It seems appropriate to acknowledge that since posting the previous article on this site, (1) the Director of Finance has now provided a response to this writer’s Ask the POA questions regarding the $571k insurance settlement received thus far for the Chimneys and realty office damage. And although appreciation is certainly extended to the Director for that response, it did nothing to alleviate concerns regarding the disposition of those proceeds.
Follow the money if you can . . .
According to the followup reply (2), $91k of the settlement amount has already been expensed (spent) for items such as replacement of IT and communication equipment and realty building repairs. However, remarkably, $11,750 of that amount has also been used to pay for marina dock repairs which have absolutely nothing to do with the insurance settlement.
For that matter, with the insurance settlement deposited and commingled with other funds in the operating cash account rather than being set aside in a capital fund, (1) how can management even discern or segregate which dollars went where?
What this all really means . . .
The Association is actually utilizing or borrowing from funds that were intended for capital replacements (capex) pertaining to the Chimneys and realty office damage to pay other expenses while also bolstering the woefully and alarmingly low balance in the operating cash account. This is not okay.
In reality, absent the insurance funds, the most recently reported operating account balance (3), which is used to fund the day to day operations of our community, would equate to only approximately $700k.
Note: That said, it must also be remembered that a 2021 Lake Petit Dam Town Hall financial presentation noted that a minimum operating cash level of $2 million was required in order to cover one month of expenses and the annual bank principal payments. (4) https://bcmatters.org/in-search-of-full-disclosure/ One must seriously question what happened to that requirement.
And even now as leadership continues to play musical chairs with our money . . .
We still have negative cash flow; we still have cash ratios hovering well below one; and we still have absolutely no idea what the price tag will be for Lake Petit Dam.
Clearly not okay.
. . . . .
If you believe the information contained on this site is important, please continue to share and pass it on. And should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently. As for questions or further discussion, I may be contacted at thepcrosses@gmail.com. Meanwhile, take care, stay safe and thank you for your readership.
Patricia Cross
10438 Big Canoe)
References:
(1) https://bcmatters.org/a-cautionary-tale/
(2) followup reply to Ticket #11424
(3) August 2023 Financial Package, Comparative Balance Sheet, pg. 2
(POAwebsite>login>POA>financials>2023August)
Apparently there’s quite a shell game going on. Time to investigate and find out what’s really happening with Big Canoe finances. Half answers to serious questions isn’t getting it.
It seems our leadership is unaware of the turmoil facing individual home budgets, our nation’s economy and indeed, that of the entire world. People are cutting back and only addressing necessities, not forging ahead with wild abandon.
Perhaps our money would be better spent on a full forensic financial audit of the books and the plans currently in the works rather than spend it on expensive chairs for the Clubhouse.
It’s time to get real, folks.
How much does a forensic audit cost as apposed to a full unqualified audit and what is the difference. What will one tell us as opposed to the other?
A forensic audit goes much deeper into financial connections within a budget. The forensic accountant follows threads and often allows them to unravel. There are typically no suggestions, recommendations or comments made in a forensic audit, it strictly deals with facts using the measurements of good accounting practices.
A forensic audit doesn’t necessarily have to cover all a company or corporation’s expenditures and income but can focus on one area exclusively, obviously this would save money paid for the audit. The cost of a forensic audit is $250 – $500 hourly. It typically takes about 35 – 50 hours to complete. If the company undergoing a forensic audit is cooperative, the time spent investigating can be substantially less. A full report with supporting facts is given. The corporation or business then acts on the facts presented. If there are legal issues involved, attorneys might be hired for further investigation.
With so many unanswered questions floating around about how Big Canoe’s budget is handled and how funds are potentially intermingled, a forensic audit would clearly show what is happening.
It can be expensive but so is buying fancy chairs for the Clubhouse.
I hope this helps.
A full forensic audit is indeed in order. This wonderful community is being, to use an old term, hornswoggled. It’s possible that everything is “ok”, but I believe in “trust but verify”. The impression that many of us are left with, true or not, is that games are being played with the future of this community and that large sums of money are being waisted or misappropriated. Show us the money!!!
