1. TRESURER REPORT

2. Cash on hand as of 1-16-18 Checking $2,416.34
Reserve account $84,787.57
Performance bonds $73,469.17
Total operations and reserve balance $87,203.91

3. Bills- Timber cove excavating $2,500 for road sweep
Office depot supplies $652.67
Kapalahike Accounting for tax preparation, amended tax returns, draft reviews $2,850
Tax penalties $9, ( Detail in following slides)
Current Payroll taxes paid $3,421.98
Conner & Alexander New HOA insurance $10,556.84
Conner & Alexander D&O Insurance premium $4,282.
Total insurance cost $14,838.84

4. IRS Visit
On , John Gray, Melany Collet and CPA Sheri Flying Hawk visited the IRS to discuss our status on taxes, fines and what it would take to be in good standing.
IRS would give limited information only pending recording of Form and cited incomplete filings from the past that did not give our CPA all proper authority to represent our interests
John Gray asked what was needed to be in good standing with IRS and 100% compliant
IRS agent responded that balance of $5, needed to be paid and form 2848 completed properly

5. IRS Continued CPA stated we had filed for penalty forgiveness
Response was balance needs to be paid in full before any discussion and that IRS was preparing to take action against HOA.
Agent also commented that he saw no compelling reason to forgive penalties and we had been notified on multiple occasions.
We questioned status of Agent would not give us status as CPA had not been authorized for that function and 2848 needs completed before we can get that information.
Note- CPA could file income tax but authorization had been limited to that function only.

6. Breakdown of penalties assessed at meeting with IRS
Tax period $3,992
Tax Period $ and $106.74
Tax period $426 and $39.40
Tax period $ and $39.40
Tax period We set up automatic payment and are current for 2017
Interest $294.27
Total penalties and interest as of $5,
IRS accepted $5, as we prepared check for entire amount due as of our meeting and forgave the additional interest for the following days due to holiday and our payment of entire amount stated at meeting

7. Current Taxes
We are now up to date on current payroll taxes current quarterly and past due
Total was $ for current taxes
Confirmation was received of payments
FTB Amended 199x- $63
FTB Amended 199x - $10
More penalties possible depending on status if 1099’s were filed
1099 filings for 2017 nearly completed
Follow up needed with IRS to determine status on 2014,2015 and filings on 1099’s

8. Total taxes and penalties paid
Tax Payments
IRS $ /16/2017
(form 941 payroll taxes from 6/30/17- we shorted them interest on payment made of $2, on 8/17/17)
IRS $ /29/2017
(failure to file form 941 payroll taxes of $ /30/2015 penalty $492.27)
IRS $ /04/2018
( Quarterly due for payroll taxes for end of 2017 due 1/18/18)

9. Total Taxes and penalties for payroll taxes
United States Treasury $ /04/2018
(2017 form did not specify time)
EDD $ /04/2018
( disability & Unemployment quarterly due for end of 2017 due 1/18/18)
IRS $ (lump sum paid today at IRS) 1/16/2018
(Civil Penalty failure to file 2014 taxes $ , Corporation Penalties for failure to file 941 form payroll taxes in 2015 $512.00, $ &
Total = $9,790.05

10. Legal bills Payment to Perry law firm of $5,275 from 12-20-17
Additional bill of $3,320 to be paid
More fees on horizon to be billed
Claim against HOA still under investigation and coverage counsel sought in attempt to tender claim coverage that was denied.

11. Insurance
Good news is that HOA insurance did not lapse but Directors and Officers did lapse for approximately 1 week
Insurance for HOA signed day of cancelation on and directors 1 week later
Payment to Conner & Alexander as follows
$10, for HOA liability and Umbrella coverage
$4,282. for Directors and Officers coverage
Total $14, increase in cost more than double previous period and approximately 3x the year before
Partial refund from canceled insurance of $2,919 coming

12. Update to previous report of December 2nd
Road maintenance listed $47,223.
Timeline for that spend was from canceling of road maintenance contract with Timer cove excavation to present
Cumulative total for roads in fiscal year ending April 30,2016 was $7025 in CPA review
This differs from my finding of $6,350
Difference was $675 more than my report. Some checks had no description.
CPA audit still needed for verification on transactions, timelines and what were authorized transactions

13. Update continued
Previous report indicated $13,000 was spent on turnout at Hwy 1 and Ruoff in Unit 1
Additional invoice not available at time of last report shows an additional $7,975 ( check did not list what work was for) was spent on turnout bringing total to $20,975 for road work in Unit 1 for mailbox turnout
Bottom line not impacted on update but CPA audit still needed to verify totals and transactions.

14. CPA meeting I met with Sheri Flying Hawk on 1-4-18
Meeting was to cover review drafts and check on status of taxes and differences between what I identified in cash and road maintenance and draft review
We have amended 2014 and believe it now to be accurate
2015 filed as well.
2016 not yet completed but close. Question of ownership of Office property on Lyons Court delayed filings.
CPA shared this was a challenging assignment and explained her reviews were not an audit and does not verify which transactions are authorized and which are not
CPA recommended training for directors to ensure transactions are all authorized going forward.- Move to have a CPA do training similar to what we did on Davis Sterling with Attorney to ensure all future transaction follow the rules that apply to non profits

15. Next steps 2016 taxes nearing completion
Full audit to take place following completion of reviews and taxes
Dues for 2018 prepared and ready to send out
Begin process for 2017 tax filings for year ending April 30,2018
Schedule training for directors on authorized transactions
Reserve study to be completed to determine where we need to be for minimum funding
Establish budget based on expected income and attempt to limit or avoid any special assessment required for minimum funding