Home › Forums › Diamondhead Country Club and Property Owners Assoc › General Manager's Forum › Retained earnings
September 14, 2014 at 12:15 pm #8476
In the latest issue of the Diamondhead News, Summary of balance sheet, 9 million,585 thousand, 677 dollars $9,585,677 is shown as Retained Earnings. I think many members of the POA that are not accountants and CPA’s would be interested to know what that almost Ten Million Dollars represents. If total liabilities are only one million three hundred thousand dollars, it would be educational, at least, to have a more detailed disclosure of the retained earnings. Retained earnings in general, are earnings a company sets aside to use for future growth or expansion, or to pay off debt. Just think the more members understand what is happening with ” their ” money, the easier it will be to make more informed decisions about the future of our community.September 14, 2014 at 2:57 pm #8475
That’s interesting. airbear. Thanks for the heads up. Anyone have any idea whether plans for future repairs and improvements or other potential expenses require such a large reserve?September 14, 2014 at 3:17 pm #8477
Retained earnings and depreciation are two very interesting items on a balance sheet. Depreciation ( sort of a deduction for tax purposes ) allows for money to be kept or set aside to replace buildings and equipment in the future. As we all know, some things really don’t decrease in value but rather increase, so one has to ask, what is the company doing with all that money they keep from “depreciation” claimed on the balance sheet ? Airlines lose hundreds of millions of dollars every year on paper for that very reason. What business do you know that can lose hundreds of millions of dollars year after year and still keep going ? A lot of that is because of the “magic” of depreciation. Check out the deferred income tax credit of 724,689 on our POA balance sheet.September 14, 2014 at 4:13 pm #8478
Hmm, way beyond my pay grade, but I’m doing some much needed reading on how to read financial statements and will get back to you with more questions soon. MANY thanks for posting here. We all need reliable info so we can figure out best solutions and you’re helping in that cause.September 14, 2014 at 4:47 pm #8479
A question about the POA’s large “RETAINED EARNINGS” was asked at the May 8 forum for officer candidates, according to my 11 pages of notes.
The FORMER POA Treasurer responded that it was “NOT a slush fund.”
(Earlier in the evening, his statements included: … “We CAN reduce dues…money left right now”… and “CAPITAL EXPENDITURES were already voted on.”)
So is this pot of “retained earnings” where the FORMER POA administration stockpiled the money “they saved” (from where and whom?) for their extensive list of planned Capital Expenditures, such as the $650,000+ East Rec Tennis Clubhouse & Grill, the $200,000 per year for 10 years plan to dredge Purcell’s canals, the extensive Country Club renovation plans, and the ongoing $250,000 per year golf course improvements?September 14, 2014 at 4:52 pm #8480
Just remember that old saying “follow the money” Don’t forget to read the controller’s report in the Diamondhead News. It’s a good example of how depreciation enhances profitability, $561,452 before depreciation, $123,048 after. I’m just a simple country boy myself and don’t profess to have any skills at this accounting stuff. However, Over the years I have learned how to find out how to keep an eye on what other people do with my money. Maybe we need to “raise your pay grade” after you do a little “due diligence”September 14, 2014 at 4:55 pm #8481
I wonder what would ever give him the idea that we would think it was a slush fund ?September 15, 2014 at 3:22 am #8482
Lol, I’ll work hard at raising that pay grade.September 16, 2014 at 2:43 pm #8496
Isen’t there a game where you have three shells with a pea under one of themSeptember 17, 2014 at 6:57 pm #8511
Very interesting everyone. If there is so much money in the DH poa *SLUSH FUND* and considering that the city now does a lot of what our dues paid for then the directors can keep their promise of immediately cutting dues in half. After that we can slowly force parasite golfers and the parasites at the cc to pay their own way.September 17, 2014 at 8:30 pm #8515
Before we hit the on ramp to the “freeway to frustration”, it would be helpful to reflect on Elite Veterans post about the shell game. Nine million in retained earnings doesn’t necessarily mean there is a storage unit stuffed with cash out behind the POA command center. Those retained earnings were more than likely “used” by the POA for whatever the board decided to spend the money on. Most corporations use retained earnings to retire debt, purchase income producing assets, or to finance large expansions. The possibility that the POA will be sending us all refund checks in the mail anytime soon is only a figment of our imagination. A couple of thoughts : When was the last time a large independent accounting firm from “outside the local area” audited the Diamondhead POA, Inc and held a public meeting for members to ask questions about that audit ? and finally, instead of highlighting a department each month in the Diamondhead News, maybe Ms. Allen, our controller could focus on a more detailed explanation of the financial statements, balance sheets, retained earnings, depreciation, you know what I mean ? Diamondhead is a $11,000,000 corporation and the marina and ship store are of importance but our controller, in my opinion, should be addressing members concerns regarding more important financial issues facing this community.September 17, 2014 at 8:55 pm #8516
Righteous, morally sound thoughts airbear406!
