Accounting for Corrupt and Incompetent Treasurer Pauline Oberland


The other day I sent a letter to the Association’s new general counsel, Nicholas Bartzen, informing him that the December 2018 financials and January 2019 financials is already more than 40 days late and 10 days late, respectively, in being posted on Lieberman’s e-STAR portal for unit owner review. Told him there could be only two reasons for the delay: 1) the board is not receiving a timely accounting of the Association’s finances, or 2) the “Time for Transparency” board is unnecessarily delaying its release. 

Lo and behold, yesterday both the belated December 2018 and January 2019 financial statements were finally posted on e-STAR. 

The unaudited December 2018 financials purports the Association’s Operating Fund earned a $265K surplus for the year ended December 31, 2018, as compared to $319K Budgeted. However, this $265K surplus includes an improper $71K surplus from the Association’s Special Assessment Fund. This means the Association’s loss for 2018 could be another year of losses in the 6-figures.

The purported $265K surplus translates a $492K windfall because the 2019 Operating Fund Budget included $227.6K for the projected 2018 Operating Fund Shortfall. Consequently, the 2018 Operating Budget overcharged unit owners by 25.0%. Great job, Treasurer Pauline Oberland!

In less than one month, unit owners should receive the 2018 Audited Financial Statements.



Earlier today I reviewed the December 2018 financials prepared by Lieberman Management Services, Inc., that were finally posted on LMS’ eSTAR portal. State Parkway’s chart of accounts have yet to be cleaned up, and LMS has yet to discontinue the incorrect recording of certain accounting transactions. (See January 9, 2019, Update below.) This means LMS continues to prepare bogus financial statements for the Association. In fact, December 2018 financials prepared by LMS purports the Association’s Operating Fund surplus for year to be a record-breaking $265K.

In the 2019 Proposed Budget Details, dated November 9, 2018, board and management had projected the 2018 Operating Fund Shortfall to be $227,497, which means the 2018 actual Operating Fund Surplus of $265K is $494K better than projected.



Today I realized that I never posted the following list of necessary financial changes below that I had created on December 25, 2018, and December 26, 2018, to this blog post:



  1. Show all sources of income in the income section of the income statement;


  1. Rename Garage Maintenance/Repairs to Garage Operations/Valet Parking and remove from maintenance expense category;


  1. Remove Cable TV Expense from maintenance expense category;


  1. Put LMS Management Contract Addendum together with LMS Management Contract;


  1. Segregate Real Estate Appeal Expense or include in corporate legal expense;


  1. Re-label mislabeled contingency accounts as appropriate;


  1. Record accrued real estate tax expense and HO policy in Association Owned Unit expense;




  1. To record Special Assessment Billed:


               Dr. Cash

                      Cr. 1350/1317 Special Assessment to Be Billed (Equal to billing amount)


  1. To record Special Assessment Income:


               Dr. 2225/2250 Deferred Special Income (Equal to monthly Special Expense)

                      Cr. 4011 Special Assessment Income


  1. Charge Litchfield Cavo installment payments to account 2105 instead of special assessment expense;


  1. Adjust Scavenger Rebate Receivable when payment is received instead of recording as income;


  1. Charge annual real estate taxes expense to Accrued Real Estate Tax by June 30, 2019:


  1. Do not permit LMS to make interfund transfers or charges to special assessments expense without advance board authorization during an open board meeting;


  1. Segregate capital expenditures by project;


  1. Segregate litigation expenses by case;



  1. Reconcile with previous year’s audit; and reverse y/e adjusting entries and charge amount due to garage operator to 2772, and zero out audit accounts;


