2024-05-14T16:09:00-05:00 2023-06-30 410746749 CLIFTONLARSONALLEN LLP 1188 PADRE DRIVE STE 101 SALINAS CA 93901 990 2022-07-01 237098729 NAVAL POSTGRADUATE SCHOOL FOUNDATION INC NAVA 8316562339 PO BOX 8626 MONTEREY CA 93943 RICH PATTERSON CEO 8316562339 2024-05-10 1 RICH PATTERSON 999009999 1 KIELY HOLCOMB CPA P01430569 8317596300 2024-05-10 3 AAL1 IAL1 2022 2023-04-26 12:10:37Z RICH PATTERSON PO BOX 8626 MONTEREY CA 93943 7995864 0 X WWW.NPSFOUNDATION.ORG X 1970 CA TO SUPPORT, PROMOTE AND ADVANCE THE MISSION OF THE NAVAL POSTGRADUATE SCHOOL. 30 30 10 161 0 0 4538148 3758664 0 0 198012 449791 -787895 -514783 3948265 3693672 92682 132997 0 0 1171708 1207629 0 0 531628 3966093 2251321 5230483 3591947 -1282218 101725 10669568 10003346 1382381 587229 9287187 9416117 X THE FOUNDATION AT THE NAVAL POSTGRADUATE SCHOOL IS A NONPROFIT 501 (C) (3) ORGANIZATION WHOSE MISSION IS TO SUPPORT, PROMOTE AND ADVANCE THE MISSION OF THE NAVAL POSTGRADUATE SCHOOL BY WORKING WITH SCHOOL LEADERSHIP TO IDENTIFY STRATEGIC INSTITUTIONAL PRIORITIES, AND BY RAISING, MANAGING AND DISBURSING PRIVATE GIFTS THAT PROVIDE THE MARGIN OF EXCELLENCE FOR CONTINUING EDUCATIONAL AND INTELLECTUAL DISCOURSE IN AREAS OF STRATEGIC CONSEQUENCE AT THE NATION'S PREEMINENT NATIONAL DEFENSE RESEARCH UNIVERSITY. THIS MISSION IS ACCOMPLISHED THROUGH FOUR DISTINCT PILLARS: RESEARCH FUNDING, INSTITUTIONAL ADVANCEMENT, COMMUNITY OUTREACH AND STUDENT AND FACULTY RECOGNITION. THE FOUNDATION IS COMMITTED TO SERVING THE STUDENTS, FACULTY, STAFF AND COMMUNITY OF THE NAVAL POSTGRADUATE SCHOOL. 0 0 2671293 132997 THE NAVAL POSTGRADUATE SCHOOL (NPS) FOUNDATION SERVES THE ALMOST 2,500 NAVAL POSTGRADUATE SCHOOL STUDENTS (AND THEIR FAMILIES) AT ANY GIVEN TIME, THE NEARLY 1,000 FACULTY AND STAFF MEMBERS AND COMMUNITY MEMBERS. EMPLOYED BY NPS AT ANY GIVEN TIME. THE NPS STUDENT BODY IS MADE UP OF 88% ACTIVE-DUTY SERVICE MEMBERS FROM THE U.S.' SIX ARMED SERVICES AND 225 INTERNATIONAL STUDENTS FROM APPROXIMATELY 50 PARTNER NATIONS. IN FY 2023 THE FOUNDATION OPERATES AND SUPPORTS 14 RECREATION CLUBS FOR THE NPS COMMUNITY. CLUB MEMBERSHIPS ARE FREE TO NPS STUDENTS, ALUMNI AND FACULTY AND THEIR FAMILIES. THE RECREATIONAL CLUBS FOCUS ON CREATING A SENSE OF COMMUNITY FOR FOUNDATION MEMBERS, PARTICULARLY STUDENTS. OVER 900 MEMBERS OF THE NPS COMMUNITY PARTICIPATE IN THE CLUBS FOSTERING RELATIONSHIPS AT NPS AND WITH THE SURROUNDING COMMUNITY. THEIR FAMILIES CAN ALSO PARTICIPATE IN CLUB ACTIVITIES AT NO CHARGE. IN