Under a new policy established by Reston Association’s Board of Directors, whistleblowers will be able to anonymously report violations of the law, RA’s deed, bylaws and policies or improper conduct to the board.
On March 22, RA’s board voted to expand the policy, which currently allows violations to be reported up to the level of the CEO. Now, the board will directly hear violations. The association is also working with a third-party service provider to establish an anonymous reporting mechanism.
The board’s treasurer Sridhar Ganesan, who worked with RA’s fiscal committee to push for the expansion, said RA still has to “conclude some procedural steps” like securing arrangements with the third party vendor before formally releasing the policy in its entirety.
“I think this is very beneficial especially in light of all the processes and internal controls that we are implementing as an organization, including the purchasing resolution,” Ganesan said at RA’s meeting last week.
Board Director John Mooney’s attempt to discuss the proposed policy during a special meeting at a later time failed. Mooney said he had hoped the board would take “a deliberative moment” to analyze the policy and ensure it independently assesses decisions made like the association’s controversial $2.65 million purchase of the Tetra property.
“This policy is meant to prevent mistakes like many believe Tetra was,” Mooney said.
After months of discussion, Reston Association’s Board of Directors unanimously approved stricter financial controls, a need flagged by two in-depth reviews of RA’s $2.65 million purchase of the Tetra property.
StoneTurn Group, an independent firm contracted to review the purchase and associated cost overruns, and a review by two RA members cited the need for updating RA’s purchasing and procurement policies over the last year.
The approval expands RA financial controls by requiring the involvement of multiple stakeholders in the review and approval process of contracts. The changes also clearly delineate steps required before and as contracts are considered. Major purchases require additional scrutiny and a greater emphasis is placed on competitively bid contracts.
Current policies have been criticized by some members as ambiguous and lax, resulting in a decision on the Tetra property that reviews indicate was not up to par.
All purchases above $2,500 require documentation justifying the need for purchases, at least two written quotes from competitive sources, an agreement reviewed by legal counsel and a purchase order signed by the department director, CFO and CEO.
Purchases between $5,000 and $24,999 require at least three written quotes from competitive sources. Major purchases of $25,000 and above require the issuance of a request for proposals, at least three written bids, a closed session meeting and final approval of the scope and pricing of the contract at an open board meeting.
For approval of those contracts, the approval of majority of board officers – defined as the president, vice president, treasurer, secretary and a board liaison for RA’s fiscal committee — is required. Earlier versions of the resolution allowed the fiscal committee chair to partake in the approval process — a move that RA Board Director Julie Bitzer said was inappropriate because it elevated the rank of a volunteer members to that of an elected board member.
Bitzer said she was amenable to allowing the fiscal committee and its chair to contribute by providing a general review.
In order to prevent the board from micromanaging the work of RA’s staff, Bitzer also suggested receiving an annual review of contracts awarded by staff, including a categorical breakdown based on cost brackets created by the resolution.
A move by Board Director John Mooney to require all contractors or service agreements to include provisions that prevent employees from discrimination based on factors like sex, race, color, national origin and religion also passed.
“These are times that we need to speak on such matters,” Mooney said.
Board director Victoria White objected to the proposal because she said it was more appropriate to include the provision in contractual language.
“Bottom line is, it needs to have teeth.” White said.
Other board members said the inclusion of Mooney’s amendment sends a strong message of RA’s position to the community.
After months of discussion, Reston Association’s Board of Directors will consider a move Thursday to strengthen its procurement controls and policies in response to a third-party review of RA’s controversial $2.65 million purchase of the Tetra property.
The rewrite of RA’s purchasing and procurement policies — which were last updated nearly six years ago — was recommended by StoneTurn Group, the forensic accounting firm contracted by RA to review the controversial purchase and cost overruns linked to the buildin’s renovation. A recent presentation by two RA members also flagged multiple concerns.
“As a result of the Tetra Property Purchase Review by the StoneTurn Group several recommendations were made that the Association should strengthen, and the better document the Association’s policies and practices related to procurement and purchasing,” wrote board president Sherri Hebert in the draft proposal. Hebert was not available for comment.