  1. Segregate Funds for Reserves, Contingencies, Deposits and Prepaid Assessments into a separate account;




  1. Record Depreciation Expense for the year on June 30, 2019 (like LMS used to);


  1. Adjust Prepaid Insurance balance @ year-end after policies are renewed;




  1. Record year-end accruals and payables;




  1. Charge sales taxes on parts charged to maintenance service income, and file sales tax returns;


  1. Investigate Doorstaff Pension Withdrawal Liability;


  1. Fire CondoCPA, and retain a new independent auditor;


  1. Audit Garage Operations for the first time;


  1. Amend Association’s federal and state tax returns;


  1. File a Certificate of Error with Cook County Property Tax Office;


  1. Distribute 2018 Audited Financial Statements to unit owners by April 1, 2019; and


  1. Have unit owners adopt revenue ruling for FY2019 at the September 2019 annual meeting of unit owners.


I also found out that I had never sent it to the board and/or management as I said at last night’s board meeting. However, the Association now has a copy of the document as I emailed it to Board Secretary Meg Doyle the next day. In any event, you can see corrupt and incompetent Treasurer Pauline Oberland still has some work to do in order to make sure the Association is in compliance with Section 19(a) of the Illinois Condominium Property Act: “The board of managers of every association shall keep and maintain the following records, or true and complete copies of these records, at the association’s principal office: (9) the books and records for the association’s current and 10 immediately preceding fiscal years, including, but not limited to, itemized and detailed records of all receipts, expenditures, and accounts.” [emphases added]

True means that the financial statements are free from material misstatements and faithfully represent the financial performance and position of the Association. Complete means having all the necessary or appropriate parts.



I was going to entitle this blog post “Accounting for Dummies” but that would be an affront to dummies.

At the September 25, 2017, board meeting, the board unanimously created a $300K Reserve, or a Loss Contingency, for Legal Expenses, Judgments and Related Legal Expenses. This was over and above the $500K Special Assessment the board passed on July 24, 2017. Moments later at the same board meeting, the board approved for distribution to unit owners the proposed 2018 budget, which funded the aforementioned $300K Loss Contingency.

Corrupt and incompetent Treasurer Pauline Oberland, contrary to the board’s September 25, 2017, resolution, claims the $300K is actually a contingency as funds are not set aside. The bad news for Treasurer Oberland is that both Reserves and Contingencies can be either funded separately or commingled with other funds. The fact something is or is not segregated in a separate fund does not make something a Reserve or a Contingency. In fact, HOA boards are advised to segregate both funds for reserves and contingencies in a separate account from the Operating Fund so the restricted funds are not inadvertently spent on Operating Fund shortfalls.

Contingencies are for unexpected expense overruns or income shortfalls; reserves are funds restricted for a specific purpose(s). In this case, the $300K Reserve is a Loss Contingency restricted for “Legal Expenses, Judgments and Related Legal Expenses.” However, corrupt and incompetent Pauline Oberland did not ensure corrupt CondoCPA did not include the $300K Reserve in the 2017 Audited Financial Statements, presumably to hide this fact from unit owners and prospective buyers alike.

Corrupt and incompetent Treasurer Pauline Oberland failed to ensure a $300K Loss Contingency was recorded in State Parkway’s 2017 Audited Financial Statements, especially since then-board president Howard Robinson made not one but two public offers to settle a couple of lawsuits for $250K.

Now corrupt and incompetent Treasurer Pauline Oberland has a bigger problem. If there are remaining funds for the purported $300K “Contingency” at the end of 2018, the board will have to make a decision on how to handle the remaining surplus. It can be refunded to unit owners or credited to their 2019 Assessments, or the board, with advance notice to unit owners, can transfer the excess to the Association’s Replacement Reserve Fund. Meanwhile, the board has yet to make a formal decision as to how the 2017 actual $135K Operating Fund budget shortfall would be funded other than the $80K put in the 2018 Projection.


Corrupt Board of Directors File False 2017 Federal and State Tax Returns


WHO: Corrupt Tom Battista, Corrupt Margaret “Meg” Doyle Stingle, Corrupt Kevin Phelan and Corrupt and incompetent Pauline Oberland.

WHAT: State Parkway’s 2017 Federal and State tax returns, prepared by Corrupt CondoCPA.

WHEN: Sometime between the end of the October 18, 2018, board meeting and the start of the November 26, 2018, board meeting.

