2022-05-16T11:40:14-05:00 2021-06-30 231144520 TAIT WELLER & BAKER LLP TWO LIBERTY PL 50 S 16TH ST STE 2900 PHILADELPHIA PA 191022529 990 2020-07-01 231352256 PENNSYLVANIA ACADEMY OF THE FINE ARTS PENN 2159727600 128 NORTH BROAD STREET PHILADELPHIA PA 19102 MARYANNE MURPHY CFO 2159727600 2022-05-16 1 MARYANNE MURPHY 999009999 HARRISON PEREIRA P00746867 2159798800 2022-05-16 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z MARYANNE MURPHY 128 NORTH BROAD STREET PHILADELPHIA PA 19102 28801716 0 X WWW.PAFA.ORG X 1805 PA AS THE FIRST ART MUSEUM AND SCHOOL IN THE US, PAFA CELEBRATES THE TRANSFORMATIVE POWER OF ART AND ART-MAKING. 43 43 326 43 -17115 0 7148845 7543533 12909455 8416916 1923747 4312607 336680 197674 22318727 20470730 5406036 4024753 0 0 9363076 8323407 0 0 1073914 8949709 8162053 23718821 20510213 -1400094 -39483 121329646 133610587 31458035 29707672 89871611 103902915 THE ACADEMY OPERATES A POST-SECONDARY EDUCATIONAL PROGRAM IN FINE ARTS AS WELL AS A GALLERY COLLECTION OF AMERICAN ART. IN ADDITION, THE ACADEMY SPONSORS FINE ARTS CLASSES FOR ALL AGES AND FREE ARTS PROGRAMS. 0 0 13943740 4024753 7444027 PAFA'S POST-SECONDARY FINE ARTS PROGRAM OFFERS PROGRAMS IN PAINTING, PRINT-MAKING, SCULPTING AND DRAWING. THE SCHOOL GRANTS A FOUR YEAR CERTIFICATE, A BACHELOR OF FINE ARTS DEGREE, AND A MASTER OF FINE ARTS DEGREE. 1664970 394505 PAFA OPERATES A GALLERY THAT DISPLAYS GREAT WORKS OF AMERICAN ART. IT IS THE OLDEST SUCH GALLERY IN THE U.S. AND ITS PRINCIPAL BUILDING IS A HISTORICAL STRUCTURE. THE SCHOOL ALSO HOSTS SEVERAL SPECIAL EXHIBITIONS EACH YEAR. 925860 579126 PUBLIC EDUCATION TEAM SPONSORS FINE ART CLASSES FOR ALL AGES BOTH ON AND OFF-SITE. 16534570 1 1 0 1 0 0 0 1 0 1 1 1 0 0 1 1 1 0 1 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 153 0 1 326 1 1 1 0 0 0 0 1 1 0 0 0 0 0 0 X 43 43 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 PA X MARYANNE MURPHY 2159722097 128 N BROAD STREET PHILADELPHIA PA 19102 KEVIN F DONOHOE CHAIRMAN 5.00 X X 0 0 0 JOSEPH D CULLEY TREASURER 5.00 X X 0 0 0 ANNE E MCCOLLUM VICE CHAIR 5.00 X X 0 0 0 THOMAS N PAPPAS VICE CHAIR 5.00 X X 0 0 0 SUSAN M HENDRICKSON SECRETARY 5.00 X X 0 0 0 REGINALD M BROWNE VICE CHAIR 5.00 X X 0 0 0 WILLIAM P HANKOWSKY ASSISTANT TREASURER 5.00 X X 0 0 0 CHARLES E CHASE TRUSTEE 5.00 X 0 0 0 JONATHAN L COHEN TRUSTEE 5.00 X 0 0 0 ROBERT I FRIEDMAN ESQ TRUSTEE 5.00 X 0 0 0 DONALD R CALDWELL TRUSTEE 5.00 X 0 0 0 RO KING TRUSTEE 5.00 X 0 0 0 MARGUERITE LENFEST TRUSTEE 5.00 X 0 0 0 WINSTON I LOWE TRUSTEE 5.00 X 0 0 0 JAMES E O'NEILL ESQ TRUSTEE 5.00 X 0 0 0 THEODORE O ROGERS JR ESQ TRUSTEE 5.00 X 0 0 0 RICHARD