UPDATE: During an Ocean Pines Association Budget and Finance Committee meeting Thursday, Finance Director Steve Phillips said with the release of April financials the year-end deficit for fiscal 2018 stood at about $1.2 million. He said the two-year deficit was now $1.6 million. Phillips credited austerity measures put into place by General Manager John Bailey with reducing spending and helping trim overall losses. Original story follows.
By Josh Davis, Associate Editor
(May 31, 2018) Ocean Pines board member Pat Supik last Thursday said projected losses for fiscal year 2018 were still about $1.6 million.
The most recent monthly financial report, for year-to-date as of March 31, showed a negative operating variance of $1.167 million.
On May 22, the association posted a statement online about an apparent delay in releasing financials for April.
“It has been customary for OPA to keep the year-end open for longer than the 13 business days that we target to deliver monthly internal financial statements during the other months within the fiscal year. OPA is informing the community that the April year-end internal statements will not be posted to the website within 13 business days.
“Keeping the period open longer will assist in accomplishing the objective of producing accurate statements, by capturing all fiscal year-end invoices and recording the appropriate accruals and other adjustments necessary prior to turning the financials over to our audit firm, SC&H,” the statement read.
General Manager John Bailey, in an interview in March, said the 2018 budget deficit primarily comes from 10 areas.
According to Bailey, about half comes from food and beverage, with gross revenues at the yacht club off $560,000 and gross revenues at the beach club missing the mark by $285,000. A 20-percent food and beverage discount, implemented after budget adoption and without board approval, added another $145,000.
Personnel costs related to several employee contracts were over budget by $100,000. Contract closure and vacation payouts of several food and beverage employees added another $140,000.
Two new unbudgeted platform tennis courts cost $94,000. Unusually high uncollectible debt was $70,000 more than what was budgeted.
Unbudgeted mold remediation at the yacht club ran $55,000, legal services ran over budget by $110,000 and auditing services, including the “deep dive” audit, were $25,000 more than budget.
With the addition of $363,640 in deficits from the previous fiscal year, the projected two-year total was $1,948,140, Bailey said in March.
Supik, during a board meeting last Thursday, said an end-of-year audit had begun and auditors were onsite last week to start field week. She said that would include an evaluation of how association management responded to recommendations from the so-called “deep-dive audit” ordered last year.
“In addition, we’ve asked the auditors this year to perform additional procedures in the payroll area, making sure that we are in compliance with procedures that were recommended in payroll,” Supik said.
She said forensic auditors were in Ocean Pines last Monday “after completing initial stages of planning.”
Director Ted Moroney added information on how to contact forensic auditors with pertinent information would be released this week.
“The only thing that they ask is no rumor or innuendo,” he said. “Put out facts, if you have them, so that we don’t waste association money. If you have actual information, you will have an address and a contact name of a senior partner at [auditing firm] Gross Mendelsohn … this week.”