The move expands RA’s current policies by building in more internal controls, stricter financial checks to avoid sole source contracting and seek competitive bidding, and improved documentation. Major purchases above $25,000 require board approval, among other levels of scrutiny.
If approved, the policies would address four broad areas: procurement rules, competitive procurement and purchasing, re-competing for services and rules governing sole service providers.
After reviewing a blistering report about Reston Association’s $2.65 million purchase of the Tetra property, the Board of Directors is mulling next steps.
Controversy surrounding the 2015 purchase, which cost RA nearly double the most recent tax assessment, continues to shadow the board.
In an effort to court closure, At-large Director John Bowman is seeking to involve legal counsel from the state to offer what could be the third review of the purchase. The draft motion will go before the board at their regular meeting at 6:30 p.m.
The proposal comes as two RA members, Moira Callaghan and Jill Gallagher, presented a scathing critique of the purchase in late January. The report flagged concerns about conflicts of interest, inadequate internal controls and limited transparency.
Last year, RA contracted StoneTurn Group to complete a $45,000 review of the purchase. The 30-page independent review included 15 recommendations to avoid a similar situation from happening in the future. In their review, Callaghan and Gallagher contend StoneTurn’s analysis was incomplete and insufficient.
Bowman said taking no further action after the members’ report would be “an avoidance of responsibility.” He also indicated forming a special board committee to review the members’ findings would require considerable board resources. The board may also lack qualifications to complete a review.
Engaging help from the state’s attorney would address “any potential concerns regarding forensic expertise,” Bowman noted.
The motion before the board tomorrow reads:
“Even though we would probably not be advised by the Commonwealth’s Attorney of any action deemed appropriate – we would have referred the matter to a qualified third party; the cost to the Reston Association would be minimal if any; and this Board could close the matter and focus on completing the internal controls.”
How do you hope RA’s board will respond to the report? Respond below.
Speaking at Reston Association’s annual Members’ Meeting on Tuesday, CEO Cate Fulkerson said she is looking to capitalize on the opportunities presented by challenges RA has faced in the past year.
“For anyone who knows my leadership style, I’m not one who walks away from a challenge or ignores difficulties,” Fulkerson said as she addressed the audience. “I believe in taking responsibility for errors, correcting them so they do not happen again, and I believe in finding opportunity in difficulty.”
Specifically, the difficulties of which Fulkerson spoke included the controversy surrounding the Tetra/Lake House renovation, concerns about how RA handles conflicts of interest, and the public input process regarding the Lake Newport soccer field proposal. Moving forward, Fulkerson said she understands the importance of building community trust and continuing on the path of leading sustainable change.
Fulkerson said she and her staff have a number of important tasks to complete in order for that to happen. The first, she said, is to establish a solid foundation with the incoming board — based, she said, on mutual respect, reciprocal communications and shared purpose.
The CEO said the StoneTurn Group review of the Tetra/Lake House deal highlighted several ways Reston Association can work toward bettering internal control policies and procedures for project management. She said she is developing a proposal along with RA CFO Robert Wood that includes the conduct of an internal process control and a walk-through review of RA’s purchasing practices, contract processing and capital-project management.
“The goal will be to have a new system in place by August of this year, so we can take the opportunity to invite StoneTurn to audit the Association in 2018 and to make sure the new processes and policies are being followed,” Fulkerson said.
Continuing work to establish a Code of Ethics for Reston Association is also on Fulkerson’s list of tasks, as she said it is of utmost importance as they work to build community trust.
In regard to new development, Fulkerson said Reston National Golf Course, Tall Oaks Village Center and St. John’s Wood are just some examples of “how vitally important it is for Reston Association to keep on track with leading sustainable change by vigilantly monitoring land-use happenings and advocating for trees, trails and thoughtful design.”
Fulkerson said community input is important to all decisions made by Reston Association. She said listening meetings are being planned for May and June in each of Reston’s districts to gather feedback on what matters most to RA members.
“Our interest is to engage you in conversation,” she said. “The timing of these listening meetings goes hand-in-hand with the development of the 2018 and 2019 Capital and Operating budgets.”
