At the November meeting of the Board of Directors, the Finance Committee Chairman Dale Morsette announced the establishment of a Subcommittee to develop a POASC Financial and Accounting Policies and Procedures Manual. The Subcommittee will be chaired by Assistant Treasurer Dick Junkins.
The Subcommittee will study existing policies and procedures and incorporate them into a new document that will modify and expand those policies and procedures as necessary. The new procedures will emphasize individual responsibility and the control of internal financial and accounting processes. The Subcommittee will be assisted by an outside accounting consultant, who will assist in reviewing the new documents. The new manual, once approved by the Board, will then become the sole reference text for Cove financial matters. The goal is to develop a “living document” that will serve as a reference through changes in POASC Officers, Board members and employees.
This is a large undertaking and it will require dedicated and knowledgeable volunteers to accomplish this task. Dick Junkins is asking for such volunteers, especially property owners with backgrounds in Accounting or Business Management, to contact him as soon as possible at 961-1099 or by e-Mail at djunkins@gulftel.com (e-Mail preferred). An organizational meeting will be scheduled for early December.
Tags: accounting, Manual, Policy, Procedure, Subcommittee
Julia, I am not a lawyer and do not pretend to be, however a power of attorney has limited rights. You would not be allowed to go into a voting booth and cast your mother’s vote in an election. I believe that there would be the same limitation in an election in Spanish Cove. I also believe that when you are acting under authority of the Power of Attorney you are supposed to indicate that you are acting under such authority and in affect “speaking” your mothers thoughts. The authority you have is to act in her best interests not to espouse your own ideas.
The situation in 2002 and before was substantially different than that which has just occurred. The safeguards implemented concerned the theft of cash which was received from members and possibly vendors. It had nothing to do with spending by the manager. It should be pointed out, in my opinion, the current situation in fact is inappropriate spending and not theft. All the spending that occurred appears to be within the scope of the managers authority (I have previously discussed this authority). This in itself does not excuse what has happened, in fact I think it is deplorable, however it does take crime out of the story. The procedures implemented in 2002 should have prevented the this from happening. However, the people who signed the checks for the expenditures were ignorant of what should have been done or negligent in performing their duty, or both. It does not mean that there were not safeguards, it means there were weaknesses. Using a recent national event as an example, would you say that the couple at the State Dinner was an example of no procedures, or a failure with the procedure.
You are entitled to your opinion regarding any 1099 liability for gas and the truck. However, I am confident that my opinion would be supported by any tax accountant. In any event, there would be no tax liability on the part of POASC since there would be no tax withholding. The 1099 is an information form only. In addition neither of us has any knowledge of whether or not the employees picked up value and included it in their tax returns, which under the law if appropriate they should do with or without a 1099. I do not believe that either one of the employees needed to do this. I do not believe the IRS is the one to call regarding opinion on this matter. I believe POASC’s accountant who is a CPA is a better source of advice and I am sure that he reviewed the matter when it first occurred several years ago. I am a believer in following the law and while treasurer raised the ire of several employees by having 1099′s issued because of payments made to them.
I do not understand why you place blame on Dick Junkins for waiting till now to bring the policies up to date. Dick was appointed to the Board several months ago. He and I discussed and worked on this matter even before he was appointed. I, personally, have fought for this to happen as far back as 2003. Unfortunately, sometimes need is more apparent after a crisis. The same is true concerning expenditures for a CPA. In 2003 I requested that the finance committee have the audit expanded beyond the cash basis audit that had always been done. The committee felt the additional cost was unnecessary. Ben Bonnet and Dale Morssette recommended to the Board and the Finance Committee that we hire the person just hired as an accounting advisor for the same position several times starting around 2004. They were turned down by both bodies. Hind sight is 20/20,, my point is that you and CPOC are blaming the wrong people when you blame the current financial team and board. Some of the blame also belongs on some of the members and supporters of CPOC who over the years have been vocal in their opposition to any assessment increase, and silent when it comes to spending for protection.
Bill PittW. I am not sure what hearing you are referring to. but I suggest that you get your facts straight. If you are referring to the criminal charges filed against Ms Black to the best of my knowledge there was no hearing held. In actuality during the case preparation I was contacted by the Assistant DA handling the case and asked if I would appear and testify against Ms Black, if asked. I told him I would be most happy testify and would provide any information or assistance he required. Don’t believe me, check the official records on the case I am sure that what I say here will be verified. If you are referring to the hearing concerning Ms Black’s unemployment appeal. I was at the hearing, ready and willing to testify along with the then Operations Manager, Roger Flack, and our Attorney. The hearing judge limited the number of people in the hearing room to one from each side plus the attorney. Our attorney felt that Roger Flack as manager was closer to the situation than I was and chose him to be present in the hearing. Karen’s attorney was paid for by the Sorensen’s so both Greg and Brenda were permitted to be in attendance. I remained, along with other witnesses, in a waiting room during the entire hearing ready to testify but was never called. Again, don’t believe me, look at the proceeding transcripts. I do not know where your information comes from but your source is unreliable. I also suggest that you personally stop posting and spreading this malicious defamation of character and slander or I will have to seek legal advice on further action. Ms Black is a convicted felon, she was denied unemployment compensation after she was fired, forced to make complete restitution of any POASC losses not covered by insurance all based on reports prepared by me as Treasurer. I would also like to point out that her apprehension after several years of stealing occurred within months of my being elected Treasurer by the Board and made possible by a special audit by our CPA made possible through Board support and agreement to fund at my request. Why would I hesitate to testify. She belonged in jail.
