I'd like to remind you that this report was requested by the City Council at the April 15th Council Meeting. As a condition of receiving a new contract the Chamber was required to provide an "Audit of The Visitor Center's expenditures for the prior year", with the results of the audit to be presented to Council within 60 days.
On August 31st the Chamber still had not provided the audit that was required by the Council more than 4 months before. After begging Phil Cotton for another 3 week extension Marshall Weinreb, CEO was notified in a letter from Phil Cotton dated September 1st that the agreement was specific in stipulating a time frame when an audit of the financial reports of the Encinitas Visitor Center would be provided to the City by the Chamber. As a result Phil directed staff to withhold any future payments to the Chamber until the audit was received and approved by the City. The report was finally submitted to the City in early September now 5 months late. The Accountant's Forensic Report was produced by Colleen Walsh, CPA from CFO to-Go.In a document dated July 19th addressed to Ken Gross, Chamber President Colleen Walsh says the following: "a review does not contemplate obtaining an understanding of the internal control structure or assessing control risk, tests of accounting records and responses to inquiries by obtaining corroborating evidential matter, and certain other procedures ordinarily performed during an audit". "Thus, a review does not provide assurance that we will become aware of all significant matters that would be disclosed in an audit.Our engagement cannot be relied upon to disclose errors, irregularities, or illegal acts, including fraud or defalcations that may exist." She goes on to state that "all information included in these financial statements is the representation of the management of Encinitas Visitor Center". "Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles". In her Forensic Report to the Chamber Board Colleen Walsh says "The forensic observations and disclosures in this report are based on information that is the representation of management". "The information and findings presented herein are not designed for those who are not informed about the financial matters of Encinitas Chamber of Commerce". "Responsibility for any action taken on the observations, disclosures and findings of this report rests with the management and Board of Directors of Encinitas Chamber of Commerce".
As a result of this haphazard review spoon fed, to the soon to be new Chamber Board Member Colleen Walsh, by two of the most uninformed, least knowledgeable so called Chamber Executives in my 20 year association with the Chamber. Ms. Walsh come up with the following assertions: *(TRUTH)
- Forensic Accounting reveals many irregularities and questions continue to arise (?)
- Former CEO diverts funds (the great 2nd copier caper/ ask Ken Gross who approved the purchase)
- Expense reports filed with the City of Encinitas to support Visitor Center financial picture inaccurate and misleading (I have reviewed 10 years of these reports from city files, virtually identical to those submitted by my staff & all approved by Richard Phillips in the city Managers office, as were mine)
- A portion of former CEO salary billed to Visitor Center ( common practice for the entire time Chamber has operated Visitor Center,10+ years. I operated the Chamber & Visitor Center with 2 paid staff and myself)
- 50% of total rent allocated to the Visitor Center ( 2400 sq. ft.total space, 1200 Chamber / 1200 V C)
- Visitor Center & Chamber rent increased 45% ( when we moved to new location space doubled)
- Chamber was never in a cash flow position to stay current with the terms of the new lease, as of June 2009 $11,960 in arrears (my last day was Jan. 24 2009 I never missed a rent payment from July 2007 thru Jan.2009, ask Ken Gross what happened when he and Michelle Johnston took over operation of Chamber after dismissing me on the 24th, conveniently not in forensic report)
- City funds that should have been flowing to V C were decreasing over time as former management struggled with cash flow ( I never missed one monthly V C reimbursement check in 24 mos., ask Ken Gross & Marshall Weinreb about their record)
- CEO received undocumented expense advances & $4,000 for furniture deposit ( after my performance review from Ken Gross I received a salary increase & the following monthly benefits - medical ins.$300, Car allowance $200, Cell phone allowance $100, ask Ken Gross & Dr. Klien for a copy of my contract & review) (I placed an $11,000 down payment for Chamber office furniture on my Amex card & after 1 1/2 yrs.I got reimbursed, ask Board Member David Da Costa who sold the Chamber $23,000 worth of office furniture)
- Fixed assets sold to D.E.M.A.in 2008 ( after reducing staff to one full time operations manager we had 2 extra desks, cabinets & chairs, originally purchased in 2007. Sold to D.E.M.A. at 25% off $3,111 deposited in chamber bank account, ask Doug Long, Charley Sougius, Dave Agious - DEMA board members who helped move and install the furniture)
Virtually everything listed above was told to Marshall Weinreb in a face to face meeting at the Lumberyard one month after he took over. Ken Gross was aware of all decisions as were the Executive Committee Members. I was an employee and served at the pleasure of the Board of Directors, I received good performance reviews and two raises while employed as CEO. If the Chamber is really interested in auditing the Visitor Center they might what to concentrate on the period from Jan. 24, 2009 to October 23, 2009.
Thanks for listening