Welcome back. We continue with our examination of the untitled and unsigned document that accompanied the release of the LLC's financials for the first four months of fiscal year 2024.
In a previous comment titled "Magnum Opus, Part I", we showed how the cash balances as reported, were impossible. The author of the document assured residents the accounting was correct. We demonstrated that the accounting was non-sensical -- not just incorrect, but absolutely non-sensical.
Now lets look at another very peculiar factoid presented. The author states empathically, that cash was $126,644.53 and would have been higher if not for $75,000 paid off in the first quarter and $25,000 paid in April.
Through a Document Request, we were able to obtain the four canceled checks of the payments made to satisfy the $100,000 loan. As a reminder, this loan was made illegally by a resident who at the time was acting as LLC President.
HOA Check: #252** Dated: 11/01/2023 Amount: $25,000
LLC Check: #12** Dated: 12/29/2023 Amount: $25,000
LLC Check: #13** Dated: 02/28/2024 Amount: $25,000
HOA Check: #252** Dated: 04/03/2024 Amount: $25,000
The first thing you must recognize is $50,000 came from the HOA and $50,000 came from the LLC, additionally, looking at the dates, only one check from the LLC is dated for 2024.
Again we must conclude the author is incorrect, cash would have not been $100,000 greater in the first quarter of 2024 because only one $25,000 check was issued by the LLC not only in the first quarter but in 2024 year-to-date.
Bottom-line, cash flows were not reduced by $100,000 as described by the author. Cash flows were reduced by $25,000.
Additionally, these were not OPERATING CASH FLOWS that were reduced, but were simply cash transferred over to the LLC from the second Special Assessment.
This is a very simple, and dishonest attempt at making the financial performance look better than actually is.
The check written in April, as the last payment of the loan was issued by the HOA, not the LLC on April 3, 2024. The one, single payment made by the LLC in 2024 is dated 02/28/2024.
Why did the HOA issue two $25,000 checks. The debt was supposed to be paid by Special Assessment 2, from the first payment collected in September 2023. The issuing account does not identify as Special Assessment 2. Given the check number, I strongly suggest the funds came from an operating account. If so, this would be "comingling". Another practice, the author assures us, did not happen.
The document summarizing the first quarter of 2024 is full of misinformation and incorrect data.
As a side note, I recently came across a presentation made by the LLC, which our President and Treasurer are on the Board and were present for this presentation. The presentation is dated January 11, 2024. On page 17, the slide is titled "Financial Analysis". The very first bullet states that as of January 11th, 2024, $50,000 of MT debt has been paid off with payoff scheduled over the next few months. This is correct.
The statement, cash would have been $100,000 greater is not correct.
This shows the document accompanying the release of the first quarter LLC Financials intentionally misinformed people. The author knew what he/she was saying, was not true.
We will pause here. Stand by for part III, it will be a doozy.
Keep the faith and get a good night's rest.
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