IVGID Audit Committee Chair: “Gross mismanagement”
The following are public comments made during the Incline Village General Improvement District Board meeting on August 9, 2023. CLICK FOR AUDIO RECORDING
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Chris Nolet, Lakeshore Boulevard, Audit Committee Chair
In three minutes, I can’t possibly address the current state of complete disrepair faced by our Director of Finance, Bobby Magee, and his few team members. His memo to the board package tonight provided some insight into the rather frightening circumstances they face.
No bank reconciliations for one year, an out of balanced GL [General Ledger] that has not been closed for the past two months. An implementation system, which is months, if not years late and still incomplete in the aggregate. These circumstances represent an extremely daunting set of conditions, even for a GID [General Improvement District].
Contrary to the refrain “I quit because of the board”, I find it rather obvious that Navazio [Paul C. Navazio, Director of Finance: 2020 to June 2023] quit because he knew these circumstances would finally catch up with him in the current year and close end related audit.
More importantly, the presence of these circumstances in any organization has historically correlated to various financial frauds. While we’ve not seen any such specific circumstances. Sudden leadership resignations, unreconciled bank accounts, and our open and out of balanced GL are well known traits, all of which indicate that substantial skepticism and expanded audit scopes are warranted.
I heard that our former chair [Tim Callicrate] is attributing these circumstances to the current amateur leadership team. I know, and I feel good about the fact that the folks in IV [Incline Village] are not so naive.
These deplorable circumstances don’t just develop overnight. For example, under the slipshod leadership of Tim Callicrate and Indra Winquest [former General Manager], two – TWO – different audit firms reported the district did not main effective internal controls over financial reporting.
Two different audit firms had to deal with restating our financial statements due to material errors.
Even worse, the Audit Committee felt that it could not approve of the Fiscal 21 CAFR [audited financial statements]. But Callicrate and his team voted to approve and submit the financials to the State anyway. These examples represent chronic worst practices.
And for Tim last month, on July 7 at Music in the Park, you admitted to me that as a chair, you failed to provide adequate board leadership during the Board of Trustees meeting on September 14, 2022. As you noted, you were shocked at the four to one design plan vote. You acknowledged that you should have paused in meeting and regrouped the trustees on the unanimous voting requirement. This failure on your part substantially contributed to the project not moving forward.
Callicrate, Winquist, and Wong are the worst of the worst, and now we’re paying dearly for their years of ineffective leadership and gross mismanagement.
Chair Dent: Thank you, Mr. Nolet.
Chris Nolet is a retired CPA and partner with E&Y, a former partner with PWC, and a resident, property owner and voter of Incline Village. He has been Audit Committee Chair since April 2023.
[Updated April 23, 2024: Chris Nolet resigned from the Audit Committee in February 2024, with a year left on his term.]
Thank you Chris for your Frank and transparent article. For many years we have been concerned that mismanagement of IVGID was taking place and tried to bring it to the BOT and GM’s attention but failed to get traction. Finally with the new BOT, even though they are being challenged by those that perhaps haven’t looked into the details of IVGID’s practices, we can hopefully implement ‘best management’ practices which will extend into the contracting and procurement processes as well.
Chris Nolet’s public comments are quite illuminating. However, implementing ‘best practices’ may not be sufficient; requests for public records, such as the FY2023 general ledger and the fixed asset register are still being stone-walled. And requests for asset disposal forms have been met with the response that they don’t exist, even though required by capital asset disposal policy IX.5. No, it will take more than implementing policies and procedures.
We are very fortunate to have the current audit committee, and the current trustee board. Hopefully, the community will wakeup to the mismanagement of the previous Trustee board , [prior] audit committee, and IVGIS staff. Would a forensic audit of IVGID useful?
What is most needed now is to stop potential evidence from being destroyed by trying to implement an unneeded, expensive financial system: Tyler MUNIS. Rolling back to the prior system as of June 30, 2022, and then compiling and processing journals and feeder systems may be the best solution. A forensic auditor would have no way to examine Fiscal Year 2023 – IVGID’s general ledger as of May 31, 2023 of 6,800 pages is incomplehensible as well as being $3.9 million out-of-balance – link here http://ourivcbvoice.com/wp-content/uploads/2023/05/Response.pdf
Incompetent people need to be fired and replaced with others who have experience with property management, financial accountability, working with multiple subcontractors. More importantly, incompetency needs to be replaced with people with vision, experience & integrity. IVGID house must be cleaned up. Otherwise, IVGID bankruptcy is a real possibility
Bankruptcy is likely not the biggest issue although the finances are in disarray; in addition to Nolet’s comments, “No work has been completed on capital asset tracking”, per a memorandum of the temporary Finance Director Bobby Magee. IVGID spends millions on capital assets each year – this is a big issue. And IVGID has received two Whistleblower complaints, which have not been made public. It is unknown whether these deal with fraud or corruption. With no working financial system, it is likely everything is run using Excel – which is inappropriate for an entity with $39 million in revenue and expenses.