In addition to inviting feedback at the upcoming meetings, the CEO encouraged members to fill out request/suggestion forms for the budget.
Full video of Fulkerson’s speech is available through the Reston Association YouTube channel.
The vote was not unanimous, but the Reston Association Board of Directors decided Thursday to begin working toward a plan of action to adopt the recommendations in StoneTurn Group’s review of the Tetra/Lake House purchase.
Following a public meeting on the issue Monday, it was proposed Thursday that CEO Cate Fulkerson and her staff draft and develop the implementation plan for board consideration at their May meeting. The plan is to take into account the recommendations in StoneTurn’s report as well as all input received from the community at Monday’s meeting, and it is to be designed to have all recommendations ready to be implemented by September.
“It is to share with us what needs to be done, even shifting some of [Fulkerson’s] goals down the road in order to make implementation of the recommendations from StoneTurn an absolute priority,” said Director Michael Sanio, the board’s vice president and a member of RA’s Tetra Review Committee.
The recommendations made by StoneTurn include the drafting of new foundational documents that have an overreaching principle statement to define ethical concerns that may arise during transactions such as the Tetra/Lake House purchase and renovation.
The September deadline was an issue of contention for Director Sherri Hebert, who said the timeline seemed too tight for the amount of work that needs to be done. In addition, she said, the creation of a task force and a community review group should be part of the remediation process.
“[They need to have] an oversight role to make sure that these things are getting done,” she said of the recommendations. “We’re trying to build that trust back with the community, and the community needs to be involved in this implementation.”
Director Ray Wedell said the creation of the task force should be done “immediately.” Other directors stated that if a task force is to be created, it should be the decision of the incoming board in April, after the election. Four new members will be a part of the nine-person board.
Fulkerson said the Board of Directors will have funding issues to consider during the implementation process, as well.
“There is a lot of it staff can do, but there are some things where I’m going to need outside expertise,” she said. “That’s going to cost you money, and you’re going to have to take that up and decide if that’s what you want to do.”
The motion passed by a vote of 5-3, with Hebert, Wedell and Lucinda Shannon voting against it. Director Jeff Thomas was not present.
Meeting screencap via RA/YouTube
The results of an independent review of Reston Association’s purchase of the Tetra/Lake House property are in, and now the discussion is shifting toward how to make best use of its findings.
That discussion began Monday during a special meeting of the Reston Association Board of Directors. Deirdre Flaherty, partner and co-founder of forensic accounting firm StoneTurn Group, answered questions from both RA members and directors during the session, and offered her advice for RA’s remediation process following the controversial purchase and a renovation process that cost $430,000 more than budgeted.
Flaherty’s advice, which built upon the recommendations offered in StoneTurn’s review in February, included the drafting of foundational documents that have an overreaching principle statement to define ethical concerns — something she says is lacking in RA’s current policy structure.
“When you have an unusual transaction and you don’t have that bedrock foundation, there’s no touchstone,” she said. “It would be my strong suggestion that great consideration is given to what those overarching principles that you want for how you do business, and then take that and drill it into writing, into practical policies and procedures for the staff, that details exactly what is to be done.”
The Board of Directors voted unanimously to accept the review delivered by StoneTurn and to begin working toward implementing the recommendations made therein. Flaherty made a number of other recommendations for how to do so, including giving staff and CEO Cate Fulkerson the time to develop new policies that are in line with the goals of the Association.
“You have some very strong, qualified people in your Association staff [who are] doing a lot of the day-to-day work, and as a result, they haven’t had the opportunity to step back and put those foundational documents into place,” she said. “My strong advice would be to have them do it — to hire people, even on a temporary basis, to handle some of your day-to-day operations so that you can elevate people like your CFO or your new head of capital projects [or] Cate to actually stepping back and giving thought and consideration to what those documents should look like, to having the communications with the membership and the board to make sure you’re comfortable with them, and then to putting them in place.”
It was also suggested by Flaherty that an RA audit committee be formed to independently make findings and assess staff.
“Anytime you have a board, you want the board to be communicating with the auditor [and] you want the auditor to have the ability to communicate with the board to the extent that they have input that is independent of management,” she said. “You want that communication to be open and direct with your board, not filtered in any way.”