These are my own thoughts on the current state of affairs regarding our troubled financial operations. It is not provided as the view of CPOC of which I am a member.
The over-riding purpose of the Board of Directors of POASC is to act as agents for property owners in the management of the assets of the association. They do that by meeting in committees or meeting as a committee of the whole to make the decisions necessary to insure proper and efficient operation. Recognizing that volunteer Boards are not typically required to have daily presence in the operation of property owner’s association they have by virtue of the various sets of “agreements adopted by the owners” been given the authority to engage such employees as required to meet the objectives necessary to properly shepherd the resources of the owners. POASC does that by hiring an operations manager and other support personnel as may be necessary. Furthermore, to meet the requirements of efficient operations the operations manager is delegated certain authority to act independently to accomplish the Board’s stipulated purpose.
Hiring an operations manager does not absolve the Board from its oversight responsibilities. Authority can be delegated but responsibility cannot. Consider for a moment the operations manager’s authority to spend POASC monies. It is a well-purposed and useful feature of arrangements between Boards and their manager. It is entirely proper for POASC members and the Board to assume that the authority to do so includes by implication or specific statement that such monies will be spent to the benefit of POASC and not to the personal benefit of non-members and especially the Board and employees, except incidentally, Thus a Board cannot say legitimately that an employee was given the right to use POASC funds for items that are clearly personal in nature such as clothing, food, gifts to non-members, entertainment, travel or the thousands of other things that might be purchased with no consideration to the benefit to POASC.
That is not to say that an employee would never do such a thing but it requires of the Board a swift intervention to stop such misuse and abuse of authority by using their stipulated and moral obligation, vigilant oversight. It is true that Boards must give benefit of trust to those they hire and the more careful they are in such hires the more likely the hire is to be deserving of such trust. In the end, though, the Board must, as we hear in international political discussions, “trust but verify.” It is an arduous task and evidence that a Board has not risen to the level of rigor required must be taken seriously and the Board questioned when necessary. The only community source of oversight for Boards is the constituency they serve. Here, it is the collective membership of POASC that provides Board oversight. We too must trust but verify and that is why state law not only permits but requires that every owner has unrestricted access to records of the association.
Suggesting that the Concerned Property Owners’ Committee (SPOC) is seeking self-importance is absurd. They seek self-preservation and preservation of POASC using the rights that accrue to POASC membership, the right to oversight of those they have elected to serve their interests. In this instance they have provided to the membership information about financial matters that are required to be available to each member and done so in a way that is efficient. At their own expense in time and money they gathered the data and made it available to members making it unnecessary for hundreds of members to individually go to the office and request it. Based on the number of telephone calls and personal conversations the CPOC has had from residents in support of the their action the entire matter is of grave concern to many our our POASC members.
One writer has suggested that the oversight required in this instance could have been better accomplished by participating in budget and finance committee meetings. I would be surprised if those committees spend their time examining patterns of credit card use. I hope not. I think that more likely they are dealing with larger goals. Yes, planning is required. Robert Mager wrote, “If you don’t know where you’re going any road will get you there.” Even so, many a well-planned journey has veered off course because no one was monitoring execution while the planners fondled their plans. Monitoring is not micro-management but the operational implementation of trust but verify.
The same writer also suggested that only office holders or aspirants were entitled to an opinion. I reject that idea. What sort of governance would a free society have if only those in power had the right of opinion. It wouldn’t be free and it wouldn’t be a republic as we are.
It seems entirely possible to me that a POASC member might well run for the Board without full knowledge of what is required and it is a heavy burden. It will be more so when our very flawed financial procedures are corrected and implemented. In those circumstances I can envision someone being required to perform tasks too demanding of their time, too foreign to their experience, or to far removed from what they had in mind when they sought office. In that instance the Board member should step forward and resign. No one would fault them because they would be doing what is best for our association. Perhaps future aspirants should run for a particular office not just a seat on the Board. No doubt our rules would have to change to accommodate that but if it was for the good of POASC, so be it.
To conclude I encourage this Board and all future Boards to be transparent in their operations. If they find a problem, tell us. If they are working on a solution, tell us. If they are implementing new procedures, tell us. Many but not all of us are willing to make some commitments to aid our Board in achieving the Nirvana we harbor in our minds. Tell us when you want some help. But always tell us the full and unvarnished truth.
