More Financial Concerns - Regina Wunsch March 22, 2016
Mar 22, 2016 12:28:24 GMT -7
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Post by Admin on Mar 22, 2016 12:28:24 GMT -7
Administrator's Note: Regina Wunsch sent a letter to the GLA Board and the members of the GLFPC mailing list on March 22, 2016. Once again she is voicing her concerns over the incomplete and inaccurate GLA financial statements. Regular readers may remember our post from the January 20th, 2016 Finance Committee meeting in which we stated:
"The Glastonbury Landowners for Positive Change website contains a series of letters written by Regina Wunsch to the GLA Board.
Regina's first notification on October 24th, 2015 to the GLA Board of major accounting problems was this letter.
On December 9th, 2015 Regina followed up on the GLA Treasurer's letter with this reply.
On the 14th of December Regina replied to another response from Rudy Parker, the GLA Board Treasurer.
At the January 11th GLA Board Meeting Regina Wunsch tried to discuss the financial accounting errors with the GLA Board. She was sharply cut off by President Charlotte Mizzi and told to put her concerns in writing and present it to a Finance Committee meeting. The 30+ landowners present were denied the opportunity to learn more about the financial errors and dubious statements that have plagued the GLA Board since Rudy Parker took over the Treasurer's position in the summer of 2015.
On January 17th Regina Wunsch carefully detailed many financial errors and accounting irregularities in this letter.
Regina Wunsch's letter was put on the bottom of the agenda for the January 20th, 2016 Finance Committee meeting. At that meeting the audience was told that the Committee may not have time to review Regina's analysis since Rudy Parker, the GLA Board Treasurer had to leave by 9:30. Sure enough, Regina's analysis did not get discussed and the Board members present suggested that another meeting could be held to talk about them. However the Committee did have time to publicly chastise Regina for airing her concerns with the Glastonbury Landowners for Positive Change (GLFPC) which resulted in Forum articles and a wide reading of the issues by many landowners. After humiliating Regina with specific charges the Committee members then asked if she would reconsider her resignation and assist the Treasurer in correcting the financial statements in time for the state required February mailing. Regina politely declined their request.".
It appears that at least for a while Regina and Rudy were working together. At the last GLA Board meeting Rudy apologized for the errors on the financial statements projected on the wall but then when on to state that the ones he was handing out to Board members were corrected by Regina. No copies were made available to the landowners.
Unfortunately financial transparency has not been accepted by the GLA Board. They have steadfastly refused to release many financial documents requested by landowners and the Forum for several months. They have also voted to ask all Financial Committee volunteers including Regina Wunsch to sign confidentiality agreements.
The full text of Regina's latest letter follows:
Dear Members of the Board,
I have serious concerns about the incomplete and inaccurate February financial reports made available to the landowners at the March board meeting and the quality of instructions given to the contracted accounting service.
As I have stated before I do not consider financials a committee matter as every board member shares the fiduciary responsibility for the Association. This is should also be of concern to all landowners as I do not see how any sound financial decisions can be made under these conditions. Therefore I am also forwarding this email to the Glastonbury Landowners email list. Unfortunately there is no way to address this matter at a monthly board meeting given the current meeting structure and the three minutes allotted each landowner at the end of the meeting are insufficient and impractical since decisions involving finances have already been made.
t was stated at a previous board meeting that the Board will only respond to landowner concerns presented to them in writing, if the landowner states that a response from the Board is desired. This would explain why I have never gotten a response from the Board to any of my previous letters to them expressing concerns about the GLA financials. I would like to clearly state that I desire a response from the Board to every concern and question within ten business days. As I consider this a serious matter I will seek legal advice on what my recourse is as a landowner, if these concerns and questions are not addressed in a timely and satisfactory manner.
Questions and Concerns:
1. At the March board meeting the February Balance Sheet in the landowner binders contained several inaccuracies and it was not possible to determine what the actual balances of several funds and the bond escrow account were. From what was said during the financial presentation it appeared that the board members were supplied with a correct final copy of the Balance Sheet. Why were no corrected copies made available to the landowners? Why were landowners not even alerted to the fact that the information they had was incorrect and why were no corrections given so landowners could update the information on the landowner copies?
