MINUTES
 
EDC Fire Safe Council Board of Directors Special Meeting
Board of Directors Meeting
Diamond Springs, Station 49
January, 12 2011
11:00 AM

 
  1. The meeting was called to order by Ken Hasse at 11:05 am. Those in attendance were: Bill Brandt, Leo Chaloux, Mary Cornelison, Richard Englefield, Janet Gastaldi, Ray Griffiths, Richard Krek, Bill Smith and Jim Stewart.
     
  2. Mary Cornelison made a motion to accept the agenda and Richard Krek seconded, all approved.
     
  3. Ken commented on Mary's emailed request to add Vicki's contract to the agenda saying that until the audit findings were reviewed we were not ready to talk about contracts.
     
  4. Ken asked Richard Englefield as the Treasurer to present the audit findings
     
  5. Rich E. first summarized the meeting with Mike Applegarth to turn in the overdue reports on 2009 Title III expenditures. Vicki brought the reports up to date in October before here appeal to the Board of Supervisors but had not submitted any reports since then (three months). Ken brought the reports up to date with a four page report.
     
  6. We are six months into our next audit. Rich had requested $5000 to cover the current audit in February. On Sept 1 we received from the auditor a list of items needed for the audit. In an August closed session meeting Vicki was directed to submit all requested items for audit by our attorney Bill Wright. Emails documenting follow-up requests for information by the auditor were presented. The last documents were submitted on Dec 15th when Vicki met with the auditor and was apprised of the preliminary findings. The completed findings were submitted to Rich and Ken in a meeting with the auditor on Jan 11th. It should have taken six weeks to complete the audit instead of four months.
     
  7. The audit report consisted of three sections plus a draft of our response. The section titled OMB CIRCULAR A-133 presented a summary of seven key Federal grants totaling $974,503 (pg 6). The Schedule of Findings on page 8 lists three "yes's" indicating significant deficiencies. Pg 10 presented the details for these three deficiencies. No material weaknesses were identified.
     
    • 2010-1 Inadequate separation of duties. The same person shouldn't be opening mail, writing checks and doing the books. Response: we will use our Bookkeeper to write checks and maintain financial records. We will present invoices for payment to Bookkeeper. This will eliminate all questions about two sets of books.
      Mary requested and received clarification on significant deficiencies.
       
    • 2010-2 There is a need for documented support for prorating time charges. Vicki did not keep time records for this purpose. Response: All contractor/employees/volunteers (who use time for matches) will maintain functional time records in the future.
       
    • 2010-3 Any contract over $25,000 should go out for bid (RFP) as required by Federal procurement policies. Barry Calenberger's multiple jobs under one contract was one example. Mt. Enterprise is a major example of a contract that needs to be renegotiated (rebid). Smaller contracts and sole source contracts may be exceptions, but should be used carefully and documented. All contracts should have Board approval.
       

    8. COMMUNICATIONS WITH THOSE IN GOVERNANCE
     
  8. We have to comply with finding and recommendations. The problems must be fixed before the next audit. If we were to go into a third audit without fixing these problems we will not be able to obtain funding. Specific recommendations under Significant Accounting Polices are self explanatory and were not discusses in detail but will all need to be addressed.
     
  9. The Auditor drafted a letter of response for us. We (Ken, Rich) have tentatively approved it. Board may modify it if necessary but needs to approve.
     
  10. Management's estimated allocations of overhead expenses between program and administration was the most sensitive estimate affecting the financial statements (pg2). This refers to a budget, which the FSC (Vicki) had never done until this year. Vicki claimed that she could not develop a budget because of the way funding comes in. The auditor said that a budget must be developed. Rich want to update our budget as soon as possible.
     
  11. There were no disagreements between auditor and management (Ken & Rich).
     
    The auditor did not report and difficulties in performing the audit, even though there were numerous delays, because in the end she received nearly everything she requested.
     
    Ken commented that the auditor was generous in this respect. Rich commented on emailed responses from auditor to Vicki in regard to requested information.
     
  12. Volunteer records. Vicki asked Darlene & Jake to put together volunteer records related to chipping program. Apparently all records were submitted but not in a form that could easily be evaluated by the auditor. She expressed some concern that the records didn't "add up." A change in format of records would improve traceability.
     