Ben, — This is an other personal statement made by me personally —— I didn’t realize Sue Huff was the Treasure for the year 2008, now if I’m seeing things correctly you were the Treasure from March of 2004 through March of 2008, and from March of 2008 through March of 2009, Sue Huff was the treasure, and from March of 2009 to present you are our treasure. If I’m not mistacking — doesn’t the Spanish Cove BY LAWS say, The Treasure is responsible for the disburshment of all POASC fund, if I’m wrong please correct me, but I take that to mean, he or she is to keep a watchful eye on the spending of POASC Funds including but not limited to
credit card statements, if somethings look questionable, you the treasure is to be there to question it, so why has it taken the CPOC to get to this point, why didn’t you or Sue do a review years ago?
Why didn’t one of you choose to STOP IT? — or at least review it
No, just trying to set the record straight for Ms. Craig. You might ask your Board member friend if he was Chairman during ANY of the years in question?
The Current Treasurer is trying to defend him self by putting all of the Credit card Mis use in 2008. He was Treasurer when the Mis use began. Also, he is now putting the blame on Sue Huff aince she was one of the Treasurers in 2008.
A Board Member friend of mine showed me the guidlines for the Treasurers job in the By Laws. If the Treasurer had been operating under the By Laws guidline he would have known about the Credit Card Mis Use at the beginning. If he was operating under the By Laws guidline he knew about the Mis Use and covered it up. Either way he has not been doing the job that he promised the Property Owners that he would do. He needs to do the Honorable thing and resign.
I was elected Treasurer April 1 2009 after being off the Board due to term limits for 1 year. The year 2008/2009 had 2 Treasurers who served briefly, one was not permitted to sign checks. Prior to 2008 I served for 4 years.
Dave Danson refused to testify at Karen Black’s hearing. He took the 5th. Way to go Dave.
Mrs Huff’ if the Board hss been working on the Credit Cards Mis Use where is the Board’s Spread Sheet? If you have one I think that you should allow the Property Owners to see it.
Also, I am surprised at Mr. Danson’s comment A CPOC was needed when he was Treasurer. Do any of you remember KAREN BLACK? Apparently Mr. Danson has forgotten about her.
Let’s see, where to start…
Mr. Junkins,
I agree with point 1 of your statement. However, Boards are elected to look for inadequacies and fix them.They are elected to protect the people who elected them. Not just tell their constituants the “everything looks real good”. It is my understanding that our current treasurer has had this office for several years. Therefore the only conclusion is that no one either knew to look or cared to.
As to point 2, your lack of knowledge around forensic accounting is showing. Everything is kept electronically these days. By working with the VISA credit card companies, other vendors and the Bank, MOST of the charges can be identified as legitmate or otherwise. And, if the Board can approve $6000 for outdoor poolside furniture, which is not used much in the wintertime, surely we can afford to fix something as serious as our current IRS problems.
As to point 3, again why did it take something as serious as the issues we face today for the Board to bring the Cove policies and procedures up to date?
Point 4?….if it is true, why didn’t the Board tell the members what they were doing until the CPOC stepped in?
Point 5 is ridiculous. WE HAVE to afford it. We can spend $80,000 on a proposesd pooltable building, but we can’t afford a CPA. You seriously need to get your priorities in order sir.
Your final point number 6 is not true. We can and MUST fix the past…if you don’t believe me, why not call the IRS and find out?
In my humble opinion the Board is still trying to keep Cove residents in the dark. I am reeling from the fact that my neighbors who have been entrusted with the safety of my money, STILL do not wish to “come clean” with a full disclosure. Again I ask the question, why are you so against the residents having FULL knowledge?
Mr Danson,
I am acting as an agent for my mother. I am providing a Power of Attorney to the Cove office per Mr. Price’s request as proof of that fact. I was not then nor am I now out of order, or mis-representing myself. I have every right to speak under the law. As to my assumption that y’all didn’t learn anything from the past, my question to you is if you did, why did you let it happen again?
There has been a request to review the checks, as to date, we have only been allowed to see the credit card statements, but none of my previous comments went to how checks are signed or processed, because that data has not been reviewed yet.The entire Community is currently exposed and liable.
Put on another hat Mr. Danson, because your accounting one doesn’t fit. Mr Davison and Ms. Nygaard were salaried, NOT hourly employees. Thus when and how long it took them to complete their duties is irrelevant. It is my understanding that the use of a Corporate vehicle was NOT for the Cove’s convenience, but was in lieu of a raise. Thus it is clearly income.
The IRS has a policy that if a mistake is discovered on a previously filed return, and the taxpayer, in this case POASC voluntarily corrects the issue before the IRS discovers it, the taxpayer only has to pay any tax due plus accrued interest. No penalties will be assessed. However that is definitely not the case if the IRS discovers the discrepancy. I am trying to help here, so that we, the residents, do not have to pay enormous penalties because our elected officials allowed us to be ripped off! Believe it or not, I am also trying to save the Board members from losing their right to be fiduciary, and possibly the Cove from losing it’s right to be not-for-profit.
But please, don’t take my $200 an hour consultative opinion (that was good enough for the Pensacola Board of County Commissioners to rely on) do what I asked Mr. Junkins to do…call the IRS and ask them…after all they are the experts. But I know that won’t happen, because an IRS audit is the very last thing that the Board wants to happen. Ask yourselves why that is, if this is such a minor problem, and I am just a noisy, nosy, incompetant, non-homeowner. ALL I WANT IS FOR THE BOARD TO DO WHAT IS RIGHT!! WHY ARE YOU, OR ANYONE AGAINST THAT?