Reminder: RA Board Special Meeting Tonight — The special meeting of the Reston Association Board of Directors originally scheduled for March 14 will be held tonight at 6:30 p.m. at RA Headquarters (12001 Sunrise Valley Drive). The purpose of the meeting is to discuss the findings in StoneTurn Group’s review of Reston Association’s purchase of the Tetra/Lake House property and the subsequent overruns in the cost of its renovation. [Reston Association]
New Town Center Restaurant Seeks Employees — Hen Penny is the newest restaurant by Pheast Food Group, a subsidiary of Thompson Hospitality. Management says it is planning to open March 30 at 1820 Discovery St., the former home of Pheast’s BRB. The business is looking to hire cashiers, delivery drivers, cooks and more. [Pheast Food Group]
St. Johns Wood Redevelopment Again on Agenda — The Reston Planning & Zoning Committee will have an informational meeting March 27 at 7:30 p.m. on Bozzuto’s planned redevelopment of St. Johns Wood. [Reston Planning & Zoning Committee]
SLHS Grad’s Team Falls in NCAA Tournament — Princess Aghayere, South Lakes High School Class of 2015, played 12 minutes for the University of Pennsylvania Quakers in their NCAA Women’s Basketball Tournament first-round game Saturday against Texas A&M. Penn led by 21 points early in the fourth quarter; however, Texas A&M staged the biggest comeback in women’s tournament history and came out victorious, 63-61. Aghayere scored 2 points and recorded 2 rebounds. [Penn Athletics]
Students Named to All-State Band, Orchestra — The All-Virginia High School Band and Orchestra will both perform April 8 in Manassas. Among the performers will be 77 students from Fairfax County, including several local students. On the All-State Band are Catie George and Mason Moy (South Lakes High School); and Nathan Coughlin, Noah McKee and Emma Rood (Herndon High School). Members of the All-State Orchestra include Herndon High’s James Adams and Ethan Morad. [Fairfax County Public Schools]
Photo via @FunInFairfax on Instagram
(Edited 4:15 p.m. after meeting agenda was posted on RA website)
A special meeting of the Reston Association Board of Directors that had been scheduled for tonight has been postponed due to weather.
The purpose of the meeting is to discuss the findings in StoneTurn Group’s review of Reston Association’s purchase of the Tetra/Lake House property and the subsequent overruns in the cost of its renovation. The special meeting has been rescheduled for Monday, March 20 at 6:30 p.m.
The agenda for Monday’s special meeting includes a 20-minute overview of the report and 90 minutes of discussion between the community and the board about its contents, followed by board consideration.
Tonight’s meeting of the Design Review Board has also been shelved, according to Mike Leone, RA’s communications director.
“With the threat of refreezing roads and sidewalks later today, along with increased wind, RA has decided to cancel all meetings for this evening,” he said.
Community group Reston 20/20 is calling for an independent committee of RA members to be formed to delve deeper into the circumstances surround Reston Association’s controversial Tetra/Lake House deal.
According to Reston 20/20’s recommendation, the committee should be formed after the board’s elections have completed in April. At that time, four new members will join the nine-person board.
“In light of the fact that the current Board majority was immersed in all the events described here and in StoneTurn’s report, it has no credibility in conducting any further actions on Tetra,” said Terry Maynard, co-chair of Reston 20/20. “The new RA Board, installed next month with a majority not involved in Tetra, should tackle the issues we raise here and any others it finds in a deep dive effort by a committee of Restonians.”
The majority of which Maynard speaks will be made up of the four new members plus director Sherri Hebert (Lake Anne/Tall Oaks District) who was elected in 2016, following the conclusion of the transaction and renovations. Hebert has also recently called for more community involvement in the analysis of the report. (Two other continuing board members, Julie Bitzer and Ray Wedell, were elected in April 2015 — after the purchase proposal had been drawn up and scheduled for referendum, which passed with 53 percent of the vote in May 2015.)