W SNOWDEN TRUSTEE 5.00 X 0 0 0 EMILY CAVANAUGH TRUSTEE 5.00 X 0 0 0 PIA HALLORAN TRUSTEE 5.00 X 0 0 0 J BRIEN MURPHY MD TRUSTEE 5.00 X 0 0 0 ARLEN SHENKMAN TRUSTEE 5.00 X 0 0 0 KENNETH R WOODCOCK TRUSTEE 5.00 X 0 0 0 MARK A DOUGLAS TRUSTEE 5.00 X 0 0 0 CHARLES H HARPER TRUSTEE 5.00 X 0 0 0 ROBERT E KOHLER PH D TRUSTEE 5.00 X 0 0 0 JANNIE K LAU TRUSTEE 5.00 X 0 0 0 ERIC W NOLL TRUSTEE 5.00 X 0 0 0 JUNE MARSHALL SMITH TRUSTEE 5.00 X 0 0 0 GERARD P CUDDY TRUSTEE 5.00 X 0 0 0 MARIANNE DEAN TRUSTEE 5.00 X 0 0 0 JILL HOLLER DUROVSIK TRUSTEE 5.00 X 0 0 0 JONATHAN HIRSCH TRUSTEE 5.00 X 0 0 0 MARTHA KENNEDY TRUSTEE 5.00 X 0 0 0 ANDREW KRESS TRUSTEE 5.00 X 0 0 0 DAVID S OLIVER TRUSTEE 5.00 X 0 0 0 JOHN TOATES TRUSTEE 5.00 X 0 0 0 SUSAN KLINE KLEHR TRUSTEE 5.00 X 0 0 0 JOEL M KOPPELMAN TRUSTEE 5.00 X 0 0 0 VALENTINE JAMES LINK TRUSTEE 5.00 X 0 0 0 KENNETH MITCHELL TRUSTEE 5.00 X 0 0 0 JAMES NIXON TRUSTEE 5.00 X 0 0 0 SANDRA NORCROSS TRUSTEE 5.00 X 0 0 0 GREGORY L SEGALL TRUSTEE 5.00 X 0 0 0 DAVID R BRIGHAM PRESIDENT - UNTIL NOV 2020 40.00 X 390332 0 45880 MARYANNE MURPHY CHIEF FINANCIAL OFFICER 40.00 X 166702 0 23164 CLINT JUKKALA DEAN OF SCHOOL OF FINE ART 40.00 X 174135 0 24727 BROOKE D ANDERSON DIRECTOR OF MUSEUM - UNTIL MAY 2021 40.00 X 196539 0 27908 LISA KUHNLE-BIAGAS CHIEF MARKETING OFFICER 40.00 X 156173 0 22177 EDWARD POLETTI CHIEF DEVELOPMENT OFFICER 40.00 X 125031 0 17754 JANE ALLSOPP VP MAJOR GIFTS 40.00 X 107692 0 14677 1316604 0 176287 12 0 1 0 ALLIED UNIVERSAL PO BOX 828854 PHILADELPHIA PA 191828854 SECURITY SERVICES 496130 WEST CHESTER MECHANICAL 20 MCDONALD BLVD SUITE 3 ASTON PA 19014 HVAC 262882 C ERICKSON AND SONS INC 2200 ARCH STREET SUITE 200 PHILADELPHIA PA 19103 CONSTRUCTION SERVICES 200060 EBW CONSULTING LLC 2114 DELANCEY PLACE PHILADELPHIA PA 19103 CONSULTING 148750 CLEAN TECH SERVICES INC 114 CHESTNUT STREET 5TH FLOOR PHILADELPHIA PA 19106 CUSTODIAL SERVICES 102174 6 246413 3166633 4130487 594340 7543533 TUITION AND FEES 900099 7443285 7443285 CONTINUING EDUCATION 900099 579126 579126 WOMENS BOARD REVENUE 900099 277370 277370 RENTALS FOR EXEMPT ACT. 900099 83113 83113 MUSEUM ADMISS/COLLECT 900099 34022 51137 -17115 8416916 1478289 1478289 10977483 8143165 2834318 2834318 2834318 95600 246413 103308 -7708 -7708 289152 84513 204639 204639 MISCELLANEOUS 900099 743 743 743 20470730 8639413 -17115 4304899 4024753 4024753 412645 412645 6473708 4929567 887975 656166 170971 127553 26481 16937 790892 584667 128593 77632 475191 335465 95182 44544 47397 15767 31630 87060 87060 268751 268751 800868 104724 682764 13380 206671 40868 165803 469302 376724 28453 64125 49634 49134 500 