A look back at board’s projects; accounting error discovered

Four qualified candidates have submitted their names to run for the Rancho Santa Fe Association Board of Directors in the May election. Many thanks to these individuals for volunteering and thanks to the Nominating Committee for a job well done.

As we move into the closing months of this fiscal year, it seems like a good time to take a look back at what has been accomplished by the current Board of Directors. Some projects are ongoing; some are nearing completion; most have been completed. The list is long, so here goes:

•Transparency

•Board meetings are recorded and the recordings posted on the Association website for three months.

•Covenant Design Review Committee (CDRC) has opened all its meetings, including deliberations, to the public.

•CDRC has taken steps to streamline its process for applicants.

•A new “Gift and Gratuity Policy” has been created for the Employee Handbook to delineate appropriate vendor and employee exchanges.

•Inclusiveness

•Voter registration has increased significantly and staff efforts to reach out to unregistered residents continue.

•Methods to streamline the voter registration process are being evaluated.

•Nominating Committee placed everyone who volunteered to run for the board on the ballot.

•Many new members of the Covenant and long-time-but-previously-uninvolved members are volunteering to serve on committees.

•Accountability

•Audited the accounting and finance department for efficiency and restructured the department.

•Instituted full accrual accounting for financial statements.

•Reviewed banking relationships to reduce costs and to improve service.

•Reviewed and replaced liability insurance to remedy critical gaps in coverage.

•Instituted regular schedule of review and bidding of vendors and service providers.

•Conducted full review of HR function, including an update of all employee benefit programs.

•Instituted regular five-day workweek for all employees.

•Instituted posting of all financial statements and 990’s on website.

•Technology

•Working with providers to expand and improve coverage.

•Taking steps to bring community-owned fiber-optic network to the Covenant.

•Updating an aging phone system in Association facilities.

•Health Club and Pool Study

•An underground utility study has been completed. Soil study will be completed in conjunction with Design & Engineering.

•Requests for Proposals (RFPs) for Design and Engineering have been received and are being reviewed by staff. The board will choose the firm for the project at its April 2 meeting.

•Focus groups have been held and community-wide Town Hall meetings will be held on April 16.

Finally, I want to address some more challenging news. As some of you might have heard, and all of you need to know, in the course of conducting a full operational review of the accounting department and while instituting full accrual accounting for our financial statements, our outside accountants discovered an internal reporting error. According to the accountants, both restricted reserves and “free reserves” for all the entities within the Association (General Services, Golf Club, Tennis Club and Osuna Ranch) appear to have been miscalculated by approximately $1,600,000.

At the moment, the outside accountants have assured us that this appears to be the result of poor internal reporting practices over the years (the reason for our audit in the first place), not because of any malfeasance.

The outside accountants are preparing a detailed report showing the balances for each entity, which they will present to the Finance Committee this week. The Finance Committee will then make recommendations to the RSF Association board. The RSF Association board will discuss the issue at our April 2 meeting.

We have made absolutely no decisions at this point in time with respect to how the various budgets might be adjusted based on this discovery. Nor do we know exactly how each entity’s fund balances will be impacted. I assure you, however, that every single member of your Association board is committed to transparency and accountability. You are all most welcome to attend our April 2 Open Session board meeting.

Ann.boon@me.com

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