The Balance sheet should also have a column for the prior month’s account balances as it is otherwise not possible to determine if there was any fund activity and inquire about it. No fund activity was mentioned in the treasurer’s report although there clearly was some as evident from the non reconciled funds and cash reserve accounts. Why has this column been eliminated? Why is fund activity not part of the treasurer’s report?
2. The landowner binders contained only an incorrect Balance Sheet, a year to date accrual based P&L and a year to date cash based Budget Variance P&L, instead of the complete packet of reports supplied in the past. It is impossible to ascertain what the actual amount of assessments paid to date is from these reports as they only show payments invoiced and due for that quarter and not the total payments made by landowners who pay the entire assessment at the beginning of the year. Without this information one cannot tell how much of the receivables due this year have been collected and how much income one can still expect and hence what portion of the receivables on the balance sheet is past dues. One can also not tell how much of the general operations savings is unallocated and how much is paid current year’s assessment money that needs be reserved for this year’s budgeted expenses. This is critical information for any type of financial planning and cash flow projections that are necessary for sound financial management and for any expenditures outside of the budget such as the contracting of the services of a road engineer, a second plow truck etc. that have been discussed.
As no board member mentioned the absence of any reports and the inability to find this information, I assume the board members received the complete packet of financial reports, derived this information from them by themselves and therefore had no need to ask the treasurer for it. If this is true, why were the landowners not given the same reports as the board members?
But as the landowners only received the incomplete packet, why was this information not at least included during the treasurer’s financial report? It is a basic and fundamental part of the “state of the finances”. It should have been included even if the report packet had been complete since not all landowners can read financial reports well enough to extract this vital information. Why is this not being done?
3. The financial reports in the landowner binders showed a collection rate of only approximately 69% for the first quarter assessments invoiced to landowners. This is substantially lower than the collection rate the 2016 budget is based on. Why was this not brought up as part of the treasurer’s financial report or at least by another Board member? How does the board intend to deal with this as this could lead to a potential budget shortfall, if this trend continues?
4. Why did the Budget Variance P&L in the member binders contain a monthly budget column? The GLA only has a yearly budget, so there is no need for this column as it contains the same value as the yearly column. Why was the “%” column that shows how much of the budget has been spent to date eliminated?
5. During the March board meeting one of the board members stated that the 004 Savings General Ops account monies were unallocated funds. Why was this not clarified and corrected? Why was the amount that was unallocated and the amount that is reserved for the budget not clearly stated? How is the actual amount that is unallocated being tracked? Who is tracking it?
6. The 1015 Payroll Costs account in the P&L showed a very clear error. Why was this not brought up by any board member prior to approving the financials? Why were the financials approved without the condition that the error be fixed and a corrected report be supplied for the GLA records?
As I stated in a prior letter to the board, also forwarded to the landowners, all data in the reports provided by the accounting service needs to be reviewed and checked for accuracy so the board and the landowners receive correct reports at the monthly meetings and the GLA preserves the integrity of its financial data. Misunderstandings and mistakes happen and also the input is only as good as the instructions given. It appears this is not happening. Who will be rendering this vital service?
7. Three board members at the March meeting abstained from approving the financials, because they did not understand them or understand enough about them to approve them. Why did the president not offer to explain the basics to these board members before the next board meeting or ask another board member to do so?
Ideally, every board member should have a basic understanding of the GLA financials and how to find critical information such as the amount of current year receivables collected and outstanding, the amount of past dues, the actual collection rate, the amount of allocated and unallocated monies available etc. At the very least the treasurer should be including all of this information in his report as it is essential for sound financial decision making and so every board member can ascertain what the actual financial status of the Association is. Why was this not done?
