2021-05-17T14:53:11-05:00 2020-06-30 910189318 MOSS ADAMS LLP 4747 EXECUTIVE DR SUITE 1300 SAN DIEGO CA 92121 990 2019-07-01 941610694 JOHN F KENNEDY UNIVERSITY JOHN 9259693300 100 ELLINWOOD WAY PLEASANT HILL CA 94523 DAVE C LAWRENCE VICE CHANCELLOR, FINANCE 9259693300 2021-05-17 1 PATRICIA J MAYER P00188643 8586271400 2019 2022-09-23 18:48:47Z DAVE C LAWRENCE 100 ELLINWOOD WAY PLEASANT HILL CA 94523 18517005 0 X WWW.JFKU.EDU X 1964 CA OUR MISSION IS TO PROVIDE ACCESS TO HIGH-QUALITY, INNOVATIVE EDUCATIONAL OPPORTUNITIES THAT INTEGRATE THEORY AND LIFE EXPERIENCE. WE INSPIRE PERSONAL, PROFESSIONAL AND ACADEMIC GROWTH, AND ADVANCE THE WELL-BEING OF OUR DIVERSE LOCAL AND GLOBAL COMMUNITIES. THIS MISSION IS BUILT UPON OUR CORE VALUES. 19 18 430 18 0 0 3095076 960720 16730985 13123864 180336 55489 1867018 4376932 21873415 18517005 887093 569639 0 0 12134919 8869516 0 0 0 10251291 8434248 23273303 17873403 -1399888 643602 29628489 21257751 21950999 20009662 7677490 1248089 X OUR MISSION IS TO PROVIDE ACCESS TO HIGH-QUALITY, INNOVATIVE EDUCATIONAL OPPORTUNITIES THAT INTEGRATE THEORY AND LIFE EXPERIENCE. WE INSPIRE PERSONAL, PROFESSIONAL AND ACADEMIC GROWTH, AND ADVANCE THE WELL-BEING OF OUR DIVERSE LOCAL AND GLOBAL COMMUNITIES. THIS MISSION IS BUILT UPON OUR CORE VALUES. 0 1 9273413 569639 13123864 WE ARE DEDICATED TO STUDENTS WHO WANT TO CONTINUE THEIR FORMAL EDUCATION, CHART NEW PROFESSIONAL DIRECTIONS AND/OR DERIVE GREATER MEANING FROM THEIR LIVES. WE PROVIDE A LEARNING ENVIRONMENT FOR THOSE SEEKING A TRANSFORMATIVE AND LIFE-ENHANCING EDUCATIONAL EXPERIENCE.OUR COURSES OF STUDY ARE DELIVERED BY OUTSTANDING SCHOLAR-PRACTITIONERS IN A CREATIVE AND CHALLENGING ENVIRONMENT. WE PROMOTE HOLISTIC, INTERDISCIPLINARY, EXPERIMENTIAL LEARNING THAT BALANCES BREADTH AND DEPTH. WE ARE RESPONSIVE TO CHANGING NEEDS OF OUR STUDENTS AND SOCIETYAND INCORPORATE SERVICE TO THE COMMUNITY INTO THE ACADEMIC EXPERIENCE. WE OFFER COURSES OF STUDY IN COUNSELING, MUSEUM STUDIES, LIBERAL STUDIES, MANAGEMENT, AND LAW. WE PROVIDED EDUCATIONAL PROGRAMS AND SERVICES TO OVER 935 STUDENTS THIS YEAR.OUR EDUCATIONAL EXPERIENCE INCORPORATES INTERNSHIPS WHICH OFFERAPPLICATION OF LEARNED TECHNIQUES AND ALLOW OUR STUDENTS TO LEARN ASTHEY WORK. THE STUDENT INTERNS, UNDER SUPERVISION, PROVIDE MENTALHEALTH CARE SERVICES AT LOW COST AT OUR THREE COMMUNITY COUNSELINGCENTERS AND LEGAL SERVICE PROGRAMS TO SENIORS AT NO COST THROUGH OURLEGAL CLINIC FOR ELDERS. FROM FOUR OF OUR LOCATIONS IN THE GREATER BAYAREA, WE PROVIDED MORE THAN 55,000 HOURS OF COUNSELING AND LEGALSERVICES AND 2,000 HOURS OF SERVICE TO CLIENTS IN THE SURROUNDINGCOMMUNITIES. 