Dick, what you say is 100% correct. The purpose of my comment concerning 1099′s was not to condone the lack of auto use procedures, but to point out that POASC was not negligent in not issuing 1099′s. I am in favor of establishing some procedures to foster record keeping regarding use of our vehicles.
Dave’s points regarding the taxable income and 1099 issues are well taken. However, I believe due diligence in the vehicle and gas situation would have been aided by something as simple as a Vehicle Log, recording all users, mileage in and out, fueling, and any personal use (if ever authorized). I had a small fleet of five vehicles in my business, and I required the use of such logs to satisfy internal and external control and audit requirements. The Subcommittee may well recommend the use of Vehicle Logs for the Cove.
Julia, I was not aware that you were not a member of POASC since you are not a property owner. This puts several things that have occurred in a different prospective. First, your original addressing of the Board was out of order, or at least done under false pretenses as you are a resident of the home you live in not an owner as your comments seem ed to indicate. Secondly, the “report” put in the mailboxes was improper solicitation, as it included your name. Our rules permit only solicitation my POASC members and only when it concerns POASC matters. The content of the handout was POASC businss, however you are not a member. It is my suggestion that in the future you refrain from from comments at Board meetings unless you specifically ask the chair for permission to speak although you are not a member and that your name not appear on any literature distributed in The Cove. There are several things in your comments that I would like to refer to.
Your assumption that POASC did not learn from experiences during the Karen Black situation are completely wrong. At the time we receive a listing of recommendations from our CPA. Most if not all of them were put into effect, including the separation of responsibilities in the handling of cash, the review of a report available from the accounting system, and the requirement that all checks had to be signed by the Treasurer, except in instances of emergency when the Treasurer was not available.
In regard to your thinking that I blindly accept things, again your are mistaken. The difference between us is that I believe in trying to work through the system as I believe more can be accomplished in that manner. I advocated the “codification” of our internal control accounting procedures as far back as 2003. Unfortunately, the Boards did not feel it was necessary. I speak not of the current Board, but prior Boards, some of which were in office during the period that the transactions being questioned occurred. If the procedures had formally been accepted and were in writing I believe that the signing of the checks would have caught the improper transactions almost immediately. It has been stated that our procedures make the Treasurer responsible for the protection of our funds. This is true. However, no where is it written that he or she is to be the signature on all checks. There are no written procedures that are to be followed in the actual signing of the checks. There is nothing in any of our rules that requires that the Treasurer be knowledgeable in good accounts payable review procedures. When you add these things all up you get the weaknesses that permitted the improper use of funds to occur. During the time that a majority of the transactions occurred the Treasurer was not even an authorized signer of checks although she repeatedly asked to have that responsibility. Through a series of lies she was told that the chairperson did not want here authorized. The chairperson was told that she could not be available to sign the checks when needed. The result was a person not knowledgeable in good procedures signing the checks. Again, let me point out that none of this occurred while most of the current Board Members and none of the “Financial” members were on the Board. This Board, all 10 members of it, have made a mighty effort to find out what had happened, obtain restitution of misused funds and most importantly has taken steps to insure that POASC is protected against it happening again. I suggest we all step back and stop blaming the messenger for the message. Let us take into consideration that the Board has to be concerned that things they say or do can expose POASC to suit and legal liability. It is far better that they err in giving out to little information rather than expose POASC to liability for giving out to much.
I have seen some comments concerning the need to have issued 1099′s for gas etc. Let me put on my accountants hat for a second. Yes, 1099′s are required if an employee receives a car etc for his or her benefit. However, it should be remembered that our manager is on call 24 hours a day 7 days a week. Often Cove business was transacted while traveling to and from his residence, such as making deposits or picking up needed maintenance supplies as well as other uses of the vehicle. It appears to me that the vehicle and gas were supplied for the convenience of The Cove, and not for the convenience of the user. If this is so there is no benefit to the user and therefore no income. No 1099 would be required. As far as the IRS and income taxes, POASC pays no tax on any assessment income. The CPA who prepares our tax returns determines what revenues are taxable and what expenses offset the income when he prepares the return. The IRS does not care how the money we receive is spent as long as it is used for Cove Purposes. The only items subject to audit would be non assessment income and any expenses relating to it.
Sue huff asked, “What have we learned?” In my opinion we learned that the rumors that were floating around were true.
My one and only reason for joining the CPOC was to find out if the rumors were true or false. . I had attended board meetings only to find that the Board was not willing to discuss problems of past bookkeeping procurers with the Membership. So the only way I could find out if the money my husband and I were paying the Cove quarterly was being used properly was to join CPOC. My husband and I have been in the Business world for many, many years in management positions which included hiring, firing, payroll, accounting, etc. We have never heard of employees using a credit card for personal reasons not even the managers, unless they had a company card in their name, had to paid the monthly balance then get reimbursed for their expenditures, oh yes with proper receipt that explained what the charge was for and the signature from an authorized manager. When going through the Visa receipts and statement all I can say is wow! If I presented the auditing personnel with records like that they would have been in my boss’ office and told them to fire me or provide with the proper training. It was a nightmare going through these receipts and statements. That is one of the reasons why we know there expenditures that were legitimate.
