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Tuesday, November 15, 2011

THE WPA 2010 AUDIT

BACKGROUND

I emailed the Board and asked to review the 2010 Audit including the management letter. I asked the Board to email me if there was a problem with my review of the record.   Board Member McBride, wrote that I should be allowed access to the record.  Today, prior to my 10:00 AM appointment I emailed the office to verify whether I would be allowed access.  The staff secretary responded that I could review the record and stated that two Board Members had sent their approval.  The rest of the Board had failed to respond.  I asked who the second Board Member was and she stated that it was Garrison.  My thanks to both of them for answering a resident question, and for their "open door" treatment of this request.

I felt that it was important to review the fiscal health of the Association, prior to voting.  This year we have several Board Members who are running for re-election.  They are Wilson, Thomas, Walters, McBride and McMillin.  Additionally, candidates Pietkewicz and Zieske have served on previous Boards.  Infact,  Zieske served on the 2010 Finance Committee.

Recently, I have not been allowed copies of documents.  I had been paying for them when some on the Board made special rules, for special residents.  Today, I hand copied the audit management letter.   Here it is for your review:

______________________________

Lawlor & Brady, LLC
Certified Public Accountants
5187 Horry Drive
Murrells Inlet, SC 29576

In planning and performing our audit of the financial statements of the Wedgefield Plantation Association, Inc. as of and for the year ended Dec. 31, 2010, in accordance with auditing standards generally accepted in the United States of America, we considered the Wedgefield Plantation Association, Inc.'s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing an opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the organization's internal control.

Our consideration of internal control was for the limited purpose described in the proceeding paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.  A significant deficiency is a control deficiency, or a combination of control deficiencies that adversely affects the Organization's ability to initiate, authorize, record, process or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Organization's financial statements that is more than inconsequential will not be prevented or detected by the Organization's internal control.  We consider the following deficiencies to be significant deficiency in internal control:

During our audit we discovered that several invoices were paid without proper back up and authorization.  The auditor will review these during our audit conference.

During our audit we discovered that the operating bank reconciliation was not properly prepared.  The closing date of the bank statement did not match with the financial statement dates and outstanding checks were improperly listed.  In addition, the Edward Jones accounts did not have bank reconciliations prepared resulting in a significant internal control deficiency internal control deficiency.

During our audit we discovered that computer file backups were kept in a file left on the premises.  One copy of the accounting files backup must be kept off-site under the custody of a responsible party such as the Association's Treasurer or other executive officer. Although the Association utilizes an on-line backup service (Carbonite), these services may prove to be inadequate during a power outage or other weather related situation.  When it comes to data security a little redundancy can go a long way.

This communication is intended solely for the information and use of management and the board of directors and is not intended and should not be used by anyone other than these specified parties.

___________________________

Does the management letter cause you any concern about the incumbent candidates?  I've presented the letter in an effort to provide you with information that may help you determine who you will vote for this weekend.  I'm concerned about the stated deficiencies.

As I reviewed the audit itself, I'm concerned about the uncollected assessments.  I'm concerned about the message sent by a failure to collect the unpaid assessments according to our governing documents. Failure to make every attempt to collect legally and according to our governing documents just sends a message that there is inequity in the treatment of our residents.

I'm concerned about several of the line items.  I reviewed the detail. Take the opportunity to set up an appointment to review the entire document. This is a report on how our assessment dollars are managed.

HOW DOES THIS IMPACT THE ELECTION?

In the end, you'll be the judge and vote.  Consider cleaning the slate, and giving Janine Cline, Alan DeMarchi, and Bill Steiner an opportunity to move Wedgefield forward.  Consider incumbent McBride's  proven dedication to adherence to our governing documents and open discussion at Board Meetings.  NOTE:   In fairness, while McMillin is an incumbent, he was not responsible as Treasurer and did not have a seat on the Finance Committee, during the period of time reflected in this audit.

You should be concerned that in July 2010, after their hostile Board take over that the Concerned Citizen element of the Board, took over finances, ignored our governing documents, and the platform of their candidates will take you back to their financial tactics!!!!