9273413 1 1 0 0 0 0 1 1 0 1 1 0 0 0 1 1 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 157 0 1 430 1 0 0 0 0 0 0 0 0 0 0 0 0 X 19 18 0 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 CA X MICHELLE BELLO ASSOCIATE VP FINANCE 9259693314 100 ELLINWOOD WAY PLEASANT HILL CA 94523 DEAN BARBIERI PROVOST (THRU 6/30/19) 45.00 X 238075 0 19662 THOMAS STEWART INTERIM PRESIDENT 45.00 X 150000 0 27573 DEBRA BEAN PRESIDENT, FORMER (THRU 6/30/19) 45.00 X 159438 0 8271 MATTHEW BRUCE VICE PRESIDENT 45.00 X 126125 0 39848 JAMES MIRR CFO (THRU 4/13/20) 45.00 X 140000 0 11481 KANIOS CHRIS G PROFESSOR 45.00 X 106645 0 38544 PROCHOVNICK ORA PROFESSOR (THRU 4/17/20) 45.00 X 104419 0 36603 ALVIN MCLEAN DEAN, PSYCHOLOGY 45.00 X 109618 0 29790 BANKS JOHN S PROFESSOR (THRU 8/23/19) 45.00 X 110626 0 20570 DR MICHAEL CUNNINGHAM CHANCELLOR, TRUSTEE 45.00 X X 0 0 0 CARLOS RODRIGUEZ TRUSTEE 3.00 X 0 0 0 DAN PITTARD TRUSTEE 3.00 X 0 0 0 DAVE LAWRENCE CFO, NU SYSTEM 45.00 X 0 0 0 DR DONALD KRIPKE TRUSTEE (THRU 10/2019) 3.00 X 0 0 0 DR E LEE RICE TRUSTEE 3.00 X 0 0 0 DR ERLINDA MARTINEZ TRUSTEE 3.00 X 0 0 0 GERALD CZARNECKI TRUSTEE 3.00 X 0 0 0 HAROLD GREENBERG TRUSTEE 3.00 X 0 0 0 HIEP QUACH TRUSTEE 3.00 X 0 0 0 JAY STONE TRUSTEE (THRU 10/2019) 3.00 X 0 0 0 JEANNE CONNELLY TRUSTEE 3.00 X 0 0 0 JOANNE PASTULA TRUSTEE 3.00 X 0 0 0 KIM FOLSOM TRUSTEE 3.00 X 0 0 0 KIMBERLY MITCHELL TRUSTEE (THRU 1/2020) 3.00 X 0 0 0 MICHAEL R MCGILL CHAIR, TRUSTEE 3.00 X X 0 0 0 MICHELLE BELLO ASSISTANT SECRETARY 45.00 X 0 0 0 REBECCA HENDERSON TRUSTEE (THRU 4/2020) 3.00 X 0 0 0 RICHARD CHISHOLM TREASURER, TRUSTEE 3.00 X X 0 0 0 RUTHANN HEINRICH TRUSTEE 3.00 X 0 0 0 STACY ALLISON TRUSTEE 3.00 X 0 0 0 THOMAS PAGE TRUSTEE 3.00 X 0 0 0 THOMAS TOPUZES SECRETARY, TRUSTEE 3.00 X X 0 0 0 TOM CLEVINGER VICE CHAIR, TRUSTEE 3.00 X X 0 0 0 WH KNIGHT JR TRUSTEE 3.00 X 0 0 0 1244946 0 232342 12 1 1 0 TRADE INTERNATIONAL GROUP 1505 ELEVATION ROAD SAN DIEGO CA 92110 SALES AND MARKETING SERVICES 3176119 SIERRA-CEDAR INC PO BOX 402521 ATLANTA GA 30384 SOFTWARE HOSTING 1425223 SYSTEM MANAGEMENT GROUP 11355 NORTH LA JOLLA CA 92037 ADMINISTRATIVE AND BACK OFFICE SERVICES 1385669 ORACLE AMERICA INC PO BOX 44471 SAN FRANCISCO CA 94144 COMPUTER SOFTWARE 855442 ALLIED UNIVERSAL SECURITY SERVICES PO BOX 31001-2374 PASADENA CA 91110 SECURITY SERVICES 714357 7 336000 624720 960720 TUITION & FEES 900099 13123864 13123864 13123864 51247 51247 959860 0 959860 959860 959860 4242 0 4242 4242 4242 DEBT FORGIVNESS INCOME 900099 3247362 3247362 169710 169710 3417072 18517005 13123864 0 4432421 569639 569639 448719 448719 6282490 4903408 1379082 281422 214527 66895 1247317 866786 380531 609568 253781 355787 81107 81107 109400 109400 15598 15598 1619459 