State Parkway’s Revised 2017 Draft Audit

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.

Hey, CondoCPA, There Are Numerous Mistakes In State Parkway’s 2017 Draft Audit

Let’s see what changes CondoCPA made in the revised 2017 draft audit, which I finally received today.

  1. 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!
  2. 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!
  3. CondoCPA made the recommended correction in changing “Parking Fees” to “Parking Assessments.” Good Job, CondoCPA!
  4. 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!
  5. 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!
  6. 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!
  7. 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!
  8. CondoCPA failed to disclose that Garage Operations – Net continues to lose 30% compounded per annum, as been the case since 1995! Bad Job, CondoCPA!
  9. CondoCPA completed State Parkway’s 2017 revised draft audit without preparing State Parkway’s federal and state tax returns. Bad job, CondoCPA.
  10. CondoCPA neglected to record the $300K Loss Contingency State Parkway’s board of directors adopted last September. Bad job, CondoCPA!
  11. CondoCPA failed to correct the two “Note 9” in the Notes to Financial Statements and renumber the subsequent notes. Bad job CondoCPA!
  12. CondoCPA failed to correct the errors in Note 10. There is no Plan C. Bad job, CondoCPA!
  13. 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!
  14. CondoCPA failed to mention that Travelers gave State Parkway notice of $1.2MM reservation of rights. Bad job, CondoCPA.
  15. 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!
  16. 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.
  17. CondoCPA vaguely disclosed the commitments, which are material. Bad job, CondoCPA.
  18. 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:

  1. Record year-end accrued garage expenses: $30,000.00 (estimated)
  2. Reclassify $55,144.85 of legal charges charged to or improperly reclassified to State Parkway $500K Special Assessment Legal Fund: $55,144.85
  3. Reclassify $154,668 of expenditures for minor repairs of non-reserve inventory components improperly charged to Replacement Reserve Fund: $154,668.00
  4. 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.

Published by mnovak431

Bullied At State Parkway Condominium Association is a blog that details the very serious financial, management and litigation issues at State Parkway Condominium.

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