2011-05-16T13:45:23-05:00 2010-06-30 RSM McGladrey Inc 201 N Harrison Street Suite 300 Davenport IA 528011999 990 2009-07-01 370673506 GRAHAM HOSPITAL ASSOCIATION GRAH 3096475240 210 WEST WALNUT CANTON IL 61520 JAMES T STRATTON 3096475240 2011-05-13 1 John J Romano 5638884000 2009 2016-02-24 21:20:13Z JAMES T STRATTON 210 WEST WALNUT CANTON IL 61520 88406353 0 X WWW.GRAHAMHOSPITAL.ORG X 1905 IL TO PROVIDE COMPASSIONATE, QUALITY HEALTH SERVICES, IN A RESPONSIBLE AND CHARITABLE MANNER, TO THE PEOPLE AND COMMUNITIES WE SERVE. 12 11 852 134 115255 -85702 508952 553989 69607410 69968848 -2126043 1717153 242973 193159 68233292 72433149 4005 4885 0 33153829 33703242 0 0 36424922 36340972 69582756 70049099 -1349464 2384050 111867906 117271910 42024478 44742373 69843428 72529537 TO PROVIDE COMPASSIONATE, QUALITY HEALTH SERVICES, IN A RESPONSIBLE AND CHARITABLE MANNER, TO THE PEOPLE AND COMMUNITIES WE SERVE. 0 0 32232177 4885 40950926 Graham Hospital is a provider of Healthcare Services in Fulton County and Surrounding areas. During this reporting period, 2093 adults and children were admitted and 268 babies were born. 10596875 13463312 Graham Medical Group which provides Physician and Professional Health Care services to the patients in Fulton County, Illinois. This includes charity care to qualified individuals and 86,889 Office Visits and 9,537 nursing and hospital visits. 6805401 8646250 Surgical Services - The hospital performed 898 Inpatient Surgeries and 2,929 Outpatient Surgeries in Fiscal Year 2010. 4814011 6116193 The Hospital operates a 24 Hour Emergency Department which had 15,661 patients registered to the ED in Fiscal Year 2010. 4814011 6116193 54448464 1 1 0 1 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 1 0 0 1 1 0 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 117 0 1 852 1 1 1 0 0 0 0 0 0 0 0 12 11 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 1 1 1 0 IL X JIM STRATTON 3096475240 210 WEST WALNUT CANTON IL 61520 BRETT BARNHART MD 2.00 X 0 0 0 JEFF JOCHUMS 2.00 X X 0 0 0 MIKE WALTERS 2.00 X X 0 0 0 WARREN WOLF 2.00 X X 0 0 0 GORDON JAMES 2.00 X 0 0 0 JOHN POTTER 2.00 X 0 0 0 KATHY TABER 2.00 X X 0 0 0 ALAN DILTS 2.00 X 0 0 0 DON HELLER 2.00 X 0 0 0 SUZANNE HOLTHAUS MD 2.00 X 0 0 0 BRAD ANDERSON 2.00 X 0 0 0 MARK PIRTLE 2.00 X 0 0 0 CHRISTINE DUVENDACK 40.00 X 155659 0 37772 JAMES T STRATTON 40.00 X 247472 0 41186 SARA KIMBLE 40.00 X 132162 0 23189 ROBERT G SENNEFF 40.00 X 416123 0 70440 JEDEDIAH CANTRELL 40.00 X 150681 0 26666 JOHN QUINONES 40.00 X 346332 0 24843 JEFFREY HEMP MD 40.00 X 326613 0 24537 DWAYNE BERNARD MD 40.00 X 325854 0 24537 JULIO ANTONIO RAMOS MD 40.00 X 295931 0 17976 DAVID LLOYD 65.00 X 249493 0 23992 GERRI DELOST 65.00 X 232859 0 12210 JUDY HELLE 40.00 X 20486 0 0 2879179 0 327348 20 0 1 0 PJ HOERR INC 107 W COMMERCE PEORIA IL 61604 BUILDING CONTRACTOR 9434747 COLEMAN MEDICAL ASSOCIATES 175 SOUTH MAIN STREET CANTON IL 61520 PHYSICIAN GROUP 6712057 MEDICAL INFORMATION TECHNOLOGY INC PO BOX 74569 CHICAGO IL 74569 INFORMATION TECHNOLOGY SERVICES 293616 HEARTCARE MIDWEST 420 NE GLEN OAK AVENUE SUITE 402 PEORIA IL 61603 CARDIOLOGY SERVICES 241311 QUEST DIAGNOSTICS PO BOX 12989 CHICAGO IL 60693 LABORATORY SERVICES 219710 12 553989 553989 PATIENT SERVICES 621110 67832755 67832755 SCHOOL OF NURSING 611600 673212 673212 CAFETERIA 722210 367772 367772 EMPLOYEE PHARMACY 446110 348744 348744 LABORATORY SERVICES 621500 327435 245860 81575 418930 418930 69968848 1224920 1224920 182146 28591 153555 153555 153555 16396958 39888 15834829 109784 562129 -69896 492233 492233 DURABLE EQUIPMENT 446199 33680 33680 BIOMED EQUIPMENT MAINT 811000 5924 5924 39604 72433149 69176681 115255 2587224 4885 4885 1475893 1475893 25626985 23885497 1741488 497373 386593 110780 4261411 3465696 795715 1841580 1431405 410175 24898 24898 69400 69400 26254 26254 7511472 436480 7074992 243900 4432 239468 10728002 9901261 826741 1201365 1117683 83682 53468 45646 7822 826672 642547 184125 3791904 2947333 844571 526080 526080 PROVISION FOR UNCOLLECT 5465594 6797693 -1332099 PURCHASED SERVICES 4032224 2168820 1863404 MEDICAID ASSESSMENT 991374 991374 MISCELLANEOUS