FISCAL YEAR 2023, THE NPS FOUNDATION PROVIDED $104,154 IN SUPPORT OF RECREATIONAL CLUBS. CLUBS COVER A RANGE OF ACTIVITIES AND INTERESTS, INCLUDING: CHESS, CYBER, CYCLING, FLYING, GOLF, INTERNATIONAL (INCLUDING LANGUAGE CIRCLES), MAKERS, RUNNING, SAILING, SKYDIVING, SOCCER, VEHICLES AND WINE. THE NPS FOUNDATION MANAGES THE NPS ALUMNI ASSOCIATION AND HOSTS REGIONAL SOCIAL AND NETWORKING EVENTS FOR ALUMNI ASSOCIATION MEMBERS. THERE ARE CURRENTLY OVER 10,000 TOTAL MEMBERS OF THE NPS FOUNDATION & ALUMNI ASSOCIATION, INCLUDING OVER 1,600 CURRENT STUDENT MEMBERS. IN FISCAL YEAR 2023 THE FOUNDATION SUPPORTED THE ALUMNI ASSOCIATION WITH $66,550.THE QUARTERLY ACADEMIC AND FACULTY AND STAFF AWARDS SPONSORED BY NPS FOUNDATION RECOGNIZE EXCELLENCE IN BOTH STUDENTS AND FACULTY ACROSS MULTIPLE DEPARTMENTS IN FY23, THE FOUNDATION PROVIDED OVER $100,000 IN FACULTY AND STUDENTS AWARD GRANTS. THE NPS FOUNDATION ALSO SUPPORTS THE AWARDS AND GRADUATION RECEPTIONS AT AN AVERAGE OF $8,000 PER QUARTER AND OVER $32,000 ANNUALLY. IN THE 2023 FISCAL YEAR, THE NPS FOUNDATION INVESTED $511,582 IN THE PLANNING AND DEVELOPMENT OF THE NAVAL INNOVATION CENTER AT NPS VISION AND HAS COMMITTED TO WORK ALONGSIDE NPS IN THE ADVOCACY, DEVELOPMENT AND FUNDING OF A NAVAL INNOVATION CENTER AT NPS THROUGH ITS COMPLETION. THE NAVAL INNOVATION CENTER AT NPS WILL BE AN INCUBATOR FOR ADVANCED WARFIGHTING SOLUTIONS UP TO THE CLASSIFIED LEVEL. IT WILL ALSO ENHANCE NPS EDUCATION AND RESEARCH AND SERVE AS A RESOURCE FOR THE DEPARTMENT OF THE NAVY AND THE NAVAL RESEARCH AND DEVELOPMENT ENTERPRISE. PROJECT ATHENA IS A COLLABORATIVE RESEARCH APPLICATION BUILT TO EMPOWER RESEARCHERS, SPONSORS AND LEADERS AT THE NPS AND ACROSS THE NAVAL EDUCATION ENTERPRISE AND THE DEPARTMENT OF DEFENSE TO ACCESS AND QUERY INFORMATION CURRENTLY STORED IN NUMEROUS SEPARATE DATABASES BY USE OF KEYWORDS, TOPICS OF INTEREST, SERVICE PRIORITIES AND OTHER FILTERS. DURING THE 2023 FISCAL YEAR, THE NPS FOUNDATION HAS INVESTED $537,080 AND HUNDREDS OF HOURS ON THE DESIGN, DEVELOPMENT AND HOSTING OF ATHENA. ATHENA 3.1 IS CURRENTLY IN BETA TESTING ON THE NPS FOUNDATION TENANT, USING COMMUNITY INPUT TO CONTINUOUSLY IMPROVE THE APPLICATION.IN FY23, THE NPS FOUNDATION PROVIDED SEED FUNDING SUPPORT TO SEVEN FACULTY RESEARCH PROJECTS AND SEEDLING FUNDING TO ONE THROUGH ITS DEFENSE INNOVATION FUND AND SEED PROGRAM. PROJECTS FOCUS ON IMPROVING NATIONAL SECURITY, INCREASING WARFIGHTING CAPABILITIES, AND ADDRESSING MILITARY INEFFICIENCIES. THE