Board Members of Five Massachusetts Companies Should Use Sarbanes-Oxley Disclosure Rules in Non-Profit Role, Asserts...( Union asks board members to seek ...),Health

Union asks board members to seek restatement of Beth Israel Deaconess Medical Center audit

BOSTON, Feb. 6 /PRNewswire-USNewswire/ -- Staples director Martin Trust should apply the same Sarbanes-Oxley standards used by Staples and other publicly traded companies to his role on the board of Beth Israel Deaconess Medical Center (BIDMC), according to labor group 1199 SEIU United Healthcare Workers East. Four other Massachusetts company directors should take similar action, says a letter sent today by 1199 SEIU to the following board members of BIDMC and CareGroup, BIDMC's parent organization:

Boston Properties executive and director Douglas T. Linde

Brooks Automation CEO and director Robert Lepofsky

Massbank director Allan Bufferd

Charles River Laboratories International director Stephen Chubb.

Robert M. Melzer, a director at Connecticut-based Genesee & Wyoming will also receive a letter. 1199 SEIU asserts that board members who serve on publicly traded companies covered by Sarbanes-Oxley should apply their knowledge of Sarbanes-Oxley disclosure standards in their nonprofit roles.

Sarbanes-Oxley does not apply directly to nonprofit organizations. However, under Massachusetts law, nonprofit directors must use their specialized knowledge and experience in their role as nonprofit fiduciaries (Mass. Gen. Laws ch. 180 6C).

BIDMC's audit disclosures appear to commingle bad debt and charity care, a practice under scrutiny by the IRS and Congress. Charity care is a key metric for non-profits.

If Sarbanes-Oxley were applied to nonprofit organizations, BIDMC's reporting would likely not meet the "real time" and "plain English" requirements of Sarbanes-Oxley (SOX 409) in disclosing charity care and bad debt. Inadequate charity care disclosure may endanger a hospital's state or local tax exemptions or expose the institution to other regulatory consequences.

The letters sent to Sar
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