In February of this year, a large academic medical center in California, Regional Tech Medical Center "(Regional Tech)," has hired you as its Chief Compliance Officer. You are to oversee all compliance operations of Regional Tech.

Regional Tech is a nonprofit corporation.

21The first is that you have found that the Regional Tech human resources department stopped undertaking a market analysis of compensation for key executives five years ago. This was done at a time when Regional Tech was facing severe revenue shortages and determined that a short-term cost savings would be to terminate the contract with the compensation consultant who reviewed the fair market value of key executive compensation. Neither the old contractorany replacement system for reviewing market compensation was ever reinstated.

Two years ago, Regional Tech recovered from its years of operating at a significant loss and the corporation's Board of Directors gave Regional Tech's Chief Executive Officer a large bonus, $300,000, on top of his existing compensation of $675,000. They simultaneously increased his salary to $950,000 with guaranteed bonuses going-forward of 30% of his salary for years that Regional Tech's actual revenues were 20% over the revenues anticipated at the beginning of the year as shown for the year's proposed budget. The year that ended December 31, just before you started as Chief Compliance officer, showed revenues of 30% over budget. The CEO's bonus would be paid as soon as the outside auditors finish their review of the financial statements, anticipated to be around the end of July.

1. Explain what steps you would take to further investigate.

2. Provide your recommendations to resolve this issue.

3. Provide your recommendations to prevent this issue from happening in the future.