Financial Committee

Started by CherylC1 • 19 replies • 1456 views

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CherylC1 (Pennsylvania)
Posts: 80

Posted:

Our HOA is in need of help! We have a financial committee that the board voted on and agreed upon.
Now they won't let us meet with the secretary unless we sign an agreement that is totally ridiculous!
We are not asking to see the list of delinquent accounts. We want to see some bills that were paid
(that look suspicious.) Like why would you write a large (over $3,000)check to the person who does our landscaping
instead of to his company and did they issue him a 1099? Things like that. The Vice-President is insisting
on attending any meetings we have and to be copied in on emails. Shouldn't the financial committee be separate from
the board but report to the board? We did not get a very good report from our auditors and want to try to help the secretary to correct these problems.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By CherylC1 on 09/27/2012 5:04 PM

Now they won't let us meet with the secretary unless we sign an agreement that is totally ridiculous!

What is in the document that is ridiculous?

CherylC1 (Pennsylvania)
Posts: 80

Posted:

The CPA that was going to head the financial committee has a friend who is an attorney.
This is what the attorney told him : DO not sign it!!! I assume you are a volunteer to the board. As dysfunctional as your past HO board is - if information got out by some means the HO can sue you to pay damages fees etc. It is a very draconian and needless agreement - It's nuts! I know they will argue confidentiality but as a CPA you are already bound by professional rules of conduct ie non disclosure.

TimB4 (Tennessee)
Posts: 21,059

Posted:

OK, so it's a non-disclosure agreement of some sort.

I understand the Boards concern, however I also suspect that no one on the Board were required to sign such an agreement. Why doesn't the committee create a document of ethical behavior that they will agree to follow and use that to try a compromise.

CherylC1 (Pennsylvania)
Posts: 80

Posted:

That is a great idea except these people really don't want anyone looking at
their financials so they will find reasons to keep us from it. If we draw up some
sort of document they won't agree to it. I am sure they knew we wouldn't sign
the agreement they came up with! And no, they didn't have to sign anything.
As a resident I would ask to see a few things that should be open to the public but
they won't let residents see anything either. Makes you wonder why doesn't it?
In our by-laws it does state that residents can ask to view HOA information.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Like why would you write a large (over $3,000)check to the person who does our landscaping
instead of to his company and did they issue him a 1099?

Many landscapers (or other manual labor jobs) dont have a "real" company setup. They just do business under their own name. In my experience, manual labor contractors are some of the worst when it comes to paperwork.

PaulT6 (California)
Posts: 409

Posted:

Suggest you review your State's laws. In California we can request A whole lot of financial information from our Assn, short of individual employees salaries or other personal info.

Paul T

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Suggest you review your State's laws. In California we can request A whole lot of financial information from our Assn

The trouble is, most HOA's are run by amateur volunteers who will run things however they want. No matter how badly. Unless there is a court order, many HOA's can just ignore homeowners without repercussion.

PaulT6 (California)
Posts: 409

Posted:

Quote:

Posted By SteveM9 on 09/28/2012 7:54 AM

Suggest you review your State's laws. In California we can request A whole lot of financial information from our Assn

How true!! Our Board has approved a $12 MILLION project for two new Ski Lodges that we don't need. They will not ALLOW a membership vote or even a survey. Must be good to be the King(s).

Paul T

CherylC1 (Pennsylvania)
Posts: 80

Posted:

We went the court route and the judge threw it out!!

PaulT6 (California)
Posts: 409

Posted:

Quote:

Posted By CherylC1 on 09/28/2012 10:21 AM
We went the court route and the judge threw it out!!

Cheryl,

From my earlier post:

"John & Ed,
Some of us have discussed re-calling the present Board but as they have not violated our Governing docs or state lea, that we know of, and lack of interest overall, we decided against it. Based on my appearances for jury duty it is my opinion that our local Judges are extremely liberal. It is also my opinion that they would look on any legal action brought against the Assn something like this:

Judge: "Why are you rich second homeowners taking my time with your trivia? Go back to the Bay area and leave me alone, I am busy prosecuting landlords that want their renters to pay their rent.

Unless you have a big "smoking gun" I think legal action may be like whistling into the wind, if you get my drift :-)

Paul T "

My opinion is that HOA cases are WAY down on the Judicial food chain.

Paul T

KellyM3 (North Carolina)
Posts: 2,239

Posted:

I'm wondering how an HOA board can require a non-disclosure agreement to look at the check ledger and financial statements of an organization that's owned, collectively, by the dues payers. Anyway, why does it matter if a board member wants to sit in on a meeting that involves the HOA board?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Cheryl;

How this Financial Committee come into being?

Thanks

CherylC1 (Pennsylvania)
Posts: 80

Posted:

The HOA have always had someone to do the checks and balances. The past two years we
have not had anyone so a resident suggested a financial committee. The president told the resident
to go ahead and they voted to have a financial committee. On the committee, 2 residents, 1 CPA and
1 accountant and former HOA secretary. Now they stalling and don't want to let us set up an appt
with the secretary. You wonder why, don't you???

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Cher

Why do I get the opinion that this is a witch hunt committee?

CherylC1 (Pennsylvania)
Posts: 80

Posted:

Well I wish I could say that is what it is. If I told you some of the things that
have been going on you wouldn't believe it! I just want my community back to where
it use to be!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Cheryl

Thanks for the answer. I believe the BOD does see the committee as a witch hunt committee thus they will not be very cooperative.

CherylC1 (Pennsylvania)
Posts: 80

Posted:

You are welcome. I think they see this as we may find something out that they don't want us to find out
but really we just want some answers. If they had nothing to hide why would they care?

They have prevented residents from filling vacancies, paid a board members wife over $5,000 to supposedly do the books for 1 month (she is a preschool teacher!) The board member had lost his job so that was pretty convenient.

They pay the landscape company thousands of dollars but there was a check for a large amount made out to the landscaper, not his company. They have had landscaping done at their houses, got us involved in a lawsuit that we have spent over $100,000 and turned away a company that was working on a grant to help us with our pond (that would have amounted to over $700,000.!!) The list goes on and on. When a resident asks to see a document they will not provide it even though our by-laws clearly state otherwise. It is a mess and it just makes me sick!

PaulT6 (California)
Posts: 409

Posted:

Cheryl,

We share the same frustrations. In my case I have two options:

1. Do the best you can with what you have to work with

2. Sell & move

We live in a beautiful high mountain community with the forest as our back yard. The only way I plan on moving is in a small box. Hang in there, nothing stays the same forever.

Paul T

CherylC1 (Pennsylvania)
Posts: 80

Posted:

Paul,

Thank you!!!! I can tell you understand and I have told my husband I want to move (even though I love my house.)
He feels the same way. We love it here so it looks like we will stay and do the best we can!

Cheryl

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