JosephineK1 (Virginia)
Posts: 5
Posts: 5
Posted:
We are having a difficulty with our management company's monthly reports. The monthly reports are showing BOTH the budgeted monthly transfers to the reserve accounts as an expense AND the actual reserve fund expenditures as an expense to the operating account. In other words, if our budget is $100,000, of which $20,000 goes to the reserve fund every year, and we spend $20,000 from the reserve fund, the management company is showing both, e.g. $40,000, as an expense for the year, so we are always showing a significant operating loss.
At first, I thought this was only a mistake with our association, but our manager says this is how they report it for all their properties. It seems as if our own management company doesn't understand basic association accounting principles. Any suggestions?
To make it clearer, if this were the first year of the association with a budget of $100,000 and we took in $100,000, spent $80,000 on maintenance, and $20,000 went to the reserve fund, and then $20,000 of the reserve fund was spent, the management company would show a $20,000 "loss" for the year, as if we spent $120,000.
At first, I thought this was only a mistake with our association, but our manager says this is how they report it for all their properties. It seems as if our own management company doesn't understand basic association accounting principles. Any suggestions?
To make it clearer, if this were the first year of the association with a budget of $100,000 and we took in $100,000, spent $80,000 on maintenance, and $20,000 went to the reserve fund, and then $20,000 of the reserve fund was spent, the management company would show a $20,000 "loss" for the year, as if we spent $120,000.