PROGRAM ALLOWS NPS STUDENTS TO PARTNER WITH PROFESSORS TO TURN IDEAS INTO ACTION. IN FISCAL YEAR 2023, THE NPS FOUNDATION PROVIDED $145,423 IN SUPPORT THROUGH THE DEFENSE INNOVATION FUND.IN 2022-23 NPS FOUNDATION SPONSORED THREE RESEARCH FELLOWSHIPS AT NPS, FACILITATING ONGOING RESEARCH IN SECURITY STUDIES, ENRICHING EXISTING CURRICULA, AND INFUSING NEW IDEAS IN THE CLASSROOMS OF NPS. THE NPS FOUNDATION PROVIDED $240,172 IN SUPPORT OF THE PROGRAM AND THE FELLOWS DURING THE 2023 FISCAL YEAR.THE NPS FOUNDATION HELD, IN PARTNERSHIP WITH NPS, THE SECOND ANNUAL RAPID INNOVATION DESIGN CHALLENGE DURING THE 2023 FISCAL YEAR. A TOTAL OF 75 STUDENTS REPRESENTING 20 SCIENCE CLASSES AND ROBOTICS TEAMS FROM MONTEREY COUNTY HIGH SCHOOLS COMPETED IN THE SECOND ANNUAL RAPID INNOVATION DESIGN CHALLENGE IN WHICH HIGH SCHOOL STUDENTS WORKED WITH MENTORS TO OFFER REAL-WORLD LOCAL SOLUTIONS TO A NATIONAL SECURITY IMPERATIVE AND GLOBAL PROBLEM CLIMATE CHANGE. THE RAPID INNOVATION DESIGN CHALLENGE PROGRAM INCLUDES SCAFFOLDED CURRICULA THAT MATCH CRITICAL SKILLS FOR HIGHER EDUCATION AND A MODERN WORKFORCE TO SCHOOL STANDARDS. EACH CHALLENGE INTEGRATES CRITICAL THINKING, ANALYTIC REASONING, PROBLEM SOLVING AND WRITTEN COMMUNICATION SKILLS AS TEAMS EXPLORE APPLICATIONS OF SCIENCE, TECHNOLOGY, ENGINEERING AND MATH TO CREATE MEANINGFUL SOLUTIONS WITH GLOBAL IMPACT. THE CHALLENGE FOCUSED ON HOW WORKFLOW PROCESS AUTOMATION CAN ADDRESS LOCAL COMMUNITY CLIMATE CHANGE CHALLENGES. PARTICIPANTS WERE ENCOURAGED TO CREATE LOW-CODE OR NO-CODE CUSTOM APPLICATIONS FOR THEIR CHALLENGE SOLUTIONS USING SOFTWARE PROVIDED BY INDUSTRY COLLABORATORS. ENVIRONMENTAL CHALLENGES THAT STUDENT TEAMS ADDRESSED INCLUDED SOIL NUTRIENT LEVELS, ENVIRONMENTALLY HARMFUL FOOD PRODUCTS, TRANSPORTATION POLLUTION, SEA LEVEL RISE, INCREASED FREQUENCY OF EXTREME WEATHER EVENTS, DROUGHT, HABITAT AND SPECIES LOSS AND OCEAN ACIDIFICATION. APPLICATIONS THAT THE STUDENT TEAMS DESIGNED SHOWED A RANGE OF TECHNOLOGICAL CAPABILITIES INCLUDING DATA ANALYTICS AND REPORTING, SOCIAL NETWORKING, NOTIFICATION, CLIMATE MONITORING AND OTHER CREATIVE METHODS TO ADDRESS THE CHALLENGES ASSOCIATED WITH CLIMATE CHANGE. THE NPS FOUNDATION SUPPORTED THIS INITIATIVE WITH $28,578. 