8. During my two appointments with Julie regarding our corporate tax returns I was made aware of the following regarding the GLA’s financials by Micah and Julie:
a) Micah was asked to set up a Snow Fund and Reserve Cash account, but was not told which Equity account to take the money from to set up the Fund. Only the active Equity accounts show up in the financial reports. There is at least one other equity account in the GLA’s chart of accounts that could be used. Regardless of this fact, complete detailed instructions must always be given to the accounting service regarding any entry into the GLA QB data base and especially regarding account set up or they cannot do their job in an accurate and timely manner. It is also frustrating to not be able to complete the data entry because more information is needed or to have to a redo entries, because the initial information/instructions given were inaccurate or confusing.
b) Complete account names must be referenced when discussing or requesting any transfers of money to avoid confusion. This is especially important for the Construction Bonds Held by the GLA Liability account as it is not a Fund (Equity) account as the name Construction Bonds Reserve Cash implies. It has no equivalent under the Equity accounts where one would logically look for it.
c) The deposits from landowners/title companies to close out past dues made at the time of my appointment were not flagged as such on the deposit report given to Micah for entering payments. As these accounts all contained overcharges and needed to be recalculated before they could be paid, so the actual balance owed and what was paid do not match what is in the live QB data base. Therefore the balances on all landowner accounts with paid off past due assessments this year need to be checked to ensure the remaining balances have been written off as overcharges and are not still in the account as owed.
d) Julie and Micah were not aware that the final month end financials should ideally be ready by the Friday before the board meeting to give the board members time to review them over the weekend and to make copies for the landowners. When the treasurer contacted Micah regarding the month end financials, Micah said he informed the treasurer that the reports he was sending were a preliminary set and he had not finished with the adjustments. He was not told by the treasurer that the final set was needed that day or over the weekend. So Micah waited for me to come in for my corporate tax appointment on Monday afternoon (day of the board meeting) to help clarify the snow fund set up and other questions before finalizing and sending the final reports. Therefore the landowners ended up with incorrect Balance Sheets.
e) It had not been explained to Julie that the GLA was required to have a balanced budget and exactly how the 2016 budget was balanced and that the Budget Variance report had to reflect this. Therefore the Budget Variance Report presented at the March board meeting showed a budget shortfall. As every item on the budget has to be tied to a G/L account it is necessary to explain exactly where the funds to balance the budget are coming from, so the appropriate G/L account can be chosen or created, if necessary. I have given Julie the necessary information and she will create the needed account to enter the unallocated funds allotted from General Ops Savings 004 to balance the budget. This should have been done by the treasurer or a board member at the time the 2016 budget was submitted to the accounting service for entry.
f) As Micah was not present on Wednesday I pointed out the 1015 Payroll account error to Julie. I told her that the treasurer stated that this was an account correction. I informed Julie that the set- up of the GLA books does not allow for entries into summary accounts; if Micah receives only summary account information when asked to enter data or make corrections, he must request that the treasurer give him the sub account under which the item belongs. I have explained this numerous times at past board meetings when landowners were still allowed to speak when the financial reports were presented and data was entered into summary accounts by the treasurer.
It is imperative that detailed and complete instructions be given to the accounting service regarding data entry, account/fund set up, required reports, desired report formats etc. I have explained this before in a prior letter to the Board. The accounting service does not do audits or read minds. The quality of what we receive depends on the quality of information and instruction they receive.
What steps will the Board take to ensure that the accounting service receives the clear and complete instructions it needs to minimize errors and do its job in a timely manner? If the accounting service is preparing the financial reports for the monthly meetings, who on the Board will insure that they receive correct instructions so the reports contain the necessary information as they presently do not?
9. The Board has repeatedly claimed that Covenant Section 12.01 gives the Board the right to grant landowners discounts on past dues or assessments on a case by case basis based on their subjective opinion of what the landowner can afford to pay or, if the landowner can pay, how much the landowner would be willing to pay. The treasurer requested at the March Board meeting that he be given “wiggle room” to negotiate lower rates at his discretion when contacting landowners with larger past dues, if the landowners do not want to pay the amount they owe. This leaves the door wide open for accusations of favoritism, cronyism, influence peddling etc. It also contributes to ill will and animosity in the community.
