Laguna Woods Village

Time for an Independent Audit?

By Kim Lefner

Calls for an independent, forensic audit of operational expenses date back a number of years. In 2010, a residents’ group “Residents Voice” reviewed and questioned expenses charged to homeowners by PCM employees. PCM and Golden Rain Foundation (GRF) Board members claimed at the time that the expenses were work-related. When pressed about credit card charges for meals at upscale restaurants and visits to pricey entertainment venues, PCM then-General Manager Milton Johns claimed the credit cards were for “Emergency use only”.
A review of the charges however, indicates lavish spending with homeowners’ HOA dues money. Examples of some of the charges include meals at expensive restaurants such as Five Crowns in Corona del Mar ($834.71), the Chart House in Dana Point ($564.21) and Gullivers in Newport Beach ($543.72), among many others.

Entertainment charges included Dana Wharf Sportfishing ($375.00), the Disney Club ($700.00) and Dave & Buster’s ($811.72). There was even a charge for a purchase from Tiffany & Co. for $441.72, which we understand was for “earrings” as a retirement gift to a departing employee. When Residents Voice members questioned PCM employee Jerry Storage about the charges for such entertainment as a sportfishing cruise, they were told only that the charges were “mutually agreed upon expenses.” Storage is still employed as the General Manager of PCM in LWV and did not respond to request for input to this article.

The credit card charges noted above were just a few in a long list of celebrations and “incentives” for PCM employees, charged to LWV homeowners. The list includes meals and celebrations for numerous employee birthdays, weddings, baby showers, retirement parties, farewell parties, new hire and “employee appreciation” celebrations. The list also includes numerous expenses for items such as an “End of Audit” party, “Maintenance Division review”, “Administration Professionals Day”, Holiday luncheon for Accounting staff ($358.23), “Power Toyota Signing Contract - Oak Creek Lunch + Clients - Cash” ($496.00), Two “Professional Development Courses” ($3,672.00), Halloween party ($242.00), “Tips for Making and Delivering Pizza for Halloween” ($45.00), “Thank you Breakfast for Halloween Committee” ($117.52), “Safety Incentives” ($400.00), “Safety Incentives for Design Team” ($714.00), numerous 2nd, 3rd and 4th Quarter “luncheons for Accounting” and other staff (hundreds of dollars).

There were also charges to LWV for professional development courses including three Information Technology classes at $1,371.00 each (total: $4,113.00). The most baffling charge was listed as; “Reimbursement for Training Software purchased for self [Matt Parker]; to be used by any MIS [Management Info Systems] staff wishing to become certified...Lifetime Member” ($1,129.00). It is unclear whether LWV homeowners paid for a PCM employee’s personal software license. Regardless, it is difficult to understand why LWV homeowners should be paying for software and/or training for PCM employees.

After the exposure of the outlandish spending resulted in blow- back from the homeowners, 10 credit cards were taken away from PCM employees between 2008-2012. But all indications are that the wasteful spending may not have stopped there. According to the residents’ group, in lieu of credit cards, the former GRF Board gave PCM between $50,000 to $80,000 per year in a “Discretionary Bonus Plan Payout”. The discretionary funds are said to increase approximately 10% every year and are used to pay for employee parties, celebrations, incentives, etc. Is this business as usual, with only the funding process having changed?

The charges listed in this article are just a snapshot of the expenditures; the total charges are too numerous to list here. But this raises the question; shouldn’t PCM provide celebrations and incentives for their own employees? Even if the GRF Board at the time authorized the expenses (a question which was not answered as of date of publication), shouldn’t homeowners have some input into how their dues money is spent? After all, many if not most of the LWV homeowners are on fixed incomes with tight budgets. Ironically, many homeowners cannot themselves afford to dine at fine steak and seafood restaurants where the average entrĂ©e costs upwards of $30.00, but have paid for their vendors and “representatives” to do so repeatedly.

The new GRF Board currently has their plate full in working to address the problems created by such issues as over-spending and deferred maintenance, among others. Once they have a handle on the more pressing issues, do you want the new Board to periodically review PCM expenditures? If so, does it make sense to suggest that the new GRF Board appoint a residents’ committee to review PCM expenditures funded through the “discretionary bonus plan”? Do you support continuing to give PCM discretionary funding from your HOA dues? We want to hear from you! Email us at:, or mail to: Community Common Sense, 30240 Rancho Viejo Road, Suite A, San Juan Capistrano CA 92675. Responses will be forwarded to the GRF Board and printed in an upcoming edition of the CCS.

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