Instead of writing and getting people worked up, why not set up a meeting with the appropriate board members and express your concerns.
Then report on that.
An excellent idea! It has been suggested several times before but the answer comes back to addressing this concern during board meetings when property owners are given a minute or so to ask questions or bring up concerns at the end of the board meeting. That’s hardly enough time to express viewpoints fully or get specific questions answered.
Alternatively, property owners can contact the board or GM through the portal Ask the POA. I’ve done this many times as have others. Because only the one writing to Ask the POA gets the answer from them, I’ve suggested publishing questions and responses for all to see. Because the volume of concerns or questions sent to Ask the POA is probably overwhelming, only those concerns directly related to the community at large would be appropriate to publish.
I would be happy to set up a public informal session with board members to discuss finances and fiscal management. This could take the form of the old Saturday morning Community Coffees where casual discussions often led to better understanding and solved problems. It was an excellent way for property owners to connect with the board and administration. We have incredible talent and problem solvers living within our gates with valuable input to share.
Would you be willing to participate in such a discussion, Ronnie?
I’ll run it by the board and report back. Thanks for the suggestion.
The last 2 part BC Matters articles clearly identifies significant mismanagement by Big Canoe Management and the POA Board. The current General Manager does not have the background, understanding and qualifications for the position. And then, the Board mistakenly relies heavily on the GM for “what is true” as well as misusing the important position of a Board member. Two examples: 1) Board discussions/decisions are made behind closed doors and Board Meetings only provide results of the closed-door meetings, 2) The Board “rule” requiring consensus is not required by the POA Community! We want representation by the Board members we vote for. Unfortunately, given the recent passage of the “Renew Big Canoe” projects, more serious issues and decisions lie ahead for the Board. With “the Vote Results” one of the most significant issues ahead (which the Board refused to address during the “vote”) is Lake Petit Dam.
My recommendation is a complete replacement of the existing Management and the current way of Board representation of the POA by hiring a professional Management Company. This type of Company(s) currently exists where they know how to operate and oversee all aspects of a Community like Big Canoe. These Management Companies are well worth the cost of having the right people in the right place at the right time to assure the quality and financial stability of a of a growing community like Big Canoe. The sooner the better since time is short to implement major changes to the current Big Canoe mismanagement and financially irresponsible actions.
Concur with everything. Given the commingling of funds to pay ongoing expenses, there will not be enough to renovate the Chimney’s let alone the Real Estate office in Capex. The last time the Chimney’s renovation was suggested, it exceeded $1million and was withdrawn by BC management as the community would not support the expenditure due to the Covenant. Rather than converting this to our GM and staff’s new offices, the community needs to approve and vote on its future use as we pay off our accumulated ongoing debt. Current management staff can remain where they are. Unfortunately, the horse is already out of the barn and the renovations are probably underway and I’m sure the funds are already withdrawn from our $15 million credit line. I’ve no intention of voting for the current finance committee members who are running for the board who put us where we are. If you haven’t watched the Smoke Signals Q&A, Sandy Pullara is very proud of the fact that she engineered the 15 million credit facility and that the Lake Petit Dam is paid for. Cost over runs are a business fact of life. Not sure what planet she’s on. Perhaps we should have a hard vocal presence at upcoming candidate events to ask these questions? If not things, won’t change.
I strongly suggest the POA table the Club House renovation and the necessary draw down on the Letter of Credit given all the questions concerning the alleged cash flow issues unless and until an independent audit can clear up these questions. Any reasonable POA would agree with this suggestion.
I would agree. I have been a member of five different golf and country clubs and their directors seem all of the same mind. Spend as much as possible and give management as much authority as possible. It is similar to our federal government. Then hire a management company to do what they should be doing. The board gets the credit and perks, the club management gets raises and the membership gets higher dues, assessments and prices. If something goes wrong, the members blame the board and the board blames the management company to cover their butts for not doing the job right. The only losers are the members.
I’m surprised not one Board candidate subscribes to this post. You would think they’d want to be attuned to any potential issues.
I for one monitor every Group in BC
I take notes on the comments and store them
I am always ready to meet with any groups that would like to hear my views
My contact info is in my bio