HOW: By falsely claiming there were, on average, 90 non-exempt vehicles parked in the garage each month instead of 58 actual per sp+’s monthly counts. This allowed the board to claim falsely inflated deductions and evade the payment of federal and state income taxes. In fact, the square footage of the parking garage is just 35,847 s.f., or approximately 325.88 per deeded parking space. Consequently, to purport 200 vehicles were parked in the garage overnight would only give each car just 179.235 s.f., which is an impossible number as vehicles need room for the driver’s door to open.

WHY: Because willfully evading taxes will make them guilty of a felony, and cause the Association to be fined $500,000?

Law Firm Levenfeld Pearlstein, LLC, And State Parkway Condominium Association Part Ways


The property manager’s monthly Financial Report, dated December 14, 2018, includes the following explanation: “Under budget. There were no corporation legal bills received during the month of November 2018. The SPCA currently has no general corporation legal counsel assisting the association.”


Sometime last month, State Parkway’s and its general counsel, Levenfeld Pearlstein, LLC, parted ways. I imagine it had to to with the ARDC investigation on one of LP Legal’s attorneys, which warned LP Legal that it reserved the right to reopen the recent investigation should there be another problem with LP Legal. Good riddance!

The bad news is LP Legal is being replaced by one of its former Community Association attorney – Nicholas “Lying Numbnuts” Bartzen. Nick ceased working for LP Legal about 5 or 6 months ago, and put out his own shingle, Altus Legal LLC.

Nick’s LinkedIn profile notes that he worked as property manager for Wolin-Levin from June 2010-July 2012; but began working as an attorney for LP Legal from August 2015. Consequently, State Parkway Condominium Association is being represented by a former associate attorney with less than 3 years of experience at LP Legal.

Levenfeld Pearlstein, LLC, had represented State Parkway for more than 24 years!

Will Regional Director Sara Kacheris Make It To Monday Night’s Budget Adoption Meeting?


Sara failed to appear at the meeting because she was “sick.” However, she was well enough to participate by telephone.



Tomorrow night is State Parkway’s budget adoption meeting, the big question is will LMS’s Regional Director Sara Kacheris show up?

a) Yes, but like last year she’ll show up empty handed, which means for the second straight year she won’t be able to answer unit owners’ budget questions.

b) No, because she’s taking a personal snow day, which also means she won’t be able to teleconference either.

c) Yes, but she won’t be able to answer questions from the unit owners. She’ll defer them to the board, but the board will defer questions to her like last year.

d) Yes, but she’ll give untruthful responses to unit owner questions and/or dispense legal opinions even though she’s not licensed to practice law in Illinois.

e) Yes, but only if her boss John Santero, who lives in Sandburg Village, also shows up.

f) No, because she’ll be busy teaching a popular LMS training course.


Board Denies Presence Of Fatal Errors In 2019 Budget But Still Refuses To Answer Simple Questions


The budget adoption meeting is still on for Monday, but with the Thanksgiving Holiday quickly approaching, my wife and I have yet to receive responses to our simple questions from the Association run by the “Time for Transparency” Board of Directors, which still has an unfilled vacant board officer/director position.

Below is the list of questions my wife and I are still waiting for the board and management to respond to:

  1. Please cite the authority that allows the Association to charge unit owners for non-common area expenses?
  2. Why does a ($106,919) change in Special Assessment Income in 2019 result in a $106,919 increase in total regular and parking assessments?
  3. Why does a $250,008 decrease in Special Assessment Expense in 2019 result in a $250,008 decrease in total regular and parking assessments?
  4. Why is there a profit in the cable t.v. pass through account (cable t.v. fees less cable t.v. expenses)?
  5. How much of 2017 Actual Operating Fund Losses are included in “Provision for Contingency” category in 2019?
  6. How much of 2018 Projected Operating Fund Losses are included in “Provision for Contingency” category in 2019?
  7. Please explain in great detail how the projected 2018 expense for “Provision for Contingency” will go from $0 today to $380,000 in less than eight weeks?
  8. Why has Helper C’s hours been cut drastically from 20 hours/week? Has this workforce change been approved by the union?
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