1326899 1326899 91929 91006 895 28 6917 6625 272 20 692905 661860 31045 2108725 2108725 378824 378824 RENTAL EXPENSES - STUDE 383813 383813 MEMBERSHIP DUES AND SUB 352640 158123 186022 8495 MISCELLANEOUS 302870 277559 23201 2110 BAD DEBT 250000 70000 180000 336848 262297 64574 9977 20510213 16534570 2901729 1073914 0 861806 1307141 1628767 3693504 2203104 229691 206869 66425 189050 117287 280340 449124 82429444 31688302 52461320 50741142 39523250 43716110 23578925 32068661 0 1617717 121329646 133610587 1446231 1565452 2847882 2463902 24692460 24713020 1700000 0 771462 965298 31458035 29707672 X 51312898 56956595 38558713 46946320 89871611 103902915 121329646 133610587 X -39483 10705080 3365707 X X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 0 PART II-B, LINE 1: IN FYE 2021, PAFA DID NOT PAY ANY LOBBYING COSTS BUT STAFF MEMBERS MAY HAVE PARTICIPATED IN EFFORTS TO INFLUENCE GENERAL LEGISLATION AT THE STATE OR FEDERAL LEVEL, NOT DEEMED LOBBYING BUT RATHER INCIDENTAL EFFORTS IN SUPPORTING PAFA IN ITS OVERALL SUCCESS. X X X X 0 37096363 378400 10326391 1666334 46134820 37873755 297151 181665 1256209 37096362 29763671 8221923 1142925 1254764 37873755 26098921 3159086 1262463 756799 29763671 24221161 591113 2047888 761241 26098921 0.09130 0.90870 0 0 2500000 2500000 74465560 26794625 47670935 5463884 4893677 570207 50741142 BENEFICIAL INTERESTS IN PERPETUAL TRUSTS 13496713 F POOLED INVESTMENT FUND/HEDGE FUND 18571948 F 32068661 OPERATING LEASE LIABILITY 965298 965298 X 26374330 10705080 103308 10808388 15565942 268751 4636037 4904788 20470730 15708733 103308 103308 15605425 268751 4636037 4904788 20510213 PART X, LINE 2: PAFA HAS REVIEWED ITS TAX POSITIONS AND HAS CONCLUDED THAT NO LIABILITY FOR UNRECOGNIZED TAX BENEFITS SHOULD BE RECORDED RELATED TO UNCERTAIN TAX POSITIONS TAKEN ON FEDERAL AND STATE TAX RETURNS FOR THE OPEN TAX YEARS (2017-2019) OR IS EXPECTED TO BE TAKEN IN THE CURRENT 2020 TAX YEAR. PART XI, LINE 2D - OTHER ADJUSTMENTS: FUNDRAISING EXPENSES 103,308. PART XI, LINE 4B - OTHER ADJUSTMENTS: FINANCIAL AID 4,024,753. STUDENT HOUSING EXPENSE NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 383,813. TRAVEL SCHOLARSHIP EXPENESE NETTED WITH TUITION AND FEES ON FINANCIAL STATEM 74,500. STUDENT EMERGENCY AID NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 65,415. OTHER EXPENSES NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 87,556. PART XII, LINE 2D - OTHER ADJUSTMENTS: FUNDRAISING EXPENSES 103,308. PART XII, LINE 4B - OTHER ADJUSTMENTS: FINANCIAL AID 4,024,753. STUDENT HOUSING EXPENSE NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 383,813. TRAVEL