Exec Director and Rumors

As a homeowner in a large community governed by an elected homeowners board that oversees a staff of at least 20 or so, I am concerned over rumors heard recently. The Executive Director had been in place for over 20 years. The Board President and Treasurer were close friends and relied on her a lot. I attended Board meetings and aside from the minor complaints of a few in the community, they were boring and perfunctory. Almost all business was discussed and completed before the meetings were open to homeowners. The current Treasurer gained a lot of the support he has because he presented the "financial picture" well and painted a good future.

Recently the Executive Director suddenly resigned for "personal and health" reasons. However, the talk in the community (no one seems to know more than just that), is that she took thousands of dollars over the years from the Homeowners' Association in addition to some of the tactics that a few unethical politicians use of buying one for the office and a second delivered to their home on the company credit. The latest rumor was that one of the staff members blew the whistle and it took months to get the president and treasurer to understand and believe the gravity of the situation.

Within days of the "resignation", the Board President who had been acting as the Interim Director was elected the Executive Director position, which he "humbly" accepted.

As mere homeowners, no one seems to know anything except that he is now in charge, that the staff members refer everything to him, and he is overseeing everything in detail. Any questions about the association and its operations must be fielded by him.

The feeling amongst homeowners is that the President and Treasurer were too close to the forest to see the trees and when they learned the truth, they also realized that it was part of their responsibility to oversee the former Executive Director. Rather than expose the loss of the funds which probably came to more than anyone realized and cause scandal in the local community and this part of the state, they swept everything under the rug and engineered a clean exodus for her.

The whole thing is running like an undercurrent through those who are involved and care -- and as a homeowner, I am concerned that the Board is not doing the right thing for all of us who own homes here. If money has been taken, some effort should be made to recoup the funds. Close to 1.5 million was recently spent to remodel the club house, and our annual fees are not going down.

This is over my head. I don't want to ask unneccessary questions and become a community 'crazy'. Everything that happens with the Board is always hear-say anyway. It's a close-knit group of men (and their spouses) and everyone else is just a homeowner. But, this time it appears to be something more substantive, and worse, illegal. As one who dutifully pays the homeowner dues and follows all the rules, good and stupid both, I think it is time to open the windows on the corporate house. What does one do in a situation like this?

Embezzlement does happen, especially when there is not a Finance Committee to look over things on an on-going basis.

20 years is a long time for one person to serve in that capacity. Shame on your board for letting this go on for that long.

An audit will find out what you want to know. But be prepared to pay for this "discovery" process.

Thank you, Donald, for the response. Unfortunately most homeowners are the same as you describe -- apathetic except for the day their dues are impacted. What we have learned is that the former director WAS the accountant until about 2 years ago, and the firm that "audited" the books every year until the last one was willing to accept whatever was handed them. There is so much CYA going on that no one knows who to believe.

Donald, I appreciate you responding. The association had an audit every year. The treasurer and executive director used the same auditor for a number of years, and the executive director wore the "accountant" hat. The decision on the auditor chosen was also heavily influenced by the ED. Anything questionable was classified to be 'acceptable' before it was ever placed in their hands. You are also correct about the breakdowns from the past.

The auditor was changed this year and that's when some on the Board and in other areas began to hear the questions. A quick lid was put on that!

The willingness of the Board to admit and to address it publicly is not apparent. It is embarrassing to see these professional people with good reputations in their areas of expertise do the Little Two-Step (from the musical BLWHIT) on substantive issues involving thousands, yet spend hours on minor issues like fence/no fence, a truck parking or color of paint.

It may not yet be over but it is, in my opinion, like closing the barn door after the horses escaped. The Board is interested in keeping the peace and saving face. The majority of homewowners are clueless, and the person who may have scammed the organization walks away with the spoils.

Ann - look at the budget and the actual expenditures for the year. You should have gotten an end of the year report to all members.