EXPENSES 335098 116671 218427 RECRUITMENT OF PHYSICIA 295853 295853 217414 104448 112966 70049099 54448464 15600635 0 112629 284548 2015846 1634480 10152435 8992110 1863250 1496488 1054475 873749 92767579 47774433 36255883 44993146 51096262 49496460 9317126 9500929 111867906 117271910 4962199 5578955 31085000 30450000 5977279 8713418 42024478 44742373 X 62499647 65053301 353007 110032 6990774 7366204 69843428 72529537 111867906 117271910 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 26254 26254 0 Part II-B, Line 1i: Explanation of Other Lobbying Activities: LOBBYING EXPENDITURES RELATED TO MEMBERSHIP DUES INCLUDED: 31% of MEMBERSHIP DUES PAID TO THE ILLINOIS HOSPITAL ASSOCIATION, OR $17,950; 31% of MEMBERSHIP DUES PAID TO THE AMERICAN HOSPITAL ASSOCIATION, OR $6,039; 30% of MEMBERSHIP DUES PAID TO THE ILLINOIS Health Care Association, OR $692; 50% of MEMBERSHIP DUES PAID TO THE ILLINOIS Homecare & Hospice Council, OR $1,573. 56079016 2547372 4063090 3885 8186947 54498646 43214801 23485459 -3422251 4005 7194988 56079016 0.86480 0.13520 0 1 0 1907257 1907257 40395041 19542848 20852193 37135454 27019269 10116185 13329827 1212316 12117511 44993146 OTHER RECEIVABLES 149239 C PERPETUAL TRUSTS 7426977 C DUE FROM MEDICARE 69400 C DEFERRED FINANCING COSTS 278248 C LONG TERM NOTES RECEIVABLE 1577065 C 9500929 CONSTRUCTION PAYABLE 1534781 ESTIMATED SELF-INSURANCE COSTS 2749330 ASSET RETIREMENT OBLIGATION 300162 FAIR MARKET VALUE OF SWAP OPTION 3479145 DUE TO THIRD PARTY PAYORS 650000 8713418 72433149 70049099 2384050 2035768 -1733709 302059 2686109 72735208 2035768 -1733709 302059 72433149 0 72433149 70049099 0 70049099 0 70049099 Part X: Description of Uncertain Tax Positions Under FIN 48: The Hospital is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. On July 1, 2009, the Hospital adopted the accounting standard on accounting for uncertainty in income taxes. The Hospital files a Form 990 (Return of Organization Exempt from Income Tax) annually. When the returns are filed, it is highly certain that some positions taken would be sustained upon examination by taxing Authorities, while others are subject to uncertainty about the merits of the tax position taken or the amount of the position that would ultimately be sustained. Examples of tax positions common to nonprofit organizations include such matters as the following: the tax exempt status of each entity and various positions relative to potential sources of unrelated business taxable income (UBIT). UBIT is reported on Form 990-T, as appropriate. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes that it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation process, if any. Tax positions are offset or aggregated with other positions. Tax positions that meet the "more likely than not" recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely to be realized on settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for uncertain tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of June 30, 2010, there were no unrecognized tax benefits identified or recorded as a liability. Forms 990 filed by the Hospital are subject to examination by the Internal Revenue Service (IRS) up to three years from the extended due date of each return. Forms 990 filed by the Hospital are no longer subject to examination for the years ended June 30, 2006 and prior. Part XI, Line 8 - Other Adjustments: CHANGE IN FAIR VALUE OF SWAP OPTION: -2116883. CHANGE IN NET ASSETS OF GRAHAM HOSPITAL FOUNDATION: 47313. CHANGE IN BENEFICIAL INTEREST IN PERPETUAL TRUSTS: 335861. Part XII, Line 2d - Other Adjustments: CHANGE IN FAIR VALUE OF INTEREST RATE SWAP AGREEMENT: -2116883. CHANGE IN INTEREST IN NET ASSETS OF THE FOUNDATION: 47313. CHANGE IN BENEFICIAL INTEREST IN PERPETUAL TRUSTS: 335861. 1 1 1 X 180.000000000000 0 1 1 0 1 0 1654121 0 1654121 0.02560 13099820 10032087 3067733 0.04750 14753941 10032087 4721854 0.07310 210843 8391 202452 0.00310 21690 21690 0.00030 232533 8391 224142 0.00340 14986474 10040478 4945996 0.07650 24276 24276 0.00040 24276 24276 0.00040 1 2306481 18453000 16800000 1653000 X 1 0 GRAHAM HOSPITAL ASSOCIATION