SCHOLARSHIP EXPENESE NETTED WITH TUITION AND FEES ON FINANCIAL STATEM 74,500. STUDENT EMERGENCY AID NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 65,415. OTHER EXPENSES NETTED WITH TUITION AND FEES ON FINANCIAL STATEMENT 87,556. FORM 990, SCHEDULE D, PART III, LINE 1A PART III - LINE 1A - WORKS OF ART - FOOTNOTE FROM FINANCIAL STATEMENT PAFA MAINTAINS A COLLECTION OF RARE AMERICAN ART THAT IS HELD FOR PUBLIC EXHIBITION. THE COLLECTION IS KEPT UNDER CURATORIAL CARE AND IS SUBJECT TO PAFA'S POLICY THAT REQUIRES THE PROCEEDS FROM THE SALES OF ACCESSIONED COLLECTION ITEMS TO BE USED ONLY TO ACQUIRE OTHER ITEMS FOR COLLECTION. PAFA DOES NOT RECOGNIZE THE CONTRIBUTIONS OF DONATED COLLECTION ITEMS, AS ITS COLLECTIONS ARE NOT CAPITALIZED. DURING THE YEAR ENDED JUNE 30, 2021 AND 2020, PAFA HAD DONATED ACCESSIONS WITH APPROXIMATE APPRAISED VALUES TOTALING $283,700 AND $455,180, RESPECTIVELY. COLLECTION ITEMS PURCHASED BUT NOT CAPITALIZED TOTALED $1,075,982 AND $1,520,803 DURING THE YEARS ENDED JUNE 30, 2021 AND 2020, RESPECTIVELY. IN ADDITION, PAFA RECEIVED $2,170 FOR THE SALE OF ART WORKS DURING THE YEAR ENDED JUNE 30, 2020. THERE WAS NO SALE OF ART WORKS DURING THE YEAR ENDED JUNE 30, 2021. 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 1 0 1 SCHEDULE E, PART I, LINE 3 PAFA INCLUDES STATEMENTS IN ITS ADVERTISING THAT THEIR POLICY IS TO NOT DISCRIMINATE AGAINST ANY MINORITY DUE TO RACE,CREED, OR COLOR. SCHEDULE E, PART I, LINE 6 PAFA RECEIVES FROM TIME TO TIME FINANCIAL ASSISTANCE FROM GOVERNMENT PROGRAMS. WINE AUCTION 342013 246413 95600 7968 24575 50552 20213 342013 246413 95600 7968 24575 50552 20213 103308 -7708 1 SCHOLARSHIPS 182 4024753 PART I, LINE 2: THE AMOUNT OF FUNDS DISTRIBUTED IS COMPARED WITH INDIVIDUAL STUDENT ACCOUNTS TO INSURE A BALANCE OF FUNDS. STUDENT FINANCIAL NEED IS EVALUATED TO INSURE STUDENTS DO NOT RECEIVE AN OVER AWARD ACCORDING TO THE GUIDELINES OF THE FEDERAL GOVERNMENT. STUDENTS RECEIVING GRANT FUNDS ARE MONITORED FOR ACADEMIC PROGRESS CONCERNING GRADE POINT AVERAGE AND COMPLETED NUMBER OF COURSES ONCE A YEAR. X 1 1 X X X X X 0 0 0 0 0 0 0 0 0 DAVID R BRIGHAM PRESIDENT - UNTIL NOV 2020 334615 0 55717 0 0 0 6066 0 39814 0 436212 0 0 0 BROOKE D ANDERSON DIRECTOR OF MUSEUM - UNTIL MAY 2021 196539 0 0 0 0 0 7861 0 20047 0 224447 0 0 0 CLINT JUKKALA DEAN OF SCHOOL OF FINE ART 174135 0 0 0 0 0 6965 0 17762 0 198862 0 0 0 MARYANNE MURPHY CHIEF FINANCIAL OFFICER 166702 0 0 0 0 0 6160 0 17004 0 189866 0 0 0 LISA KUHNLE-BIAGAS CHIEF MARKETING OFFICER 156173 0 0 0 0 0 6247 0 15930 0 178350 0 0 0 PART I, LINE 1A SOCIAL CLUB DUES ARE PAID FOR THE PRESIDENT. A PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT 232237287 NONEAVAIL 2020-06-17 25000000 REFINANCE DEBT 0 0 0 A 25000000 308397 2020 0 0 1 1 A 0 0 0 0 0 0 0 A 0 0 0 0 1 0 0 0 0 A 1 X 32 540010 AVERAGE HIGH/LOW X WINE AUCTION ITEMS 48 54330 AUCTION SALE VALUE 0 1 0 PART I, LINE 33: COLLECTION OR ARTWORK IS NOT CAPITALIZED. PLEASE REFER TO FOOTNOTE FROM FINANCIAL STATEMENT FOUND IN SCHEDULE D, PART XIV WHICH CORRESPONDS TO SCHEDULE D, PART III - LINE 1A. FORM 990, PART VI, SECTION A, LINE 2 PAFA USES THE SERVICES OF A TRUST COMPANY WHERE THREE BOARD MEMBERS ARE PAID DIRECTORS, DONALD R. CALDWELL, THOMAS N. PAPPAS AND WINSTON I. LOWE, ESQUIRE. ASSETS UNDER MANAGEMENT WITH THIS INVESTMENT COMPANY TOTALED APPROXIMATELY $32,335,000 AND $25,760,000 AS OF JUNE 30, 2021 AND 2020, RESPECTIVELY. FOR THE YEAR ENDED JUNE 30, 2021, PAFA WAS CHARGED A 0.4% FEE FOR THIS SERVICE. FOR THE YEAR ENDED JUNE 30, 202, THIS FEE WAS APPROXIMATELY $122,000. IN ADDITION, THIS TRUST COMPANY PROVIDES TWO LINESOF CREDIT FOR PAFA; INTEREST EXPENSE PAID DURING THE YEAR FOR THESE LINES OF CREDIT WAS APPROXIMATELY $31,000. ALTHOUGH THE TRUST COMPANY IN QUESTION CHARGES PAFA FOR ITS SERVICES, IT ALSO MADE SUBSTANTIAL GIFTS TO PAFA. THE NET CHARGES AFTER SUCH GIFTS RESULTED IN THIS FEE BEING QUITE SMALL. THE QUESTION OF THE TRUST COMPANY'S CHARGES TO PAFA WAS SUBMITTED TO THE FINANCE COMMITTEE, AND THEN TO THE FULL BOARD OF TRUSTEES. AFTER CONSIDERATION OF THE TRUST COMPANY'S CHARGES, THE TRUST COMPANY'S GIFTS TO PAFA, AND THE PERFORMANCE OF THE TRUST COMPANY, THE BOARD DECIDED THAT THE RELATIONSHIP WITH THE TRUST COMPANY WAS QUITE BENEFICIAL TO PAFA. PAFA WAIVED ANY TECHNICAL CONFLICT WITH THE TRUST COMPANY. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 IS PREPARED BY TAIT, WELLER & BAKER LLP. THE INITIAL REVIEW IS PERFORMED BY THE CFO. THE FORM 990 IS THEN SENT TO THE BOARD OF TRUSTEES FOR REVIEW. BEFORE FILING FORM 990, THE BOARD OF TRUSTEES IS REQUESTED TO REVIEW THE RETURN AND SUBMIT ANY CORRECTIONS, COMMENTS OR QUESTIONS. FORM 990, PART VI, SECTION B, LINE 12C DURING THE FISCAL YEAR, EACH MEMBER OF THE BOARD OF TRUSTEES AND EACH SENIOR KEY EMPLOYEE COMPLETES A FORM SETTING FORTH, IF ANY, ANY POTENTIAL CONFLICT OF INTEREST HE/SHE HAS WITH PAFA. SUCH COMPLETED FORMS ARE RETAINED BY THE VICE-CHAIR/SECRETARY OF THE BOARD. IF ANY CONFLICT OF INTEREST IS IDENTIFIED, IT IS REFERRED TO THE APPROPRIATE COMMITTEE OF THE BOARD, WHICH EXAMINES IT AND REFERS IT TO THE ENTIRE BOARD FOR ACTION. THE BOARD DECIDES WHETHER SUCH CONFLICT IS TO BE WAIVED, ON THE GROUNDS THAT THE TRANSACTION OR RELATIONSHIP IN QUESTION