At the Covenant/Bylaw meeting in Emigrant Hall, Board attorney Alanah Griffith stated that the Board had the right to negotiate on past due debt without landowner approval of the deals negotiated based on Section 12.01. But the example she gave outlined a clear objective process that applied to all landowners who could not or would not pay their past due assessments. The first step required submission of the last three years’ of filed tax returns and other documentation, if necessary, to objectively assess the financial situation of the landowners in question. Then depending on the income situation the board proceeded with the collection process according to established guidelines for the various income categories. Since there is an agreed upon objective and consistent process for debt payment negotiations it is understandable that the board would not need approval of every deal, which would be highly impractical. The board in the example given that had full authority to negotiate on behalf of the landowners was acting within the confines of an agreed upon process and within agreed upon established guidelines.
Therefore I request that the Board provide a written signed statement from Board attorney Alanah Griffith stating that she believes that Section 12.01 gives the Board the right to negotiate assessment and past due discounts on a case by case basis based on individual and/or collective board member subjective opinion regarding what a landowner can or is willing to pay. The statement should also include her assurance that this approach to granting assessment and past due discounts and fee waivers is in compliance with Montana laws regarding the management of corporate finances.
10. Please state in writing the Board’s criteria for filling board positions vacated before a board member’s term expires. The vote to fill the advertised Board vacancy at the March board meeting has left me totally confused.
When filling previous vacancies it was stated that the Board was looking for landowners with specific skills and enough time to help lighten the Board’s workload. Skills in the area of financials were especially needed and desirable. One of the candidates applying for the current open position was doing very professional, reliable and successful work as a volunteer making collection calls for the Association. It was only because she offered to make the calls that I volunteered to recalculate the accounts of the landowners on her call list and the accounts where correct statements were needed for timely liens and closings of properties with a past due balance. She not only made sure that all account balances were correct before she made any calls, she also did research to find data missing in the QB customer module, such as physical addresses and current contact information, if what she was supplied with was obsolete etc. She also had business experience having owned and run her own business in the recent past. For some reason none of her contributions as a volunteer were mentioned by the Board and a candidate with no apparent needed skillset and no volunteer activity was chosen to fill the vacancy.
So one must conclude that if a landowner with needed skills wishes to join the Board, it is best not to volunteer and show oneself to be professional, dependable, organized and successful in one’s volunteer work for the Association, because that appears to work against the landowner should a vacancy on the Board occur and the landowner applies to fill the vacancy. It appears that in that situation , it is best to do nothing for the Association until there is an opening and one is appointed or wait until the November elections and one is elected.
We have now arrived at the stage where landowners are not allowed to ask questions of the treasurer at the time he gives his report; the financial reports presented are not checked for accuracy; the Board approves inaccurate financials, because they are unable to spot problems or just assume the reports are accurate; information needed to ascertain the state of the GLA finances is no longer made available to the landowners in the financial reports in the member binders at the monthly Board meetings and not included in the treasurer’s report either; the GLA has a growing problem of landowners not paying their current assessments, but the treasurer does not include the collection rate in his report and no board member asks about it; the Board is in real need of members with the skills to help out with some of the treasurer’s job, but when an opening on the Board becomes available they pass over a volunteer who has reliably and successfully helped out in that area in favor of someone who has no apparent skills needed by the Board and who has put in no volunteer time; the contracted accounting service is not being given the instructions and information to do its job in a timely manner; the Board wants to grant discounts, fee waivers and settle past due accounts on a case by case basis solely based on their subjective opinion and discretion and create even more mistrust and disharmony.
This situation is not tenable.
As I have stated in previous letters to the Board, you are dealing with corporate funds, not your personal ones. They are laws governing the management of corporate funds. Being volunteers does not exempt you from your fiduciary duties or the laws.
Accurate and complete financial data is the basis for sound financial decision making and successful short and long term planning. Therefore the Board must ensure that the data entered is correct and the accounting service receives complete and correct instructions and information. But the best data is useless, if no one understands how to use it. Therefore it is also necessary for at least some board members to educate themselves in its use and the basic set- up of the GLA accounts.
