Reston Association's Inexperience Led to Lake House Overrun: Report

RESTON, VA — Stone Turn Group has turned in their report on the over-budget Reston Lake House -- also known as the Tetra property -- and the firm blamed the skyrocketing costs on the Reston Association's inexperience with such an acquisition.

Stone Turn Group, which was brought in to figure out how the $2.6 million property went $430,000 over budget after it was purchased in 2015, called it an "unusual transaction" for the association in their report, which was released Feb. 28.

"We understand that the Association had never purchased property before and the nature of the project, an interior renovation, was different from any project previously undertaken by the Association," the report states. "There were no written internal control policies and corresponding processes for the Association staff to rely upon as they went through the transaction."

The association didn't seek member input on required design elements until after an estimate had already been compiled and included in a budget, a critical error that resulted in flawed estimates, the firm stated. In addition, the estimation process wasn't "performed in a manner that could have yielded a reasonable estimate and was not documented," they wrote.

"The internal control processes of the Association are not sufficient to account for funds when they are contracted or encumbered, but instead track expenditures only as they are paid," the report continues. "The encumbrance process is an important aspect of controlling spending commitments.

"The internal control processes, including those for Conflict of Interest tracking, procurement, and invoice payment, among others, are not sufficiently robust to ensure compliance with the Association policies and our analysis has found multiple instances of required documentation not being maintained."

Stone Turn Group made a number of recommendations in the report, mostly advising the Reston Association to put in place better policies and procedures and review them annually.

Read the entire report here.

Image via Reston Association