753540 865919 945341 393572 551769 311932 129866 182066 197164 82085 115079 506928 18910 488018 316558 131792 184766 682 284 398 338886 141088 197798 999997 416327 583670 1315826 190795 1125031 OTHER EQUIPMENT 974885 974885 BOOKS & SUBSCRIPTIONS ( 307525 128031 179494 REPAIRS & MAINTENANCE 223253 8328 214925 FEES 110843 46147 64696 58864 24507 34357 17873403 9273413 8599990 0 1475 1475 2929590 2423838 4392492 838238 197763 0 147748 0 29649251 18167745 15494184 11481506 6465237 6512694 29628489 21257751 708068 738754 82457 0 776267 0 20384207 19270908 21950999 20009662 X 3209416 -3033976 4468074 4282065 7677490 1248089 29628489 21257751 X 643602 -1306913 -5766090 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X 1 25000.00 1 0 20.00 2500 X X 0 6465237 47457 6512694 6180717 284520 6465237 5679999 500718 6180717 4744144 300000 635855 5679999 4895664 -151520 4744144 0.29510 0.35890 0.34600 0 1 1 4688317 4688317 6793189 1074007 1074007 6793189 792538 792538 0 4271188 4271188 0 2364012 2364012 0 11481506 DUE TO AFFILIATES 5365560 NOTE PAYABLE TO AFFILIATE 11637500 ESTIMATED LIQUIDATION AND OPERATING COSTS NET OF ESTIMATED RECEIPTS 2267848 19270908 X 16624855 -1306913 -1306913 17931768 15598 569639 585237 18517005 17288166 0 17288166 15598 569639 585237 17873403 PART II, LINE 9: ALL COSTS RELATED TO MAINTENANCE OF EASEMENT REFLECTED IN THE FINANCIAL STATEMENTS ARE OPERATING COSTS. THE UNIVERSITY PROVIDES REGULAR LANDSCAPE MAINTENANCE FOR PUBLIC ACCESS PORTION OF THE PROPERTY. PART III, LINE 4: VARIOUS PAINTINGS AND SCULPTURES ON PUBLIC DISPLAY. PART V, LINE 4: ENDOWMENT INCLUDES BOTH DONOR RESTRICTED AND BOARD DESIGNATED FUNDS. DONOR RESTRICTED FUNDS ARE USED AS PER DONOR INSTRUCTIONS WITH USES PREDOMINATELY FOR SCHOLARSHIPS AND GENERAL AWARDS. PART X, LINE 2: JFKU IS A NON-PROFIT ORGANIZATION UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE AND RELATED STATE PROVISIONS AND AS SUCH IS NOT SUBJECT TO FEDERAL AND STATE INCOME TAXES. THERE IS NO UNRELATED BUSINESS INCOME TAX FOR THE YEAR ENDED JUNE 30, 2020. AS SUCH, NO PROVISION FOR INCOME TAXES HAS BEEN REFLECTED IN THE ACCOMPANYING FINANCIAL STATEMENTS. INCOME TAX BENEFITS AND/OR LIABILITIES ARE RECOGNIZED FOR INCOME TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN, ONLY WHEN IT IS DETERMINED THAT THE INCOME TAX POSITION WILL MORE-LIKELY-THAN-NOT BE SUSTAINED UPON EXAMINATION BY TAXING AUTHORITIES. JFKU HAS ANALYZED THE TAX POSITIONS TAKEN IN ITS FILINGS WITH THE INTERNAL REVENUE SERVICE AND THE CALIFORNIA FRANCHISE TAX BOARD. JFKU BELIEVES THAT ITS INCOME TAX FILING POSITIONS WILL BE SUSTAINED UPON EXAMINATION AND DOES NOT ANTICIPATE ANY ADJUSTMENTS THAT WOULD RESULT IN A MATERIAL ADVERSE EFFECT ON JFKU'S FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS. ACCORDINGLY, JFKU DOES NOT HAVE ANY RESERVES, OR RELATED ACCRUALS FOR INTEREST AND PENALTIES FOR UNCERTAIN INCOME TAX POSITIONS AT JUNE 30, 2020. PART XI, LINE 4B - OTHER ADJUSTMENTS: SCHOLARSHIPS 569,639. PART XII, LINE 4B - OTHER ADJUSTMENTS: SCHOLARSHIPS 569,639. 