Reston Association Board of Directors Improves Gaps Around Financial Decision Making Due to $ 1.3 Million Acceptance Paycheque Protection Program loan to which he was not entitled several months ago.

Some RA members criticized CEO Hank Lynch for continuing the PPP loan in late March without consulting the board at a formal meeting. RA President Julie Bitzer, members of the Board of Directors, RA’s General Counsel and CFO were consulted before making the decision. The funds were returned on May 14 without legal penalties or finance charges.

In a July 23 statement, Bitzer said the process indicated there was a “substantial gap in our instruments of governance.”

“Specifically, formal controls over how RA can obtain unsecured loans do not exist,” she wrote in the statement authorized by the council.

She also noted that staff and board members made “assumptions and mistakes” in a rush to protect RA’s financial stability in response to COVID-19, adding that the majority of the board don’t think Lynch acted with bad intentions or exceeded her authority.

In May, the Reston Association refused to disclose information about the loan amount to Reston Now. The issue was first raised publicly at a board meeting in May when Lynch briefed the board on why the loan was repaid.

Nonetheless, RA passed several motions to fill in the gaps in decision-making and improve overall coordination this month:

Propose to the CEO to present to the Tax Committee all outstanding unsecured loans previously concluded for their review and request the Tax Committee to provide its review and recommendations on these loans to the Board at the regular Board meeting in September 2020.

Move to ask the Board of Directors and CEO to establish a periodic review of our business processes and controls in order to continue to refine our operations.

Move to request the Tax Committee and Board Governance Committee to review and provide draft amendments to the draft staff reviews of Resolution 10 on Evaluation and Finance: Budget Amendments to Clarify What constitutes a significant change in the biennial budget which will require action by the Executive Board. The Board requests that the draft amendments to resolution 10 be presented to it at the latest during its full Board meeting in November 2020 for consideration and action.

In late June, the board also ordered the CEO and staff to take no action to secure more loans – whether secured or unsecured – without board approval.

Bitzer also noted that Lynch’s decision to cancel summer programs was seen as a public health decision, not a budget decision. The move was criticized by some members who said the change was a budget amendment, which only the board is allowed to complete.

“Few, if any, organizations were fully prepared for the COVID-19 pandemic, and the RestonAssociation was no exception. Organizations had to respond to the crisis, at least initially, with the resources at their disposal, and then quickly pull together additional resources to deal with obvious and less obvious potential challenges to the functioning of the organization and, to some, their very existence, ”Bitzer wrote.

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