  13. The auditor suggested that the format for meeting records should be changed.
     
  14. Long term planning also refers to budget. We need a budget that will provide at least 90 days operational money (reserve).
     
    Checks were not deposited in timely fashion.
     
    Bank reconciliations were not found in files submitted to the auditor.
     
    Cash distributions were not adequately documents.
     
    Timely grant billing was huge. AQCMD was not billed for an entire year. Funds to pay for dumpsters were borrowed from other accounts.
     
  15. Referring to FINANCIAL STATEMENT FOR JUNE 30th pg 7. Item 8 shows a shortage of $87,000 and operating at deficit. This left a $71 balance for the year. The $87K was invoiced in the next year. This leaves no money to pay auditor or other expenses. Rich will ask for another $5000 for the audit next year and we are effectively $13,000 in the hole.
     
    Salary is one place to find money. If we had not been able to recover the $87K we could have been out of business. The money in the bank in contractually obligated.
     
  16. Mary asked about money for operating expenses. Rich deferred discussion of Title III.
     
  17. $63,000 had to be returned from GF 5 and some may have to be returned from the GF 6/7 project. Vicki had assumed the treasurer function and responsibilities.
     
    Rich K commented that all financial transactions should be approved by Board.
     
    Board consensus was that approval could be given after review by Board.
     
  18. Ken summarized 2009 Title III status.
     
    There is $2300 left in operations, $27,000 is left in CWPP and there is $36,000 in the defensible space budget. The $2300 is the only operations money that we have. About $40,000 was invoiced from old Title III agreements, but appears to have been spent already. The 2010 $80,000 hasn't been received yet.
     
  19. Bill Smith asked; where are we going to get money for overhead? We can meet contractual obligations for grants. A portion of the grants funding is committed to admin costs for the project. We will be saving admin money by not paying for an executive coordinator now but we cannot continue without one in the long term.
     
  20. Ken spoke about the way forward. We have changed both our physical and mailing address, our phone number and we will be changing our email address. Our physical address is now that of our accountants where all of our financial records are kept.
     
  21. We will propose that we go out with RFP for an executive coordinator. The pay will probably be half of what it is now. The job specifications will be different than present contract. There may be a possibility of using incentives for obtaining grants funding.
     
  22. Rich E.: We don't have all of our records yet. We need to prepare for the next audit now.
     
  23. Jim S.: CAFSC has applied to SNC for funding for coordinators for 22 council 22 counties. We need more details on this. Average for council is $41.2 K. (Total $1.2 million.)
     
  24. Mary: We did this to ourselves by allowing (encouraging) Vicki to do it all. Bill S.: Vicki was willing and allowed this to happen.
     
  25. We cannot operate long term without an executive coordinator but Vicki has spent a lot of time that could have been better spent on administration. The function at Tahoe where three people attended but only one needed was an example. The WUI workshop at Plymouth was another waste of time.
     
  26. Bill B. ALT established its own 501(c)3 because of concern about the viability of EDCFSC. Rich K. emphasized the need for the umbrella of EDCFSC or we won't get grants.
     
  27. We need a secretary to meet the 501(c)3 requirements. Ray G. volunteered use of his name.
     
    Jim moved, xxx seconded all approved Ray as secretary.
     
    Rich E. left the meeting at 1 hr 30 min.
     
  28. The Board consensus was that we didn't need a presentation from auditor but more time needed to review response.
     
  29. The Board also agreed that the Gathering of Councils (January 26th) should be cancelled.
     
  30. The next meeting will be at Gold Hill at 10am. Rich K will confirm time with Kathleen EDCFPD.
     
  31. More board members needed.
     
  32. Rich K. moved to adjourn, seconded by xxxx. All approved.
     
  33. The meeting was adjourned at 12:42 pm.
Attachments:
  1. Communications With Those In Governance
  2. Independent Auditors Report And Financial Statement June 30, 2010
  3. Government Report (OMB Circular A-133) for the year ended June, 30, 2010
  4. Letter to Jeanine J. Mays, January 11, 2011
Submitted by: Ken Hasse, Chairperson