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 1 0 1 SCHEDULE E, PART I, LINE 3 ADVERTISING PLACED IN MEDIA AND ON NU EXTERNAL FACING WEBSITE GENERALLY CONTAIN THE FOLLOWING STATEMENT: ADMISSION IS OPEN TO QUALIFIED APPLICANTS WITHOUT REGARD TO RACE, RELIGION, SEX, AGE, PHYSICAL DISABILITY, OR ETHNIC ORIGIN. SCHEDULE E, PART I, LINE 6 THE UNIVERSITY RECEIVES FEDERAL FINANCIAL AID ASSISTANCE FOR STUDENTS IN THE FORM OF PERKINS LOAN FUNDS AND PELL AND SEOG GRANTS. THE UNIVERSITY IS REQUIRED TO PROVIDE 25% OF THE FUNDS AVAILABLE TO STUDENTS FOR THE SEOG PROGRAM. 1 SCHOLARSHIPS TO JFK STUDENTS, TUITION REDUCTION 650 569639 FMV TUITION IS REDUCED BY THE AMOUNT OF INDIVIDUAL SCHOLARSHIPS AWARDED TO STUDENTS. PART I, LINE 2: JOHN F KENNEDY UNIVERSITY IDENTIFIES ELIGIBLE GRANTEES AS PER REGULATIONS FOR EDUCATIONAL PURPOSES AND COMMUNITY SERVICES. GRANT FUNDS AND GRANTEES ARE MONITORED AS APPROPRIATE PER REGULATIONS THROUGH PERIODIC AND ANNUAL REPORTS. X X 1 1 X X X X 1 0 0 0 0 0 0 0 0 DEAN BARBIERI PROVOST (THRU 6/30/19) 100000 0 0 0 138075 0 8750 0 10912 0 257737 0 0 0 THOMAS STEWART INTERIM PRESIDENT 150000 0 0 0 0 0 10500 0 17073 0 177573 0 0 0 DEBRA BEAN PRESIDENT, FORMER (THRU 6/30/19) 141438 0 0 0 18000 0 6018 0 2253 0 167709 0 0 0 MATTHEW BRUCE VICE PRESIDENT 126125 0 0 0 0 0 8873 0 30975 0 165973 0 0 0 JAMES MIRR CFO (THRU 4/13/20) 140000 0 0 0 0 0 9800 0 1681 0 151481 0 0 0 KANIOS CHRIS G PROFESSOR 106645 0 0 0 0 0 7570 0 30974 0 145189 0 0 0 PROCHOVNICK ORA PROFESSOR (THRU 4/17/20) 104419 0 0 0 0 0 7309 0 29294 0 141022 0 0 0 ALVIN MCLEAN DEAN, PSYCHOLOGY 109618 0 0 0 0 0 8430 0 21360 0 139408 0 0 0 BANKS JOHN S PROFESSOR (THRU 8/23/19) 55073 0 0 0 55553 0 6180 0 14390 0 131196 0 0 0 PART I, LINE 1A FIRST CLASS TRAVEL IS MADE AVAILABLE TO BOARD MEMBERS IF THE FLIGHT IS OVER 3 HOURS. THIS IS NOT INCLUDED AS TAXABLE INCOME TO SUCH BOARD MEMBERS IF UTILIZED. HOUSING ALLOWANCE IS PROVIDED TO THE PRESIDENT AND TREATED AS A TAXABLE BENEFIT. PART I, LINE 4A DEBRA BEAN, PROVOST, RECEIVED SEVERANCE PAYMENT OF $138,075 DURING 2019. JOHN S BANKS, PROFESSOR, RECEIVED SEVERANCE PAYMENT OF $55,553 DURING 2019. FORM 990, PART III, LINE 3 IN APRIL 2020, THE BOARD OF TRUSTEES APPROVED THE ADMINISTRATIVE RELOCATION OF JFKU'S EDUCATIONAL OPERATIONS AND A PLAN OF LIQUIDATION. AS