2671293 1 1 0 0 0 0 0 0 0 0 1 1 0 0 0 1 1 0 0 0 0 0 0 0 1 0 0 1 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 24 0 1 10 1 0 0 0 0 0 0 0 0 0 0 0 0 X 30 30 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 0 1 1 0 CA X RICH PATTERSON 8316562427 NAVAL POSTGRADUATE SCHOOL MONTEREY CA 93940 MICHAEL MORGAN TRUSTEE 2.00 X 0 0 0 GARY COUGHLAN TRUSTEE 2.00 X X 0 0 0 RICHARD ELSTER TRUSTEE 2.00 X 0 0 0 KAREN HARGROVE TRUSTEE 2.00 X 0 0 0 JULIE ROTH TREASURER 2.00 X 0 0 0 CRAIG JOHNSON SECRETARY 2.00 X X 0 0 0 SUSAN MONTGOMERY TRUSTEE 2.00 X 0 0 0 DANIEL OLIVER TRUSTEE 2.00 X 0 0 0 HANK PLAIN CHAIRMAN 2.00 X X 0 0 0 DAVID RICE TRUSTEE 2.00 X 0 0 0 ANDREW ROSENBERG TRUSTEE 2.00 X 0 0 0 MICHAEL SHUTE TRUSTEE 2.00 X 0 0 0 WILLIAM TYLER III TRUSTEE 2.00 X 0 0 0 THOMAS PRESCOTT TRUSTEE 2.00 X 0 0 0 LEONARD RIGGS JR TRUSTEE 2.00 X 0 0 0 ROBERT SKINNER TRUSTEE 2.00 X 0 0 0 EVAN ALLEN TRUSTEE 2.00 X 0 0 0 NORMAN WESLEY TRUSTEE 2.00 X 0 0 0 CHRIS FUSSELL TRUSTEE 2.00 X 0 0 0 KENNETH BEALL TRUSTEE 2.00 X 0 0 0 LISA LAPIN TRUSTEE 2.00 X 0 0 0 STEVEN LERMAN TRUSTEE 2.00 X 0 0 0 SCOTT NEGRI TRUSTEE 2.00 X 0 0 0 WILLIAM O'DONNELL JR TRUSTEE 2.00 X 0 0 0 JAMES CAREY TRUSTEE 2.00 X 0 0 0 ROBERT JAUNICH TRUSTEE 2.00 X 0 0 0 MARK KAUFMAN TRUSTEE 2.00 X 0 0 0 ANDREW PAUL TRUSTEE 2.00 X 0 0 0 DAN LYNCH TRUSTEE 2.00 X 0 0 0 JOHN MICEK TRUSTEE 2.00 X 0 0 0 RICHARD PATTERSON CEO 40.00 X 222328 0 122766 TODD LYONS VP, RESEARCH 40.00 X 186372 0 12283 408700 0 135049 2 0 1 0 0 3150 2816754 938760 1280750 3758664 207132 207132 2445568 2202909 242659 242659 242659 1366919 2816754 1928553 -561634 -561634 207167 170730 36437 36437 OTHER INCOME 611710 10414 10414 10414 3693672 10414 0 -75406 32176 32176 100821 100821 382245 133786 19112 229347 702528 499304 58237 144987 29165 19709 2997 6459 29283 20564 3286 5433 64408 40723 5000 18685 65613 65613 31398 31398 58492 57923 569 1984 1208 776 31614 13785 17829 52227 52227 5285 5285 80693 38722 41971 6953 6953 27151 27151 SCHOOL FUNDING EXPENSE 1562923 1562923 CLUB EXPENSE 104154 104154 ALUMNI ASSOCIATION 66551 66551 MEALS 35409 979 792 33638 120874 30472 58468 31934 3591947 2671293 389026 531628 1257418 709435 26129 26144 1861936 1333922 945100 1168888 64317 75800 18292 146383 97212 51717 49171 6462951 6621694 10669568 10003346 1382381 587229 1382381 587229 X 7288960 7226918 1998227 2189199 9287187 9416117 10669568 10003346 101725 27205 0 X X 0 1 X 1 0 X 1185152 4041324 3960466 4538148 3758664 17483754 23820 47640 23820 48155 52295 195730 1208972 4088964 3984286 4586303 3810959 17679484 5867442 11812042 198809 213904 129841 198012 207132 947698 39063 13741 52804 18679986 161128 0.63230 0.72770 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 2152617 221504 40231 