How do you expect to responsibly handle the business of the GLA if at the monthly Board meeting you do not know what the to date income is, what the outstanding (non past due) receivables are, what the actual collection rate versus the one used for the budget is , what the projected cash flow is and what the available unallocated funds are? And how can you expect to do this, if you have no idea if the information you are basing your decisions on is accurate, because no one thinks it is necessary to check the entries made by the accounting service?
Regina Wunsch SG 72
"The Glastonbury Landowners for Positive Change website contains a series of letters written by Regina Wunsch to the GLA Board.
Regina's first notification on October 24th, 2015 to the GLA Board of major accounting problems was this letter.
On December 9th, 2015 Regina followed up on the GLA Treasurer's letter with this reply.
On the 14th of December Regina replied to another response from Rudy Parker, the GLA Board Treasurer.
At the January 11th GLA Board Meeting Regina Wunsch tried to discuss the financial accounting errors with the GLA Board. She was sharply cut off by President Charlotte Mizzi and told to put her concerns in writing and present it to a Finance Committee meeting. The 30+ landowners present were denied the opportunity to learn more about the financial errors and dubious statements that have plagued the GLA Board since Rudy Parker took over the Treasurer's position in the summer of 2015.
On January 17th Regina Wunsch carefully detailed many financial errors and accounting irregularities in this letter.
Regina Wunsch's letter was put on the bottom of the agenda for the January 20th, 2016 Finance Committee meeting. At that meeting the audience was told that the Committee may not have time to review Regina's analysis since Rudy Parker, the GLA Board Treasurer had to leave by 9:30. Sure enough, Regina's analysis did not get discussed and the Board members present suggested that another meeting could be held to talk about them. However the Committee did have time to publicly chastise Regina for airing her concerns with the Glastonbury Landowners for Positive Change (GLFPC) which resulted in Forum articles and a wide reading of the issues by many landowners. After humiliating Regina with specific charges the Committee members then asked if she would reconsider her resignation and assist the Treasurer in correcting the financial statements in time for the state required February mailing. Regina politely declined their request.".
It appears that at least for a while Regina and Rudy were working together. At the last GLA Board meeting Rudy apologized for the errors on the financial statements projected on the wall but then when on to state that the ones he was handing out to Board members were corrected by Regina. No copies were made available to the landowners.
Unfortunately financial transparency has not been accepted by the GLA Board. They have steadfastly refused to release many financial documents requested by landowners and the Forum for several months. They have also voted to ask all Financial Committee volunteers including Regina Wunsch to sign confidentiality agreements.
The full text of Regina's latest letter follows:
Dear Members of the Board,
I have serious concerns about the incomplete and inaccurate February financial reports made available to the landowners at the March board meeting and the quality of instructions given to the contracted accounting service.
As I have stated before I do not consider financials a committee matter as every board member shares the fiduciary responsibility for the Association. This is should also be of concern to all landowners as I do not see how any sound financial decisions can be made under these conditions. Therefore I am also forwarding this email to the Glastonbury Landowners email list. Unfortunately there is no way to address this matter at a monthly board meeting given the current meeting structure and the three minutes allotted each landowner at the end of the meeting are insufficient and impractical since decisions involving finances have already been made.
t was stated at a previous board meeting that the Board will only respond to landowner concerns presented to them in writing, if the landowner states that a response from the Board is desired. This would explain why I have never gotten a response from the Board to any of my previous letters to them expressing concerns about the GLA financials. I would like to clearly state that I desire a response from the Board to every concern and question within ten business days. As I consider this a serious matter I will seek legal advice on what my recourse is as a landowner, if these concerns and questions are not addressed in a timely and satisfactory manner.
Questions and Concerns:
1. At the March board meeting the February Balance Sheet in the landowner binders contained several inaccuracies and it was not possible to determine what the actual balances of several funds and the bond escrow account were. From what was said during the financial presentation it appeared that the board members were supplied with a correct final copy of the Balance Sheet. Why were no corrected copies made available to the landowners? Why were landowners not even alerted to the fact that the information they had was incorrect and why were no corrections given so landowners could update the information on the landowner copies?