Thank you Chris. You have made us all aware of concerns that woulds raise the eyebrows of anyone who has taken accounting courses. You always reconcile your accounts and balance your budgets.
Does a board member expect to be required to vote for something just becasue a donor offers money? My thought is no. If a director finds a project to not be in the best interests of a community the director has a resiponsibility to exercise independent judgement. Directors are elected by voters to represent the best interests of the community.
I think the repair of IVGiD may go beyond establihment of BMPs. One could reasonably believe a full overhaul from top to bottom may be in order.
I appreciate Chris Nolet’s candor and directness in discussing these issues. It would appear that the current Board is trying to address the shortcomings of the past. Why then are those from the past, viz., Mr. Callicrate trying to foment a recall campaign?
Mark S Tanner
The recall petitions on both Dent and Schmitz contain false statements. A complaint has been filed with the State, as filing false recall petitions is illegal per NRS 306. https://www.leg.state.nv.us/nrs/NRS-306.html
And the State has indicated it may investigate.
But the petition wording (200 words maximum) does not really explain the reasons why Callicrate is fomenting the recall. There are several possibilities. Here is an email exchange between the Callicrate and Schmitz:
https://ourivcbvoice.com/two-emails-a-must-read-redacted-public-records/
Callicrate may resent he was prevented from filing for re-election in 2022, but fortunately a Nevada judge actually enforced the law – and the Nevada constitution. See here: https://ourivcbvoice.com/who-do-we-want-running-ivgid/
Mr. Callicrate also has financial issues, related to the $1.6 million reverse mortgage on the house he inherited from Barbara Stedman at 170 Mayhew Cir, Incline Village. The reverse loan mortgage company filed for Default … To Cause Sale on May 5, 2023. This was 17 months after Stedman died. The face value was $3 million. Callicrate got a promissory note loan from Robert Stephen Hardy of Zephyr Cove, NV for $1.65 Million – presumably to pay off the reverse mortgage company. The securty is the Deed of Trust to the house and “assignment of rents”. And a 15% interest rate. That is $247,500 annually. The house is currently worth $2.1 million to $2.4 million [based on an iqproperty.com report]. The Mayhew property has been listed for sale – maybe more than the value – because sale will trigger consequences for Callicrate. https://www.realtor.com/realestateandhomes-detail/170-Mayhew-Cir_Incline-Village_NV_89451_M14428-03870 [UPDATE Aug 16, 2023: The Mayhew property sold for $3 million on Aug 3, 2023.]
While elected, Mr. Callicrate NEVER FILED an Ethics form, although required by the State of Nevada. http://ourivcbvoice.com/wp-content/uploads/2023/07/2022_No_form_Callicrate_NCoE_Ross_Armstrong.png Since there is no mechanism for enforcement, nothing happened to Callicrate. Mr. Callicrate was in jail in Oregon for his second DUII in 2014. A week after his release, he filed for election as Trustee. https://ourivcbvoice.com/issues/misc/nevada-resident-callicrate-pled-guilty-to-second-duii-in-oregon/
Kevin McMillin, editor of the Bonanza (now Sierra Sun, TDT), would not report on this – so the public never knew.
All of these facts may lead one to believe Callicrate has questionable judgement. It is not easy to deduce why he might take certain actions.
Mr Callicrate’s property sold quickly for $3,030,000
Confused by the value you placed on the Mayhew home
What was your pupose of reporting the Reverse Mortgage? It is a tool used by many homeowners
The reverse mortgage was one of the transactions regarding the Mayhew property. Unlike a regular mortgage, a reverse mortgage is triggered by the death of the mortgage holder.
The value on the Mayhew property was from propertyiq. Other realtors in IV also said $3 million, the face value of the reverse mortgage in 2018, was high. We recently learned that the property sold August 3, for $3.03 Million.