2333890 2303797 -100998 50182 2152617 1973241 365995 35439 2303797 1946097 220124 192980 1973241 2161581 1236 -169529 47191 1946097 0.21000 0.41000 0.38000 0 0 55326 18444 36882 46822 39835 6987 44235 38933 5302 49171 INVESTMENTS 6621694 F 6621694 X 3773172 27205 83693 110898 3662274 31398 31398 3693672 3644242 83693 83693 3560549 31398 31398 3591947 PART V, LINE 4: DONOR RESTRICTED ENDOWMENT FUNDS ARE TO BE USED FOR DONOR SPECIFIED USES AND BOARD DESIGNATED ENDOWMENT FUNDS ARE TO BE USED FOR ANY USES APPROVED BY THE BOARD. PART X, LINE 2: AS A TAX-EXEMPT NONPROFIT ORGANIZATION, THE FOUNDATION IS EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE (IRC) AND FROM STATE FRANCHISE TAX UNDER CALIFORNIA REVENUE AND TAXATION CODE SECTION 23701(D) BUT IS SUBJECT TO TAXES ON UNRELATED BUSINESS INCOME WHEN EARNED. MANAGEMENT HAS CONSIDERED ITS TAX POSITIONS AND BELIEVES THAT ALL OF THE POSITIONS TAKEN IN ITS FEDERAL AND STATE EXEMPT ORGANIZATION TAX RETURNS ARE MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION. THE FOUNDATION'S RETURNS ARE SUBJECT TO EXAMINATION BY FEDERAL AND STATE TAXING AUTHORITIES, GENERALLY FOR THREE AND FOUR YEARS, RESPECTIVELY, AFTER THEY ARE FILED. GOLF TOURNAMENT 3840998 2510754 1330244 134670 1452273 WINTER BALL 342675 306000 36675 183372 158238 4183673 2816754 1366919 318042 1610511 1928553 -561634 1 1 THE MORSE FOUNDATION 3000 CLUB ROAD PEBBLE BEACH CA 93953 471592912 501(C)(3) 10000 0 N/A TO SUPPORT DONEE'S PROGRAMS 1 0 SCHOLARSHIP AWARDS 34 100821 N/A PART I, LINE 2: BOARD APPROVES GRANT AMOUNTS EACH YEAR. GRANTS ARE ISSUED TO ORGANIZATIONS BASED ON THE FOUNDATION'S PROGRAM SERVICES AND TO INDIVIDUALS BASED ON DONOR REQUIREMENTS. X X 0 0 0 0 0 0 0 0 0 RICHARD PATTERSON CEO 222328 0 0 0 0 0 14065 0 108701 0 345094 0 0 0 TODD LYONS VP, RESEARCH 186372 0 0 0 0 0 9497 0 2786 0 198655 0 0 0 X 1 29500 FMV X TRIPS/VACATIONS 11 800300 FMV X DINNERS 4 252500 FMV X WINE 4 165000 FMV X FIRESIDE CHAT 1 28000 FMV X ELECTRIC GUITAR 1 5000 FMV X WOOD BOWLS/PENS 1 450 FMV 0 0 0 FORM 990, PART VI, SECTION A, LINE 1A THE BOARD MAY, BY A MAJORITY OF THE TRUSTEES THEN IN OFFICE, PROVIDED THAT A QUORUM IS PRESENT, DESIGNATE ONE OR MORE COMMITTEES, EACH CONSISTING OF TWO OR MORE TRUSTEES, TO SERVE AT THE PLEASURE OF THE BOARD. MEMBERSHIP OF TRUSTEES IN COMMITTEES IS DETERMINED BY THE BOARD CHAIRMAN. BOARD APPROVAL WILL BE REQUIRED TO INVITE ANY NON-BOARD MEMBER TO SERVE ON ANY BOARD COMMITTEE TO WHICH THE BOARD DELEGATES AUTHORITY