In its analysis, Reston 20/20 says StoneTurn’s report provides “important new information on the timeline of actions leading to the excessive price paid for the property and its huge repair costs,” which it says is “a vital first step in understanding fully what transpired in this unfortunate venture for RA and its members.” The analysis goes on to ask numerous followup questions, many related to personal responsibility for decisions made during the process, including:
- “Did RA agree on the price prior to Board approval in January 2015? If so, why? Who made that decision and why?”
- “Who altered the appraisal instructions to assume Tetra was in good repair and the hypothetical restaurant use was large and extended into the lake?”
- “Why wasn’t conflict of interest specifically discussed in the StoneTurn report?”
Reston 20/20 says it wants the citizens’ committee to have “unlimited access to all RA records relating to Tetra; the authority to interview RA employees, contractors and others with possible knowledge about Tetra; and the authority to request records from contractors who worked [with] RA on the Tetra purchase and renovation.”
A group of Reston Association members, working under the name Mediaworld Ventures LLC, had been selected in September 2016 by the Board of Directors to complete a review of the purchase and cost overrun at a cost of $1. The parties could not agree on the terms of a contract, however, and negotiations were terminated in January. The board agreed later that month to have StoneTurn complete the review at a cost of $45,000.
StoneTurn’s review provided 15 recommendations to the RA board for how to avoid a similar situation from happening in the future. Reston 20/20 members say without rooting out more specifics of the transaction, changes to procedure may have minimal effect.
“We believe it is vital to understand the full details of what transpired, including identifying any violations of policy, procedure or the law and the persons involved in those activities. If we do not dig out these details, RA runs a serious risk of repeating many of the same errors in the future no matter what process changes are added.”
The RA Board of Directors has a special meeting scheduled for Tuesday at 6:30 p.m. (weather-permitting) to discuss the results of StoneTurn’s report and the recommendations for the board that were provided within.
A half-dozen residents have thrown their hats in the ring for an At-Large seat on the Reston Association Board of Directors, and they faced the community Thursday in a candidate forum at RA headquarters.
Roberto Anguizola, Eric Carr, Mike Collins, Charles Dorfeuille, Ven Iyer and HeidiAnne Werner are all vying for the three-year term on the board. The forum provided them an opportunity to tout their abilities, as well as their goals if they should be elected.
When contemplating the 2018-19 Reston Association budget, which will be approved later this year, candidates said there is a wide number of factors that must be considered. Collins, who was an RA board member from 2010-2013, said it is important for the board to get back to fundamentals.
“We’re not doing the very basic thing we have to do, and that’s maintaining our facilities to the best of our ability,” he said. “That’s going to require laser-like focus by the board, they are going to have to be intimately familiar with our operations, and they have to just say no.”
Dorfeuille, an eight-year resident and a member of the Community Engagement Advisory Committee, advocated for a line-by-line analysis of the budget that separates essential items from non-essential.
“We are spending too much for what I believe we as a community are being given,” he said. “What is non-essential, we look at in the line-by-line review of what we can reduce or what we can de-prioritize.”
“Our assessments have nearly doubled in the last 15 years — this is not sustainable and it is not warranted,” he said. “In another 30 years, the Reston as we know it now will only be affordable for the wealthy top.”
Carr, a former cluster president with over 20 years of nonprofit and government management experience, said a long-term capital plan is needed so the RA board can “get [its] arms around” the existing capital assets that need to be addressed.
“We think about these 40-, 50-year assets we own in two-year budget cycles,” he said. “That doesn’t make sense and it’s very hard to project into the future, and we continue to get surprised when pools fall into disrepair or when pathways need maintenance.”
Werner, a lifelong Restonian who works as an association manager, said natural environments need to be protected from development. She added that services, programs and facilities available to Reston Association members need to be optimized.
“This really is to put a focus on our facilities, to make sure they are in the proper maintenance and attractive for members to use,” she said.
Anguizola, a trial attorney who has lived in Reston since 2008, said his top priority would be to address aging infrastructure in the community. He touted partnerships with nonprofit groups and businesses as a way to achieve that goal without increasing assessments.
“Most of the recreational facilities and amenities in Reston were built in the late ’70s, early ’80s,” he said. “They need attention, and that’s going to cost money to keep them at the level everyone expects them to be at.”
