM THE FINANCE AND INVESTMENT COMMITTEE. THE INVESTMENT COMMITTEE, WHICH WAS FORMERLY A SUBCOMMITTEE OF THE FINANCE COMMITTEE, WAS ELIMINATED, AND INVESTMENT RESPONSIBILITIES WERE ASSUMED BY THE RENAMED FINANCE AND INVESTMENT COMMITTEE. - THE NOMINATING COMMITTEE WAS RENAMED THE GOVERNANCE AND NOMINATING COMMITTEE AND THE BYLAWS WERE REVISED TO ADD GOVERNANCE RESPONSIBILITIES TO THIS COMMITTEE'S DUTIES AND RESPONSIBILITIES. - TO INCREASE FINANCIAL OVERSIGHT, THE BYLAWS WERE AMENDED TO REQUIRE THE CHAIRMAN OF THE BOARD TO APPROVE THE PRESIDENT'S EXPENSES IN EXCESS OF $10,000, AND TO REQUIRE THE PRESIDENT TO APPROVE AN EXECUTIVE VICE PRESIDENT'S EXPENSES IN EXCESS OF $10,000 AND REPORT THE EXPENSES TO THE CHAIRMAN OF THE BOARD. THE CHAIRMAN OF THE BOARD MUST PERFORM A MONTHLY REVIEW OF ALL EXPENSES OF THE PRESIDENT AND THE EXECUTIVE VICE PRESIDENTS. SUMMARY OF SIGNIFICANT JUNE 23, 2010 AMENDMENTS THE JUNE 23, 2010 SIGNIFICANT CHANGES TO THE BYLAWS WERE CLARIFYING AMENDMENTS, AS FOLLOWS: - SPECIFIED THAT THE PRESIDENT IS AUTHORIZED TO ENGAGE OUTSIDE ADVISORS - CLARIFIED THAT THE PRESIDENT AND VICE PRESIDENT EXPENSES SUBJECT TO PRE-APPROVAL ARE OUT-OF-POCKET EXPENSES FORM 990 REVIEW PROCESS FORM 990, PART VI, SECTION B, LINE 11A IT IS THE POLICY OF THE ORGANIZATION TO HAVE ITS AUDIT COMMITTEE CONDUCT A REVIEW OF THE FORM 990 DURING ITS PREPARATION BY AN OUTSIDE ACCOUNTANT WITH THE ASSISTANCE OF THE ORGANIZATION'S GENERAL COUNSEL, OFFICERS AND STAFF. THE FINAL VERSION OF THE FORM 990 IS PROVIDED TO ALL THE MEMBERS OF THE ORGANIZATION'S BOARD OF TRUSTEES BEFORE IT IS FILED WITH THE IRS. FOR THE TAX YEAR BEING REPORTED, THE 990 WAS REVIEWED BY BOTH THE AUDIT COMMITTEE AND THE BOARD BEFORE IT WAS FILED WITH THE IRS AND A FINAL COPY WAS PROVIDED TO ALL BOARD MEMBERS BEFORE FILING. MONITORING OF CONFLICT OF INTEREST POLICY FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION SENDS OUT A QUESTIONNAIRE TO TRUSTEES AND OFFICERS ON AN ANNUAL BASIS TO IDENTIFY POTENTIAL CONFLICTS. THE AUDIT COMMITTEE IS CHARGED WITH THE RESPONSIBILITY TO ENSURE THAT THE QUESTIONNAIRES ARE DISTRIBUTED, REVIEWED AND MONITORED. THE AUDIT COMMITTEE ALSO WILL ENSURE THAT THE ORGANIZATION COMPLIES WITH IT'S CONFLICTS OF INTEREST POLICY. COMPENSATION REVIEW FORM 990, PART VI, SECTION B, LINE 15A & 15B THE ORGANIZATION COMPLIED WITH THE REBUTTABLE PRESUMPTION BECAUSE: (1) THERE WAS AN INDEPENDENT COMMITTEE REVIEW OF COMPENSATION; (2) COMPARABILITY DATA FROM AN INDEPENDENT COMPENSATION CONSULTANT WAS OBTAINED AND REVIEWED BY THE COMMITTEE; AND (3) THE COMPENSATION DECISIONS WERE CONTEMPORANEOUSLY DOCUMENTED IN COMMITTEE MINUTES. HOWEVER, THE ORGANIZATION SUBSEQUENTLY DISCOVERED THAT THE DATA MAY NOT HAVE BEEN BASED ON PROPER COMPARABLE ORGANIZATIONS DUE TO MISREPRESENTATIONS FROM THE CEO TO THE COMPENSATION CONSULTANT. FURTHER, WHILE AN INDEPENDENT COMMITTEE REVIEWED COMPENSATION, THE CEO PAID HERSELF ADDITIONAL COMPENSATION, STIPENDS AND EXPENSE REIMBURSEMENTS WITHOUT THE KNOWLEDGE OR APPROVAL OF THE BOARD OR COMMITTEE. ALL OF THIS IS MORE FULLY DESCRIBED IN SCHEDULE L. AVAILABILITY OF DOCUMENTS FORM 990, PART VI, SECTION C, LINE 19 KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES MAKES ITS GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY AVAILABLE UPON REQUEST, AND ON ITS WEBSITE. PORTIONS OF THE FINANCIAL STATEMENTS CONTAIN CONFIDENTIAL INFORMATION WHICH IS NOT DISCLOSED, BUT THE INFORMATION FROM THE STATEMENTS REGARDING INCOME, EXPENSE, AND ASSETS AND LIABILITIES IS REFLECTED IN PARTS VIII, IX AND X OF THIS FORM 990. DIRECTOR AND OFFICER ADDITIONAL INFORMATION FORM 990, PART VII, COLUMN A KAREN L PLETZ PRESIDENT & TRUSTEE TERM ENDED 12/18/2009 RICHARD K HOFFINE EXECUTIVE VICE PRESIDENT TERM ENDED 12/31/2009 DOUGLAS C DALZELL EXECUTIVE VICE PRESIDENT TERM ENDED 12/31/2009 KESTER J NEDD DO TRUSTEE TERM ENDED 04/2010 ROSHANN S PARRIS TRUSTEE TERM ENDED 04/2010 LINDA FALK CFO HIRE DATE 2/15/2010 TERM ENDED 6/18/2010 SUSAN STANTON EXECUTIVE ADMINISTRATIVE OFFICER HIRE DATE 2/15/2010 TERM ENDED 6/18/2010 FRED CORNWELL INTERIUM CONTRACTED CFO CONTRACTED START DATE 6/18/2010 HOWARD D WEAVER DO PRESIDENT & TRUSTEE HIRE DATE 12/18/2009 EXCESS BENEFIT TRANSACTIONS SCHEDULE L, PART I, LINE 1 A. Karen Pletz 1. False Expense Reports. (a) As reported in the Form 990 for FYE 6/30/09, serious allegations of misconduct by the Organization's President and CEO, Karen Pletz ("CEO"), were brought to the attention of the Organization's Board of Trustees ("Board") on October 20, 2009, including that the CEO was providing false information to the Internal Revenue Service ("IRS"). That same day, the Board appointed a Special Committee to conduct an investigation into the allegations and the Board hired independent legal counsel, which had no prior professional ties to the CEO and her management team and was knowledgeable about the special responsibilities of nonprofit institutions, to represent the