The Balance sheet should also have a column for the prior month’s account balances as it is otherwise not possible to determine if there was any fund activity and inquire about it. No fund activity was mentioned in the treasurer’s report although there clearly was some as evident from the non reconciled funds and cash reserve accounts. Why has this column been eliminated? Why is fund activity not part of the treasurer’s report?
2. The landowner binders contained only an incorrect Balance Sheet, a year to date accrual based P&L and a year to date cash based Budget Variance P&L, instead of the complete packet of reports supplied in the past. It is impossible to ascertain what the actual amount of assessments paid to date is from these reports as they only show payments invoiced and due for that quarter and not the total payments made by landowners who pay the entire assessment at the beginning of the year. Without this information one cannot tell how much of the receivables due this year have been collected and how much income one can still expect and hence what portion of the receivables on the balance sheet is past dues. One can also not tell how much of the general operations savings is unallocated and how much is paid current year’s assessment money that needs be reserved for this year’s budgeted expenses. This is critical information for any type of financial planning and cash flow projections that are necessary for sound financial management and for any expenditures outside of the budget such as the contracting of the services of a road engineer, a second plow truck etc. that have been discussed.
As no board member mentioned the absence of any reports and the inability to find this information, I assume the board members received the complete packet of financial reports, derived this information from them by themselves and therefore had no need to ask the treasurer for it. If this is true, why were the landowners not given the same reports as the board members?
But as the landowners only received the incomplete packet, why was this information not at least included during the treasurer’s financial report? It is a basic and fundamental part of the “state of the finances”. It should have been included even if the report packet had been complete since not all landowners can read financial reports well enough to extract this vital information. Why is this not being done?
3. The financial reports in the landowner binders showed a collection rate of only approximately 69% for the first quarter assessments invoiced to landowners. This is substantially lower than the collection rate the 2016 budget is based on. Why was this not brought up as part of the treasurer’s financial report or at least by another Board member? How does the board intend to deal with this as this could lead to a potential budget shortfall, if this trend continues?
4. Why did the Budget Variance P&L in the member binders contain a monthly budget column? The GLA only has a yearly budget, so there is no need for this column as it contains the same value as the yearly column. Why was the “%” column that shows how much of the budget has been spent to date eliminated?
5. During the March board meeting one of the board members stated that the 004 Savings General Ops account monies were unallocated funds. Why was this not clarified and corrected? Why was the amount that was unallocated and the amount that is reserved for the budget not clearly stated? How is the actual amount that is unallocated being tracked? Who is tracking it?
6. The 1015 Payroll Costs account in the P&L showed a very clear error. Why was this not brought up by any board member prior to approving the financials? Why were the financials approved without the condition that the error be fixed and a corrected report be supplied for the GLA records?
As I stated in a prior letter to the board, also forwarded to the landowners, all data in the reports provided by the accounting service needs to be reviewed and checked for accuracy so the board and the landowners receive correct reports at the monthly meetings and the GLA preserves the integrity of its financial data. Misunderstandings and mistakes happen and also the input is only as good as the instructions given. It appears this is not happening. Who will be rendering this vital service?
7. Three board members at the March meeting abstained from approving the financials, because they did not understand them or understand enough about them to approve them. Why did the president not offer to explain the basics to these board members before the next board meeting or ask another board member to do so?
Ideally, every board member should have a basic understanding of the GLA financials and how to find critical information such as the amount of current year receivables collected and outstanding, the amount of past dues, the actual collection rate, the amount of allocated and unallocated monies available etc. At the very least the treasurer should be including all of this information in his report as it is essential for sound financial decision making and so every board member can ascertain what the actual financial status of the Association is. Why was this not done?