SUCH, EFFECTIVE DECEMBER 31, 2020, JFKU WILL CLOSE AND THE TRANSFER ITS EDUCATIONAL PROGRAMS TO AFFILIATED ENTITIES, PENDING ACCREDITOR APPROVAL. FORM 990, PART VI, SECTION A, LINE 4 THE BYLAWS OF THE ORGANIZATION WERE AMENDED DURING THE REPORTING YEAR. FORM 990, PART VI, SECTION B, LINE 11B THE DRAFT FORM 990 WAS DISTRIBUTED TO SENIOR MANAGEMENT AND THE AUDIT COMMITTEE. THE FINAL VERSION OF FORM 990 WAS DISTRIBUTED FOR REVIEW BEFORE FILING TO THE TRUSTEES BY EMAIL. FORM 990, PART VI, SECTION B, LINE 12C THE BOARD OF TRUSTEES HAS ANNUALLY REVIEWED AND APPROVED (BY A MAJORITY OF DISINTERESTED TRUSTEES) THE BUSINESS TRANSACTIONS WITH TRUSTEES OR THEIR AFFILIATED PROFESSIONAL SERVICE FIRMS. SUCH REVIEWS INCLUDE CONSIDERATION OF DATA ON COMPARABLE SERVICE PROVIDERS COLLECTED BY UNIVERSITY COUNSEL. THE INTERESTED TRUSTEES WERE EXCUSED FROM BOARD SESSIONS DURING WHICH THOSE BUSINESS TRANSACTIONS WERE DISCUSSED AND DID NOT PARTICIPATE IN VOTING ON SUCH TRANSACTIONS. QUESTIONNAIRES ARE DISTRIBUTED EVERY JANUARY. COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY IS MONITORED BY UNIVERSITY COUNSEL AND WAS REVIEWED BY THE BOARD DURING THE YEAR ENDED JUNE 30, 2020. FORM 990, PART VI, SECTION B, LINE 15 COMPENSATION OF THE PRESIDENT OF THE UNIVERSITY IS REVIEWED BY THE BOARD AT THE TIME OF HIRING AND AS NECESSARY THEREAFTER. COMPENSATION OF OTHER OFFICERS AND KEY EMPLOYEES IS DETERMINED OR REVIEWED BY THE PRESIDENT, IN COORDINATION WITH THE CHANCELLOR. IN BOTH CASES, COMPENSATION IS DETERMINED WITH REGARD TO COMPENSATION PAID TO SENIOR EXECUTIVES OF COMPARABLE NON-PROFIT AND PROPRIETARY INSTITUTIONS IN EDUCATION AND OTHER FIELDS. THE PROCESS IS DOCUMENTED AND WAS LAST COMPLETED IN JUNE 2020. 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 9: CHANGE TO FAIR VALUE OF ACCOUNTS RECIEVABLE -2,255,338. ESTIMATED LIQUIDATING/OPERATING COSTS IN EXCESS OF OPERATING RECEIPTS -3,510,752. SYSTEM MANAGEMENT GROUP 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 201269904 PROVIDES ADMINISTRATIVE SERVICES TO AFFILIATED INSTITUTIONS CA 501(C)(3) LINE 12B, II N/A 1 NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 562438569 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 10 N/A 1 NORTHCENTRAL UNIVERSITY 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 900171867 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 10 N/A 1 SPECTRUM PACIFIC LEARNING INC 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 453996682 INACTIVE CA 501(C)(3) LINE 10 N/A 1 NATIONAL UNIVERSITY INTERNATIONAL INC 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 453997908 INACTIVE CA 501(C)(3) LINE 2 N/A 1 NATIONAL UNIVERSITY 11355 NORTH TORREY PINES ROAD LA