Post by Shauna on Jan 21, 2014 15:15:55 GMT -5
Dear Members and Residents,
As you may be aware, I obtained a little more than a year's worth of financial data which was being held on the Board's behalf at Braun Hamstead (attorney for GHPOA board) office. I had attempted to obtain this material from the board itself by numerous written requests, but was ignored. I asked Mr. Hamstead, and I presented my request in a legally correct manner and obtained access at his office under supervision of a staff attorney. This was presumably to protect the association records and Board from me, a member and past president. I analyzed the data that I was able to photograph, and below are my findings. If anyone wishes to contact me with questions, my email is shaunajohnstone@comcast.net and my phone is 304-885-0046.
Originally there was another signer. This accounts for all the redactions (X's). I have removed all identifying information regarding that person, and am asking you to consider this information as if it (the letter) is only from me. As I have mentioned in another post, I am an experienced accountant, and I am not representing that this information is perfect (some documents were not made available to me), but it is the best I could do with the approximately 250 documents I photographed.
I never received any response from the Board. I did receive a personal reply from Rita Mihalik responding to a couple of points but not representing the board. She states that her reply only represented herself. I will leave her to post her comments or not, as she wishes.
It saddens me that this information is not freely available from the board.
Dear Officers and Members of the Glen Haven Property Owners Board,
As you are aware, about a month ago, I obtained from Attorney Hamstead’s office, photos of a little more than the past years’ financial records for the GHPOA. I have thoroughly reviewed those records, examining the receipts, disbursements, bank statements, available records of decisions made by the board, etc. including receipts for payments and authorizations for those payments. Although the dates do not match our fiscal year, I wanted to determine the results of our financial activities for our most recent calendar year. I have entered all information on QuickBooks both to again start an automated accounting system and to verify the bank reconciliations.
I shared my findings with XXXXXX because XXXXXXXXXXX, XXX, and XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX best interests of the community at heart. XX XXX I decided that it would be prudent to share these findings with you, the board, in writing.
As you certainly know better than XX, Glen Haven has changed in the past few years from a community where residents volunteered to do necessary community maintenance to one where services have to be paid for. Since this is the case there are standards which now must be met in order to comply with state and federal laws and adhere to accounting best practices. It is also necessary to maintain transparency with the members of the association.
Some items of question, requirement, or concern:
1. Our Corporation must issue 1099’s to any unincorporated individual or business to whom we pay in excess of $600.00 in any calendar year. Form 1099 is used to report different types of taxable income. Several individuals and business entities are affected including XXXXXXXX,XXXXXXXXXX,XXXXXXXXXXXX, and XXXXXXXXXXXXXXXXXXXXXXXXXX. This will definitely need to happen for 2013 before January 31st 2014, and we should send amended forms for 2012 as soon as they can be prepared.
2. I noted that there was no receipt for 933.33 for sidewalk concrete. We must always be careful to pay from original receipts. If one is lost, we should go to the vendor and ask for another copy.
3. Dave Jewell, a board member, is in charge of the maintenance committee, and is in charge of hiring himself to do work (which is appreciated). He also approves his own expenditures. This represents a conflict of interest. To resolve this the Board should either 1) Hire someone else to do the work 2) ask David to resign from the board and continue to do the work or at least 3) the board should put someone else in charge of maintenance and David should continue to do the work but all work should be requested and signed off on by at least one other board member.
4. XXXXXXX was paid $1075 by cashing check 1211 and giving him the cash. This unfortunately gives the appearance that you deliberately and knowledgeably “paid someone under the table” (see number 1). I understand that you may simply have been meeting the gentleman’s’ requirement that he be paid in cash, cashing a check and paying in cash could imply a different intent.
5. There is no clear itemization of the cost of the sidewalk adjacent to the dock. This is necessary to keep track of capital improvements for insurance purposes.
6. Proper internal controls require that the President and the Treasurer sign all checks. Bank statements should be sent to the address of another officer at their home, reviewed, and then delivered to the treasurer.
7. Since grounds work, mowing and items such as the Glen Haven sign repair are major expenditures, it is necessary that regular bids be obtained for this work. If it works out that our current arrangement is the lowest cost and highest quality arrangement, good, but a bid process should be developed and followed.
8. Liability and D&O coverage has become a major expense. If they are not, bids should also annually be obtained and coverage reviewed for levels and need versus cost to determine whether efficiencies are available.
9. A detailed accurate itemized financial statement should be presented to the membership in the packet that is annually mailed out. This way, people can come to the meeting prepared and interested. I noted that $418.50 was listed on the 2012/13 on the treasurers report as a “ledger correction” when in actuality it was the final payment to Vital Signs for signage. I was not able to determine what the $112.69 ledger correction was, not having records for the entire year of 2012. The actual cost of signage including labor for the calendar year was at least $1956.90 and for the past fiscal year at least $1373.62. This is not reflected on the Treasurer’s report.
