What is the $192,739 reduction in equity since year end 2018, and where exactly did it go? This question was asked in my previous editorial, and leadership quickly took the opportunity at the April board meeting to discuss the question. It was actually confirmed that the adjustment total through March 31st is $192,739. It was also noted that the year end financial statements provided to property owners were “preliminary” and presented to the finance committee as such. It was stated that these adjustments were “normal” year end accruals with the largest items being late invoices, allowance for bad debt and expense for remediating the bank this year on Wilderness due to rain that occurred in December 2018. I am not going to challenge how “normal” these adjustments might have been as a full review of the explanations provided can be found on the video of the April 18th board meeting. (1)
But “preliminary”? Here’s the problem. Year end financial packages are generally posted and eblasted to the community during the week leading up to the January board meetings. Where was the word “preliminary” ever mentioned? Statements were not labeled as “preliminary” or draft, and there has been no mention of this in finance committee minutes or board presentations. (2) (5) More importantly, there has never been any mention of these adjustments when they were made. If these statements are “preliminary”, when and why aren’t they ever corrected? For example, 2017 and 2016 “preliminary” financial statements, which overstated net income, also remain posted to the POA website as the actual financial information for the year. (3) (4) And why does our board and our finance committee report to property owners using these “preliminary” numbers without advising us of that very fact? (5) (6)
Management stopped short of saying that 2018 net income would be reduced $192,739 because of these adjustments. Without that confirmation, I have no reference and, therefore, can make no assumption here. But what I can do, and have done, is request that any revised or corrected 2018 December/Year-End Financial Statements be posted and provided to the property owners.
In fact, following the April Board meeting, I was contacted by management and several committee members to attend a four on one meeting to “discuss” my article. I was even contacted by the Chairman of the Audit Committee inquiring about whether I was “satisfied” with the explanation that was provided at the board meeting and if it was sufficient. I explained that it wasn’t about satisfying me, but about providing accurate information to all property owners. After requesting that revised financial statements be made available to the community, I was told by the Chairman that it was “bad timing” and that there may be more adjustments. I followed up this conversation with a formal, written request sent on April 29th , to the full Board of Directors, that any revised December and Year End 2018 Financial Statements be posted and provided to all property owners. Still no response.
What could possibly be so bad that our board would not willingly provide property owners current and accurate financial information? Does this really mean that 2018 net income which was already under budget 466k will be reduced another $192,739? (5) For that matter, does this mean that it may be reduced even more?
Surely it is important that accurate financial information be available as the board attempts to solicit support for capital projects that so many in this community do not even want.
Meanwhile our POA president is quick to surmise that erroneous information is going out to the community that in turn is damaging property values. (7) That Mr. President, is why we need accurate information provided to the community at all times by our board. In the meantime, perhaps the financial information in the President’s recent “POA ninety-day financial report”, published in the May 2019 Smoke Signals and the May 2019 Inside The Gates (8), should be fact checked to determine if some of it is misleading or just plain out erroneous.
Please feel free to distribute and pass this on. Likewise, if you have questions or would like further discussion, I can be contacted at thepcrosses@gmail.com.
Patricia Cross
10438 Big Canoe
References:
- April 18th Board Meeting Video at 5:50 to 7:20 (See POA Website)
- Summary of Operations – 12/31/2018
- Summary of Operations – 12/31/2017
- Summary of Operations – 12/31/2016
- Finance Committee Meeting Minutes – January 22, 2019
- Board of Directors Minutes – 1/24/2019
- May 2019 – Smoke Signals – POA, Page Two; 2nd Column https://bigcanoenews.com/images/stories/smoke_signals_digital_editions/2019_05/2019SS5News28DigitalRev2.pdf
- May 2019 – Inside the Gates – POA President’s Report, Pg. 4
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