IS FAVORABLE TO PAFA NOTWITHSTANDING THE CONFLICT, OR WHETHER SUCH RELATIONSHIP OR TRANSACTION IS TO BE NEGATED. FORM 990, PART VI, SECTION B, LINE 15 THE SEVEN OFFICERS OF THE BOARD OF TRUSTEES (PAFA'S GOVERNING BODY) CONSISTING OF: THE CHAIR OF THE BOARD; THE VICE-CHAIR AND TREASURER; THE VICE-CHAIR AND SECRETARY; THE VICE-CHAIR AND ASSISTANT SECRETARY; THE VICE-CHAIR; ASSISTANT TREASURER AND ASSISTANT SECRETARY COLLECTIVELY CONSTITUTE THE COMPENSATION COMMITTEE WHICH DELIBERATES AND DECIDES ON THE COMPENSATION OF THE PRESIDENT/CEO OF THE ORGANIZATION. THE COMMITTEE STUDIES COMPARABILITY DATA OBTAINED FROM SEVERAL SOURCES AND IT MAINTAINS CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION IN THE FORM OF NOTES AND MINUTES MADE BY THE BOARD CHAIR WHICH ARE MAINTAINED IN THE PRIVATE OFFICE OF THE BOARD CHAIR. IN THE PRESIDENT/CEO'S FIRST YEAR IN OFFICE, THE PRESIDENT/CEO AND PAFA ENTER INTO A WRITTEN EMPLOYMENT AGREEMENT WHICH EMBODIES THE DECISIONS ON COMPENSATION. IN EACH SUCCEEDING YEAR OF THE PRESIDENT/CEO'S TENURE, THE COMPENSATION COMMITTEE REVIEWS THE COMPENSATION AND MAKES ANY NECESSARY ADJUSTMENTS. WITH RESPECT TO COMPENSATION OF OTHER OFFICERS OR KEY EMPLOYEES OF PAFA, RECOMMENDATIONS ARE FIRST MADE BY THE PRESIDENT/CEO (AFTER HIS INTERNAL PROCESS OF CONSULTATION WITH SENIOR STAFF, INCLUDING THE CHIEF FINANCIAL OFFICER) WHICH ARE EMBODIED IN THE ANNUAL BUDGET, AND REVIEWED BY THE BOARD'S FINANCE COMMITTEE (WHICH IS CHAIRED BY THE VICE-CHAIR AND TREASURER OF THE BOARD). THE ANNUAL BUDGET, WHICH EMBODIES THE COMPENSATION OF THE PRESIDENT/CEO (AS INITIALLY PROPOSED BY THE BOARD'S FINANCE COMMITTEE) AND THE COMPENSATION OF OTHER OFFICERS AND KEY EMPLOYEES (AS INITIALLY PROPOSED BY THE PRESIDENT/CEO) IS ULTIMATELY PRESENTED TO THE ENTIRE BOARD OF TRUSTEES BY THE BOARD'S FINANCE COMMITTEE FOR CONSIDERATION, POSSIBLE AMENDMENT, AND FINALLY ADOPTION. FORM 990, PART VI, SECTION C, LINE 19 THE DOCUMENTS ARE MAINTAINED IN THE FINANCE OFFICE AND ARE AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART XI, LINE 9: CHANGE IN BENEFICIAL INTEREST IN PERPETUAL TRUSTS 2,939,464. COLLECTION ITEMS PURCHASED BUT NOT CAPITALIZED -1,075,982. CHANGE IN MARKET VALUE OF SWAP 1,423,881. OTHER INCOME PER FINANCIAL STATEMENTS 78,344. FORM 990, PART XII, LINE 2C THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES APPROVES THE ENGAGEMENT LETTER OF THE INDEPENDENT ACCOUNTANT, MEETS WITH AUDITORS ON A PERIODIC BASIS THROUGHOUT THE YEAR, AND RECEIVES AND REVIEWS THE AUDIT REPORT, WHICH IT PASSES ON FOR REVIEW TO THE FINANCE COMMITTEE OF THE BOARD AND TO THE ENTIRE BOARD WITH ITS COMMENTS.