10. We noted that there appear to be no documented meetings and no minutes. All business appears to be done by email. XX would ask that regular meetings (quarterly?) resume, be posted with an agenda, and that minutes be posted.
11. There is an approved budget for 2012 and 2013 budget of 17,650 and there is no provision for funding the road account. The original intention of the increase in the dues from $75.00 to $240.00 was to set aside half of the increase for the road fund. There is very little in the road fund.
12. In Fiscal Year 2012, $4240.00 was spent for grounds work. Were Glen Haven board members paid for labor for planting flowers, mulching, etc.? If so, we will need to develop a list of those people, and how much they were paid as they should receive 1099’s if over $600.00. I was not able to copy those records.
13. XX believe that there was a cap set on the amount the board could spend on a project without the vote of the membership. (Shauna) believes it was $2000.00, set some years ago. Can this be verified?
14. There is a budget of $1000 for the “Dues Collection Committee”. Has this committee been successful in collecting dues and do you anticipate any further expenditure.
15. It appears that the Board budgets to spend all funds incoming. XX believe it would be prudent to budget to budget to reserve funds each year.
16. XX believe that the documents of the corporation should not be held at an attorney’s office but here at Glen Haven and readily viewable by members upon reasonable request. Viewing need not take place in a board member’s home. The public library in winter or the pavilion in summer could be used. Perhaps we could budget for a storage space nearby to store the records so that the officers would not be burdened with storing the documents? Just a suggestion.
In summary, XX truly thank you for the hard work you do. XX are sure that you are simply not aware that becoming an organization that pays for all its expenses is a game changer in terms of recordkeeping, public notice, taxes, and accounting to list a few.
In serving the best interests of our community, XX would like to suggest that you have the records for the past 2-3 years reviewed (not audited) by an independent CPA. They would verify the accuracy of the records and give you official information and instruction regarding taxes, documentation and non-employee compensation, etc. We, the association, could then move forward with confidence and knowledge.
Since a review would be a large expense, (Shauna) can suggest several CPA’s that may be able to help us here.
Again, please understand that XX are contacting you in the spirit of cooperation and desire to be of assistance. XX would like to have the opportunity to discuss these issues with the Board at your earliest opportunity.
Warm Regards,
signed by: Shauna Johnstone
As you may be aware, I obtained a little more than a year's worth of financial data which was being held on the Board's behalf at Braun Hamstead (attorney for GHPOA board) office. I had attempted to obtain this material from the board itself by numerous written requests, but was ignored. I asked Mr. Hamstead, and I presented my request in a legally correct manner and obtained access at his office under supervision of a staff attorney. This was presumably to protect the association records and Board from me, a member and past president. I analyzed the data that I was able to photograph, and below are my findings. If anyone wishes to contact me with questions, my email is shaunajohnstone@comcast.net and my phone is 304-885-0046.
Originally there was another signer. This accounts for all the redactions (X's). I have removed all identifying information regarding that person, and am asking you to consider this information as if it (the letter) is only from me. As I have mentioned in another post, I am an experienced accountant, and I am not representing that this information is perfect (some documents were not made available to me), but it is the best I could do with the approximately 250 documents I photographed.
I never received any response from the Board. I did receive a personal reply from Rita Mihalik responding to a couple of points but not representing the board. She states that her reply only represented herself. I will leave her to post her comments or not, as she wishes.
It saddens me that this information is not freely available from the board.
Dear Officers and Members of the Glen Haven Property Owners Board,
As you are aware, about a month ago, I obtained from Attorney Hamstead’s office, photos of a little more than the past years’ financial records for the GHPOA. I have thoroughly reviewed those records, examining the receipts, disbursements, bank statements, available records of decisions made by the board, etc. including receipts for payments and authorizations for those payments. Although the dates do not match our fiscal year, I wanted to determine the results of our financial activities for our most recent calendar year. I have entered all information on QuickBooks both to again start an automated accounting system and to verify the bank reconciliations.
I shared my findings with XXXXXX because XXXXXXXXXXX, XXX, and XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX best interests of the community at heart. XX XXX I decided that it would be prudent to share these findings with you, the board, in writing.
As you certainly know better than XX, Glen Haven has changed in the past few years from a community where residents volunteered to do necessary community maintenance to one where services have to be paid for. Since this is the case there are standards which now must be met in order to comply with state and federal laws and adhere to accounting best practices. It is also necessary to maintain transparency with the members of the association.