Organization and assist the Special Committee with its investigation. The Special Committee's investigation revealed that the CEO defrauded the Organization over a period of several years and used the Organization's assets for her personal benefit and to detriment of the Organization. In the FYE 6/30/09 Form 990, the Organization indicated that the investigation was ongoing but that as of May 1, 2010, it had uncovered the following known false expenses: FYE AMOUNT 6/30/09 $ 49,264.31 6/30/08 41,333.56 6/30/07 28,480.09 6/30/06 10,716.70 6/30/05 8,951.23 6/30/04 3,459.42 TOTAL $142,205.31 In each case, the Organization paid for or reimbursed the CEO for expenses based on representations by the CEO on her expense reports that the expenses furthered the Organization's exempt activities. The Special Committee's investigation revealed that a majority of information submitted by the CEO to justify these charges were materially false. The Special Committee determined that these expenses, whether paid by the Organization or reimbursed to the CEO, were for personal travel, entertainment and meals, and in connection with that, the CEO submitted false documents to justify the expenses and/or obtain reimbursement from the Organization under false pretenses. (b) Additional Investigation. Due to the discovery of false expense reports in the sampling investigated by the Special Committee, the investigation expanded to include other expense reports. In the FYE 6/30/09 Form 990, the Organization reported that, to the extent additional false expense reports were found, they would be disclosed as additional excess benefit transactions on a future Form 990 or through an amendment to that FYE 6/30/09 Form 990. The additional investigation of the CEO by the Special Committee revealed that a high percentage of the charges submitted by the CEO as business expenses were either wholly fraudulent or not for a business purpose. Given this high percentage of expense reports that contained false information, the Organization has taken the position in its lawsuit filed against the CEO, Kansas City University of Medicine and Biosciences v. Karen L. Pletz filed in the Circuit Court of Jackson County Missouri on March 22, 2010 ("Lawsuit"), that the CEO may have collected as much as $1,276,049 from the Organization through false expense reports for the period from July 1, 2001 to November 30, 2009 relating to false travel and entertainment expenses, with an additional $872,652 of false travel and entertainment expenses charged to the Organization corporate credit cards by the CEO during that period. These amounts equal the total amount of expense report reimbursements and CEO expenditures using the corporate credit cards submitted during the time frame of July 1, 2001 through November 30, 2009 as detailed below. These amounts do not include the reimbursements and credit card charges attributable to charitable contributions. Total Excess Benefits for CEO 6/30/10 Fiscal Year Expenses Corporate Credit Card Total 2002 82,140 89,852 171,992 2003 87,754 54,479 142,233 2004 120,835 83,096 215,931 2005 141,397 137,953 279,350 2006 155,459 88,724 254,183 2007 240,748 172,466 403,214 2008 218,921 100,377 319,298 2009 169,133 115,975 285,108 2010 59,662 34,730 94,392 TOTAL 1,276,049 872,652 2,165,701 The exact amount of false expenses are unknown at this time. If additional information becomes available on the exact amount of false expenses determined in the Lawsuit or through further investigation, it will be disclosed in a future Form 990 or through an amendment to this FYE 6/30/10 Form 990 filing. Further, in paragraph 14 of the Indictment filed against the CEO in the United States District Court for the Western District of Missouri on March 30, 2011 ("Indictment"), it stated that "An audit conducted by the Tax Exempt Government Entities Division (TEGE) determined that for the years 2006 through 2008, the CEO received unreported income from disallowed travel and entertainment claims totaling $1,074,917, leading to a tax loss to the United States of at least $280,000." The IRS did not provide the Organization with the detail to arrive at this $1,074,917 amount so it is unable to report which travel and entertainment expenses have already been disallowed by the IRS as referenced in the Indictment. 