Lack of oversight leads to concern about fraudulent financials

Following is an excerpt of the statement I made at the August 19 MCA Executive Board meeting with regard to the Financial Statements.

Since I first reviewed MCA’s financial statements in August 2025, I have raised concerns that they may be materially misstated.

I think by now it’s clearly understood, including by the executive director, that the organization lacks competent accounting personnel and adequate internal controls over financial reporting. The board has discharged its fiduciary duty by refusing to impose any standard of care upon the executive director for financial management of the HOA. It has defended the decisions of management and stood athwart those who would expect good governance and following best practices.

The board has allowed the executive director to both authorize contracts, payments and expenditures, and prepare the financial statements and budgets that govern and guide the organization’s financial decision making. This is a failure of segregation of duties and a clear demonstration that MCA management lacks institutional control over financial reporting.

At the February meeting I asserted that the December 2025 financial statements, which the board approved, were materially misstated. The clearest example is the $182,215 recorded in 2024 as “Audit adjustments.” This entry has nothing to do with generally accepted accounting principles (US GAAP), and everything to do with presenting fraudulent financial statements to the MCA board and members. (How can an “audit adjustment” result in $180 thousand additional income?)

We know that this misstatement is not due to error because the executive director made the entry intentionally. The concern is not merely that it was intentional but that it was labeled “Audit adjustments,” creating the appearance that these 2024 figures had been audited or conformed to audited financial statements.

In May of this year, I assisted the executive director with transitioning the accounting software from Quickbooks Desktop to Quickbooks Online. During the brief time that I worked with MCA management it became clear that the assessments revenue, cash, accounts receivable, and the allowance for doubtful accounts had not been, and were not being reported accurately, or according to the accrual method.

The MCA board has created an environment with little to no oversight or accountability and has empowered management to refuse to provide information to the board when requested; an environment in which errors, omissions, or misconduct would be difficult to prevent or detect.

I am calling on the board to re-perform the annual financial reports from 2019 – 2025, by engaging competent accounting professionals to review the bank records and source documents, Quickbooks Desktop accounting files, and all other available materials, and  to compile and issue annual reports for each year. MCA members deserve to have reliable, accurate financial information, and strong fiscal oversight over the assets of the HOA.

The MCA has $12 million in annual income and no way of accurately or reliably reporting its financial position or results of operations; as such it is a failing organization.