I personally apology to Simon sez for listing Nautilus on the reports, but if it had listed Nautilus receipt as for Update Printing there would not have been listed. Nautilus is also a Gym and I think I have heard that it is also a Restaurant, and if this is not correct I apology again.
One more comment, as this will be my last on the Web Page, as I do not want to continue this discussion, except at a board meeting where the whole membership can hear the conversation.
In response to Sue Huff. If the Board needs to know what charges are justified charges. The Board could detemine that had they made the Property Manager and Book Keeper provide justification for the charges. I don’t think that the Board has done anything to obtain the exact details of the Credit Card charges. From what I can determine Joan Fletcher and Sue Huff make all of the decisions without involving the Board. I talked with one Board Member that said that the Board as a whole has never reviewed the Credit Card statements.
OK. Let’s bring this down to ground level. There are good points on both sides of the argument. But let’s review some salient points:
1. Some of the Cove’s financial procedures have been inadequate in some areas for years – probably since the inception of POASC.
2. The biggest inadequacy has involved the lack of documentation of Cove purchases and our current difficulty in matching some past expenses to credit card statements. I doubt that a Forensic Accountant could do anything to improve our knowledge about those past expenses, but would certainly contribute to our CURRENT expenses, to the tune of many thousands of dollars.
3. Apparent abuses have occurred over the past several years; some significant enough to raise the questions we have today.
4. The Board and current Management are well aware of the past inadequacies and have taken steps to ensure those problems are corrected. Those steps have been ongoing, positive, and proactive; and not as a knee-jerk reaction to any report received CPOC, though that group has presented some useful information that can be used going forward.
5. We need a Financial Policies and Procedures Manual for POASC. We don’t need, nor can we afford to have that manual written by a CPA. As has been done with Cove repairs and maintenance, we can do it in-house effectively and inexpensively, and with people who are well-qualified for the task. The draft documents will be checked by our CPA consultant before they are adopted by the Board.
6. It’s time to move forward, not backward. There is little about the past that can be corrected today, but we can use our knowledge of past problems to correct our current and future procedures. The Financial Policies and Procedures Subcommittee will proceed with this effort, and will produce a comprehensive and workable document that will carry POASC into a more sound and responsible financial future. As the article above states, I seek knowledgeable people to assist. Several have come forward and the Subcommittee is forming. I will soon schedule our organizational meeting.
One item that the Board members that have posted their thoughts have failed to note. You all should go to the SpanishCove.org and pull up the By-laws for Spanish Cove.. Look at Page 22 E. Treasurer. It states that to comply with Section 10-3A-41 of the Alabama Nonprofit Corporation Act., which requres that a nonprofit corporation have a treasurer, the Treasurer of the Board shall also be the Treasurer of the Associiation. the Treasurer:
Shall be responsible for the custody of all funds and securities belonging to the Association and for the receipt, deposit or disbursement of such funds and securities under the direction of the Board of Directors.
So please tell me where was our overseer to our funds. Are you hiding behind the fact you either didn’t have a policy put in place to protect our funds or the policy was poorly written and no one ever corrected this policy.
You need to give the home owners here more credit then to think we are just got off the turnip truck. If the board had been doing their job all these years the property owners would not have to take it upon ourselves to veiw these recored that every property owner has the right to view. ( And also not require them to pay to see the records.
Phew, me’thinks thee doth protest too much! With compliments to WS.
Ms.Huff,
In response to your posting of Dec 2, speaking solely for myself, while the Board has been aware of the issue for several months, I do not think it has been “dealing” with it. It was not until the inquiries were made by the CPOC that any ‘action’ was seen. Nor has the Board, until the inquiry by the CPOC been willing to speak to the Cove homeowners about the ‘solutions’ that were being worked on. It may be that the Board WAS working diligently, but without proper communication, no one knew that you were. This is almost as bad as inaction. Had the Board been open and honest about the ‘Plans’ to fix the issues that allowed the situation to occur, the CPOC would never have been formed.
We are NOT troublemakers. We would LOVE not to have to work or spend our own money to bring this information to our neighbors. This is NOT our idea of a pleasant pastime. The Board’s non-responsive attitude when asked legitimate questions (i.e. adjourning) is what started us on this journey.
To correct your statement that the CPOC has stated that there is no real way to tell what is a legitimate charge and what is not, what we stated is that WE, the CPOC, have no way of telling. However, I am of the opinion, which I have previously shared with you, that a Forensic Accountant would research the charges in depth. That is what they do. And, Mr. Lowe, the new CPA has stated he is NOT a forensic accountant. Even if he were, it is my understanding, he has been engaged to work on implementing new systems and procedures, not review historical data. It is also my understanding that he will only be working a handful of hours every month, just as the previous accountant.
