HOAleader.com - Tip of the Week - October 18, 2013
Published: Fri, 10/18/13
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Are Your HOA Financial Statements Adequate?
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In this week's tip, we offer the beginnings of a primer on HOA
financial statements, specifically, who should prepare them and
how often?
Our experts all agree that there are two answers to the question
of who should prepare your financial statements. "It depends
whether you're self managed or use a management company," says
Brad van Rooyen, a partner at Home Encounter, a Tampa, Fla.,
company that manages 15 community associations totaling about
3,000 owners.
"In a self-managed situation, it would be the treasurer's
responsibility to oversee the preparation of the financials, and
it should be done on a monthly basis," adds van Rooyen. "If
you're self managed, I'd also recommend sending your accountant
the information to handle paying the bills and preparing the
balance sheet. The cost isn't that much, maybe $50-$75 per month
for an association of 30 units or so, and you have only a handful
of bills to pay. Let the accountant put the financial statement
together and send it to the treasurer for a final look before
sending it to the board and then onto members. If there's a
management company, it's their responsibility to prepare the
financial statements."
Though most associations prepare financials monthly, there are
situations in which another frequency may work better. "It
typically depends on the association's size," says Corbin Seti,
senior vice president of community and lifestyle services at
FirstService Residential (formerly known as RMI Management) in
Las Vegas. "An association with a $75,000 annual budget can
maybe look at that information quarterly. An association with
an $8 million budget may be looking at financials monthly. It
depends on the expectations of the board and of the community."
Your state law may dictate the answer, too. "I come from a very
regulated state where this is all regulated by law," adds Seti.
"Under Nevada law, boards must convene every 100 days solely for
the purpose of reviewing financials. That's for any association.
But that gives boards leeway because not everybody needs to meet
monthly to discuss financials. You'd have a board meeting just
to review the financials even if there's no other business.
Some associations need a financial committee based on the size
and need of the community."
What specific information should you include? And to whom
should the statements be distributed when they're prepared?
Get the skinny in our new article:
http://www.hoaleader.com/members/904.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Financial Statements from A to Z
Test your knowledge on HOA financial statements: Who should prepare them?
How often should they be prepared--monthly, quarterly, or only for annual
board meetings? To whom should the statements be distributed when they're
prepared? What specific information should be included in them? Here are
answers from our experts.
Click here to read full article:
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Can Members Bring Their Lawyer to HOA Meetings?
In May, a California court held in SB Liberty v. Isla Verde Association that
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lawyer attend an HOA meeting? Should you let such a participant speak? Can
you ask the lawyer to leave? What happens if the lawyer tries to hijack the
meeting?
Click here to read full article:
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Click here to read full article:
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In this week's tip, we discuss why you should care about the goings on of teen
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Click here to read full article:
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In this week's tip, we discuss whether it's ever OK for you to tell delinquent
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Click here to read full article:
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