As always, the busy beavers of The Bastion are hard at work here in the lodge and have obtained copies of Gunstock’s annual audit. We also caught up with the Chair of the Gunstock Area Commission, Doug Lambert, who answered a couple of questions following Wednesday night’s regular monthly meeting in which the audit was released and accepted. Lambert told The Bastion that the annual audit is required by law and is the triggering mechanism for transferring Gunstock’s annual payment to Belknap County coffers in 45 days from receipt of the report , which for the ended fiscal year is $320,285.00.

You can view, or download the audit report itself here:

There were three additional documents presented along with the financial audit itself. This is the “Governance Letter” below. It describes the methods used, along with some statements about the process itself, and to the cooperative nature of the management team in working with the audit firm.

“For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.”

Final Governance Letter, Vachon Clukay, 10/19/22

This document also included a reference to the disastrous Audit Committee. GAC Chair Doug Lambert tells The Bastion that it only scratches the surface on the difficulty and disruption caused by their involvement with the audit firm. During his presentation, the principal of the audit firm Vachon Clukay, Jarad Vartanian noted that they had been presented with proposed tasks that amounted to what is called “forensic auditing” which is far beyond the scope and purpose of the annual financial audit for which they had been hired to perform.

“Due to unanticipated events and circumstances beyond our control, audit fieldwork was disrupted and delayed on multiple occasions. Such disruptions and delays were caused by conflicting information about whether or not audit fieldwork was temporarily suspended, as well as the temporary resignation of all management personnel of the Commission.”

Final Governance Letter, Vachon Clukay, 10/19/22

You can see the full Governance Letter here:

The next document is the “Report on Internal Control Over Financial Reporting.” This one identifies the actual REAL problem regarding Gunstock: the lack of policies in place by the Commission itself. This is not news, in that the Lambert-led GAC has been discussing this situation for several months. In fact, at last month’s meeting, they adopted a policy requiring Commissioners to review the check register each month, and to acknowledge doing so. Lambert told The Bastion that he was concerned from the start of his tenure at the lack of guiding policies for the Commission. “While a recently resigned Commissioner often claimed the GAC was a board of directors and they they should conduct themselves with a ‘nose-in, hands off approach,’ the lack of policies of any kind was akin to having one’s nose cut off to perhaps spite that face.” He further stated that “I think one would be hard-pressed to find a board anywhere that simply existed as if in a vacuum.”

During Wednesday’s meeting, Chairman Lambert asked the auditor about this: “Do you think it’s up to management or is it the commission’s responsibility to put these in place?” The reply was that it is ultimately the commission’s job to do so, of course with input and in partnership with management. Lambert pointed out that it is hard to accuse management of wrongdoing or violating some sort of rules when none exist- aside from the fact that they, of course, DIDN’T do anything wrong in the first place. The audit firm keyed in on this:

“As part of our audit, we performed testing procedures over the significant financial transaction classes of the Commission which included inquiry, inspection, examination of individual transactions and review of control policies. In performing such procedures, we noted that the Commission lacks formal policies and procedures that allow or require the Board of Commissioners to exercise control as the governing body of the Commission. More specifically this includes no formal review or approval process over cash disbursements, payroll transactions, contracts, bank accounts, and a detailed budget of Commission expenditures.”

Internal Control Letter, Vachon Clukay, 10/19/22

You can read or download the complete letter here:

“In planning and performing our audit of the financial statements of the Gunstock Area Commission, as of and for the year ended April 28, 2022, we considered Gunstock Area Commission’s internal control structure to determine audit procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure.

Management Letter, Vachon Clukay, 10/19/22

And obviously, the concerns on policy by the current GAC had been communicated to the auditors during the process:

“We have already discussed these comments and suggestions with the Commission, and we would be pleased to discuss them in further detail at your convenience. The purpose of this letter is to provide constructive and meaningful recommendations to you.“

Management Letter, Vachon Clukay, 10/19/22

Aside from the important and relevant information in the preceding documents, Lambert told The Bastion that this particular one sets out a guiding path forward in correcting the GAC policy deficiencies as he sees them. “We have been discussing policy creation for several months and this will provide a good roadmap for us as we translate that into action. Working in concert with the management team, we hope to build a proper policy manual that will both guide all of us currently involved with good stewardship of Gunstock, as well as helping future people so as to avoid the messes and entanglements we have been currently dealing with.”

You can read or download the full document here:

So there you have it. As reported yesterday here on The Bastion, there is NO smoking gun. No malfeasance. No crimes or criminal acts. No nothing. Except a very successful and profitable ski area owned by the public and run by a commission. A commission lacking in policy procedures, but committed to correcting that. Please keep coming back daily to The Bastion for important stories with a local perspective, written by local people.