2. Compensation. It was reported in the FYE 6/30/09 Form 990 that in addition to the false expense reports, the CEO received unauthorized and excessive compensation. (a) Unauthorized Stipends. In the FYE 6/30/09 Form 990, the Special Committee identified unauthorized compensation paid to the CEO totaling $780,000 for the following years: FYE AMOUNT 6/30/09 $195,000 6/30/08 195,000 6/30/07 195,000 6/30/06 195,000 TOTAL $780,000 EXCESS BENEFIT TRANSACTIONS CONTINUED SCHEDULE L, PART I, LINE 1 The unauthorized compensation payments for FYE 6/30/06 to 6/30/09 were disclosed as excess benefit transactions in the FYE 6/30/09 Form 990. The CEO allowed minutes of meetings of the Organization's Executive Committee that never occurred to be prepared and placed in the minute books. These fraudulent minutes purport to approve additional lump sum stipend payments to the CEO, over and above her regular compensation. The CEO took the stipends knowing that this additional compensation was never disclosed to nor approved by the Board. In the FYE 6/30/09 Form 990, the Organization indicated that it would continue to investigate years prior to FYE 6/30/06 to determine whether unauthorized stipends were paid in those years. In the FYE 6/30/09 Form 990, the Organization stated that it was possible that the stipends paid in those years also were not authorized. The stipends paid were as follows: FYE AMOUNT 6/30/05 $195,000 6/30/04 193,000 6/30/03 132,000 6/30/02 174,000 TOTAL $694,000 The Organization has now concluded that the stipends for FYE 6/30/02 to 6/30/05 for a total of $694,000 were unauthorized. In addition, an unauthorized stipend of $42,000 was paid in FYE 6/30/00. Thus, the amount of unauthorized stipends for years from FYE 6/30/00 to 6/30/09 that constitute excess benefit transactions totals $1,516,000. There also were unauthorized stipends paid in the current FYE 6/30/10. These stipend amounts that constitute excess benefit transactions equal $130,000. (b) Excessive Compensation Due to Comparison with Potentially Non-Comparable Organizations. In the FYE 6/30/09 Form 990, the Organization reported that it followed the "rebuttable presumption of reasonableness" in setting compensation for its CEO for FYE 6/30/09. As part of the process, the independent Compensation Committee of the Board received an annual report from an independent compensation consultant setting forth proposed salary ranges for the CEO. The salary ranges were presented to the board and committees as proper comparable compensation numbers paid by similar organizations for similar positions. At least some of these reports were provided to the Organization's then legal counsel, a national law firm, who on at least one occasion signed off on the compensation consultant report. The Special Committee subsequently discovered that the CEO made misrepresentations to the compensation consultant regarding her actual duties and the real operations of the Organization as compared to a person in similar positions at similar institutions. In the FYE 6/30/09 Form 990, the Organization reported that while the investigation was still ongoing, the Organization believed that these CEO misrepresentations may have contributed to the compensation consultant's use of inflated comparable compensation numbers in establishing the CEO compensation ranges and in rendering its determination that the CEO's compensation was reasonable. The result was that the Organization likely paid excessive compensation to the CEO. In addition, the consultant did not include the unauthorized stipends discussed above in the compensation analysis. In the FYE 6/30/09 Form 990, the Organization also indicated that to the extent the Organization determined that excess compensation was paid, the excess amount would be disclosed in a future Form 990 or through an amendment to this Form 990. This investigation has continued after the filing of FYE 6/30/09 Form 990 and it is believed that excessive compensation may have been paid to the CEO in one or more years relating to these misrepresentations, but the amount of excessive compensation still has not been determined. Therefore, there is no additional information to be reported as of the date of the filing of this FYE 6/30/10 Form 990. It is one of many allegations contained in the Lawsuit and to the extent additional information becomes available, it would be disclosed in a future Form 990 or through an amendment to this FYE 6/30/10 Form 990. (c) Inflated Incentive Plan Bonuses. In the FYE 6/30/09 Form 990, the Organization reported that from 2000 through 2009, the CEO and other executives were eligible to receive bonuses under a performance-based incentive compensation plan. It was also reported in the FYE 6/30/09 Form 990 that in 2006 and 2007, the CEO manipulated and falsified performance results in order to increase her incentive compensation under the plan. There is no additional information to be reported as of the filing date of this FYE 6/30/10 Form 990. The investigation is still ongoing and this allegation is contained in the Lawsuit. If the exact amount of any excess compensation is determined relating to the inflated incentive plan bonuses, it will be disclosed in a future Form 990 or through an amendment to this FYE 6/30/10 Form 990. (d) Charitable Contributions. In the FYE 6/30/09 Form 990, the Organization reported that the CEO directed hundreds of thousands of dollars of Organization's assets be donated, often in her personal name or to pay her personal pledges, to other nonprofit