I have also shared with the Board, that allowing Mr. Davison and Ms. Nygaard to fill up their vehicles (whether or not they were owned by the Cove) with gasoline was not the method prescribed by the Federal government for reimbursement. I personally, have no interest in restitution, or even prosecution for that matter. Since it was done as it was, the fair value of the use of a Corporate vehicle, along with the gasoline and food purchases MUST be treated as additional income, and both former employees should receive a Form 1099 for each year that this occurred. Their wages/earnings have been incorrectly reported to the IRS. This must be corrected. I do not believe this is on the list of the Board’s “fixes”.
Do not get me wrong, I am happy to see the Board taking these initial steps to insure that we are never placed in this situation again, but that is not ALL that needs to happen. We have to clean up the milk that has already been spilt, not just make sure it doesn’t spill again.
I am aware that many on the Board are resentful of the CPOC. But I am just as aware that there are some who are GRATEFUL for the work we are doing. As I stated in a previous posting, this is not the first time this has happened here in the Cove. The previous, and yes, even the current Boards did NOTHING to protect the homeowners from its recurrence. It should come as no surprise that some homeowners are now unwilling to just trust blindly that the proper processes and procedures are being put into place. Nothing short of full disclosure of what happened, what is being done to fix the problems that occurred because of improper oversight and management, and how you intend to insure it never happens again is acceptable.
I applaud those members of the Board who are truly interested in getting this out in the open, and fixing ALL the issues. These are leaders with vision. And, unfortunately, until the Board completes ALL the changes needed to correct the situation, the CPOC will continue to work on behalf of all Cove residents to insure their right to know, and the Boards responsibility to disclose is met. If this is your idea of stirring the pot, then so be it.
After reading the remarks made by Simon Sez (?), Dale, Sue and Dave I can’t help but make my response. For the life of me I can’t understand how after all this time when months ago (some times years) you had employees that came to some of the board members and told their story of how money was being mis-spent, books were not allowed to be looked at, and these are the same board members that took an oath to represent the property owners and to over see the running of our corporation. These employees or board members were either not backed or were told there was nothing that could be done about these problems. Some were even told if they were to talk there could be reprocussions against them. Not only were these employees told this but we as a committee were told the same thing. So most just quit.
When we first became aware of these problems, we when to a couple board members and asked the question of what is being done about the problems. First were told the Operation Manager had done nothing wrong as there was nothing in his contract that said he couldn’t use the credit card for personal use and then they must have thought again and found (some) charges they felt should be paid back and asked him to pay back the charges. As I remember at one board meeting when Dale was asked if all was paid back was told that maybe $5.00 was still owning. Apparently he has not looked at the same charges we looked at.
Over the last months since we became aware of these problems we have attended the monthly board meetings, where most thought we as property owners would be allowed to talk and ask questioned. Well except for one meeting, where after I asked a question concerning these charges the meeting was adjourned. So when you all say we should just sit back and let the same people that did nothing over the last five years to protect our money are saying we should just let you do your work and trust your doing it. After viewing what we have in the running of Spanish Cove and how the Corporation has been put in jeopardy with the IRS coming in and auditing us or worst losing our Not for Profit statis.
Has the officers of the board ever asked a tax accountant of what we should be doing to cover our butts against a IRS audit. I think not!!! It is time for this Corporation to start acting like a business. We are the size of a town and the money that goes through the books is a very large amount of money. I for one think we need a professional company to come in and set up our accounting system and not have the operational manager and a few property owners who are not CPA’s write these proceedures. You were suppose to have hired a CPA, Rick Lowe so why not let him do what is is licensed to do and make sure we are operating by the law.
To sum this up as I have started to ramble. If the Board had been doing there duty and had at least answered our questions months ago we would never have started the committee. It is very apparent that there needs to be an overseer to the running of Spanish Cove. Kind of like the government, not too smart to have the fox guarding the hen house. It’s time that the property owners speak up and the board needs to listen. That’s why we have scheduled a town meeting on Jan. 12th at the Club House for all to attend and be heard. We even invite the whole board to be there.
Most of us came to Spanish Cove to relax and enjoy our later years. Most have worked in the business work and are tired of fighting for what is right. I for one would love to just enjoy our beautiful community and truly believe that the people that volunteed to oversee the running of our Cove would remember the property owners that have worked hard for their money and would like to see it taken care of and not put in the tank and burned by the ones we hired and then to say this was just their perks.
Hope to see you all at the FIRST TOWN MEETING IN JANUARY 2010
The board has been dealing with the whole credit card fiasco for many months and is now trying to put policies and procedures into place so this situation does not happen again.
Much time and energy was put into cataloging certain credit
card purchases by the CPOC, but what have we learned? How do we know what purchases were legitimate and which were not? Were we able to find areas where we could get restitution? The committee has stated the same thing many of the board members have said, there is no real way of telling in most instances.
Were there some questionable purchases made? It seems that there may have been. The board has looked long and hard at what we can prove and has sought restitution in those areas. Most of the charges are just anybodies guess as to what was purchased.
I understand people wanting to know what the board is doing so this does not occur again. They absolutely need to know, but I cannot understand how putting a list of credit card charges in everybody’s box moves us in any positve direction.
Yes, we need to learn from this and we are. So then what is the reason for some people wanting to keep the pot stirred?
