By Greg Ellison

(July 29, 2021) Ocean Pines Controller and Finance Director Steve Phillips updated the Board of Directors last week on a pending reserve fund study and forensic audit, along with continuing computer software challenges.

Reserve study

Philips said the latest study of reserve account balances by Virginia-based firm Design Management Associates is in progress, with a board presentation anticipated in September.

Six years ago, the OPA board paid Design Management $31,800 to ascertain what level of reserves it should maintain based on assets.

At present, an internal review process for the analysis of reserve funds is underway with draft reports recently distributed to department heads.

Updates involve departmental fixed assets, including buildings, furniture and equipment, along with depreciated values for each.

Doug Greene, a partner with the Richmond firm, presented an initial report to the board in April 2016, with a follow-up review conducted in 2018.

Phillips said individual departments should be finished confirming reserve figures versus assets on hand by mid-August, at which point Green would return to consult with Pines officials.

“He was on site on in April,” he said.

Also in August, the Ocean Pines Budget and Finance Committee will review reserve study data.

“Budget and finance will have a chance to weigh in on the analysis and the numbers,” he said.

General Manager John Viola, who served on the Budget and Finance Committee in 2018, said it was agreed then that reserve accounts should cover a range of 22-28 percent of assets.

“Right now, we’re at 22 percent of the number we believe we need for reserves,” he said. “Over the last three years, we’ve done a lot, and we’ve invested a lot, but we’re still at 22 percent.

Forensic audit

Salisbury accounting firm TGM Group is completing a forensic audit of association financials.

Phillips said TGM conducted preliminary investigations of internal fiscal controls during April and May.

“The main message or theme was there was no significant adjustments,” he said.

TGM confirmed numerous favorable financials reported by association departments were accurate.

“They came out in the field and tested on site,” he said. “The last couple of weeks we’ve been getting monitored.”

TGM is slated to release its report no later than next week and will be on hand to discuss details at the annual Homeowner’s Meeting in August.

Northstar

Minor hiccups are continuing to plaque the association’s Northstar IT software that was purchased in Jan. 2019.

Phillips said the most recent struggles are tied to software updates issued right as summer season was ramping up in June.

“Updates have really been the ‘bear,’ in terms of unexpected issues,” he said.

The results have been a recent uptick in “tickets,” or problems reported to software designers.

“That’s when we really increased our tickets,” he said. “We were managing downward to 5-10 but then jumped back up.”

At present the focus is improving software update processes with a new Northstar manager brought into the proceedings, Phillips said.

“They need to do adequate testing internally before they turn it over to us for any testing,” he said. “We need to test it before we roll it out as well.”