corporations. In the FYE 6/30/09 Form 990, the Organization reported that in 2005 and 2006, the CEO made personal donations of approximately $45,000 to Benedictine College, ostensibly in connection with her status as a member of the Board of Directors of that institution. The CEO had the Organization reimburse her for those personal donations to Benedictine College without the knowledge and consent of the Organization's Board of Trustees. In 2003 and 2004, the Organization reimbursed the CEO for $35,000 of contributions to Benedictine College. These reimbursements were made without the knowledge and consent of the Organization's Board of Trustees. The CEO did not direct the Organization to include the amounts personally reimbursed to her for her personal contributions and commitments to Benedictine College or that were directly paid to Benedictine College on her behalf to be included in her personal income for these years. It also was reported in the FYE 6/30/09 Form 990 that the CEO joined the United Way's Tocqueville Society, a fundraising arm of the United Way. Membership in the Tocqueville Society is limited to individual donors. In 2005-2009, the CEO made personal commitments and pledges in the amounts of $30,000 (2005), $40,000 (2006), $50,000 (2007), $75,000 (2008) and $75,800 (2009). The CEO then directed the Organization, without the knowledge of the Organization's Board of Trustees, to pay her personal pledges to the Tocqueville Society, which totaled over $270,800 over the five year period. The CEO did not direct the Organization to include the amounts paid to the United Way by the Organization for her personal pledges and commitments to the Tocqueville Society in her personal income for these years. In the FYE 6/30/09 Form 990, the amounts of these charitable contributions (which total $350,800) that were reimbursed to the CEO, or paid on her behalf to fulfill her personal pledges, were disclosed as excess benefit transactions. The Organization also indicated in the FYE 6/30/09 Form 990 that the special investigation was ongoing and, to the extent that additional charitable contributions were discovered that constitute excess benefit transactions, they would be disclosed on future Form 990 or through an amendment to FYE 6/30/09 Form 990. The investigation continues through the Lawsuit proceedings. The following additional information was discovered after the FYE 6/30/09 Form 990 filing. EXCESS BENEFIT TRANSACTIONS CONTINUED SCHEDULE L, PART I, LINE 1 The additional information is from the United States government's investigation of the CEO's false charitable contributions. The Indictment of the CEO stated: "It was further of the scheme and artifice that Pletz signed and filed materially false Forms 1040 for tax years 2003 through 2006. These personal returns falsely claimed itemized deductions for charitable contributions on line 15 of Schedule A. Pletz had provided her tax preparer with a handwritten list of charitable deductions she intended to claim as personal deductions. As Pletz well knew, KCUMB, not she, made the contributions either by KCUMB check or KCUMB credit card to organizations including United Way, Lyric Opera, Deron Cherry Foundation, Truman Medical Center, Boys & Girls Clubs, and Benedictine College. The false portions of Pletz's charitable deductions were as follows: 2003: $ 81,250 2004: $116,680 2005: $160,445 2006: $207,253 After the Internal Revenue Service ("IRS") audited Pletz's personal tax returns for tax years 2005 and 2006, she filed amended returns for those years, drastically reducing her charitable contributions. For 2005, she reduced them from $183,546 to $46,097; and for 2006, from $243,503 to $44,073." (Indictment at paragraph 15). The false charitable donations total $565,628 for these years. Note that the contributions listed in the Indictment include contributions only for calendar years 2003-2006. The Organization reported in its FYE 6/30/09 Form 990 listed above that it also either reimbursed the CEO or paid her personal pledges for charitable contributions made in years after 2006 in addition to the years reported in the Indictment. By combining the $565,628 of contributions for 2003-2006 listed in the Indictment with the false charitable contributions for 2007-2009 that represent either reimbursed amounts to the CEO or payment of her personal pledges listed above, the total false charitable contributions total at least $766,428 for the period from 2003-2009 ($565,628, reported in the Indictment, plus $200,800 for the 2007-2009 - Tocqueville Society donations reported above in the FYE 6/30/09 Form 990). The Organization does not have the detail from the Indictment to determine if the donations reported in the Indictment overlap with the false charitable contribution information for 2003-2006 reported in the FYE 6/30/09 Form 990 listed above. If an exact excess benefit transactions amount attributable to false charitable contributions and reimbursements is determined, it will be disclosed in a future Form 990 or through an amendment to this FYE 6/30/10 Form 990. 