210 WEST WALNUT STREET CANTON IL 61520

X GRAHAM MEDICAL GROUP

175 SOUTH MAIN STREET CANTON IL 61520

OUTPATIENT PHYSICIAN'S CLINIC GRAHAM HOSPITAL ASSOCIATION - ER

210 WEST WALNUT STREET CANTON IL 61520

X GRAHAM MEDICAL GROUP - FARMINGTON

141 EAST VERNON STREET FARMINGTON IL 61531

OUTPATIENT PHYSICIAN'S CLINIC GRAHAM MEDICAL GROUP - LEWISTOWN

2001 NORTH MAIN STREET LEWISTOWN IL 61542

OUTPATIENT PHYSICIAN'S CLINIC GRAHAM MEDICAL GROUP - CUBA

114 SOUTH 4TH STREET CUBA IL 61427

OUTPATIENT PHYSICIAN'S CLINIC GRAHAM HOSPITAL EXTENDED CAR UNIT

210 WEST WALNUT STREET CANTON IL 61520

SKILLED NURSING FACILITY GHA HOME MEDICAL EQUIPMENT STORE

101 SOUTH MAIN STREET CANTON IL 61520

HOME MEDICAL EQUIPMENT - RETAIL STORE GHA HOME MEDICAL EQUIPMENT STORE

200 WEST MAIN STREET HAVANA IL 62644

HOME MEDICAL EQUIPMENT - RETAIL STORE GRAHAM HOSPITAL HOME HEALTHHOSPICE

410 ELM STREET CANTON IL 61520

HOME HEALTH AND HOSPICE PROVIDER GRAHAM HOSPITAL SCHOOL OF NURSING

210 WEST WALNUT STREET CANTON IL 61520

SCHOOL OF NURSING GRAHAM HOSPITAL PHARMACY

210 WEST WALNUT STREET CANTON IL 61520

PHARMACY FOR PATIENTS AND RETAIL FOR EMPLOYEES Part I, Line 3c: Illinois patients with low income and without significant assets who are uninsured receiving medically necessary services in excess of $300 may qualify for charity care, and those with higher incomes may be charged a maximum of 25% of their annual family income over a period of one year. Assets exempt from consideration are: a primary residence and certain protected personal property, pension and retirement plans, and other assets with a value of up to 300% of the Federal poverty Level. Patients with significant assets may be excluded from the uninsured discount regardless of their income level. Part I, Line 6a: NOT APPLICABLE Part I, Line 7: GRAHAM HOSPITAL ASSOCIATION UTILIZED WORKSHEET 2 TO CALCULATE ITS COST-TO-CHARGE RATIO. Total expenses reported in the Financial Report for the year ended 06/30/10 less THE BAD DEBT PROVISION OF $5,465,594 and the Medicaid Assessment Provider Tax of $991,374 are divided by Gross Patient Charges of $150,639,505 to reach a Cost to Charge Ratio of 42.21%.During each fiscal year various Community Health Improvement Services are held at a facility owned by Graham Hospital Association or Graham Hospital Association employees assist with services held at various locations within the catchment area. An actual count of community members served is recorded if available or estimated if not available. Cost for each activity is recorded at the actual cost of supplies, and staff time is calculated by using actual time spent multiplied by average wages for the employees involved. Any offsetting revenue is subtracted from the cost of the activity to reach a net cost of each event. When community groups use a room in one of the Graham Hospital Association facilities, there is no charge for the community group and the cost of the room use is estimated at a nominal flat rate fee and recorded here as an In-Kind Contribution. Part I, Line 7g: NOT APPLICABLE Part I, Line 7f: $5,465,594 OF BAD DEBT EXPENSE IS SUBTRACTED FOR PURPOSES OF COMPUTING THE PERCENTAGE IN PART I, LINE 7K, COLUMN F. THE ORGANIZATION'S TOTAL COMMUNITY BENEFIT EXPENSE AS A PERCENTAGE OF TOTAL EXPENSES, LESS BAD DEBT, IS 23.20%, AND