JOLLA CA 92037 237172306 EDUCATIONAL INSTITUTION CA 501(C)(3) LINE 2 N/A 1 CITY UNIVERSITY OF SEATTLE 521 WALL STREET NO 100 SEATTLE WA 98121 237421224 EDUCATIONAL INSTITUTION WA 501(C)(3) LINE 2 N/A 1 NCU INC 8667 E HARTFORD DR STE 100 SCOTTSDALE AZ 85255 832721678 HOLDING COMPANY CA SYSTEM MANAGEMENT GROUP C 0 INNOVA MANAGEMENT GROUP INC 8667 E HARTFORD DR STE 100 SCOTTSDALE AZ 85255 010898917 HOLDING COMPANY AZ NCU HOLDINGS LLC C 0 NATIONAL EDUCATION PARTNERS INC 8667 E HARTFORD DR STE 100 SCOTTSDALE AZ 85255 860930587 SERVICE PROVIDER AZ INNOVA MANAGEMENT GROUP INC C 0 NCU HOLDINGS LLC 8667 E HARTFORD DR STE 100 SCOTTSDALE AZ 85255 263309860 HOLDING COMPANY DE NCU INC C 0 0 0 1 1 1 0 0 0 0 1 1 0 1 1 1 1 1 1 1 NATIONAL UNIVERSITY J 926000 CASH NATIONAL UNIVERSITY M 8918033 CASH NATIONAL UNIVERSITY Q 7746185 CASH NATIONAL UNIVERSITY E 11637500 LOAN NATIONAL UNIVERSITY E 4602197 CASH NATIONAL UNIVERSITY S 3247000 CASH NORTHCENTRAL UNIVERSITY D 4318 CASH SYSTEM MANAGEMENT GROUP R 549034 CASH SYSTEM MANAGEMENT GROUP E 763363 CASH SYSTEM MANAGEMENT GROUP M 999997 CASH SYSTEM MANAGEMENT GROUP C 336000 CASH SCHEDULE R, RELATED ORGANIZATIONS: THE NUS IS AN ALLIANCE OF EDUCATIONAL INSTITUTIONS, SERVING DIVERSE LEARNERS FROM HIGH SCHOOL TO DOCTORAL PROGRAMS. THE NUS INCLUDES 6 INDEPENDENT NON-PROFIT ORGANIZATIONS EXEMPT UNDER IRC SECTION 501(C)(3): NATIONAL UNIVERSITY, NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL, NORTHCENTRAL UNIVERSITY, JOHN F. KENNEDY UNIVERSITY, CITY UNIVERSITY OF SEATTLE, AND SYSTEM MANAGEMENT GROUP (SMG). SMG IS A SUPPORTING ORGANIZATION EXEMPT UNDER IRC SECTION 509(A)(3) WHICH PROVIDES SUPPORT AND SERVICES TO ITS TAX-EXEMPT AFFILIATES IN THE NUS. SPECTRUM PACIFIC LEARNING COMPANY LLC AND NATIONAL UNIVERSITY INTERNATIONAL LLC ARE WHOLLY-OWNED BY NATIONAL UNIVERSITY, AND ARE TREATED AS DISREGARDED ENTITIES FOR TAX PURPOSES. THE BOARD OF TRUSTEES OF EACH NUS AFFILIATE GOVERNS EACH AFFILIATE INDEPENDENTLY. THE BOARD OF TRUSTEES HAS NO AUTHORITY TO REMOVE, REPLACE OR APPOINT A MAJORITY OF THE GOVERNING BODY OF THOSE OTHER AFFILIATES. THE BOARD OF TRUSTEES OF EACH AFFILIATE, ACTING IN ITS INDEPENDENT CAPACITY, PERIODICALLY APPOINTS ITS OWN NEW TRUSTEES. THE BOARD OF TRUSTEES HAS A MAJORITY OVERLAPPING COMPOSITION BETWEEN EACH AFFILIATE OF NUS. IN ADDITION, THE NUS AUDIT FIRM PREPARES A SET OF "COMBINED NOT "CONSOLIDATED" AUDITED FINANCIAL STATEMENTS THAT INCLUDE THE SIX INDEPENDENT NON-PROFIT ORGANIZATIONS EXEMPT UNDER IRC SECTION 501(C)(3): NATIONAL UNIVERSITY, NATIONAL UNIVERSITY VIRTUAL HIGH SCHOOL, NORTHCENTRAL UNIVERSITY, JOHN F. KENNEDY UNIVERSITY, CITY UNIVERSITY OF SEATTLE, AND SYSTEM MANAGEMENT GROUP.