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After reading Mr. Quinn’s post I reached out to him via email as he is a qualified financial professional and CPA and former distinguished SCA Treasurer deserving of respect. Since I am banned from Berman’s blog my email to him asks him to correct his Berman post. Berman as usual did his customary smear preamble when presenting Mr. Quinn’s post.
Some of this accounting/audit talk is in the weeds but that’s where we are and so I will address his comments and conclusions.
1.Mr. Quinn’s opening and major presentation deals with auditor selection making a point as if I disagreed with that. I didn’t and don’t.
2. The question of Independence and Appearance of Independence is a point I raised and Mr. Quinn as it relates to Mr. Porter doing both the Reserve Study and the Audit was discussed. Mr. Quinn fails to acknowledge that Porter’s Reserve Study company gives the board a choice of inflation factors between 3 1/2 % and 6 %. The fact that Porter gives a choice at all in my view contaminates the Independence. But then to allow Porter with his other company be the auditor in my view destroys Independence. But even if you disagree with that it does create a cloud on the Appearance of Independence and does violate Audit Standards, I have asked Mr. Quinn to acknowledge that.3. I pointed out in my email to Mr. Quinn that the current committee ignores its duty under the charter to oversee that the board is in compliance with NRS116 and Nevada laws which incorporate the governing documents. That was one of my major points as to lack of Independence and or the lack of Appearance of Independence as there are and have been significant violations by management and the board.
It is my hope that Mr. Quinn will consider amending his Berman post as the reader is being misled.
“Again, as SCA’s ESTIMATED reserve values are neither verified by the Auditor nor included in the audit section of SCA’s financial report, I don’t believe the reserve values influence the Auditor’s opinion of SCA’s financial statements. Mr. Stern believes otherwise. We will have to agree to disagree.”
Mr. Quinn responded on the Berman Blog with the above and fails to address my two specific points as his comment is only focused on the rendering of a clean opinion and what that means and doesn’t mean. He and I agree on that.
1. Mr. Quinn on an Anthem Today post made the point, “SCA’s 2023 Budget did not provide adequate reserve funding.” That’s his professional opinion. It’s mine too. And yet my point about Mr. Porter giving the board a choice of an inflation factor range of between 3 1/2% and 6 % will dramatically impact the 2023 Reserve Study. That’s not Independence nor is it the Appearance of Independence. Far from it because the issue isn’t about a clean opinion. It’s about money and arms length transactions. And this combination creates an Appearance of Lack of Independence or worse.
2. My second point unaddressed was the Audit Committee’s manifesto includes “Compliance oversight with Laws & Regulations and related risks. AUDIT COMMITTEE members Greg Swensen and Andrew Muha blew it off not owning the responsibility. Mr. Quinn in his Anthem Today post stated that “the CAM at the time told the board that hiring a resident for a managerial position was a professional ethics/standards violation.” The board ignored her. The Audit Committee didn’t weigh in. I don’t know who is right but Mr. Quinn thinks the board got it wrong. And for certain the Audit Committee got it wrong by not weighing in and that’s where INDEPENDENCE and APPEARANCE OF INDEPENDENCE are in play. And that has nothing to do with a Certified Audit. So please address the point.
3. Mr. Quinn stated in his AT post, “SCA is wasting its money because the COO isn’t knowledgeable to know that SCA doesn’t need a CFO. SCA’s accounting is bookkeeping not finance.” Again Mr. Quinn and I agree. Yet the very people he is defending including Berman, Swenson and Muha disagree with him.
4. Mr. Quinn’s objective as stated is to replace the board majority. He and I agree again. Yet Mr. Berman #1 cheerleader for COO , staff and board mischaracterizes Mr. Quinn’s comments to suggest he’s got things right and I don’t know what I am talking about. SPIN!
5. There is so much more that Mr. Quinn and I agree on. But since he hasn’t actually addressed my two points it’s not clear. But should be decide that my two points are not correct then he is right , we will just have to agree to disagree. But first PLEASE address the two points specifically otherwise this is pointless.A couple homeowners have emailed me and called me to point out the dishonesty of Swenson and Muha as they like Quinn are making a case for something that wasn’t challenged and none of the have the intellectual honesty to not only correct themselves but are quite content in participating in a smear. I originally clearly gave them the benefit of the doubt of having made an honest mistake and giving them the opportunity to clean it up. That shows you folks the kind of governance that exists at SCA. With that level of dishonesty it is time to “throw the bums out.”
It is clear that competency and character are missing. But perhaps that is the new normal. Your votes now and into the future will decide that.
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