An update to a balancing act . . .

It seems only fair to mention that after publication of “A balancing act”, (1) a member of the POA management team reached out to this writer in an attempt to explain some of the issues that had been noted in that article. The POA President, Treasurer and GM were also included in the loop as they were copied in the original correspondence.

Hoping that reasonable answers could be provided to the serious questions, several emails traveled back and forth over the course of several days. Unfortunately, much of the information that was provided brought forth additional and more disturbing questions.    

A reclassification of assets . . .

Management acknowledged that the comparative balance sheet information for the previous year (2019) was indeed out of balance $460k. That information has since been corrected and reposted on the POA website. (2a)  It was explained by management that the outage took place while reclassifying AECD cash to other assets per suggestion of the Finance Committee on January 18^th.

Although it is understood that mistakes can sometimes occur, it remains difficult to understand how the outage was missed by so many others (GM, BJL and each member of the POA board).   In addition,

• • • Reaching back to reclassify an asset in a prior year long after receipt of the audited financial statements heightened the propensity for error.

    • Further it must also be noted that there is no documentation of this suggestion in the finance committee minutes.

However, the suggestion was further acknowledged as the POA Treasurer was quick to jump into the discussion seeking to provide “clarification” that “the financial statements reviewed by FinCom/Board Liaison were pre-reclassification and capital true up.”

The Board Designated Master Plan Fund remains out of balance.  Exactly where did that $265k go? . . .

For quick historical reference, according to leadership, master plan funds are maintained in a separate bank account (cash). Total transactions posted to the account throughout the year as indicated on the monthly reports (3) simply do not agree with the December 31^st Master Plan Fund balance as shown on the Comparative Balance Sheet. Either the Master Plan Fund balance is incorrect (beginning as early as August 2020) or the reports do not contain all transactions that have been made to the account.

Management explains that since some expenses had been paid out of the operating account previously, “it was decided to true up the accounts with the actual expenses spent in 2020 for the Master Plan and Capital Replacement accounts on the December balance sheet.” (Remember, the POA Treasurer stated that these true ups took place after year end and after January 18^{th .})

Once again, the Master Plan Fund is a cash account. True ups do not apply to cash accounts.

• • • Perhaps there are missing expenditures that have not been disclosed.

• • • Perhaps there are transfers to other accounts that have not been disclosed.

    • Or perhaps the balance is completely wrong.

It is impossible to tell, and management has failed to provide the information requested by this writer to prove otherwise.

And, let’s not forget a few more characteristics of the Master Plan Fund:

• • • The Master Plan Fund is the account designated to fund the Creek 9 renovation that was projected to have a $2.2 million balance at year end.

    • The Master Plan Fund is also the same account designated to receive all capital contribution fees as recently approved by the property owners.

    • Transfers of cash into the Master Plan Fund have required board approval. (4) (5) It should be expected that any transfers of cash out of the account would also require board approval.

Management explains the December anomaly is attributed to Christmas bonuses, vacation pay, spruce up campaign and bad debt expense . . .

Also as noted in the previous article, December payroll expenses along with administrative and public works operating expenses increased significantly over the previous month thus creating a $246k loss for the month. Specifically the increase in payroll expense for the month totaled $191k with the increase in operating expenses totaling $172k for a total increase in these categories over November of $363k. (2b) (6)

When asked why some of these budgeted expenses were not accrued throughout the year (to more accurately reflect income each month), management indicated that beginning this year, vacation pay will be accrued monthly. There was no mention of accrual for any other amounts.

In conclusion, this update is intended to provide a fair representation of the explanations that have been provided to this writer by management.

. . . . .

If you would like to see additional articles posted in the future, please check back frequently or subscribe for an email notification. Likewise, please feel free to forward and share this information with your friends and neighbors. For questions or further discussion, I may be contacted at thepcrosses@gmail.com . Till the next time . . . take care and stay safe.

Patricia Cross (10438 Big Canoe)

Reference

1) ”A balancing act”, January 31^st, 2021, bcmatters.org, https://bcmatters.org/a-balancing-act/

2) December 2020 Financial Package, (a) Comparative Balance Sheet, pg. 2, (b) Summary of Income from Operations, pgs. 7-8

(POAwebsite>login>POA>Financials>SummaryOfOperations>December2020)

3) Reconciled Board Designated Capital Fund reports (various pg. #s)

(POAwebsite>login>POA>Financials>SummaryOfOperations>January – December2020)

4) POA Board of Directors Meeting, Minutes, March 19^th, 2020

(POAwebsite>login>POA>Meetings>Minutes>March2020)

5) POA Board of Directors Meeting, Minutes, June 18^th, 2020

(POAwebsite>login>POA>Meetings>Minutes>June20202020)

6) November 2020 Financial Package, Summary of Income from Operations, pgs. 7-8

(POAwebsite>login>POA>Financials>SummaryOfOperations>November2020)