The following article was published in September 2013, and titled: "A SHORT HISTORY OF THE CHANGING FINANCIAL REPORTS PROVIDED TO MEMBERS. WHEN OUR BOARD SAYS THEY HAVE THE EXPERTISE, ARE OUR REPORTS DUMBED DOWN TO LIMIT OUR INFORMATION?"
The Wedgefield Examiner has been frustrated by the ever changing financial reports provided to residents. After each of our annual meetings one third of our board changes. As residents, we elect the board. Shortly after the annual meeting the board holds a reorganization meeting to elect the officers of the board. One of the most critical officer positions is treasurer. The history presented below will show that each treasurer then reformats the type of information we will receive. If you attend meetings regularly, or read the minutes of fully transcribed meetings, or listen to the tapes, you will note that each treasurer declares that things will be changing to make financial reports better for you. Most declare that the board has the expertise to handle the accounting. The Wedgefield Examiner reviewed the reports provided to residents on the WPA website for the three years from 2010 through 2013. To date, our most recent complete financial report was through July 31, 2013. Therefore, we looked at July for each of the other years. There wasn't consistency in reporting. During the examined period of time, we had five treasurers. We started with 2010 because that was a year when we had a CPA performing the accounting and reporting service. NOTE: If the financial reports are more than one page, we've provided the first page- only.
HERE IS A RECORD OF THE REPORTS MADE AVAILABLE TO RESIDENTS FOR EACH YEAR
July 2010:
Members received (1) Statement of Assets, Liabilities, and Fund Balance - Income Tax Basis (not provided on blog), (2)Statement of Revenues and Expenses - Budget VS Actual Income Tax Basis. Members were able to see at a glance, year to date expenses and revenues, amount budgeted, how much over or under, the association was on any given line item. Additionally, all checks were written by the CPA firm after board and staff presented proper documentation, to support the check request. Once the checks were prepared by the CPA, two board officers signed them. This becomes important as we review the years that follow, after the association returned to board managed in house, month to month accounting. As you review the report samples for each year provided below, you'll note that as residents, we begin to see substantial change - a limiting of the information provided to residents. It should be noted that in July of 2010 there was a recall, the board reorganized, and we had a new treasurer - our second, who brought the old in house accounting program - TOPPS back. He added hours to our paid staff time, paid to have the system reinstated, ignored previously approved Finance Committee members, and put his own committee in place. but kept the accountant. The treasurer also authored several financial oriented by-law changes to be voted on at the annual meeting. The Statement of Revenues and Expenses Budget VS Actual Income Tax Basis is provided below.
July 2011:
Members were receiving the world of finance and reporting by our third treasurer in a twelve to 14 month period. This treasurer fired the accountant - making such public disparaging comments about the professional, that he was threatened with a lawsuit. It happened. Did he ever notify the membership from the board table that he had placed our association in such legal jeopardy? NO! This treasurer brought accounting in house, hired a contract bookkeeper ( He called this person an accountant but would not allow members to review the individual's credentials, or the independent contract.), who was assisted by our association paid staff person. As residents we received a one page monthly report called - Current Monthly Financial Report Synopsis. This report has 13 lines, including sub totals, and totals. This was the beginning of poor financial reporting to members. Financial operations went down hill from here. Many of the board members that allowed this to happen sit at the board table today. This treasurer authored a contract without a total contract amount and gave the previously no show for months contractor, a 40- 50% advance on the contract. He later stated that he had to do it because if he didn't two of the other board officers would have signed the check. The check books were in house. Additionally, we were provided what some might call a check register. No figures appear on the record. It is a list of recipients and a list of the officers who signed the checks. Review the reports on the WPA website. Can you determine the total amount budgeted? How do we stand year to date in each of the line items, according to budget? During the 2011 annual meeting, this treasurer reported that the 2010 audit was in and that the report noted that there were undocumented payments made (no receipts) to individuals - some of them board members, in the second half of 2010, after the recall. I wasn't on the board in 2010 but I had volunteered on the Christmas decorating, turned in receipts, and received payments. I was named as one of the people who had received reimbursements, without receipts. With a current board member making that claim, I stated I had turned in receipts and could describe the documents. The office staff person who received them went to a file and provided them. They had not been filed properly or provided to the auditor.
July 2012:
Members were receiving monthly financial reports from our fourth treasurer in 2 years. We received a 14 line - Monthly Financial Report Synopsis. There is a note posted on the WPA website that states, "Expense Ledger available upon request". This treasurer worked with the in house staff noted in the 2011 description. The management firm took over for a few months. The reports changed, and almost monthly, the treasurer reported there were errors, or corrections needed to be made. It should be noted that during 2012, our future 2013 treasurer introduced assignment of our reserves according his calculations for assignment, and the board accepted it and began to draw funds from current year into reserves. Important? Yes. First, residents who asked for his formula of allocating reserves, weren't answered. Shouldn't there be a monthly report on how the reserves are being used and the amount of each category, with growth and reductions for approved expenses?
July 2013:
There is another reorganization meeting and yes, we are at treasurer number five. As members, we have a enhanced - Revenue and Expenditures Synopsis - 3 pages. This treasurer hires what he terms as accountant, supposedly very part time, and brings our paid staff person into the day to day accounting entries. The new accountant, declares during an interview with another board member, that she is not an accountant, but a bookkeeper. Our treasurer writes her job description and leaves off all education and certification requirements. As treasurer he develops a "off the shelf contract" for a reserve study. We've talked enough about how they tied the hands of the contractor. Once the reserve study is in, our treasurer attempts to call for a board vote on a 2014 budget, using his, not the reserve assignment percentages, contained in the study. The projected 2014 budget will come to a board vote at the September meeting. Will there be a budget for operating and a projected budget for the flow of money in and out of our reserves? We'll see.
The Wedgefield Examiner goes back further into the financial reports:
After I reviewed the July Financial reports from 2010 through 2013, I wondered if there was another board, or board treasurer who reported the total amount budgeted in each category, year to date expense or income, and whether the board was over, or under projections. I went back to 2008. In January 2009 the board hired the CPA firm. The 2008 treasurer was a known Concerned Citizen who had served as treasurer off and on, for almost 10 years. This treasurer must have felt that you had a right to know. Here is the top portion of that report. FINAL COMMENTS FOLLOW THE DOCUMENT.
COMMENTS:
The question we started with in the headline of this article - "Are our reports dumbed down to limit our information?", can be answered now. We will each have to answer for ourselves. I believe they have been dumbed down to limit our information. They have been dumbed down to suit the need for control by our treasurers and their boards. They've trusted that you won't notice, that you'll let them do as they please, and relay how and what information they see fit. Each board has claimed, in numerous arenas, that they have the expertise. Shouldn't our funds, our most important asset be managed by a CPA, who has to tell the monthly accounting story, according to sound financial practices - not whims? These reports look like a strange magic act designed to cover and confuse, rather than report.
