Columbia village system in question Police inquiry points to flaws in how money is handled

March 15, 1998|By Dana Hedgpeth | Dana Hedgpeth,SUN STAFF

A police investigation of possible embezzlement from a Columbia village center is raising questions about the way the planned community has been governed since it began 30 years ago.

Anne Darrin resigned Feb. 27 after 10 years as the Dorsey's Search village manager after a Columbia Association audit showed that about $100,000 may have been misappropriated from Dorsey's Search over several years, according to sources familiar with the document.

The allegations -- the first in Columbia since a CA treasurer was convicted of embezzling 20 years ago -- bring to light the fact that the CA knows little about what happens to the $1.3 million it gives annually to the 10 village centers. Dorsey's Search will get about $130,000 next year from the association.

"The very principle Columbia was established on was creating a village system where they would not be managed under the homogeneous whole [of CA] but have their own independent voice," said Padraic M. Kennedy, CA's president for 26 years.

At a grass-roots level

This was in keeping with the vision of Columbia's developer, James W. Rouse, who believed in keeping control at a grass-roots level. Each of the 10 villages elects its own governing board. That group hires a full-time manager, whose salary can range from $23,000 to $45,000, to run daily events at its center.

The village centers receive grants from the CA and, under the direction of village boards, are free to spend the money as they see fit.

"It is [the village board's] job to manage their managers," Kennedy said.

But that system -- which put the financial responsibility in the hands of part-time board members who meet every two weeks -- was established when the village budgets were small.

"The villages evolved from sleepy entities by financial terms, but their incomes have now crept up and became large," said Guy Guzzone, chairman of the Kings Contrivance Village Board. "It took something like this to let people know they deal with significant dollars."

The CA grants to the village centers range from $195,924 for Long Reach, Columbia's largest village with an estimated 14,000 residents, to $77,315 for the River Hill village, which has about 4,000 residents.

No uniform system

The CA is supposed to get quarterly and yearly financial statements, but, until this year, those did not have to be in the same format, making it difficult to keep track of expenses. The villages were not required to have bookkeepers, though only Dorsey's Search -- where Darrin kept the books -- did not.

"With different systems for recording expenses and income, it became easy to make excuses while doing reports that could hide things," said Joe Merke, chairman of the Columbia Council -- the elected governing body of the homeowners' association. "When you've got 10 different ways of recording your money, it makes it 10 times harder to find anything wrong."

Deborah Herman, an Ellicott City accountant for four of Columbia's villages, said: "You've got the CA, which is the mother ship, disbursing [$1.3 million] a year to little villages, and it is not holding the reins to oversee it. It seems a little loose."

The probe into Darrin's financial records prompted the CA to conduct an audit of Columbia's nine other village centers that is still under way.

In the past five years, none of the village centers has been audited by CA staff members or an outside auditor. In a recent memo to village centers, CA's chief financial officer, Rafia Siddiqui, wrote, "It's been too long since we have given you the attention you deserve."

The investigation has also prompted some members of the Columbia Council to seek more control over the villages' finances.

"It seems like there may be cracks in the way we look at village centers' [operations]," said Wanda Hurt, a council member from Owen Brown village.

Maintaining autonomy

But moves to change the way the village centers operate irk those who agree with the original Columbia vision of village autonomy.

At a Dorsey's Search Village Board meeting this week, Ken Puckett, who represents the village on the Columbia Council, said proposals to reduce village fiscal autonomy would "gut the village boards."

"Over time, you would see [village boards] die out because people would stop participating," he said. "It would be the first step to making Columbia an incorporated city by putting all the reins of power under CA's control."

The Columbia Association has had its own difficulties in adjusting from what began as a small homeowners association and grew into essentially a town government for Columbia's 90,000 people. The association has an annual budget of $49 million and 190 employees. The typical homeowner in a $200,000 house pays an estimated $740 annually to the association in what amounts to a local property tax.

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