Collins said the board must do a better job of managing its staff and analyzing its needs in the effort to keep costs down.
“The board needs to have firm controls on the budget from the get-go, they need to be willing to get into the details, get behind the top-level numbers and again, say no,” he said. “Sometimes we don’t need a new truck, we don’t need a new computer system. I hate getting into the weeds like that, but apparently we need to do it.”
The independent review of Reston Association’s purchase and renovation of the Lake House provided 15 recommendations for the Board of Directors, but at least one director says the community deserves more.
Director Sherri Hebert (Lake Anne/Tall Oaks District) says she has been fielding “many calls and emails” from residents since the review came out Wednesday, asking what the next step in the ongoing process is going to be.
“[They’re asking] ‘What are you guys going to do? Are you going to sweep this under the rug?'” Hebert said. “There are a lot of questions still from a lot of the community members.”
A public meeting is scheduled for March 14 for the Reston Association board to “review the report and hear comments on the suggested improvements,” according to a news release. In a Friday email to fellow board members, candidates in the 2017 election and community advocates, Hebert explained what she would like to see happen at that or another special meeting in the near future.
“I strongly suggest, and maybe it is already set up this way, that the meeting on the 14th be a Q&A with the public, StoneTurn and the Board. By Q&A, I mean that the public can ask questions of either StoneTurn or Board members about the findings in the report. It would be great if former Board members attended as well. A good old fashion public meeting of give-and-take. Short of giving the public an opportunity to express their views and ask questions, we will be handling individual requests one at a time (not very efficient). If this can’t be done on the 14th, another session needs to be scheduled prior to any decisions of the Board.”
When contacted by Reston Now for further comment, Hebert said she believes the findings in StoneTurn’s report to be valuable; however, she said more needs to be done to regain the community’s trust in the board.
“There needs to be some accountability — somebody or some group of people needs to stand up and say, ‘You know what, I messed up on that, I made a mistake,'” she said. “Until that happens, I’m not sure we’re ever going to be able to move on.”
The director also said she wants to see any decisions regarding the next steps in the Lake House process be handled by the incoming board. The nine-member board will have four new faces in April, after the election.
“That’s a huge shift in the board, and whoever ends up winning needs to be a part of these discussions,” she said.
Hebert said discussions about how a question-and-answer session with the community would be handled are in their early stages.
“Hopefully, I can meet with some of my peers this week and find out what we’re going to do on the 14th,” she said. “And if not the 14th, then when?”
StoneTurn Group’s independent review (available here) of Reston Association’s Tetra/Lake House purchase has given 15 recommendations to the Board of Directors for how to avoid a similar situation from happening again.
The forensic accounting firm was contracted by the Reston Association board in January, at a cost of $45,000, to review the controversial purchase and the cost overruns associated with the building’s renovation. The 30-page report, released Wednesday morning, focuses on “identifying areas for process improvement, potential changes to internal controls and/or modification to governance procedures to help ensure situations like the Lake House cost overrun can be avoided in the future.”
Among the findings of the StoneTurn Group were a lack of written internal control policies for RA staff to rely upon during the transaction; internal control processes that are “not sufficient” to account for funds when they are contracted or encumbered; and an estimation process for renovations that “was not performed in a manner that could have yielded a reasonable estimate and was not documented.”
In the review, the firm noted a lack of a comprehensive Code of Conduct or Code of Business Ethics, which are “generally considered to be cornerstone documents for an effective internal control environment.” (The Board’s Governance Committee is now in the process of creating such a code.)
The firm also noted that its analysis of items discussed in executive session was “significantly hampered by the absence of any meeting minutes and retained packages of information presented and discussed.” In addition, the review reads that RA “does not have a clear or central document retention policy and procedure” and that StoneTurn had to rely on finding documents “from various employees and directors based on their individual retention decisions.”
The recommendations made by StoneTurn to the RA Board of Directors in the review are as follows:
Recommendation 1: Policies should be established, documented and then reviewed and updated on an annual basis. All updates to the policies should be tracked within the policy itself.
