problem with financial report.

Our Building Manager (also a Board member-another problem and story) gave us the financial report date Feb 1 - March 1. Since it is done on the accrual basis more income was reported that if it had been from Feb 1 to Feb 29, thus our loss doesn't appear as high.

The previous inhouse bookkeeper saw this statement and was not happy. The Building manager told the previous bookkeeper that she (the building manager) had learned how to "work the books".

Now we need to get the correct February statement from the current bookkeeper. (The members will not be happy when they see the true loss for February. (Other than the previous bookkeeper, only the current Board has seen the problem financial statement.)

Our problem is How do we deal with the Building Manager that is trying to "cook the books?"
Any suggestions would be appreciated.
Problems like this make me so glad that I am not the President. I didn't even really want to be on the Board.

PS Our dues are increasing by 7% effective June 1 of this year.

I believe Bonnie's issue is with the span of the report. If assessments are due on the 1st of the month and the books are kept on an accrual basis then a report from Feb 1st thru March 1st will accrue TWO months worth of assessments but will only include 29 (or 30 in the case of 2012 leap year) days of expenses.

Clearly, to me, that is not a valid basis of comparison and significantly distorts the reported variance.

As to whether the preparer is deliberately cooking the books, I cannot say.

It seems to me the report does not meet GAAP.

If you were previously performing cash basis accounting, my question would be who authorized the management company to change the process?

If it wasn't authorized, the board needs to instruct the MC to return to the cash basis process and make all future reports based on that process.

Steve

I was in an organization (social) that had a budget of $500K with most of the revenue received in the first few month of the year and we used an Accrual Basis. Talk about being gypsy rich....LOL

When we brought in a Financial Advisor, we were advised that our members might have a better time understanding a Cash Basis as most worked their personal finances and business finances (many small business owners) on such as basis.

He also said the IRS would take a dim view of jumping back and forth so be sure if we changed, we planned on staying on that basis.

We were also using the accrual basis before. Apparently, we asked the new bookkeeper to do the cash basis, but he said it was to difficult to transfer quick books to a cash basis. I wasn't there when he told the President that it was too difficult.

We don't really have a management company just a lady who is Buidling manager.