Through the years there have been so many ways the poa used creative accounting and other means to hide what they were really spending the most money on. As per one article on this board the poa often pulled staff from other areas such as general landscaping and used them on the golf courses. I think there was probably some outright theft once when thousands vanished *I heard about 50K went missing one year*
Although I know we won’t get a refund we were promised that the dues would be cut in half immediately. Now the poa board doesn’t seem to remember that promise. To get rid of the poa we should hire an outside auditor to go through all the books not just the most recent. Then many would go to jail. I don’t pay dues to criminals. That audit will cost us money but what would be brought to light would end the poa board and it’s unfair dues. Also to get rid of the poa we’ll probably have to hire a lawyer to fight them. The poa board will fight us to keep robbing our money *I no longer call it dues*. The DH poa will use our own money to fight us so they can keep existing. We will win in the end because it’s no longer moral for us to pay for their golf and country club.
I’m amazed at how many seem willing to just stand by and take it knowing the history of the DH poa. Start speaking with your friends about this unfairness or we could be in for even higher dues manicuring two 18 hole courses as golf continues to tank nation wide.September 18, 2014 at 3:00 am #8518
I agree totally that the controller should address members’ concerns and that there should be an outside audit followed by a Q & A session with members, another part of responsive governance that’s been lacking here. Besides its juvenile tone, the most unprofessional part of Boyd’s response in the Questions and Comments thread was that he and Irwin passed up an opportunity to answer questions. If, as he claims, there is misinformation here, he and Irwin preferred letting it fester to putting on their big boy pants and addressing it.
So, in my higher pay grade quest 😉 I’ve learned that there are an appalling number of ways that corporate management can manipulate financial statements to adjust the picture more to their liking, and they can do it without running afoul of the Generally Accepted Accounting Practices. Even more reason for distrust to build especially if management is reluctant to answer questions.September 18, 2014 at 6:59 am #8524
Congratulations pdutton for doing a little due diligence regarding how financial statements can be manipulated, even while in compliance with GAP. (generally accepted accounting practices). The more informed members become and the more they understand about how our money (yes our money, not their money) is being utilized and for what purposes, the more likely we are to gain some transparency and real accountability. Diversion is always a good strategy for keeping the focus away from a surreptitious agenda. Mr. Boyd’s comments that he finds this site “entertainment”may provide some insight into this diversion idea. Management seems reluctant to address the golf expense issues that monopolize so many of the comments on the site. could there be a reason for that ? Example, Operating expenses for 7/31 show golf operations of $148,173 and while they seem way out of line and everyone is rightly concerned, we may be missing something. Administration $82,460 Architect & Engineer $11,301 and $7948 for marketing total $101,709 !! Maybe we should ALL focus more attention on WHO we are paying and HOW MUCH we are paying THEM. By the way, shouldn’t the Marketing Department ($7948 a month) be marketing the marina instead of the Controller ? Sorry I just couldn’t resist that fish fry thing !September 18, 2014 at 9:18 am #8528
Airbear, your statement:
“DIVERSION IS ALWAYS A GOOD STRATEGY FOR KEEPING THE FOCUS AWAY FROM A SURREPTITIOUS AGENDA”
…is right on target regarding the tactics and behavior of the Old Guard POA ruler-types. Such diversionary action is going on now, orchestrated by some of the same POA “Incorporators” that used our dues to create the City….Any excuse will be used to deflect Members’ attention away from the spending schemes of these self-appointed rulers.
As you said earlier in this topic thread, “FOLLOW THE MONEY,” and follow the spending of our POA dues on secretive projects WITHOUT BUSINESS PLANS that Members can get copies of and review. There are reasons certain people insist on pushing expensive projects (while concealing the details) that most Members do not want or need.
Any POA Member should be able to get a copy of any “business plan” or any other report with details and/or “rationale” info related to any POA project requiring large amounts of OUR dues money, OR affecting our community’s future (such as the STRANGELY ELUSIVE “Covenant Renewal Report” prepared under the previous POA administration).
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