Chris Nolet, thank you so much for sharing the results of your team’s audit and for sharing other factual information regarding IVGID’s operations. This mis-management of IVGID has obviously been taking place over a long period of time. Regardless of one’s position on the current recall underway, it seems there is a lack of trust and confidence amongst the community with regard to IVGID’s finances, management, and operations. Is receivership a viable path forward to straighten out this mess? If not, what does the audit committee recommend as a resolution to its findings?
Chris Nolet’s comments are not the result of an audit. He is the Audit Committee Chair – the external auditor generally reports to the Audit Committee, not management. However, Mr. Nolet is providing factual information based on his interactions with IVGID staff and management. Regarding “receivership” or solutions – good questions. Will need more thoughts on this.
This recall and Callicrate’s behavior mirror that of Trump:he refuses to accept defeat, he takes no responsibility for his mistakes while serving on the Board, he spreads lies, he maliciously attacks Trustees who don’t agree with him, and he rallies people in the community to believe his lies, turn against Trustees and divide our community.
This recall is based on lies and has been accompanied by slanderous, malicious and downright nasty comments and accusations, primarily on social media. It has damaged people’s lives and reputations and is a disgrace to our village. People need to file a complaint with the Secretary of State accordingly.
https://www.nvsos.gov/sos/home/showpublisheddocument?id=4281
Regarding this financial debacle I’m not surprised and always suspected the “mass exodus” – as the recallers call it – was isolated to a few senior leaders who had direct oversight of the finances and resigned to avoid culpability.
I also have suspected fraud (only suspected). As an ex auditor for a major bank I find the lack of procedures and mitigating controls disturbing. Material daily losses at golf F&B? How does this happen? Either they have excess supply and absorb losses due to spoilage,or revenues aren’t accurately reported. The root cause of golf F&B losses needs to be identified. Is an inventory performed regularly to manage costs? Are daily sales reconciled to inventory and revenues? Are purchase orders reconciled? Is there separation of duties?
Callicrate accusing Trustees Schmitz and Dent of micromanagement is rich and hypocritical considering the demand for financial transparency and fiduciary responsibility dates back to his time on the Board. It wasn’t until Trustees Schmitz and Dent came along that this happened. They detected financial discrepancies and asked questions. That’s not micromanagement, that’s doing their jobs as Trustees. And let’s not forget Wong who is a CPA and an auditor, and yet, these financial risks and lack of controls went unchecked while she served on the Board.
This information ought be published in the Tahoe Tribune etc. so voters have the full story…
Good suggestion. This has actually been submitted to several news sources including Mynews4 and KKOH who have yet to do anything with it. The Tahoe Daily Tribune and other local media are biased and do not pick up this type of story, and even ignore material sent directly to them. The IVGID (Quarterly) Magazine has refused to run an advertisement for our publication – see our article on https://ourivcbvoice.com/trashing-the-ivgid_quarterly/, stating we are a “political organization”. This is called “viewpoint discrimination” and is a violation of First Amendment rights under the US Constitution. We are a volunteer organization.
However, based on your suggestion, we’ll try and submit to the TDT again. Thanks for your comments.
Readers: please consider forwarding a link of this story to your friends and neigbors. We can’t rely on the media to provide fact-based information.
I found this site very interesting as this site is only “reporting” on what one side believes to be true. For example, only Chris Nolet’s comments and no comments from on other members of the audit committee members who disagree with Audit Committee Chair Nolet. Why is that? Is this site only for those who may agree?
No other members of the Audit Committee made public comments the evening of August 9, 2023. We found Chris Nolet’s comments very enlightening, and reported what he said.
As a voter who does their own research this site provides verifiable facts, not beliefs. This site used in conjunction with archived IVGID reports, Nevada Ethics filings, Washoe County and TRPA public records, etc helps create a factual timeline of evidence. If information herein is factually untrue, I would hope Ms. Krolick would submit verifiable public records (evidence) to voters.
A recall effort of duly elected Trustees is a serious matter.
Thank you for recognizing we provide fact-based information, and provide links to documents we have archived (or other sites as appropriate) to provide evidence.
Suggest we collect all pertinent facts and data, engage all relevant parties and refrain from personal attacks with the ultimate objective of creating a roadmap for corrective action and future IVGID success in the best interest of the IVGID customers (the citizens and businesses of Incline Village).
Pat Hoxie
Incline Village
We are fact-based and data-focused. Our post, Transparent, Accountable and Ethical https://ourivcbvoice.com/transparent-accountable-ethical/ provides links to some of the data analysis tools we have created.