THE PERCENTAGE INCREASES TO 49.22% IF MEDICARE ALLOWABLE COSTS ARE INCLUDED IN TOTAL COMMUNTY BENEFIT EXPENSE. Part III, Line 4: I. THE RATIONALE AND COSTING METHODOLOGY USED TO CALCULATE BAD DEBT EXPENSE AT COST CONSISTED OF MULTIPLYING THE COST TO CHARGE RATIO TIMES THE GROSS BAD DEBT EXPENSE PER THE INCOME STATEMENT.II. THE TEXT FROM THE FOOTNOTE OF GRAHAM HOSPITAL ASSOCIATION'S FINANCIAL STATEMENT IS AS FOLLOWS: PATIENT RECEIVABLES DUE DIRECTLY FROM THE PATIENTS ARE CARRIED AT THE ORIGINAL CHARGE FOR THE SERVICE PROVIDED LESS AMOUNTS COVERED BY THIRD-PARTY PAYORS AND LESS AN ESTIMATED ALLOWANCE FOR DOUBTFUL RECEIVABLES BASED ON A REVIEW OF ALL OUTSTANDING AMOUNTS ON A MONTHLY BASIS. MANAGEMENT DETERMINES THE ALLOWANCE FOR DOUBTFUL ACCOUNTS BY IDENTIFYING TROUBLED ACCOUNTS, BY HISTORICAL EXPERIENCE APPLIED TO AN AGING OF ACCOUNTS AND EXISTING ECONOMIC CONDITIONS. PATIENT RECEIVABLES ARE WRITTEN OFF AS BAD DEBT EXPENSE BASED ON INDIVIDUAL CREDIT EVALUATION AND SPECIFIC CIRCUMSTANCES OF THE ACCOUNT. RECOVERIES OF RECEIVABLES PREVIOUSLY WRITTEN OFF ARE RECORDED AS A REDUCTION OF BAD DEBT EXPENSE WHEN RECEIVED. Part III, Line 8: The total Medicare allowable costs of care are calculated through the FY10 Medicare Cost Report according to CMS regulations regarding allowable cost. Part III, Line 9b: WHILE GRAHAM HOSPITAL ASSOCIATION DOES MAINTAIN A WRITTEN COLLECTION POLICY, IT DOES NOT SPECIFICALLY ADDRESS THOSE PATIENTS WHO ARE KNOWN TO QUALIFY FOR CHARITY CARE OR FINANCIAL ASSISTANCE. HOWEVER, DURING THE COLLECTION PROCESS, ALL REASONABLE EFFORTS ARE MADE TO DETERMINE ELIGIBILTY FOR CHARITY CARE OR FINANCIAL ASSISTANCE. Part VI, Line 2: Graham Health System partners with various organizations within the area we serve to enhance the health and wellness of our community. For instance, we work closely with the Fulton County Health Department who has identified three main focus areas in their three year plan. One of these areas is Obesity and Graham Health Systems has implemented programs targeted for youth and adult members of our community who meet the definition of Obesity. A second goal identified by the FCHD is to reduce the spread of infectious diseases. We, also, work diligently to minimize the spread of infectious diseases for our patients and members of our community through education of patients, community members and staff and in-house we focus on processes to ensure proper sanitation and making supplies readily available for anyone entering our facilities. We utilize a Physician Needs Analysis & Workforce Plan in order to ensure we offer an adequate mix of services for our service area. Part VI, Line 3: The Charity Care/Financial assistance Program is made available to patients upon registration. Financial Assistance Applications are available to patients upon registration or to anyone requesting the application at anytime for claims exceeding $300. The applications are available on Graham health System's website at http://www.grahamhospital.org/FinancialAssistance. Appointments may be made with a Financial Counselor if assistance is needed. Medicaid services application assistance is available. Part VI, Line 4: Graham Health System serves Fulton County, Illinois including the communities of Canton, Farmington, Fairview, Cuba, Lewistown and the rural