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OPA Board addresses theft, fraud

The Ocean Pines Board on Sunday discusses a timeline of missing funds and theft allegations that started a year ago. A large crowd was present during the meeting, held in the community center.

By Josh Davis, Associate Editor

(March 1, 2018) “Obviously there’s a lot on everybody’s minds, so we’re going to address that in today’s meeting,” Ocean Pines Association Board of Directors President Doug Parks said at the outset of a regular board session Sunday.

Parks said to the capacity crowd there was talk of “questionable financial ongoing things … having to do with the yacht club and, I guess, the overall environment in Ocean Pines.”

“Trust that we take this information very, very seriously,” he said. “This is an important event in our organization and we as the board are prepared to do what it takes to … [get] all the required information out in front of the membership, so that everybody is aware of the things that are going on.”

Parks spoke while a slideshow event timeline was projected onto a screen inside the Assateague Room of the community center. Throughout the first hour of the nearly five-hour meeting, additional folding chairs were set up in the back of the large room, which can hold perhaps 200 people.

The timeline began last May, when Parks said things occurred “that started to have us ask questions.”

He admitted some of the information “was not presented, probably, in the best way.”

According to the timeline, the former chief financial officer, Mary Bosack, resigned last May and John Viola was brought in to fill the director of finance position until a permanent replacement could be hired.

A “concern with missing petty cash” occurred last July and Viola and the then Acting General Manager Brett Hill, led an investigation.

The investigation found that a staff member was involved and Hill fired the employee for cause.

The “terminated employee stated [the] amount of $2,500 was stolen,” according to the timeline. The “Board [was] notified and after much discussion, and based on AGM (acting general manager) recommendations, decided no charges will be filed as it would cost more in legal fees than could be recovered.”

Parks added Ocean Pines Police interrogated the employee and later clarified there was no board vote, but rather a consensus, not to pursue charges. He said the board was also following the advise of an attorney.

Under the circumstances, Parks said, “A regular audit wasn’t going to be enough.”

According to the timeline, the results of a “deep-dive audit” done by SC&H Group, LLC was presented in a management letter to the board in July and Viola began “implementation of process changes as recommended by [the] audit].”

The board was informed of the potential for additional missing funds in August and Viola introduced changes to cash-handling procedures. Accounting firm TGM Group LLC was contracted to review the changes and make further recommendations.

“To this day, we don’t know how much [money] was involved,” Parks said. “We don’t know if it was any involved at all. But we felt it prudent to move forward with [making changes] to the cash-handling side of it.”

Parks said the situation was then presented to the Worcester County Bureau of Investigations.

“We contacted them. On the advice of the attorneys, [the association] made sure that all we did was provide the information that was requested of us when we first reached out to them … to get that whole process started and make sure the investigation was ongoing and that they had everything they needed,” Parks said.

That’s also when, Viola resigned, Parks said.

“He had done his duty. The whole time it was temporary. He was stepping in until somebody else could be appointed or hired,” Parks said. “At that point, we felt we had done everything we needed to do to keep this process moving forward.”

Hill resigned in September and John Bailey was hired as the permanent general manager.

Also in September, the county bureau of investigations was provided with “personnel and payroll information” related to the investigation. Bailey has continued to follow up with the bureau and has been told the investigation continues.

The association hired a new finance director, Steve Phillips, in January.

Parks said the slow pace of the county investigation is frustrating.

“It’s gone through to the point where in my weekly meeting with [Bailey] I said, ‘not good enough — I want the guy’s name,’” Parks said. “I called [the bureau] personally, the detective who is on the case, and basically got the same thing: ‘we are still looking through records. We’re still requesting information.’”

Parks said he asked for a timeline, but was told, “These investigations are thorough. We have to have discipline.”

“Basically, he was buying some more time,” Parks said. “I don’t think any of us can control the speed in which that investigation is being done. I wish I had a better answer … by all means, I think anybody is free to call the Worcester County Bureau of Investigations on behalf of the membership and say, ‘we’re very concerned with the progress and can we get an update?’

“We’ve been, on a regular basis, continuing to query them, saying, ‘where are we with the investigation? Our membership demands this. We, as a board, demand it. Please help us out,’” Parks continued. “He said ‘we’re getting close,’ but, again, I think it’s just more of a manufactured answer.”

Parks said public allegations last month by Hill that additional thefts occurred started discussions of a fraud audit or forensic audit.

“We’re reluctant to spend the money, but at this point in time … it’s very important to move forward with this,” he said. “We’re as frustrated as [anyone] as to why these things are happening. We don’t have a lot of information … [but] at this point in time I think we’ve hit a crescendo or a threshold to where we can’t be protective of the environment.

“We’re going to have to spend some fairly significant funds to get this done, but I think, overall, it’s probably prudent to do so,” Parks added.

He said the board received correspondence from members suggesting, “we’ve been sitting on our hands and doing nothing” regarding all of the allegations.

“That’s about as far from the truth as you can get,” Parks said, adding some information was being kept confidential on the advice of association attorneys.

“It’s frustrating at times,” he said. “Do we have results yet? No. But things are in progress.”

Reached for comment on Monday, Lt. Ed Schreier from the Worcester County Sheriff’s Office confirmed the county bureau of investigations was “currently investigating a complaint.”

“It is not prudent to discuss investigations. CBI has been in constant contact with the Ocean Pines Board and has kept them informed on every step,” Schreier said in an emailed statement. “Investigations must be done in an efficient and thorough manner and should not contain time constraints. The nature of an investigation is to determine if a crime was committed and who may have committed it.”