TO MAKE AND EXECUTE DECISIONS WITHOUT PRIOR BOARD APPROVAL. PERSONS WHO ARE NOT TRUSTEES MAY SERVE ON COMMITTEES NOT HAVING THE PREVIOUSLY REFERENCED DELEGATED AUTHORITY AT THE DISCRETION OF THE COMMITTEE CHAIR. COMMITTEES SHALL HAVE ALL THE AUTHORITY OF THE BOARD WITH RESPECT TO MATTERS WITHIN THEIR AREA OF ASSIGNED RESPONSIBILITY, EXCEPT THAT NO COMMITTEE, REGARDLESS OF BOARD RESOLUTION, MAY: (A) TAKE ANY FINAL ACTION ON ANY MATTER WHICH, UNDER THE CALIFORNIA NONPROFIT CORPORATION LAW, ALSO REQUIRES APPROVAL OF THE TRUSTEES. (B) FILL VACANCIES ON THE BOARD OF TRUSTEES OR ON ANY COMMITTEE WHICH HAS BEEN DELEGATED ANY AUTHORITY OF THE BOARD. (C) AMEND OR REPEAL THE BYLAWS OR ADOPT NEW BYLAWS. (D) AMEND OR REPEAL ANY RESOLUTION OF THE BOARD OF TRUSTEES WHICH BY ITS EXPRESS TERMS IS NOT AMENDABLE OR REPEALABLE. (E) APPOINT ANY OTHER COMMITTEES OF THE BOARD OF TRUSTEES OR THE MEMBERS OF THOSE COMMITTEES. (F) APPROVE ANY TRANSACTION (I) TO WHICH THE FOUNDATION IS A PARTY AND IN WHICH ONE OR MORE TRUSTEES HAVE A MATERIAL FINANCIAL INTEREST; OR (II) BETWEEN THIS FOUNDATION AND ONE OR MORE OF ITS TRUSTEES OR BETWEEN THE FOUNDATION AND ANY PERSON IN WHICH ONE OR MORE OF ITS TRUSTEES HAVE A MATERIAL FINANCIAL INTEREST. FORM 990, PART VI, SECTION B, LINE 11B THE AUDIT COMMITTEE SHALL HAVE THE RESPONSIBILITY FOR REVIEWING THE FOUNDATION'S FORM 990 (INCLUDING ALL PERTINENT SCHEDULES) BEFORE IT IS FILED WITH THE INTERNAL REVENUE SERVICE. -A DRAFT OF THE FORM 990 SHALL BE READY FOR REVIEW BY THE AUDIT COMMITTEE NO LATER THAN ONE MONTH PRIOR TO THE FILING DEADLINE. -AFTER THE DRAFT OF THE FORM 990 HAS BEEN OBTAINED BY THE AUDIT COMMITTEE, THEY HAVE NO MORE THAN TWO WEEKS TO COMPLETE THEIR REVIEW. -IN CONDUCTING THEIR REVIEW OF THE DRAFT OF THE FORM 990, IT IS PREFERRED THAT THE AUDIT COMMITTEE SHALL CONDUCT A TOP-LEVEL OR BIG PICTURE TYPE REVIEW; HOWEVER, IF THE AUDIT COMMITTEE DESIRES OR DEEMS IT NECESSARY TO CONDUCT A MORE DETAILED REVIEW OF THE FORM 990, THEN THEY SHOULD CONTACT THE PREPARER OF THE FORM 990 TO REQUEST COPIES OF THE RELEVANT TAX RETURN WORK PAPERS THEY WOULD LIKE TO SEE. -ONCE THE AUDIT COMMITTEE HAS COMPLETED THEIR INITIAL REVIEW OF THE FORM 990, EITHER A MEETING OR A CONFERENCE CALL SHALL BE SCHEDULED WITH THE PREPARER OF THE FORM 990 (REGARDLESS OF WHETHER THE FORM 990 IS EXTERNALLY OR INTERNALLY PREPARED) TO DISCUSS ANY QUESTIONS, COMMENTS, AND SUGGESTED REVISIONS IDENTIFIED BY THE AUDIT COMMITTEE. -THE PREPARER OF THE FORM 990 