Gunstock audit comes back clean as mountain prepares for winter

GILFORD — No material weaknesses or significant deficiencies were found by the annual audit of Gunstock Mountain Resort, according to a presentation by the auditors at Wednesday's Gunstock Area Commission meeting. 

David Strang — former commissioner and chair of the GAC’s now-disbanded audit committee who clashed with management over his approach to commission oversight — attended the meeting, unsuccessfully attempting to participate as a commissioner. He departed before its conclusion.

Critics of Gunstock’s management had accused them of financial malfeasance. Though the audit's findings make recommendations for the GAC and management to strengthen internal controls, nothing presented by the auditor supports these claims.

“In this current year, we didn’t see anything that was fraudulent in nature,” said Jarad Vartanian of Vachon Clukay & Company PC, who gave the auditor’s report. “That doesn’t mean it didn’t exist, it just means we didn’t note any in our audit.”

Finding no substantial deficiencies, the auditor did make observations and recommendations to the commission and management. 

The commission should develop more thorough financial and contractual oversight policies, the auditor said, and management should ensure proper documentation for all credit card transactions.   

Auditors reviewed all of the area’s credit card statements in addition to taking a sample of about 50 for further testing. In that sample, one transaction lacked sufficient supporting documentation, which the auditor raised to management as “an opportunity for strengthening internal controls.” Vartanian noted that the issue of insufficient credit card receipts is among the most common raised in municipal audits by their firm. 

Auditors also recommended that all major contracts the mountain enters and its bonus and incentive programs be formally approved by the commission. The letter raised no instances of abuse of bonus programs. 

In the last fiscal year, Gunstock’s gross revenue increased from $14 million to $18.2 million. This meant its return to county coffers was more than $320,000 — up from $247,000 last year, according to the report. 

Following the presentation, General Manager Tom Day read a written statement on behalf of himself and Chief Financial Officer Cathy White. 

“Since the inception of the audit committee, we have had our honesty and integrity assaulted in print, radio and multiple gatherings,” Day said, naming Strang, former Commissioner Peter Ness, as well as Reps. Mike Sylvia (R-Belmont), Norm Silber (R-Gilford), Barbara Comtois (R-Barnstead) and Dawn Johnson (R-Laconia).

“These individuals have shown themselves to be petty, mean-spirited bullies who believe that the louder they talk, and spread unsubstantiated claims, the more they will be heard,” Day continued. “In our experience, they don’t want to be informed of the facts, they just want to win an argument — even when there is absolutely no evidence to back up their claims.”

White followed this by painting a stark picture of Gunstock’s financial ascent in the past three years. Day assumed the role of GM in January 2020. 

In November 2019, White noted, Gunstock had more than $4.2 million in long-term debt — and just over $16,000 in the bank.

“Most of you probably had more in your bank” at the time, White said to the audience. 

In April 2022, at the end of the fiscal year considered under this audit, Gunstock had nearly $8 million in its accounts, and its long-term debt had been reduced to $2.2 million. Gunstock has taken on no RAN — short term debt, paid back within a year, that it historically used to cover the expenses of jumpstarting winter — in two years.

The crowd applauded. 

“Cathy and I are probably the worst crooks ever,” Day chuckled. 

The two said they waited to make this statement until after the audit had been completed and presented. 

The audit, whose findings are usually presented in July, was delayed by conflicting information from the GAC in June about whether the audit had been suspended, the brief suspension that followed, and the mountain’s closure after management walkouts.

Commissioner Denise Conroy, who was appointed in August largely based on her financial background, took the helm during commissioners’ questions about the findings. She expressed concern about the auditor’s letter to management: why were such concerns about policy, after 19 years of Gunstock audits, only raised now? Though she agreed that substantial policy work, already on the horizon for the GAC, is needed, she wondered why such non-material concerns were raised to management.

Vartanian emphasized that the audit process and findings were not influenced by local politics.

Strang, who had pulled a chair to the end of the table where commissioners sat, attempted to ask his own question of the auditor.

“You’re out of order, sir,” Chair Doug Lambert said, banging his gavel. “This is for the commission to be discussing.”

Strang has filed a lawsuit against Lambert and the GAC for an alleged coup against him. Strang maintains that he never resigned from the commission and should not have been excluded from its business and his privileges as a member. This is the first meeting he has attended in person since July 26. The county delegation accepted a verbal, conditional resignation by Strang on Aug. 1. There will be a hearing on the suit Oct. 26.

When asked by Commissioners Lambert and Jade Wood to join the audience after being denied opportunity to speak — there will be time for public input at the end of the meeting, Lambert told him — Strang acquiesced and stated he had no intention to disrupt the meeting. He departed before the meeting's public comment portion.

At its most recent meeting, the county delegation agreed to begin advertising for the two open commission seats for a duration of one month starting in the beginning of November. This means that the new delegation, sworn in during December, will start the term with a stack of applications on its desk.

Strang’s term on the GAC expires in November, meaning that even if successful in his suit and reinstated on the commission, he would have to face the delegation that unseated him to retain his membership on the commission.

Not everyone sees questions about Day and White as resolved: Sylvia, former delegation chair, an advocate for Strang and a leading voice in the accusations against management, spoke during public comment.

He expressed suspicion about potential bias of the audit firm, which has done the mountain’s audits since 2003.

“When there are serious questions asked, they start backpedaling with some serious issues that they did address,” Sylvia said. In an interview after the meeting, Sylvia said he felt Day’s statement included incorrect depictions of their correspondence. 

At the height of Gunstock’s July unrest, Day wondered whether the mountain would even be able to open for the winter. Now, as summer conflict settles, the season fast approaches.

The management team discussed an optimistic hiring picture for the winter, despite summer turmoil, and progress on projects such as the addition of a second magic carpet in the beginner area, advancements in snowmaking and grooming technology and improvements to tubing and ski patrol buildings. The parking lot is still in modeling stages, according to Facilities Director Patrick McGonagle. Other projects, such as expansions of the Panorama Pub and Stockade Lodge, are set for next year.

The tentative opening day for Gunstock this winter, Day reported, is Friday, Dec. 9.