3. Organization Managers. (a) False Expense Reports. As reported in the FYE 6/30/09 Form 990, the CEO's own misconduct and lack of supervision encouraged Douglas Dalzell ("Executive Dean") and Richard Hoffine ("COO"), both of whom were "organization managers" of the Organization, to disregard their own duties of good faith, due care, honesty, obedience to the mission and loyalty to the Organization and its Board. The CEO's misconduct and her encouraging of misconduct by the Executive Dean and COO caused a situation in which, while the Executive Dean and the COO were aware of these expenditures, they did nothing to bring these issues to the attention of the Board. The Organization also indicated on the FYE 6/30/09 Form 990 that the investigation is still ongoing, and to the extent the Organization determines that the COO and Executive Dean "knowingly participated" in this excess benefit transaction, it will be disclosed on a future Form 990 or through an amendment to this Form 990. This investigation continues and there is no additional information to be reported on this matter as of the date of this FYE 6/30/10 Form 990 filing. As reported on the FYE 6/30/09 Form 990, no other "organization manager" (other than the CEO) knowingly participated in the expense reimbursements knowing they were excess benefit transactions. During the periods in question, neither the Board nor any committee reviewed individual expense reports, nor is such board or committee review common or customary. Further, even if they did review the reports, they would not have been able to discover that the information reported on the expense reports was fraudulent. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (b) Unauthorized Stipends. It was reported in the FYE 6/30/09 Form 990 that the Organization is not aware of any "organization manager" (other than the CEO) that knowingly participated in establishing the unauthorized stipends knowing it was an excess benefit transaction. The Board and committees were not aware of nor did they authorize the unauthorized stipends. The CEO obtained the unauthorized stipends through fraudulent minutes of meetings that never occurred. The CEO took the stipends knowing that this additional compensation was never disclosed to nor approved by the Board. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (c) Excessive Compensation. It was reported in the FYE 6/30/09 Form 990 that the Organization is not aware of any "organization manager" (other than the CEO) that knowingly participated in establishing the potentially excessive compensation. The Board and its committees relied on reports from an independent compensation consultant that the Board and the committees believed to contain accurate information. Unbeknownst to the Board and its committees, the CEO misrepresented her actual duties and the real operations of the Organization as compared to a person in similar positions at similar institutions in order to justify inflated comparables in the consultant reports and her inflated salaries that resulted from the consultant reports. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (d) Inflated Incentive Plan Bonuses. It was reported in the FYE 6/30/09 Form 990 that the Organization is not aware of any "organization manager" (other than the CEO) that knowingly participated in the inflated incentive bonuses knowing it was an excess benefit transaction. The Board and committees were not aware that the CEO had manipulated and falsified performance results in order to increase her incentive compensation under the plan. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (e) Charitable Contributions. It was reported in the FYE 6/30/09 Form 990 that the Organization is not aware of any "organization manager" (other than the CEO) who knowingly participated in reimbursing the CEO for charitable contributions she made or paying on her behalf personal charitable pledges she had made. These payments and reimbursements were made without the knowledge or consent of the Board. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. 