ORIGINAL POST: AUGUST 21, 2018
Today, Bumbling CPA, CondoCPA, finally distributed the revised 2017 draft audit, dated August 20, 2018, more than a month after I informed CondoCPA of the errors in the draft audit I inspected on July 18, 2018.
Let’s see what changes CondoCPA made in the revised 2017 draft audit, which I finally received today.
- CondoCPA fixed the Holiday Fund mess. This means State Parkway’s board of directors can’t abuse the year-end Holiday Fund distributions in order to distort the Operating Fund’s Financial Results. Good Job, CondoCPA!
- CondoCPA did not stop recording depreciation on the vacant Engineer’s Unit, which would have reduced State Parkway’s Operating Fund shortfall. Good Job, CondoCPA!
- CondoCPA made the recommended correction in changing “Parking Fees” to “Parking Assessments.” Good Job, CondoCPA!
- CondoCPA neglected to insert a note about the lost scavenger rebates as a result of CondoCPA improperly recording them in the first place, which is unlike the previous scavenger rebate write-off in 2006. Bad Job, CondoCPA!
- CondoCPA made no adjustments to the charges to State Parkway’s Reserve Fund, including those that were never authorized by State Parkway’s board of directors. Bad Job, CondoCPA!
- CondoCPA made no adjustments to the charges to State Parkway’s $500K Special Assessment Fund for Legal Fees, due to lack of advance unit owner notice and/or lack of board authorization. Bad Job, CondoCPA!
- CondoCPA made the recommended correction regarding Garage Operations – Net. Good Job, CondoCPA! However, CondoCPA continues to improperly net Garage Operations Revenue with Garage Operations Expenses. Bad Job, CondoCPA!
- CondoCPA failed to disclose that Garage Operations – Net continues to lose 30% compounded per annum, as been the case since 1995! Bad Job, CondoCPA!
- CondoCPA completed State Parkway’s 2017 revised draft audit without preparing State Parkway’s federal and state tax returns. Bad job, CondoCPA.
- CondoCPA neglected to record the $300K Loss Contingency State Parkway’s board of directors adopted last September. Bad job, CondoCPA!
- CondoCPA failed to correct the two “Note 9” in the Notes to Financial Statements and renumber the subsequent notes. Bad job CondoCPA!
- CondoCPA failed to correct the errors in Note 10. There is no Plan C. Bad job, CondoCPA!
- CondoCPA made the recommended disclosure with respect to garage revenues and expenses, but took the unprecedented step of not providing garage revenue and garage expense details. Bad job, CondoCPA!
- CondoCPA failed to mention that Travelers gave State Parkway notice of $1.2MM reservation of rights. Bad job, CondoCPA.
- CondoCPA failed to disclose that State Parkway is currently (2018) in the third year of an unannounced 13-year special assessment. Moreover, CondoCPA failed to disclose the board waived $371K of reserve contributions in 2018. Bad job, CondoCPA!
- CondoCPA makes no mention of the $45K-$50K for rooftop anchors, an unbudgeted reserve inventory component item, that OSHA required to be installed by August 20, 2018. Bad job, CondoCPA.
- CondoCPA vaguely disclosed the commitments, which are material. Bad job, CondoCPA.
- CondoCPA failed to disclose the interfund loan and its terms. Bad job, CondoCPA.
Altogether CondoCPA received 4 “Good jobs” and 15 “Bad jobs.” CondoCPA not only sucks, but it is also corrupt!
CondoCPA corrections in the latest revision increased State Parkway’s 2017 Operating Fund Deficit to ($54,833) from ($51,960) in the July 18, 2018, draft. But CondoCPA changed it’s opinion to ‘qualified’ from ‘unqualified’. But corrupt CondoCPA still has a very long way to go. The following accounting adjustments are still needed:
- Record year-end accrued garage expenses: $30,000.00 (estimated)
- Reclassify $55,144.85 of legal charges charged to or improperly reclassified to State Parkway $500K Special Assessment Legal Fund: $55,144.85
- Reclassify $154,668 of expenditures for minor repairs of non-reserve inventory components improperly charged to Replacement Reserve Fund: $154,668.00
- Record the $300,000 Loss Contingency the board created in September 2017 after the board made not one but two public offers to settle all litigation claims with Mr. Novak for $250,000: $300,000.00
If CondoCPA makes all of the aforementioned adjustments, State Parkway’s Operating Fund Deficit will soar to ($594,646), or an increase of $539,813. If CondoCPA cannot make these adjustments, it should simply issue an adverse opinion instead of a qualified opinion.