SHALL MAKE ANY REVISIONS TO THE FORM 990 AS SOON AS FEASIBLY POSSIBLE TO ENSURE THAT THE FORM 990 IS FILED WITH THE INTERNAL REVENUE SERVICE ON A TIMELY BASIS. -ALL OF THE QUESTIONS, COMMENTS, AND SUGGESTED REVISIONS SET FORTH BY THE AUDIT COMMITTEE SHOULD BE DOCUMENTED, ALONG WITH ANY RESPONSES FROM THE PREPARER OF THE FORM 990, IF APPLICABLE. -AFTER THE FORM 990 HAS BEEN REVIEWED BY THE AUDIT COMMITTEE AND FILED WITH THE INTERNAL REVENUE SERVICE, THE AUDIT COMMITTEE SHALL MAKE A PRESENTATION AT THE NEXT FULL BOARD OF TRUSTEES MEETING TO UPDATE THE FULL BOARD REGARDING THE REVIEW OF THE FORM 990; AT THIS MEETING WITH THE FULL BOARD OF TRUSTEES, IT IS NOT REQUIRED FOR THE AUDIT COMMITTEE TO REVIEW ALL THEIR QUESTIONS, COMMENTS, AND SUGGESTED REVISIONS; A SUMMARY OF THEIR IMPORTANT POINTS WILL BE SUFFICIENT. FORM 990, PART VI, SECTION B, LINE 12C DUTY TO DISCLOSE -IN CONNECTION WITH ANY ACTUAL OR POSSIBLE CONFLICT OF INTEREST, INTERESTED PERSONS MUST DISCLOSE THE EXISTENCE OF THE FINANCIAL INTERESTS AND BE GIVEN THE OPPORTUNITY TO DISCLOSE ALL MATERIAL FACTS TO THE EXECUTIVE COMMITTEE OF THE FOUNDATION WHEN THE EXECUTIVE COMMITTEE CONSIDERS A PROPOSED TRANSACTION OR ARRANGEMENT. ADDRESSING THE CONFLICT OF INTEREST -THE PRESIDING OFFICER OF THE EXECUTIVE COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT. -AFTER EXERCISING DUE DILIGENCE, THE EXECUTIVE COMMITTEE SHALL DETERMINE WHETHER THE FOUNDATION CAN OBTAIN WITH REASONABLE EFFORT A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT FROM A PERSON OR ENTITY THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. -IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY POSSIBLE UNDER CIRCUMSTANCES NOT PRODUCING A CONFLICT OF INTEREST, THEN THE EXECUTIVE COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED MEMBERS WHETHER THE TRANSACTION OR ARRANGEMENT IS IN THE BEST INTEREST OF THE FOUNDATION, AND WHETHER IT IS FAIR AND REASONABLE. ONCE THIS DETERMINATION IS MADE, THE EXECUTIVE COMMITTEE SHALL DECIDE WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT. VIOLATIONS OF CONFLICT OF INTEREST POLICY IF THE EXECUTIVE COMMITTEE HAS REASON TO BELIEVE THAT A MEMBER HAS FAILED TO DISCLOSE, IT SHALL INFORM THE MEMBER OF THE BASIS AND AFFORD THE MEMBER AN OPPORTUNITY TO EXPLAIN THE ALLEGED FAILURE TO DISCLOSE. IF, AFTER HEARING THE MEMBER'S RESPONSE AND AFTER MAKING FURTHER INQUIRY, OR THE EXECUTIVE COMMITTEE DETERMINES THE MEMBER HAS FAILED TO DISCLOSE AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, THE