8. During my two appointments with Julie regarding our corporate tax returns I was made aware of the following regarding the GLA’s financials by Micah and Julie:
a) Micah was asked to set up a Snow Fund and Reserve Cash account, but was not told which Equity account to take the money from to set up the Fund. Only the active Equity accounts show up in the financial reports. There is at least one other equity account in the GLA’s chart of accounts that could be used. Regardless of this fact, complete detailed instructions must always be given to the accounting service regarding any entry into the GLA QB data base and especially regarding account set up or they cannot do their job in an accurate and timely manner. It is also frustrating to not be able to complete the data entry because more information is needed or to have to a redo entries, because the initial information/instructions given were inaccurate or confusing.
b) Complete account names must be referenced when discussing or requesting any transfers of money to avoid confusion. This is especially important for the Construction Bonds Held by the GLA Liability account as it is not a Fund (Equity) account as the name Construction Bonds Reserve Cash implies. It has no equivalent under the Equity accounts where one would logically look for it.
c) The deposits from landowners/title companies to close out past dues made at the time of my appointment were not flagged as such on the deposit report given to Micah for entering payments. As these accounts all contained overcharges and needed to be recalculated before they could be paid, so the actual balance owed and what was paid do not match what is in the live QB data base. Therefore the balances on all landowner accounts with paid off past due assessments this year need to be checked to ensure the remaining balances have been written off as overcharges and are not still in the account as owed.
d) Julie and Micah were not aware that the final month end financials should ideally be ready by the Friday before the board meeting to give the board members time to review them over the weekend and to make copies for the landowners. When the treasurer contacted Micah regarding the month end financials, Micah said he informed the treasurer that the reports he was sending were a preliminary set and he had not finished with the adjustments. He was not told by the treasurer that the final set was needed that day or over the weekend. So Micah waited for me to come in for my corporate tax appointment on Monday afternoon (day of the board meeting) to help clarify the snow fund set up and other questions before finalizing and sending the final reports. Therefore the landowners ended up with incorrect Balance Sheets.
e) It had not been explained to Julie that the GLA was required to have a balanced budget and exactly how the 2016 budget was balanced and that the Budget Variance report had to reflect this. Therefore the Budget Variance Report presented at the March board meeting showed a budget shortfall. As every item on the budget has to be tied to a G/L account it is necessary to explain exactly where the funds to balance the budget are coming from, so the appropriate G/L account can be chosen or created, if necessary. I have given Julie the necessary information and she will create the needed account to enter the unallocated funds allotted from General Ops Savings 004 to balance the budget. This should have been done by the treasurer or a board member at the time the 2016 budget was submitted to the accounting service for entry.
f) As Micah was not present on Wednesday I pointed out the 1015 Payroll account error to Julie. I told her that the treasurer stated that this was an account correction. I informed Julie that the set- up of the GLA books does not allow for entries into summary accounts; if Micah receives only summary account information when asked to enter data or make corrections, he must request that the treasurer give him the sub account under which the item belongs. I have explained this numerous times at past board meetings when landowners were still allowed to speak when the financial reports were presented and data was entered into summary accounts by the treasurer.
It is imperative that detailed and complete instructions be given to the accounting service regarding data entry, account/fund set up, required reports, desired report formats etc. I have explained this before in a prior letter to the Board. The accounting service does not do audits or read minds. The quality of what we receive depends on the quality of information and instruction they receive.
What steps will the Board take to ensure that the accounting service receives the clear and complete instructions it needs to minimize errors and do its job in a timely manner? If the accounting service is preparing the financial reports for the monthly meetings, who on the Board will insure that they receive correct instructions so the reports contain the necessary information as they presently do not?
9. The Board has repeatedly claimed that Covenant Section 12.01 gives the Board the right to grant landowners discounts on past dues or assessments on a case by case basis based on their subjective opinion of what the landowner can afford to pay or, if the landowner can pay, how much the landowner would be willing to pay. The treasurer requested at the March Board meeting that he be given “wiggle room” to negotiate lower rates at his discretion when contacting landowners with larger past dues, if the landowners do not want to pay the amount they owe. This leaves the door wide open for accusations of favoritism, cronyism, influence peddling etc. It also contributes to ill will and animosity in the community.
At the Covenant/Bylaw meeting in Emigrant Hall, Board attorney Alanah Griffith stated that the Board had the right to negotiate on past due debt without landowner approval of the deals negotiated based on Section 12.01. But the example she gave outlined a clear objective process that applied to all landowners who could not or would not pay their past due assessments. The first step required submission of the last three years’ of filed tax returns and other documentation, if necessary, to objectively assess the financial situation of the landowners in question. Then depending on the income situation the board proceeded with the collection process according to established guidelines for the various income categories. Since there is an agreed upon objective and consistent process for debt payment negotiations it is understandable that the board would not need approval of every deal, which would be highly impractical. The board in the example given that had full authority to negotiate on behalf of the landowners was acting within the confines of an agreed upon process and within agreed upon established guidelines.
