BACK TO THE JUNE MEETING - ROADS REPORT, AND A QUESTION - WHAT IS THE HURRY?

Roads Chair, Adam Anderson  reported that he had completed his study of the conditions of our roads.  He had prepared a map of our roads, marked the areas to be considered for repair, and designated the areas most in need of attention.  There is $20,000 in the Roads budget.  After discussion it was determined that the management company would assist in securing bids for the project.  There was a question whether all contractors considered would be licensed and insured.  Mr. LaFrance commented that they would be.

It appears that Anderson did a responsible job of evaluating and preparing a report so that the Board could make a decision on how to proceed.  He basically followed a pattern that has been utilized here for years.  That is a problem, not Anderson's fault, but a problem for this Board, and many Boards of the past. 

The real problem is there is no foundation to the decision making on roads, drainage, the landing, maintainance of buildings, etc..  Every Board has members who claim to be experts, some with real credentials in a specified field, others - figments of their imaginations.  We are left with putting our assessment dollars in piece meal fashion, to "make it work for today", knowing tomorrow we'll be back to patch it up again.  It is like the homeowner with a home that has dry rot who keeps painting the damage to make it look good for today.  There is no real improvement to the home, certainly not to the long term stability of the structure.  The root problem hasn't been evaluated, or really addressed.

We'll stay with roads.  In 2011, Huggins spent $29,000 on road repair, by a contractor that wasn't licensed or insured.  The contractor abandoned the job for months on his first project for $20,000 (There wasn't even a contract.). The Board ignored key areas like huge holes at the circle where over half the association has to drive every day, and rewarded the contractor with an additional $9,000!  Two of the roads  repaired in 2011 - William Screven and Duck Pond, are on the list again this year. During the 2011 fiasco, we had 3-4 Board Members declaring their vast expertise.

We don't have a comprehensive study/plan, conducted by professionals, who have examined the life expectency of critical elements, developed a long term plan with associated dollars, or a comprehensive date plan to restore and rebuild. We just keep painting the dry rot to the tune of the drummers on the Board, who call themselves experts.  Don't misunderstand, I'm not laying this problem at the feet of Anderson as Road Chair.

What we need is a PROFESSIONAL RESERVE STUDY, so that we can set aside funds, follow a plan, and use our funds to care for the foundations of our community.

 As to expertise, in the past formulas have been drawn by best guess, allocate funds to tie them up so those canal people have no where to get money, funds have been allocated but not restricted and in the case of the office - just pulled from where ever- ignoring reserve allocations, or review of expeditures in previous years and allocating according to a percent of poor spending.  How's that working for us?  You be the judge.

The 2009 Board approved  a budget for 2010, with $10,000 for a reserve study.  The January to June 2010 Board issued a request for proposal, and actually had bids in the office waiting to be opened at the time of the recall.  When the new Treasurer was informed (it is in the July 2010 Minutes) of the bids, he said, "we have enought talent on the Board".  A lot of our money then went to lawyer fees, and things fell by the wayside with the turmoil at the Board table.

I'm told by a credible source, that when the 2011 Board developed the 2012 budget that $5,000 was included under professional fees for a reserve study. It was stated at the June meeting that there wasn't any money in the budget for  a reserve study.  I can't verify who is correct.  I don't have the 2012 budget that was mailed with our 2011 Annual Meeting packet.  I can't write the Board and ask for a copy because they don't answer and the management company doesn't either.  IF ANYONE HAS A COPY, WOULD YOU EMAIL IT TO ME.

I don't have much hope for this Board doing the right thing.  We have sounds of "we have talent to do this in our community".   During the June Meeting we had excuses as to why we had to use the method presented for the immediate allocation of reserves.  There was so much dancing around the subject that I don't quite have it all, but it was something about not getting clobbered in another audit and something about taxes, and protecting our non profit status. Listen to the tape for yourself.   I might as well say it, you'll claim I'm thinking it, and quite frankly, I am.  I don't trust that answer.  Why?  I was on the 2009 Board.  We had the first audit conducted in 4 or 5 years and we weren't given any detail about assignment of reserves as it related to how it impacted the payment of taxes.  We were advised to get a professional reserve study  Additionally, I wrote to the Board, asked to see the 2010 audit and management letter.  I reviewed it in the office.  I don't remember all the details of the  full report, but I did sit and hand copy the management letter and typed it and published it for you.  The management letter usually covers material findings, important findings, and it isn't in there.  I'm not making any claims of wrong doing, but here is the management letter for the 2010 audit:

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.


Why are we spending another $20,000 now, throwing more on top the $29,000 spent last year?  What if we had a plan, a reserve study, and we had $49,000 to spend on effective repair and maintenance of our roads?  Is our Board just being short sighted again?  Not Board Member McBride.  He tried to get the 2011 Board to talk about proper studies before we repaired the roads in 2011 and was shut down for Huggin's road plan.  He tried to get this Board to consider a reserve study at the June Meeting.

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