Some items of question, requirement, or concern:
1. Our Corporation must issue 1099’s to any unincorporated individual or business to whom we pay in excess of $600.00 in any calendar year. Form 1099 is used to report different types of taxable income. Several individuals and business entities are affected including XXXXXXXX,XXXXXXXXXX,XXXXXXXXXXXX, and XXXXXXXXXXXXXXXXXXXXXXXXXX. This will definitely need to happen for 2013 before January 31st 2014, and we should send amended forms for 2012 as soon as they can be prepared.
2. I noted that there was no receipt for 933.33 for sidewalk concrete. We must always be careful to pay from original receipts. If one is lost, we should go to the vendor and ask for another copy.
3. Dave Jewell, a board member, is in charge of the maintenance committee, and is in charge of hiring himself to do work (which is appreciated). He also approves his own expenditures. This represents a conflict of interest. To resolve this the Board should either 1) Hire someone else to do the work 2) ask David to resign from the board and continue to do the work or at least 3) the board should put someone else in charge of maintenance and David should continue to do the work but all work should be requested and signed off on by at least one other board member.
4. XXXXXXX was paid $1075 by cashing check 1211 and giving him the cash. This unfortunately gives the appearance that you deliberately and knowledgeably “paid someone under the table” (see number 1). I understand that you may simply have been meeting the gentleman’s’ requirement that he be paid in cash, cashing a check and paying in cash could imply a different intent.
5. There is no clear itemization of the cost of the sidewalk adjacent to the dock. This is necessary to keep track of capital improvements for insurance purposes.
6. Proper internal controls require that the President and the Treasurer sign all checks. Bank statements should be sent to the address of another officer at their home, reviewed, and then delivered to the treasurer.
7. Since grounds work, mowing and items such as the Glen Haven sign repair are major expenditures, it is necessary that regular bids be obtained for this work. If it works out that our current arrangement is the lowest cost and highest quality arrangement, good, but a bid process should be developed and followed.
8. Liability and D&O coverage has become a major expense. If they are not, bids should also annually be obtained and coverage reviewed for levels and need versus cost to determine whether efficiencies are available.
9. A detailed accurate itemized financial statement should be presented to the membership in the packet that is annually mailed out. This way, people can come to the meeting prepared and interested. I noted that $418.50 was listed on the 2012/13 on the treasurers report as a “ledger correction” when in actuality it was the final payment to Vital Signs for signage. I was not able to determine what the $112.69 ledger correction was, not having records for the entire year of 2012. The actual cost of signage including labor for the calendar year was at least $1956.90 and for the past fiscal year at least $1373.62. This is not reflected on the Treasurer’s report.
10. We noted that there appear to be no documented meetings and no minutes. All business appears to be done by email. XX would ask that regular meetings (quarterly?) resume, be posted with an agenda, and that minutes be posted.
11. There is an approved budget for 2012 and 2013 budget of 17,650 and there is no provision for funding the road account. The original intention of the increase in the dues from $75.00 to $240.00 was to set aside half of the increase for the road fund. There is very little in the road fund.
12. In Fiscal Year 2012, $4240.00 was spent for grounds work. Were Glen Haven board members paid for labor for planting flowers, mulching, etc.? If so, we will need to develop a list of those people, and how much they were paid as they should receive 1099’s if over $600.00. I was not able to copy those records.
13. XX believe that there was a cap set on the amount the board could spend on a project without the vote of the membership. (Shauna) believes it was $2000.00, set some years ago. Can this be verified?
14. There is a budget of $1000 for the “Dues Collection Committee”. Has this committee been successful in collecting dues and do you anticipate any further expenditure.
15. It appears that the Board budgets to spend all funds incoming. XX believe it would be prudent to budget to budget to reserve funds each year.
16. XX believe that the documents of the corporation should not be held at an attorney’s office but here at Glen Haven and readily viewable by members upon reasonable request. Viewing need not take place in a board member’s home. The public library in winter or the pavilion in summer could be used. Perhaps we could budget for a storage space nearby to store the records so that the officers would not be burdened with storing the documents? Just a suggestion.
In summary, XX truly thank you for the hard work you do. XX are sure that you are simply not aware that becoming an organization that pays for all its expenses is a game changer in terms of recordkeeping, public notice, taxes, and accounting to list a few.
In serving the best interests of our community, XX would like to suggest that you have the records for the past 2-3 years reviewed (not audited) by an independent CPA. They would verify the accuracy of the records and give you official information and instruction regarding taxes, documentation and non-employee compensation, etc. We, the association, could then move forward with confidence and knowledge.
Since a review would be a large expense, (Shauna) can suggest several CPA’s that may be able to help us here.
Again, please understand that XX are contacting you in the spirit of cooperation and desire to be of assistance. XX would like to have the opportunity to discuss these issues with the Board at your earliest opportunity.
Warm Regards,
signed by: Shauna Johnstone