Election Book Cooking

Every January, the previous year financials are closed out and updated for reporting in the new year. A few routine things are supposed to be done to update the balance sheet and show the financial health of the Association and its two condos. 

This shows you the starting surplus or deficit for the year among other things. It doesn't work right if Condo 1A's earnings are incorrectly used to reduce Condo 1's deficit instead of be kept for its own surplus.

One of those things is, for each condo, transferring the net income from the previous year to retained earnings for the new year. This may sound complicated, but it is simple arithmetic. For January 2023, you just take the retained earnings from the December 2022  balance sheet and add the total net income for the year to that. It is done separately for Condo 1 and Condo 1A. That becomes the new retained earnings for the balance sheet in 2023. The retained earnings indicate the surplus or deficit each condo is starting the year with.

Unfortunately, Condo 1A's net income for last year was added into Condo 1's retained earnings instead of its own. Condo 1's net income was added to its own retained earnings. This artificially and falsely reduces the surplus reported for Condo 1A and similarly articially and falsely reduces the Condo 1 reported deficit. In the January 2023 financial report, one part of the report at the top of the document correctly reports the numbers while the balance sheet itself a couple of pages later - which is the official document for reporting - has the mistake. When I reported the mistake, I was sent a "revised" report with the same "mistake" still in it.

Last year, the same "mistake" was made and not corrected until after the board election even though I reported that "mistake" immediately. What an amazing coincidence a similar "mistake" happens two years in a row before the election to support a false narrative of how effective deficit reduction has been!

To verify this, you can review the following financial reports obtained from Front Steps: December 2021, January 2022, February 2022, March 2022, December 2022, and January 2023. It is tedious, but I am willing to walk through this with anyone who wants to verify it. These reports are all available in Front Steps, our association web site.