July 12, 2007 Issue                                       

©2007 The Chestnut Hill Local

Board opts to stick with ’06 audit
By PETE MAZZACCARO

The Chestnut Hill Community Association Board of Directors voted at its June 28 meeting to reverse a prior decision to secure a new audit of the CHCA and the Local for the fiscal year ending March ’06. It decided instead to accept a completed audit from Jebran and Associates and commense with securing an audit for the fiscal year that ended in March ’07.

In May, following a board motion to do so, former president Ron Recko signed a letter of engagement to employ O’Hara, Ward and Associates to perform a full audit of the March ’06 year. The firm agreed at Recko’s request to refrain from performing the audit.

The decision to stick with Jebran and Associates followed a recommendation to do so by new CHCA treasurer Moss Disston.

“As I went through [Jebran’s audit] I grew more comfortable,” he said. The motion to support Disston’s recommendation passed 28 to 6, with four abstentions.

Disston said he had submitted questions to Jebran that had been answered and that he felt the audit should be accepted pending minor amendments.

Several board members took issue with Jebran’s ’06 audit, most notably Jim Foster and Meredith Sonderskov. Both serve on the board’s Oversight Committee, which issued several recommendations over the course of the last year in an effort to prevent financial mismanagement the committee identified during the last three years in a lengthy report reprinted in this paper on March 29.

After a motion was made to support Disston’s recommendation that the ’06 audit be accepted, Sonderskov made a counter motion for the board to seek a substitute, “independent and unqualified” audit.

Her comments spurred a debate on the merits of reversing the May decision and also a discussion of what was meant by unqualified, a term that appeared to mean different things to different people.

Foster said he was disappointed with the motion and reiterated what he felt the board had voted on in May when it approved $11,000 in expenditures (an amount that would have been split between the Local and CHCA) on a new audit. 

“The preliminary figures were absolutely not an unqualified audit,” Foster said. “We voted to get an unqualified audit. Now what we’re being asked to do is go back to the first auditor we were dissatisfied with.”

Foster said earlier that an unqualified audit was one in which the auditor was given an institution’s books and then verified the information in those books with other parties, vendors, bank statements, etc.

“That did not happen in this audit,” Foster said.

Others in attendance at the meeting insisted the Jebran’s audit was unqualified. Harry Johnston, a former community manager of the Chestnut Hill Community Association, said he was certain Jebran’s audit was indeed unqualified and said to suggest otherwise was slanderous to Jebran’s reputation.

In an interiew following the meeting, Foster told the Local that he could not understand why an institution like the CHCA, which had suffered through several years of fiscal trouble, would not take steps to shed light on what had gone wrong in the past.  He also said he had found problems with Jebran’s numbers and that there were inconsistencies in payables and receivables between the CHCA, the Local and the Chestnut Hill Community Fund.

(The Local and CHCA file a tax return as one entity and are audited as such. The CHCF files separately.)

“We need a new set of eyes to look at these financials,” Foster said. “Why wouldn’t a board that has had serious trouble with its financials not want to tell a community, ‘We went out and got a new, thorough audit.’ What we have now will not pass the smell test for a major non-profit organization with a profitable subsidiary worth more than $1 million.”

In a separate interview, Disston told the Local he made the recommendation to the board to accept Jebran’s audit after reviewing the document and getting satisfactory answers to several written questions posed to Jebran from members of the board and the CHCA’s Budget and Finance Committee. He said he found Jebran’s work was consistent with audits Jebran had completed for the association in the past and believed everything in the audit was in order.

“He did a good job,” Disston said. “He’s a certified public accountant and did the job he was expected to do. I don’t know why it was thought to be inferior by some.”

Disston said that following the board’s acceptance of the audit he had prepared the joint tax return of the the CHCA and Local and that it had been signed by he and Jebran and filed.

Other Business:

After some discussion of the work of the Oversight Committee, board member Ned Mitinger offered a motion to disband the committee. After some debate in which supporters of the committee pointed out that it had been approved for two years, the motion was tabled.

CHCA president Tolis Vardakis introduced a letter to Richard Snowden that appears in this week’s issue (page 4). He asked for support from the board but declined to read or distribute the letter beforehand. The board entered executive session to discuss the matter. After executive session, Vardakis said he had not read the letter. Many on the board offered support for the idea but did not want to support a letter they had not yet had the opportunity to read.