Responses to Modoc County Grand Jury Report F1 & R1 - The prior Board of Directors received training on several*

& R1 - The prior Board of Directors received training on several occasions. On January 22, 2014, annual Board Orientation was provided by Dom Demsher regarding the Brown act/open meeting law. The Board tabled additional training offered by Susan Ness, Regional Vice President of the Hospital Council of Northern & Central California, and Peggy Wheeler, Vice President of the California Hospital Association. The current Board of Directors received training from Bill Charney, author of The Board Member's Playbook, on May 14, 2015 during a regional board training sponsored by the Oregon Office of Rural Health, at Lake Health District. Board members from Surprise Valley Health Care District (SVHCD), Lake Health District (LHD), Last Frontier Health Care District (Modoc), and Mayors Memorial Health Care District (Fall River Mills) attended. Annual Health Insurance Portability and Accountability Act (HIPAA) training has also been provided. In addition to these trainings, each SVHCD Board member received personal copies of Open and Public IV, Special District Board Member/Trustee Handbook from the California Special Districts Association, and the Brown Act. These publications were purchased and provided to all SVHCD board members by the Board Chair and CEO.

& R2 - The previous Financial Manager and former interim CEO failed to keep financial records in order, not Administration. The previous Board hired the current CEO. The current Board of Directors concurs with the previous Boards' decision. Based on the current CEO's qualifications and performance, the right person was hired for the job.

& R3 - The prior Board of Directors and current Board of Directors have been receiving monthly financial information since February, 2015. The Finance Committee was created on April 29, 2015 consisting of the Board Chair & Treasurer. The Finance Committee meets on Friday preceding the board meeting. It wasn't until after the previous Financial Manager left on February 2, 2015, that the CEO was able to take control of the financial information. The Board of Directors does not make informed decisions based on financial information. The Board approves policies created by management and approves the results of operations. The CEO and Senior Leadership run the facility including all operational decisions.

& R4 - The previous Financial Manager and former interim CEO prevented the audit process from beginning. The current CEO has paid off the Auditors and is working closely with them to begin the audit process. Fiscal year 2012 audit will begin January 2016 followed by fiscal year 2013. Fiscal year 2013 will require extra audit time including expanded testing of transactions.

& R5 - The Board of Directors, CEO, and Director of Nursing have been working closely with Healthland, Infinite Consulting, and United Health Group to complete Meaningful Use Stage II. Continued training and support from Healthland and Infinite Consulting is on-going. North Main Street, PO Box 246, Cedarville, CA 96104 Phone: (530) 279-6111 Fax: (S30) 279-2680 Clinic Phone: (530) 279-6115 Clinic Fax: (530) 279-6100 HCD Surprise Valley Health Care District

& R6 - The previous Board of Directors forced the districts Human Resource Manager/Administrative Assistant/Information Technology into early retirement. It is the Board Secretary and their designee, not the Chairman of the Board who is responsible to accurately record actions taken by the Board based on District bylaws. The previous Board Secretary failed to keep detailed accurate records documenting actions taken by the Board. The new Human Resource Manager/Administrative Assistant has been taking accurate minutes of all Board meetings since March 18, 2015.

& R7 - The previous Board of Directors did not adopt a pre-employment drug screening policy on October 30, 2014 according their minutes. The policy that the previous Board attempted to pass did not include any language of any kind regarding pre-employment. SVHCD is a drug free workplace and has a drug policy that has been approved by the California Department of Public Health. 9-30-15 Patrick Green Date Board Chair