Mr. Morsette,
This response to your posted comment is mine alone. While I do not speak fo the rest of the committee here, they are all welcome to respond to your statement or not. It is certainly up to them.
It saddens me to hear that you are of the opinion that people who do nothing wrong except to attempt to make sure that their friends and neighbors are protected from losing money, have an exaggerated sense of their ‘position’. I would think that protecting Cove money would be of utmost importance to a man in your position. I don’t think the question should be why do we want full disclosure of the mismanagement of Cove funds, but why are you so against it?
In response to the Operations Managers authority, I have not seen anything in the by-laws that stated he had the authority to use a Corporate credit card on anything he pleased. He did not have the authority to mis-use the Cove’s operating funds. Your argument is that we never specified that he couldn’t use it any way he pleased in his employee handbook (although we both know the Cove doesn’t even have one of those). That is like saying it is ok to steal from a department store because they didn’t have a sign saying you shouldn’t. That is no argument at all.
I was unaware of Kliftin’s termination. But to address that issue, the CPOC did not fire her,or try to get the Board to fire her, nor did they fire MR. Davison. These were actions taken by the very Board on which you serve. As was the decision to attempt to prosecute Mr. Davison. I have to believe, regardless of your opinion, the Board found evidence of wrongdoing or they would not be attempting to bring criminal charges against him. You make it sound as if these things occurred because of the CPOC. I was not aware we 6 were so powerful.
As to what can be gained by going over and over this, well seeing as how this is NOT the first time something like this has happened here in the Cove,(I reference the previous Bookkeeper, Ms. Black) it is apparent we did not learn from our past mistakes. Past Boards obviously did nothing to fix the problems that allowed it to happen then and now. Now it is up to the Homeowners to make sure the Current Board gets it right.
And, finally as to being elected, people in the Unites States make many errors in judgement when it comes to elected officials, as history has taught us. But, Mr. Morsette, what you may have lost sight of is that as a duly elected/appointed official of Spanish Cove, you answer to each and every homeowner. One just as important as the next, and we don’t have to be elected to anything. If there are only six people who want to know, even if there is only one person,you are answerable to them.
CPOC: I think you should all read Dave Danson’s comment below – especially regarding the authority of the Operations Manager. I argued against punishing him because he WAS operating within his authority! He also was never given the opportunity to answer any of the questions being thrown around – just as Kliftin was terminated before being asked any of the questions. Somehow I don’t think they would be amenable to doing it now.
BECAUSE he had that authority, we have been working on correcting those procedures, not continuing to look in the rear mirror. I don’t understand what can be gained by going over the same old ground over and over and over. We have been burning up peoples time and energy for no good reason I can see. Except perhaps to satisfy a small group of people’s exaggerated sense of their position.
The Board of Directors were directly, or indirectly, elected by all of the Property Owners of Spanish Cove. Who has elected any of your group to repesent all (or 20%) of our Property Owners – other than yourselves, of course.
Mr. Danson,
I wasn’t going to reply. It seems fruitless. However, there is some truth in what you say. I am not on a committee other than the CPOC. This is due in large part to the Board being unwilling to allow me to serve. I have an MBA in Business Management, and until 2 years ago when I became disabled, I worked as a Systems Consultant for companies such as ACIPCO (Birmingham), Children’s Mercy Hospital in Kansas City, and even for the Pensacola Board of County Commissioners and Pensacola Sheriff’s Department to name but a few. These folks paid up to $200 and hour for my help, not to manetion all travel expenses, but as I am not a homeowner here (I live with my mother who owns the home)I am not allowed to offer my knowledge and experience for free.
I do not expect you to believe in the CPOC or it’s objectives as you obviously beleive we should blindly trust our leaders. To that end, I will leave you with a few quotes from men you might have heard of:
Thomas Jefferson said:
All tyranny needs to gain a foothold is for people of good conscience to remain silent.
Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.
Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories.
Benjamin Franklin said:
Beware of little expenses. A small leak will sink a great ship.
And even more to the point, Richard Nixon said:
Any change is resisted because bureaucrats have a vested interest in the chaos in which they exist.
I can see clearly now… that I was wrong in not acting more decisively and more forthrightly in dealing with Watergate.
I say, it seems we have trusted too long, and not learned from past mistakes. If it is wrong to attempt to insure that the residents of Spanish Cove stop getting ripped off, then Sir, I am happy to be wrong.
The Cove’s very first Purchase Order was issued today-for the gas water heater at the RVCH.
Excuse me, but I am confused. I can not understand what the goals of CPOC. Are they to question what every dollar of money is spent on? Are they to try and further discredit our former manager? Are they to question the desire of the Board to make Spanish Cove as fine a place to live as possible?
If their goal is to question how money is spent I would suggest that the appropriate time and place to do that is during the budget preparation time. That time is now, for next year. I have been on the finance committee for many years since I moved into the Cove. I actually did much of the work in preparing the budgets for 2002 and 2003. I do not remember ever seeing any of the “CPOC Membership” at any finance committee meeting during any of the time I have been on the committee. I have attended every Budget Hearing meeting since I moved into the Cove. Again, I have never heard any member of CPOC question any item at the hearings. It therefore appears to me that knowing how the money is being spent is not the goal.