4. Correction. It was reported in the FYE 6/30/09 Form 990 that the CEO has not corrected any of the reported excess benefit transactions. The Organization, based on authorization from the board of directors, filed a Lawsuit against the CEO for restitution for these amounts plus other damages suffered by the Organization due to CEO's mismanagement of the Organization and breach of fiduciary duties. There still has been no correction of the excess benefit for FYE 6/30/09 and prior periods and no correction of the excess benefit transactions reported in this current FYE 6/30/10 Form 990. Total Excess Benefits for CEO 6/30/09 and prior periods Expense Reports unknown Unauthorized Stipends 1,516,000 Excessive Compensation unknown Inflated Incentive Bonuses unknown Charitable Contributions unknown Total unknown Total Excess Benefits for CEO 6/30/10 Expense Reports unknown Unauthorized Stipends 130,000 Excessive Compensation unknown Inflated Incentive Bonuses unknown Charitable Contributions 0 Total unknown The investigation is ongoing and any of these amounts may increase based on the results of the additional investigation. To the extent additional known excess benefits are discovered through additional investigation, they will be disclosed on a future Form 990 or through an amendment to this Form 990. EXCESS BENEFIT TRANSACTIONS CONTINUED SCHEDULE L, PART I, LINE 1 B. Hoffine & Dalzell 1. Excessive Compensation Due to Comparison with Potentially Non-Comparable Organizations. As reported on the FYE 6/30/09 Form 990, the Organization followed the "rebuttable presumption of reasonableness" in setting compensation for its CEO. It also followed the rebuttable presumption of reasonableness for Richard Hoffine ("COO") and Douglas Dalzell ("Executive Dean"). As part of the process, the independent Compensation Committee of the Board received an annual report from an independent compensation consultant setting forth proposed salary ranges for the COO and Executive Dean. The salary ranges were presented to the board and committees as proper comparable compensation numbers paid by similar organizations for similar positions. At least some of these reports were provided to the Organization's then legal counsel, a national law firm, who on at least one occasion signed off on the compensation consultant report. The Special Committee subsequently discovered that the CEO made misrepresentations to the compensation consultant regarding the real operations of the Organization and what types of other organizations were comparable organizations. As reported on the FYE 6/30/09 Form 990, while the investigation is ongoing, the Organization believes that these CEO misrepresentations may have contributed to the compensation consultant's use of inflated comparable compensation numbers in establishing the COO and Executive Dean compensation ranges and in rendering its determination that the compensation paid to the COO and Executive Dean was reasonable. The result is that the Organization likely paid excessive compensation to the COO and Executive Dean in one or more years. It was reported in the FYE 6/30/09 Form 990, that the Organization hired a separate and independent compensation consultant to determine the proper level of compensation and that to the extent the Organization determines that excess compensation was paid, the excess amount will be disclosed on a future Form 990 or through an amendment to this Form 990. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. Any additional information that becomes available will be provided in future Form 990s or through an amendment to this FYE 6/30/10 Form 990. 2. Inflated Incentive Plan Bonuses. As reported on the FYE 6/30/09 Form 990, from 2000 through 2009, the COO and Executive Dean were eligible to receive bonuses under a performance-based incentive compensation plan. In 2006 and 2007, the CEO manipulated and falsified performance results in order to increase her incentive compensation under the plan, with the result that the incentive compensation of the COO and Executive Dean under the plan were also increased. It was reported in the FYE 6/30/09 Form 990, that the special investigation was still ongoing, and when the Special Committee determines the amount of any excess compensation, it will be disclosed on a future Form 990 or through an amendment to this Form 990. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. 3. Use of Organization Property, Supplies and Time to Run For-Profit Businesses. As reported on the FYE 6/30/09 Form 990, the CEO allowed and fostered an atmosphere in the executive offices of "anything goes," which included employees using Organization property, staff, supplies and time to run personal for-profit businesses out of the Organization when they should have been engaged in Organization business. For example, the Executive Dean operated several family-owned restaurants out of the Organization using the Organization's internal auditor to keep the restaurant books on the Organization's computers. The investigation is ongoing, and to the extent the Special Committee determines any excess benefit transaction resulted, it will be disclosed on a future Form 990 or through an amendment to this FYE 6/30/10 Form 990. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. 