EXECUTIVE COMMITTEE SHALL TAKE APPROPRIATE AND CORRECTIVE ACTION. FORM 990, PART VI, SECTION B, LINE 15 DETERMINING REASONABLE COMPENSATION -THE FOUNDATION SHALL SATISFY THE LEGAL PRESUMPTION OF REASONABLENESS SET FORTH IN THE INTERNAL REVENUE CODE SECTION 4958 REGARDING INTERMEDIATE SANCTIONS, BY FOLLOWING THESE STEPS WHEN DETERMINING THE ANNUAL COMPENSATION FOR ANY FOUNDATION INSIDER: -COMPENSATION ARRANGEMENT SHALL BE APPROVED IN ADVANCE BY INDEPENDENT MEMBERS OF THE EXECUTIVE COMMITTEE. THIS GROUP SHALL BE COMPOSED OF PERSONS WHO DO NOT HAVE A CONFLICT OF INTEREST WITH RESPECT TO THE COMPENSATION ARRANGEMENT. THE MEMBERS OF THE GROUP CAN CHANGE DEPENDING UPON THE PERSON WHOSE COMPENSATION IS UNDER REVIEW. -BEFORE MAKING THE REASONABLE COMPENSATION DETERMINATION, THE EXECUTIVE COMMITTEE GROUP SHALL RELY UPON COMPARABILITY DATA (COMPARABILITY DATA INCLUDES COMPENSATION PAID BY COMPARABLE AND SIMILARLY SITUATED ENTITIES) IN DECIDING WHETHER TO APPROVE THE COMPENSATION. -THE EXECUTIVE COMMITTEE MEMBERS SHALL CONTEMPORANEOUSLY DOCUMENT IN WRITING ITS BASIS FOR MAKING ITS REASONABLE COMPENSATION DETERMINATION. THE FOUNDATION UTILIZES A WORKSHEET THAT IS COMPLETED BY THE GROUP WHEN IT CONVENES, AND THE WORKSHEET SHALL SERVE AS THE REQUIRED WRITTEN DOCUMENTATION FOR THE FOLLOWING: -TERMS OF THE APPROVED COMPENSATION AND THE DATE APPROVED. -MEMBERS OF THE EXECUTIVE COMMITTEE GROUP PRESENT DURING DISCUSSIONS ON THE COMPENSATION AMOUNT, THOSE WHO VOTED AND HOW THEY VOTED. -DESCRIPTION OF COMPARABILITY DATA OBTAINED AND RELIED UPON; HOW THE DATA WAS OBTAINED. -ANY ACTIONS BY AN EXECUTIVE COMMITTEE MEMBER HAVING A CONFLICT OF INTEREST (E.G., DISCLOSURE OF CONFLICT OF INTEREST; RECUSAL FROM THE DISCUSSION) -THE REASONABLE COMPENSATION DISCUSSION SHALL BE UNDERTAKEN BY THE EXECUTIVE COMMITTEE MEMBERS ANNUALLY; THE INDIVIDUAL WHOSE COMPENSATION IS BEING DISCUSSED SHALL NOT BE PRESENT DURING SUCH DISCUSSIONS. THE ACTIONS TAKEN BY THE EXECUTIVE COMMITTEE SHALL BE PRESENTED FOR FULL BOARD OF TRUSTEES APPROVAL AT ITS ANNUAL MEETING IN NOVEMBER. -THE BOARD DETERMINES AND APPROVES THE COMPENSATION OF THE EXECUTIVE DIRECTOR. THE INDIVIDUAL WHOSE COMPENSATION IS BEING DETERMINED IS NOT INCLUDED IN THE APPROVAL PROCESS. FORM 990, PART VI, SECTION C, LINE 19 THE COPIES OF DOCUMENTS ARE PROVIDED UPON REQUEST. FORM 990, PART XII, LINE 2C: THE PROCESS FOR OVERSIGHT AND SELECTION OF AN INDEPENDENT ACCOUNTANT HAS NOT CHANGED FROM THE PRIOR YEAR.