Recommendation 2: For every established policy, internal written processes should be established and “owners” of the internal processes should be identified. We recommend that these internal processes include both the procedures required to execute the policy (a preventative control) as well as procedures that will verify that the process has been followed properly (a detective control).
Recommendation 3: Establish a comprehensive Code of Conduct for both the Association Board of Directors and staff.
Recommendation 4: Consider adopting a policy that will provide greater transparency to the considerations undertaken in Executive Session.
Recommendation 5: Establish a process whereby the threshold is calculated and included in the budgeting documents. Establish a procedure at the estimation of Capital Projects to compare the aggregate estimated cost of a project to the threshold.
Recommendation 6: Clarify the existing policy to provide guidance for situations where a project expands or where an estimate is found to be insufficient. This should include guidance on when an overrun should be brought to the attention of the Board of Directors as well as guidance on the appropriate process to follow when the revised amounts exceed the threshold.
Recommendation 7: Prepare a long term Capital Improvement Plan and update it on an annual basis.
Recommendation 8: Establish written policies and procedures for the evaluation and management of capital projects which should include: 1) a requirement to specify the design in advance of the estimate or budget being prepared; 2) a requirement to identify and disclose the key assumptions including in the estimate or budget; and 3) a requirement to maintain the documentation supporting the estimate or budget.
Recommendation 9: Establish a process to ensure that purchase orders and contracts cannot be issued without encumbering the funds and ensuring that the approved budgeted amounts are sufficient.
Recommendation 10: Establish a quarterly or semi-annual review process where the aggregate amount of encumbered amounts plus estimates of all amounts remaining to be contracted are compared to the annual approved budget.
Recommendation 11: Revise the resolution to remove the language stating the policy is only required to “the extent practical”. In the event that written quotations are deemed not to be necessary require that a memorandum be prepared and approved detailing the reasons and authorizations for the decision.
Recommendation 12: Develop a process to ensure that prior to an invoice being paid they are matched and agreed to properly approved contracts or purchase orders. This should include an analysis of the aggregate amount paid under any to ensure that the invoice is within the approved terms.
Recommendation 13: Establish a formal document retention policy specifying the nature of the documents required to be maintained which should include specific requirements for financial documents, documents presented to either the Board of Directors or a Board Committee, etc.
Recommendation 14: Establish a procedure to record and track all proffered amounts and any restrictions on such amounts.
Recommendation 15: Establish a procedure to analyze likely annual covenant compliance at interim periods but no less frequently than semi-annually.
In a community meeting with a StoneTurn Group representative in early February, many residents spoke to express what they were hoping to see in the review — including individual culpability, specific conflicts of interest and potential law-breaking that may have occurred in the process of the purchase. That type of information, which the StoneTurn representative at the meeting said was outside the scope of their work, is not explicitly outlined in the review.
The Reston Association Board of Directors plans to review the report, and a special public meeting will be held Tuesday, March 14, at 6:30 p.m. regarding its findings.
Photo via Reston Association
Lake House/Tetra Review On Schedule: Michael Sanio, RA Board of Directors vice president, said at Thursday night’s meeting that the independent review of the Tetra/Lake House purchase remains on track to be submitted by StoneTurn Group by midnight Tuesday. Sanio said RA’s Tetra Review Committee is “very pleased with the progress” that has been made, and that the review will be made public once it has been seen by all board members. [Reston Association]
South Lakes High Student Government Honored — The South Lakes High School SGA is one of 21 statewide that have been recognized with the Virginia Student Councils Achievement Award for 2016-17. [Fairfax County Public Schools]
SLHS Sophomore Selected for IT Award — Anika Kumar has been selected as a 2017 Virginia affiliate winner of the National Center for Women and Information Technology Award for Aspirations in Computing. Kumar, who became interested in computers when she took a class in middle school, has produced her own video game. [Fairfax County Public Schools]
Teen Job Fairs Slated for March, April — The 2017 Fairfax County Teen Job Fairs and Resume Building Workshops will be held at Chantilly High School, Oakton High School, West Springfield High School and South County Secondary School. [Fairfax County]
Photo of Lake Anne sunrise this morning via Instagram user @annemusicmarkets
Many Reston residents turned out Thursday afternoon to give their two cents to the forensic accounting firm tasked with analyzing the cost overruns associated with Reston Association’s purchase of the Tetra/Lake House facility.
