Thursday, October 13, 2016

Wot's a GENERAL LEDGER???????

As the Arizona Homeowner Forum gets ready to welcome our 25,000th visitor, the amazing feedback has produced some even more remarkable developments: 
  1. A number of CAI member Management Companies seem to be resisting giving up basic HOA records such as bank account details and related documents to members
  2. A number of HOA attorneys have even denied the term “General Ledger” exists when faced with requests for copies of this most basic of accounting records
  3. Even CAI has yet to fulfill our request for records we are entitled to under ARS 10.

See the attached below comprising:
  1. Exchanges with the CAI CAZ Director correcting her on a point of law related to ARS 10
  2. A request to the CAI’s own CPA, Michael Ginsburg, to correct this most basic of accounting misinformation on the General Ledger as a basic accounting term.
  3. The rebuttal of our offer to educate CAI members on the first known Arizona HOA bankruptcy announced by Carpenter Hazlewood recently for the Crossings in Prescott

See the attached
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Sent: Thursday, October 13, 2016 3:29 PM
To: 'Kayte Comes' <kayte@cai-az.org>
Cc: ashaw@shawlines.com; grandbails@cox.net; jjreynolds@gmail.com; josh.bolen@carpenterhazlewood.com; jperkins@ccmcnet.com; linda@alphacommunitymanagement.com ; mwade@leisureworldarizona.com ; suzanne@restorationarizona.com ; toni.rudolph@firstcitizens.com
Subject: RE: Request for Annual Report of CAI Central Arizona

Kayte
You’ve had our request for two weeks now. If you were an HOA subject to the overriding effects of ARS 33, you would now be in default. .
Please respond promptly with the Annual Financial Statements

The Arizona Homeowners Forum
Visit our blog at www.arizonahoa.blogspot.com
**************************************************
From: Kayte Comes [mailto:kayte@cai-az.org]
Sent: Thursday, October 13, 2016 1:00 PM
To: John Sellers <Jas@arizonahomeowners.net>
Subject: RE: Request for Annual Report of CAI Central Arizona

Hello John,
I will look into your request, but Ginsberg & Dwailebee are not out auditors.  They prepare the annual taxes only. 
Thank you
Kayte Comes
Executive Director
Community Associations Institute
Central Arizona Chapter
*****************************************************
From: John Sellers [mailto:Jas@arizonahomeowners.net]
Sent: Thursday, October 13, 2016 12:51 PM
To: Kayte Comes <kayte@cai-az.org>
Cc: mike@gadcpas.com
Subject: RE: Request for Annual Report of CAI Central Arizona

To: Kayte Comes
Executive Director
Community Associations Institute
Central Arizona Chapter
11225 N. 28th Drive, B102
CC: Michael Ginsburg CPA

Kayte
RECORDS REQUEST
In response to your email below, I’m well aware of that. But there is a difference between ARS 10-11602 which, as you correctly point, requires 6 months of membership for a much more exhaustive list of records, and ARS 10-11620.
I requested the records under that latter provision, namely Annual Financial Statements only. This provides that any member, without time limit of membership, is entitled to be furnished with, not inspect, a copy of them.  For the rest you have to wait 6 months. See highlighted section below. As you have a CPA, I assume his statements will be included. Kindly therefore supply the Annual Financial Statements by return please.
ON A SEPARATE ACCOUNTING NOTE, as the AHF blog approaches its 25,000th visitor, we’re getting a lot of amazing feedback from everywhere.
Some HOA members for instance are finding it easy to get basic banking records, others are not. Why there should be any doubt these records are available to members is beyond me. Records such as bank account opening documentation, signature cards and other standard banking documents are obviously fundamental records.
If you’ve visited our blog, you’ll know it was the General Ledger for the Crossings at Willow Creek HOA that was provided to the Prescott Police, as supplied by the HOA. This is the basis of their current investigation, based on our complaint against Dennis May of Amcor. I’ve attached that same document.
I’ve been staggered by the number of CAI AZ member firms, mostly attorneys, who are denying members copies of the Associations “General Ledger” on various grounds. The most common of which is they’ve never heard of that accounting term. Or it doesn’t exist. Or such request is not specific enough. That sounds like an attorney offering accounting advice, or worse.
So I’ve copied CAI’s auditor, Michael Ginsburg CPA, on this.
Michael, as you know the General Ledger is one of the fundamental accounting records. So this is absurd. CAN YOU PLEASE PROVIDE CONFIRMATION OF THAT, AND THE IMPORTANCE OF THE GENERAL LEDGER -PLEASE?
FINALLY
Kayte, I offered to write an article in response to your request. See below. I’ve heard nothing back. I have to assume you feel I’m not qualified. Is that the case?  