4. Organization Managers. (a) Excessive Compensation. As reported on the FYE 6/30/09 Form 990, the Organization is not aware of any "organization manager" (other than the CEO) that knowingly participated in establishing the potentially excessive compensation. The Board and its committees relied on reports from an independent compensation consultant that the Board and the committees believed to contain accurate information. Unbeknownst to the Board and its committees, the CEO misrepresented the real operations of the Organization and what types of other organizations were comparable organizations in order to justify inflated comparables in the compensation reports and the inflated salaries that resulted from it. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (b) Inflated Incentive Plan Bonuses. As reported on the FYE 6/30/09 Form 990, the Organization is not aware of any "organization manager" (other than the CEO) that knowingly participated in the inflated incentive bonuses knowing it was an excess benefit transaction. The Board and committees were not aware that the CEO had manipulated and falsified performance results in order to increase the COO's and Executive Dean's incentive compensation under the plan. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (c) Use of Organization Property, Time and Supplies to Run For-Profit Businesses. As reported on the FYE 6/30/09 Form 990, the Organization is not aware of any "organization manager" (other than the CEO, COO and Executive Dean) who knowingly participated in this activity. The Board and its committees were not aware of nor did they approve such activities. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. EXCESS BENEFIT TRANSACTIONS CONTINUED SCHEDULE L, PART I, LINE 1 5. Correction. As reported on the FYE 6/30/09 Form 990, the Special Committee has not yet determined the extent or amount, if any, of any excess benefit transaction involving the COO and Executive Dean. Because no amount, if any, has been determined, there has been no attempt to correct. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. C. Other Executives. 1. Excessive Compensation Due to Comparison with Potentially Non-Comparable Organizations. As reported on the FYE 6/30/09 Form 990, the Organization followed the "rebuttable presumption of reasonableness" in setting compensation for its CEO. It also followed the rebuttable presumption of reasonableness for Richard Hoffine ("COO") and Douglas Dalzell ("Executive Dean"). What was not reported in the FYE 6/30/09 Form 990 is that in addition to the CEO, COO, and Executive Dean, the salaries of other executives were established using the rebuttable presumption of reasonableness for FYE 6/30/09 and prior periods. The rebuttable presumption of reasonableness procedure also was followed for FYE 6/30/10. Just as with the CEO, COO and Executive Dean, the process involved an independent Compensation Committee of the Board. The committee received an annual report from an independent compensation consultant setting forth proposed salary ranges for the CEO, COO, Executive Dean and certain other executives. The salary ranges were presented to the Board and committees as proper comparable compensation numbers paid by similar organizations for similar positions. At least some of these reports were provided to the Organization's then legal counsel, a national law firm, who on at least one occasion signed off on the compensation consultant report. The Special Committee subsequently discovered that the CEO made misrepresentations to the compensation consultant regarding the real operations of the Organization and what types of other organizations were comparable organizations. While the investigation is ongoing, the Organization believes that these CEO misrepresentations may have contributed to the compensation consultant's use of inflated comparable compensation numbers in establishing compensation ranges not only for the CEO, COO and Executive Dean, but also for the other executives in rendering its determination that the compensation paid to these other executives was reasonable. The result is that the Organization may have paid excessive compensation to one or more other executives including the following: Sandra K. Willsie, D.O., Executive Vice-President for Research, Medical Affairs and Dean of the College of Osteopathic Medicine for FYE 6/30/05 - 6/30/09, Darin L. Haug, D.O., Executive Vice-President for Academic and Medical Affairs/Dean College of Osteopathic Medicine for FYE 6/30/08 - 6/30/10, and Mary Pat Wohlford-Wessels, Ph.D., Executive Vice President for Research and Institutional Effectiveness for FYE 6/30-08 - 6/30/10. It is the Organization's belief that Sandra K. Willsie and Darin L. Haug were disqualified persons during one or more years when the improper comparable compensation numbers were used to establish their salaries but Mary Pat Wohlford-Wessels was not a disqualified person. It was reported in the FYE 6/30/09 Form 990, that the Organization hired a separate and independent compensation consultant to determine the proper level of compensation for these executives and that to the extent the Organization determines that excess compensation was paid, the excess amount will be disclosed on a future Form 990 or through an amendment to this Form 990. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. Because the Organization does not believe that Mary Pat Wohlford-Wessels is a disqualified person, it only will provide any additional information that becomes available with respect to Sandra K. Willsie and Darin L. Haug in future Form 990s or through an amendment to this FYE 6/30/10 Form 990. 2. Inflated Incentive Plan Bonuses. Darin L. Haug, Sandra K. Willsie and Mary Pat Wohlford-Wessels also were eligible to receive the incentive plan bonuses discussed above for the CEO, COO and Executive Dean. This was not reported in the FYE 6/30/09 Form 990 but it is now disclosed on this FYE 6/30/10 Form 990. As reported above, in 2006 and 2007, the CEO manipulated and falsified performance results in order to increase her incentive compensation under the plan, with the result that the incentive compensation of Sandra K. Willsie under the plan also was increased in these years. It was reported in the FYE 6/30/09 Form 990, that the special investigation was still ongoing, and when the Special Committee determines the amount of any excess compensation relating to the incentive plan bonus, it will be disclosed on a future Form 990 or through an amendment to this FYE 6/30/10 Form 990. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. 3. Organization Managers. (a) Excessive Compensation. As reported on the FYE 6/30/09 Form 990, the Organization is not aware of any "organization manager" (other than the CEO) who knowingly participated in establishing the potentially excessive compensation. The Board and its committees relied on reports from an independent compensation consultant that the Board and the committees believed to contain accurate information. Unbeknownst to the Board and its committees, the CEO misrepresented the real operations of the Organization and what types of other organizations were comparable organizations in order to justify inflated comparables in the compensation reports and the inflated salaries that resulted from it. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. (b) Inflated Incentive Plan Bonuses. As reported on the FYE 6/30/09 Form 990, the Organization is not aware of any "organization manager" (other than the CEO) who knowingly participated in the inflated incentive bonuses knowing it was an excess benefit transaction. The Board and committees were not aware that the CEO had manipulated and falsified performance results in order to increase the incentive compensation of Sandra K. Willsie under the plan. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. 4. Correction. The Special Committee has not yet determined the extent or amount, if any, of any excess benefit transaction involving Sandra K. Willsie and Darin L. Haug. Because no amount, if any, has been determined, there has been no attempt to correct. There is no additional information to report on this matter as of the date of this FYE 6/30/10 Form 990 filing. BUSINESS TRANSACTIONS WITH INTERESTED PERSONS SCHEDULE L, PART IV (A) CASEY PLETZ (B) CASEY PLETZ IS THE DAUGHTER OF KAREN PLETZ WHO WAS A DIRECTOR AND OFFICER OF KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES DURING THE TAX YEAR (C) COMPENSATION $40,611, BENEFITS $6,163 (D) CASEY PLETZ IS AN EMPLOYEE OF KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES (E) NO (A) MARGARITA DALZELL (B) MARGARITA DALZELL IS THE DAUGHTER IN LAW OF DOUG DALZELL WHO WAS AN OFFICER OF KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES DURING THE TAX YEAR (C) COMPENSATION $26,576, BENEFITS $13,531 (D) MARGARITA DALZELL IS AN EMPLOYEE OF KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES (E) NO (A) PARRIS COMMUNICATIONS, INC. (B) ROSHANN S. PARRIS WAS A TRUSTEE OF KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES DURING THE TAX YEAR AND AN OFFICER, DIRECTOR, AND OWNER OF PARRIS COMMUNICATIONS, INC. (C) $154,484 (D) PARRIS COMMUNICATIONS, INC. PROVIDES PUBLIC RELATION SERVICES TO KANSAS CITY UNIVERSITY OF MEDICINE AND BIOSCIENCES (E) NO INDEPENDENCE AVENUE DEV CO 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 431848034 REAL ESTATE MO 501(C)(3) 11A NA HEALTH POLICY INSTITUTE 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 201138771 HEALTHCARE MO 501(C)(4) N/A NA DERON CHERRY CELEBRITY INVITATIONAL GOLF 1750 INDEPENDENT AVENUE KANSAS CITY MO 64106 431683174 FUNDRAISING MO 501(C)(3) 11A NA SCORE 1 FOR HEALTH 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 203773804 HEALTHCARE MO 501(C)(3) 7 NA MEN'S HEALTHLINK INC 1750 INDEPENDENCE AVENUE KANSAS CITY MO 64106 203070848 HEALTHCARE MO NA C CORP 222 4701 1.00000 THE DR LEONARD SMITH CRAT 1750 E INDEPENDENCE AVENUE KANSAS CITY MO 64106 436842045 INVESTMENTS MO NA TRUST -10940 67418 1.00000 false true false false false false false false false false true false true true true false false false SCORE 1 FOR HEALTH N 266444