Deirdre Flaherty, partner and co-founder of the StoneTurn Group, joined RA Vice President Michael Sanio and Eric Carr, chair of RA’s Tetra Review Committee, on a panel to hear statements from Reston citizens. StoneTurn has been contracted by the Reston Association Board of Directors at a cost not to exceed $45,000 to conduct their review by the end of February.
The forum was structured loosely, with members provided three minutes to take the podium and speak individually, or five minutes to speak on behalf of a group. It broke down into informal conversation throughout, however, as residents asked questions from the audience and demanded answers regarding what exactly the firm is planning to find — and how those findings will be presented.
“The intention is to make the report public when it is finished,” Sanio said when pressed about how the findings would be shared with the community. “That’s why we have the consultant doing the work.”
Many residents shared their skepticism about the transparency of the review process, though.
“It is vitally important… that your final report is published, unaltered and unredacted,” said Dick Stillson, who was a member of the MediaWorld group that had offered to do the work for a fee of $1. Negotiations ended, Stillson said, in part over RA’s requirement that findings be confidential. “There is no way that the community will have confidence in the work that you’ve done, or in fact that the board really did ask for an independent review of the Tetra purchase, if that report is not published in its complete form and made available to the community.”
RA members voted in a referendum in May 2015 to allow the association to purchase the Tetra property for $2.6 million — a cost more than double its tax assessment. Renovations made on the property, which were expected to cost $259,000, ended up costing nearly three times that. RA has since opened the renovated facility as The Lake House.
The goal of the review, according to Reston Association, is to “identify areas for process improvement, potential changes to internal controls and/or modification to governance procedures to help ensure situations like the Lake House cost overrun can be avoided in the future.” Sanio said the goal is twofold: to determine what transpired during the Tetra purchase and to make sure something similar doesn’t happen again.
Several residents at the meeting inquired why the StoneTurn contract was not made available on the Reston Association website for public review; the 13-page document was later added to the site.
Flaherty told residents she is extremely confident the review will be completed to its scope and within the time frame allotted. Some residents, though, questioned how intricacies of the matter including culpability, conflicts of interest and potential law-breaking would be handled.
“The scope of our work isn’t to do that right now,” Flaherty said. “[But] whatever we see will be divulged.”
While Flaherty said it is not the reviewer’s responsibility to go to the authorities with any evidence of illegal activity, both Sanio and Carr said they would do so if necessary.
Terry Maynard, of the Reston 20/20 Committee, said a “vigorous investigation” is needed to get to the bottom of “the greatest leadership crisis in the history of the Reston Association.”
“Never have so many people in Reston’s leadership on the RA Board of Directors and among its senior staff behaved so unethically if not outright illegally,” Maynard said. “[They have] demonstrated such complete incompetence in analyzing and managing the finances of a single RA project, and used secrecy behind a legal facade to protect the guilty while so neglecting the interests of the community.”
Sanio said members of the RA board have endured a lot of negativity from the community throughout the process.
“I’ve heard lots of accusations, I’ve read accusations, some of them unfounded, and I think for those that serve on the board as volunteers, you’ve put those individuals that commit untold hours in your service into a very, very difficult position,” he said. “I would urge you to reflect on that. These are your peers in the community, and they’ve stepped forward to be helpful. … I think that those that have stepped forward deserve the respect.”
“We too are looking for answers as well, and I’m confident with the competency of the StoneTurn group and Dee (Flaherty) here, that we’ll get what we need,” he said.
But Dennis Hays, of the Reston Citizens Association board, said the meeting didn’t clear up many of the issues people have about the process. In fact, he said, the opposite occurred.
“I’m more concerned now at the end of this meeting than I was in the beginning,” he said. “If we get a report that just says, ‘Here’s what we need to do in the future,’ then we have wasted $45,000.”
Anyone with comments to share who was unable to attend Thursday’s community session is encouraged to email [email protected].