Regards
John Sellers on behalf of
The Arizona Homeowners Forum
Visit our blog at www.arizonahoa.blogspot.com
******************************************************
From: John Sellers [mailto:jasellers123@gmail.com]
Sent: Tuesday, August 16, 2016 11:16 AM
To: kayte@cai-az.org
Cc: 'Josh Bolen' <josh.bolen@carpenterhazlewood.com>; scott@carpenterhazlewood.com; 'Lydia A. Peirce Linsmeier' <lydia.linsmeier@carpenterhazlewood.com>; 'James D. Atkinson' <james.atkinson@carpenterhazlewood.com>; curtis@carpenterhazlewood.com
Subject: FW: Call for Magazine Articles - 2016 Fall Issue "Managing Your HOAs Finances... Tips to Save Money, Time, and Resources"
Kayte
According to Josh Bolen, our HOA in Prescott is going to file bankruptcy within 30-60 days. See attached.
I have a lot of experience in bankruptcy and frankly it’s exciting professionally because you never know where it might end up. This includes:
1.      The $800mm rescue of Burmah Oil in the 1974 where we had to force the British Government to buy 40% of British Petroleum
2.      The $1bn bankruptcy of the Kendavis Group in 1984. They were the oil family in Fort Worth that inspired the TV series “Dallas”
3.      The near $6Bn bankruptcy of one of the largest Hotel chains in the world when I was at Citibank in 1990 just after the Gulf war started and the real estate market collapsed
4.      The first ever prepackaged bankruptcy for Resorts International (Merv Griffin)in 1988.
5.      There’s a few smaller ones too.
I also:
1.      I’m not an accountant thank goodness but came top of the JP Morgan training program in 1973 devised by Sandy Burton, SEC Chief Accountant
2.      Wrote the anti-money laundering procedures for the bank I ran in London owned by the Italian Government
3.      As relationship manager for Exxon at Chase in 1983 we set up for them what has now become one of the largest payment systems in the world - the ACH direct debit system which every HOA seems to use to collect payments
4.      If you check out our professional web site at www.yavapairegionalcapital.com I have slightly over $30billion of successful financings in infrastructure and were currently trying to work with the Governor’s office on some exciting new facilities.
So I’d be happy to write something if you feel my credentials are up to it. I’ll let you decide
Two questions:
  1. How many words?
  2. Can we get Josh Bolen to write a balancing article which can give the story of a bankruptcy from the inside? I’ve never been on the inside of one and I think it would be riveting to get that very unique perspective. We were always the ones cleaning up the mess. I’m sure there’s a lot we could learn from him. I’ve copied him and will let him respond.
John Sellers
*************************************************
From: Kayte Comes [mailto:kayte@cai-az.org]
Sent: Thursday, October 13, 2016 10:44 AM
To: John Sellers <Jas@arizonahomeowners.net>
Subject: RE: Request for Annual Report of CAI Central Arizona

Hello John,
Per the Arizona Nonprofit Corporation Act below your membership will be at six months on November 19, 2016.  Your membership was purchased May 19, 2016.  At that time you can contact me and we can schedule a time for you to come to the Chapter office and review the financial statements that are eligible for members to review.  If you wish to make copies you can do so at our office.
Thank you
Arizona Nonprofit Corporation Act – 10-11602 – Inspection of Records by Members; Applicability

10-11620. Financial statements for members
A. Except as provided in the articles of incorporation or bylaws of a corporation organized primarily for religious purposes, a corporation on written demand from a member shall furnish that member its latest annual financial statements that may be consolidated or combined statements of the corporation and one or more of its subsidiaries or affiliates, as appropriate, and that include a balance sheet as of the end of the fiscal year and statement of operations for that year. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements shall also be prepared on that basis.
B. If the annual financial statements are reported on by a certified public accountant, that report shall accompany them. If not, the statements shall be accompanied by a statement of the president or the person responsible for the corporation's accounting records both:
1. Stating that person's reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation.
2. Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

Kayte Comes
Executive Director
Community Associations Institute
Central Arizona Chapter
11225 N. 28th Drive, B102
*****************************************************
From: John Sellers [mailto:Jas@arizonahomeowners.net]
Sent: Saturday, October 01, 2016 1:28 PM
To: Kayte Comes <kayte@cai-az.org>
Subject: Request for Annual Report of CAI Central Arizona
Pursuant to ARS 10-11620. Financial statements for members, can you please supply me with a copy of the most recent accounts of the corporation
Thank you
Regards
On behalf of the Arizona Homeowners Forum
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