areas in and around these communities as a primary service area and additional smaller communities and the rural areas around these communities as secondary areas. Part VI, Line 5: Graham Hospital participates in a region wide Disaster Preparedness Grant that subsidizes region wide disaster response drills with all agencies within the region as well as improving our ability to respond to a community disaster as an organization. We have improved internal communication with the implementation of an automated warning system, have a number of drills involving employees and outside organizations in order to feel confident our response will be timely and efficient for any type of disaster. Part VI, Line 6: Graham Hospital provides a variety of health and wellness education opportunities for the community we serve including topics such as cancer awareness, cardiac event warning signs, stroke awareness, smoking cessation, first aid topics, prepared childbirth topics, nutrition and weight management and help in dealing with bereavement and grief issues. GHA provides various health screenings for the public for asthma, blood pressure, diaper checks, head lice, skin cancer, and women's health issues free of charge to the public. Transportation vouchers are offered to patients so they are able to return home safely from the hospital if they are unable to provide their own transportation. A valet service is offered to all patients and visitors to the hospital as a service in particular to the members of our community who have diminished ambulatory capacity. The governance of Graham Hospital is provided by a Board of Trustees who are appointed by various church and service organizations from our communities to ensure that the needs or our residents are represented in the planning, implementation and provision of health services. Part VI, Line 7: NOT APPLICABLE X X X X X X 0 1 0 0 0 0 0 0 0 CHRISTINE DUVENDACK 152584 0 0 0 3075 0 15870 0 21902 0 193431 0 0 0 JAMES T STRATTON 165666 0 0 0 81806 0 17021 0 24165 0 288658 0 0 0 SARA KIMBLE 132162 0 0 0 0 0 13301 0 9888 0 155351 0 0 0 ROBERT G SENNEFF 290928 0 0 0 125195 0 43680 0 26760 0 486563 0 0 0 JEDEDIAH CANTRELL 111657 0 0 0 39024 0 11731 0 14935 0 177347 0 0 0 JOHN QUINONES 322589 0 0 0 23743 0 0 0 24843 0 371175 0 0 0 JEFFREY HEMP MD 326613 0 0 0 0 0 0 0 24537 0 351150 0 0 0 DWAYNE BERNARD MD 325854 0 0 0 0 0 0 0 24537 0 350391 0 0 0 JULIO ANTONIO RAMOS MD 295931 0 0 0 0 0 0 0 17976 0 313907 0 0 0 DAVID LLOYD 213481 0 0 0 36012 0 0 0 23992 0 273485 0 0 0 GERRI DELOST 212532 0 0 0 20327 0 0 0 12210 0 245069 0 0 0 Part I, Line 4a THE FOLLOWING INDIVIDUALS PARTICIPATED IN A 457(F) PLAN IN 2009 SPONSORED BY GRAHAM HOSPITAL ASSOCIATION: ROBERT SENNEFF - $43,680, JAMES T. STRATTON - $17,021, SARA KIMBLE - $13,301, JEDEDIAH CANTRELL - $11,731, AND CHRIS DUVENDACK - $15,870. THE DOLLAR AMOUNT REPRESENTS THE CURRENT YEAR CONTRIBUTION MADE BY GRAHAM HOSPITAL ASSOCIATION ON BEHALF OF THE INDIVIDUALS TO THE PLAN IN 2009. THIS INFORMATION IS INCLUDED IN DEFERRED COMPENSATION ON THE FORM 990, PART VII AND SCHEDULE J, PART II. THE FOLLOWING INDIVIDUALS PARTICIPATED IN A 457(F) PLAN IN 2009 SPONSORED BY GRAHAM HOSPITAL ASSOCIATION: ROBERT SENNEFF - $111,195, JAMES T. STRATTON - $81,806, AND JEDEDIAH CANTRELL - $39,024. THE DOLLAR AMOUNT