If the goal is to further discredit the former manager I suggest that in my opinion there is little they can do beyond the action of filing a criminal complaint which the present Board has already done. A crime is a crime and if convicted under the laws of this country his reputation will be soiled for all to
know.
As far as the Board’s desire to make Spanish Cove the best place to live, I think we should give all 10 members a big thank you. Each of them, in their own way and in what is best in their judgements is trying to do just that. We may not all agree with everything they do individually or as a group, I know I don’t, and never have agreed with everything, but let us recognize two things. 1. No one’s opinion is more valid than anothers. 2. If you want to have a say it POASC run for the Board, or join a committee. Don’t sit on the sidelines saying I have been away all summer, or just complain about what others have done.
Julia, you have the right to not agree with any spending. You have your priorities and I have mine. Remember, however, the under our rules of operations the manager has the authority to spend up to $500 for a budgeted item without the approval of the Board. He can also spend up to $1500 on any item with just the approval of the Board Chairperson. Thus, what was purchased in that Circle K store, although you might not be in agreement with, falls well withing the managers scope of authority. That being said, it is possible that the purchase was for personal not business use and as a result improper. If this is the case it would fall under the already filed criminal complaint. What benefit was there in further fanning the fires of discontent?
Ken, your conversation concerning Purchase Orders, I am in agreement with fundamentally, but I do not feel a purchase order in necessary or desirable for every minor purchase, such as a tankful of gas. In any event the manager is working on a purchase order system, it has already been shown to the finance committee, and was started on before your comment was made and there was any “report” by CPOC. Also Ken, my comments regarding running for the Board and or serving on a committee does not apply to you you have and are doing both. However, I never have seen you at a finance committee meeting the area of Cove Operations that pertain to this conversation.
Mr. Simon, My name is Ken Streeter and I’am a member of the CONCERNED PROPERTY OWNERS COMMITTEE, and proud to be so, the following is my personal statement.
The comittee members are responsible, capable,and most have education and experience in business and accounting, we all live in Spanish Cove and gladly pay association fees.to POASC.
I deeply regret you feel the committee has misleading information in the packet we recently released to the board and the membership, I beleive that is NOT CORRECT, and this is why.
A- There should have been a purchase order issued showing who ordered the service, why it was needed,and the cost.
B- There should have had a receipt showing what we got for our money,who signed for it and the date we received it. C- Everything should have been documented and noted on or attached to the credit card statement.
The nautilus charge on the credit card statement simply said Nautilus, it did not even say — Nautilus Printing it had no paper work attached to it, it was a charge that that we couldn’t justify.
In my opion every property owner should read the packet we have delivered to them, join our committee and assist us anyway they can, — call us at 251 942 8001 for more info. — or simply come to our TOWN HALL MEETING january 12th at the COVE CLUBHOUSE
@6:30pm TUESDAY EVENING.
We are only human, we can make mistakes like anyone else, but we did a good job creating this report, and it is not our intent to incite or mislead anyone, if you would like to contact me I would be happy to spend more time with you.
In reply to SimonSez, I wish to point out, and reiterate the statements made in the handout. The committee had no access to any information other than the credit card statements. We had no opportunity to research the questionable charges (charges we couldn’t identify)listed in the report.
There is a paragraph in the report that states, “If an entry was questionable and we had no way to gather additional data, it was included. That raises the possiblity that some items may be legitimate…”
That said, there are still too many unanswered questions. For instance on June 2 2008 there was a charge for $219.80 at a Circle K store in Daphne. I personally find that difficult to understand.
We have no intention of inciting anyone. We strongly believe that the homeowners of Spanish Cove need to know how their hard-earned money has been managed. Without this knowledge, we cannot grow and change what needs to be changed so that this does not occur again. If you disagree, then shame on you.
Sorry, pasted in the wrong section…………..another long day in the office (dealt with budget cuts and staffing issues).
Butch, I was not inferring anything regarding your work performance or making any criticisms. I do recall an earlier communication about receiving input or concerns.
Everyone has different management – leadership styles.
Hi Mr. Junkins, if you’re interested in some insights from a one time employee while you’re putting together the POASC Financial & Accounting Policies and Procedures Manual, I’d be happy to volunteer a few. My email address is on its way to you @ djunkins@gulftel.com. Although I no longer work for POASC and utimately backed away from becomming a property owner, my degree is in Business Managment (class of ’88)…If that can be of some use? Pehaps I can make some contributions to your “living document” as it relates to POASC employees. My interest centers on the procedures used to evaluate employee performance and its effect on promotions/demotions, pay raises/cuts, and how this information is communicated before significant action is utimately taken.
Thank you.
Nautilus is the name of the printing company that prints the Update. Why provide misleading information with intent to incite?
Shame on the so-called “concerned citizens!”
Sometimes, Gary, all you need is common sense.
Dick, I would give you a hand if I could as I write many formal policy and procedures as part of my job (25 years ago my agency only had two three ring binders, now we have five), but my background – education is not in accounting or business.