Big Canoe’s Financial Blogger, Patricia Cross, has just run 2 back-to-back stories detailing missing money. Her latest article published June 3, 2021 entitled “Ask The Board” is a review of the just released 2021 Capital Reserve Fund Study. A cool $1 Million Dollars just went “Poof” from the books according to the stated “2021 Beginning Balance”.
Other recent revelations include (1) $18,000 that inexplicably went missing between the February and March Financial Reports. In the “2021 Beginning Cash Balance” it just went “Poof”. No explanations provided. (2) Then there is the $265,000 at the end of 2020’s new “Board Designated Master Fund” that did not reconcile with the Accounting Entries. In short when you take the beginning balance, add in all the deposits, and subtract all the expenditures… you came up with $265,000 missing. Again, “Poof”, with no explanations. (3) So far this year that same Board Designated Fund is now showing $55,000 of Excess money in the fund that is not reconciling with the plus and minus columns. This is basic accounting stuff…… the money is supposed to balance. A forensic auditor will tell you that any of this is a Red Flag Indicator.
All of the above has been uncovered in just the past 6 months, and all of it after the Finance Committee suddenly stopped reporting to the Board. So we have a Board out of the Loop, a Consultant Team (BJL) with ties to the Developer, a GM being paid almost a Quarter Million a year; a Financial Director Jane Hagan being paid well into 6 figures / yr; an entire accounting support team; a Finance Committee; separate Annual Auditors, and a separate Audit & Risk Committee, plus the outside Reserve Fund Study Group. All of these experts and they can’t seem to do something as simple as balance the books, or catch these glaring errors. It begs the question…. how many versions of the books are there? Are there different sets of books for different groups? 1 for the Auditors; 1 for Property owners; 1 for BJL; the Board gets to see another one?
Just to be clear, this is also not a totally new phenomena. Back in pre-Covid days there were the unaccounted for, and still unexplained, losses at the Clubhouse. -$625,727.00 in 2018; and -$775,220.00 in 2019 which were previously reported on by this paper. Over the years requests for closer looks at the books have been responded to by the POA Attorney’s, telling property owners they lack authority.
I think it is most likely time to start the public discussion of legal action against the Big Canoe POA. NOT to assume criminality. NOT to assume fraud. But simply to acquire a court order to open up the financial records to property owners. I am opening discussions with a Forensic Accounting Group that I have worked with in previous investigations to get some guidance. There are too many open questions popping up over the past few years. Too many unaccounted for losses, missing monies. And never any satisfactory explanations.
The laws of Georgia state the following in regards to property owner rights of inspection:
O.C.G.A. § 14-3-1602 (c)(2) gives members access to the “Accounting records of the corporation”. O.C.G.A. § 14-3-1620 seperately requires the Non-Profit (the POA in this case) to publish the annual Audit, which they do, but Annual Audits are not forensic in nature, and are not designed to accomplish deeper analysis.
Courts are generally responsive to requests to further open up the full “Accounting Records” ….. for just cause. I think there is more than sufficient evidence of discrepancy at this point to ask a judge for a simple ruling on the matter. We are not talking about a long, expensive, complex legal matter. It is a routinely simple matter to (1) Ask for the access. (2) Supply the evidence of discrepancies (3) You get a favorable ruling or you do not. The community also might want to (4) hire a Forensic Auditor to oversee the review of the opened Accounting Records, which would most likely be icing on the cake for a judge to grant access to the Big Canoe Book(s) & Ledger(s).
BC Property Owners might learn a thing or two about those running the community, simply by seeing how they first respond to such requests outside of a filed legal action, which I think could initially come in the form of a formal request letter submitted by an Attorney representing a group of BC Property Owners.
BC Property Owners are going to have to figure out if they are going to allow this to go on. We have some serious financial issues on the horizon and now is as good a time as any to start the accountability process. Who knows…. maybe the POA Board Of Directors will voluntarily make good on their repeated mantra of Transparency. You never know until you ask.
Publisher’s Note: I am also a property owner in this community, and have a personal stake in where my money is going. I am publicly committing an initial $1000 to the retainer of an attorney, if a sufficiently serious group of property owner’s were to organize with such a goal in mind. I am not interested in anything that resembles a witch hunt, but at this point I firmly believe that BC Property Owners need a Forensic Audit of the POA Books… and I will put my money where my mouth is, and add to that as necessary, but this must be a collective, focused, and calm effort if it is to succeed. With that said, I would warn against what I expect will be an insider push to move this towards a “blue ribbon committee” of the usual suspects to lead this (i.e… led by the same “financial experts” on our committees that have already failed to catch any of this.) A group of open, honest, responsible and diverse property owners that are perhaps not traditionally associated with the board or existing committees is what I personally believe is needed. Not trying to be mean or cast personal blame, but it seems just common sense that it would be prudent to get some distance between those already involved, and a new and separate group trying to independently and forensically review the financial records.
Read Patricia Cross’ Article: https://bcmatters.org/ask-the-board/
Peace,
– david / publisher
Focus on Big Canoe, GA
* a publication of The Mountains Voice
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