REPRESENTS THE CURRENT YEAR DISTRIBUTION MADE TO THE INDIVIDUAL BY THE PLAN IN 2009. THIS INFORMATION IS INCLUDED IN REPORTABLE COMPENSATION ON THE FORM 990, PART VII AND SCHEDULE J, PART II. CITY OF CANTON IL 376000876 138206AA5 2009-06-30 31085000 PHYSICIAN CLINIC & FARMINGTON CLINIC CONSTRUCTION, OB RENOVATION 0 0 31085000 7195284 476622 23889716 2011 1 0 0 1 0 0 0 0 1 0.00000 0.00000 0.00000 1 0 1 1 MORGAN STANLEY & HARRIS NA 25.000000000000 0 0 0 MIDAMERICA NATIONAL BANK SEE BELOW FOR DESCRIPTION OF RELATIONSHIP 828508 INTEREST, DIVIDENDS, AND REALIZED GAINS EARNED ON THE ORGANIZATION'S INVESTMENTS WITH MIDAMERICA NATIONAL BANK. 0 MIDAMERICA NATIONAL BANK SEE BELOW FOR DESCRIPTION OF RELATIONSHIP 82528 BANK FEES PAID BY THE ORGANIZATION TO MIDAMERICA NATIONAL BANK 0 MIDAMERICA NATIONAL BANK SEE BELOW FOR DESCRIPTION OF RELATIONSHIP 23635 REALIZED GAIN ON INVESTMENT ACCOUNTS AT MIDAMERICA NATIONAL BANK 0 Form 990, Part VI, Section B, line 11 THE FORM 990 WILL BE REVIEWED BY THE SENIOR ACCOUNTANT, DIRECTOR OF ACCOUNTING, AND THE VP OF FINANCE/CFO PRIOR TO FILING THE RETURN. Form 990, Part VI, Section B, line 12c THE ORGANIZATION USES A CORPORATE COMPLIANCE OFFICER, CORPORATE COMPLIANCE AUDITOR, CORPORATE COMPLIANCE COMMITTEE OF THE BOARD, AND A CORPORATE COMPLIANCE SUB-COMMITTEE TO MONITOR COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY. ANNUAL AUDIT WORK PLAN REVIEWED AND APPROVED BY THE BOARD AND UPDATED QUARTERLY. Form 990, Part VI, Section B, line 15 THE COMPENSATION OF THE CEO IS REVIEWED ANNUALLY BY THE EXECUTIVE COMPENSATION COMMITTEE. THE ORGANIZATION UTILIZES AN OUTSIDE FIRM, SULLIVAN, COTTER, AND ASSOCIATES, INC. TO PROVIDE OUTSIDE EXECUTIVE COMPENSATION EVERY ONE TO TWO YEARS. THE LAST REVIEW WAS COMPLETED IN MAY 2010. THE COMPENSATION OF THE VP OF FINACE/CFO, VP OF ANCILLARY SERVICES - CORPORATE COMPLIANCE OFFICER, VP OF CLINICAL OPERATIONS/MEDICAL STAFF AFFAIRS, AND VP OF PATIENT SERVICES IS REVIEWED ANNUALLY BY THE EXECUTIVE COMPENSATION COMMITTEE. THE ORGANIZATION UTILIZES AN OUTSIDE FIRM, SULLIVAN, COTTER, AND ASSOCIATES, INC. TO PROVIDE OUTSIDE EXECUTIVE COMPENSATION EVERY ONE TO TWO YEARS. THE LAST REVIEW WAS COMPLETED IN MAY 2010. Form 990, Part VI, Section C, line 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART XI, LINE 2C THE ORGANIZATION'S BOARD OF DIRECTORS ENGAGES THE INDEPENDENT ACCOUNTANTS TO PERFORM THE AUDIT. IN ADDITION, THE BOARD AND AUDIT COMMITTEE, MADE UP OF BOARD AND COMMUNITY MEMBERS, MEET WITH THE AUDITORS TO REVIEW THE AUDIT REPORT, ALONG WITH THE MANAGEMENT LETTER IF APPLICABLE. FORM 990, SCHEDULE K, PART III, LINE 2 A medical office building which 75% of the building was financed by our tax-exempt bond issuance and 25% was financed through equity has lease arrangements for less than 10% of the building square footage that could result in private business use. Given this portion of the property which is leased for these purposes is less than 10% and this percentage falls below the 25% equity funding, we believe no tax exempt bond issue proceeds are considered to be utilized for private business use. FORM 990, SCHEDULE L, PART IV RELATIONSHIP BETWEEN INTERESTED PERSON AND THE ORGANIZATION WARREN WOLF, VICE CHAIRMAN OF GRAHAM HOSPITAL ASSOCIATION, IS A DIRECTOR ON THE BOARD OF MIDAMERICA NATIONAL BANK.