Reston, VA

A forensic analysis by Ernst & Young (EY) has flagged concerns with past financial practices and decision making by the Lake Anne Reston Condominium Association.

LARCA President Senzel Schaefer said she initiated the review following a board vote after last year’s election brought a new slate of board members who committed to “change and fiscal responsibility.” In-fighting and contention over finances have marred the board leading up to and following the election. Schaefer said she hoped the review would shed light on financial mismanagement, ultimately putting the board on “a new path to financial solvency.”

The review calls on LARCA to establish better internal controls and accountability practices. E&Y reviewed spending and other activities of the previous LARCA board over the last three fiscal years.

Schaefer said the report — which she characterized as an audit — is critical to improving the financial standing of the association. She says she’s been targeted by a “small but vocal group” of people seeking to halt the audit and her work. A lawsuit has been served against her, she said.

“I repeatedly pointed out to these individuals and still believe that good governance starts with transparency of operations and finances and following our bylaws, which were not adhered to in the past, so I will not stop the audit because we need to know where operations broke down and how to fix them,” she said.

“The question should be: in light of our financial irregularity and operational failures; why would anyone be so opposed to an audit which would give us answers and a path forward?” she added.

Others contend the review offers an incomplete and misleading picture of LARCA’s past financial practices. They also state Schaefer acted unilaterally by approaching E&Y with strong allegations against the previous board. Schaefer denies those allegations, saying she acted with the consent of the board.

Karen Jarvis, a property owner at Lake Anne who stepped down from her role as chair of LARCA’s finance committee, said a request for significant additions, corrections, and retractions is in progress. Jarvis, who is a procurement compliance manager and a former finance manager, says that the report is based on limited documentation to E&Y — some of which she says is accessible in LARCA’s administrative office.

“We are still working with E&Y to get a final version signed off with corrections,” Jarvis said. “There were huge amounts of information that were not provided but are readily available.”

The draft report — which was posted publicly by a community advocacy group — was released on May 29 and presented to the membership in mid-June. The Fairfax County Police Department also expects to release a report about its investigation of LARCA by the end of July, according to Second Lieutenant Erica Webb.

When analyzing $2.68 million dispersed to the top ten vendors, EY found “limited written policies and procedures at LARCA,” including the lack of written bidding, contracting or payment requirements. It suggested considering rebidding for large vendors to ensure the most favorable market-competitive rates were secured.

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Shadowood CondosA group of Shadowood Condominium owners say they are fed up with mismanagement at the 450-unit development and are mobilizing for new directors to run for the condo board in March.

Shadowood has had a history of issues over the last several years, including a case in 2012 about the limits of the board to impose fines and rules on owners. That case went all the way to the Virginia Supreme Court.

There was also a political battle in 2012, when condo owner Brian Olivia headed the board and ran “Shadowood in a manner that caused Shadowood to to sue him last year to recover damages for harm down to Shadowood,” current board chair Tom Summakie said in an email to owners.

More than half the units are occupied by renters, so most owners live off-site. Nearly two dozen units are owned by Fairfax County, which offers them as Section 8 housing.

A group that calls themselves “Concerned Co-Owners at Shadowood” has sent a list to other owners of 30 complaints about the neighborhood and its board.

“Are you fed up with or even know that these things may be occurring?” the email reads. It points out that the community website has not been updates in more than a year, that the board dos not communicate with residents, that rules are not enforced and that common areas and properties are dilapidated, among other complaints. Read More

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