Therefore I request that the Board provide a written signed statement from Board attorney Alanah Griffith stating that she believes that Section 12.01 gives the Board the right to negotiate assessment and past due discounts on a case by case basis based on individual and/or collective board member subjective opinion regarding what a landowner can or is willing to pay. The statement should also include her assurance that this approach to granting assessment and past due discounts and fee waivers is in compliance with Montana laws regarding the management of corporate finances.
10. Please state in writing the Board’s criteria for filling board positions vacated before a board member’s term expires. The vote to fill the advertised Board vacancy at the March board meeting has left me totally confused.
When filling previous vacancies it was stated that the Board was looking for landowners with specific skills and enough time to help lighten the Board’s workload. Skills in the area of financials were especially needed and desirable. One of the candidates applying for the current open position was doing very professional, reliable and successful work as a volunteer making collection calls for the Association. It was only because she offered to make the calls that I volunteered to recalculate the accounts of the landowners on her call list and the accounts where correct statements were needed for timely liens and closings of properties with a past due balance. She not only made sure that all account balances were correct before she made any calls, she also did research to find data missing in the QB customer module, such as physical addresses and current contact information, if what she was supplied with was obsolete etc. She also had business experience having owned and run her own business in the recent past. For some reason none of her contributions as a volunteer were mentioned by the Board and a candidate with no apparent needed skillset and no volunteer activity was chosen to fill the vacancy.
So one must conclude that if a landowner with needed skills wishes to join the Board, it is best not to volunteer and show oneself to be professional, dependable, organized and successful in one’s volunteer work for the Association, because that appears to work against the landowner should a vacancy on the Board occur and the landowner applies to fill the vacancy. It appears that in that situation , it is best to do nothing for the Association until there is an opening and one is appointed or wait until the November elections and one is elected.
We have now arrived at the stage where landowners are not allowed to ask questions of the treasurer at the time he gives his report; the financial reports presented are not checked for accuracy; the Board approves inaccurate financials, because they are unable to spot problems or just assume the reports are accurate; information needed to ascertain the state of the GLA finances is no longer made available to the landowners in the financial reports in the member binders at the monthly Board meetings and not included in the treasurer’s report either; the GLA has a growing problem of landowners not paying their current assessments, but the treasurer does not include the collection rate in his report and no board member asks about it; the Board is in real need of members with the skills to help out with some of the treasurer’s job, but when an opening on the Board becomes available they pass over a volunteer who has reliably and successfully helped out in that area in favor of someone who has no apparent skills needed by the Board and who has put in no volunteer time; the contracted accounting service is not being given the instructions and information to do its job in a timely manner; the Board wants to grant discounts, fee waivers and settle past due accounts on a case by case basis solely based on their subjective opinion and discretion and create even more mistrust and disharmony.
This situation is not tenable.
As I have stated in previous letters to the Board, you are dealing with corporate funds, not your personal ones. They are laws governing the management of corporate funds. Being volunteers does not exempt you from your fiduciary duties or the laws.
Accurate and complete financial data is the basis for sound financial decision making and successful short and long term planning. Therefore the Board must ensure that the data entered is correct and the accounting service receives complete and correct instructions and information. But the best data is useless, if no one understands how to use it. Therefore it is also necessary for at least some board members to educate themselves in its use and the basic set- up of the GLA accounts.
How do you expect to responsibly handle the business of the GLA if at the monthly Board meeting you do not know what the to date income is, what the outstanding (non past due) receivables are, what the actual collection rate versus the one used for the budget is , what the projected cash flow is and what the available unallocated funds are? And how can you expect to do this, if you have no idea if the information you are basing your decisions on is accurate, because no one thinks it is necessary to check the entries made by the accounting service?
Regina Wunsch SG 72