The Report
Information for this Transparency Study was gathered by a questionnaire sent to the President of each Resident Association related to ORANJ. To encourage candid answers we promised not to reveal the names of the Associations, nor of respondents selected by the Presidents. After telephone follow-up calls, 22 of the 24 questionnaires were returned. A Summary of Questionnaire Responses is in Appendix A. From the questionnaires, we selected the most promising responses for analysis and inclusion in the report, in order to:
- Compare evidences of present transparency levels with respondent’s feelings about how much residents enjoy candid and open communication from boards and managements;
- Explore possible differences in levels of transparency related to different sizes of a community’s Independent Living population (IL), as reported in ORANJ occupancy reports;
- Analyze the different roles of boards, managements, and resident committees;
- Suggest ways that communities can improve their transparency.
Many ORANJ communities do not use readily available transparency instruments.
10 of 22 do not distribute their Annual Report (Question 37)
9 out of 22 do not distribute their annual audited financial report. (Q. 37)
14 do not make available, on request, IRS Form 990, which is publically available. (Q.36)
Only 10 communities out of 22 answered “Yes” to Question 24. “Does a member of your board of directors, or a designated representative, who is not the chief executive or other staff member, hold quarterly meetings with your residents or their elected representatives?”
Since this is a quoted part of the NJ State Law, twelve communities appear to be failing to comply with the law. See the statement from the law in Endnote #1 below.
How do respondents in communities of different sizes feel about the levels of transparency in their communities?
Self Ratings on Transparency given in Questions 1, 2, 11 and 43 in the Summary of Responses were converted into Transparency Scores (See Endnote #2 for method of computation.) Average transparency scores were computed for four groups, based on number of Independent Living units, as follows:
| Independent Living (IL) Residents | Communities | Average Transparency Score: | |
| Large: | Above 300 | 4 | 22.5 |
| Medium: | 250-300 | 7 | 19.7 |
| Small: | 175-249 | 6 | 19.7 |
| Very Small: | Under 175 | 5 | 19.2 |
Note: The highest possible score is 28, and the lowest possible score is only 4. The lowest transparency score given by any respondent was 17. This may be interpreted as being “Fairly well informed” On questions 1 and 2 the lowest rating for either residents or for officers and committee chairs was that they feel that they are “Fairly well informed.”
The self ratings of the four large communities are slightly higher than those in the medium, small and very small communities.
However, our samples are so small that these ratings can only be suggestive of differences in how residents feel about the level of transparency in their communities. Answers to other questions regarding written data that is actually communicated, suggest that the self rating scores of the Very Small communities, in particular, may imply greater transparency than actually exists.
Financial Transparency
Question 29 is about the Standard Financial Package given to the resident Financial Commitee.
Question 33 asks about involvement of the Resident Finance Committee in Budget Development.
Two tables provide the wording of Q29 and Q33 and the CCRC responses.
Question 29 – Finance committees in the Large and Medium communities are more likely to gather and use detailed financial statistics than are those in Small and Very Small communities. The larger the IL community, the more likely the resident finance committee is to be receiving and making use of a larger variety of financial data. For example:
- The four largest IL communities used an average of eight out of the nine instruments in the Standard Financial Package. (See all the Number 1’s indicating use of an instrument.)
- The seven medium sized IL communities used an average of six out of nine instruments.
- The six Small IL communities used an average of 5.3 instruments, close to the number used by the medium sized communities. However, this lower average was the result of one Small community which used none of the instruments.
- One of the five Very Small communities used seven of the instruments. Another used three instruments and a third used only one. Two of the Very Small communities used none of the instruments at all.
Question 33. On the positive side, three finance committees in the large IL group, and two in the medium sized communities work closely together, as partners with management, in ALL STAGES of budget development. How could one imagine a greater level of financial transparency than that? Two other communities participate in four out of five stages in the development of budgets.
None of the eleven finance committees in the small and very small communities had any involvement in budget development, except one that participated in preliminary discussions, and a second that took part in discussing future rate increases and in reviewing the draft budget before its approval.
The perspective of managers, who make creative use of Finance Committee members in the budget process, can best be illustrated by an interview with one of them, whose CCRC Finance committee participates in every stage of budget development. This manager expressed admiration for the competence of resident finance committee members, appreciation for how much their insights help management and great confidence in their ability to keep appropriate confidences until the budget is announced.