Month: December 2018

Legal Expenses are reported in line item 50300-000 Professional Services. A quick look at the financial reports shows the 2018 actual expenditures to be drastically over budget. In fact, the variance has set a record. This variance measurement is defective due to a faulty budget.

The faulty budget for 2018 looks as if someone made a typo and entered $2,000 instead of $20,000. It appears this quality defect went unnoticed. Variance to this defective standard is understandably enormous.

The budgeting process for 2019 did not appear to recognize the 2018 defect as the 2019 budget is only slightly increased from the erroneous 2018 value. We should expect high over budget variance in 2019 as well.

Comparing the reported variance to the current budget with the variance to the 2015 budget reveals the current budgeting process is adding significant variation to this measurement.

The budgeting process needs some work to make it more robust.

Will investigate.

Financial Statements

• June 2018:          54300-000 Pool Supplies                                               $17.25
• August 2018:      54300-000 Pool Supplies                                               $203.91
  • Note: “***Pool supplies expensesbooked for August will be reclassified and reflected on the Sept statement”. (Sept – NO, Oct – NO)

Declaration

• November 2018 Violation of 60-day notification of new budget [CC&Rs§ 8.1 paragraph 4 & 8.2 paragraph 3].
• December Annual meeting notice violates SC Code §33-31-705 Notice of meeting location no fewer than ten days.
• December 21, 2018 “Special Meeting” not called per Bylaws § 3.9.
• Bylaws § 3.21(f)(v) Delinquency Report
• CC&Rs § 3.2(a): “…publish notice of proposed action…specifically includes posting notice at the entrance to Barefoot Resort at least thirty days prior to the Board meeting at which such action is to be considered.”

Budget

• Administrative: 50300-000 Professional Services
  • 2015:     budget 15,000, actual 14,190
  • 2016:     budget 10,000, actual 26,120
  • 2017:     budget 26,140, actual 17,130
  • 2018:     budget 2,000, actual 24,468 (annual rate as of 10/31)
  • 2019:     budget 7,000

Why is the annual budget uncorrelated to the actual expenditures? What is the budgeting process?