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BjW1 (Florida)
Posts: 24
Posted:
If a member asks for an audit how far back in date do we reach?
They have been in residence since 9/06 we have been in office since 7/05
How often should the books be audited as a standard?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Your documents should tell you the timeline for audits. I wouldn't be surprised if you do an audit once a year. That may be helpful just to "clear the air" with the owners.
I am a trained auditor. The only thing an audit is good for is to find issues and wave flags. They don't resolve any issues. It just allows people to see what areas need improvement or where something lacks.
An audit is a good thing if the HOA is doing things correctly. However, when things aren't being handled correctly, it turns quite ugly and ruins the focus of the HOA.
My best advice is that the HOA's money is everyone's money. It's like a "kitty" in the game of poker. Everyone gives equally into the pot. So it's best to make sure you don't have any cheaters with aces up their sleeves when the dealing is done.

Former HOA President
BradD2 (Florida)
Posts: 418
Posted:
Audits, Reviews, etc... are dependant upon the size of the Association. Ours could never afford an audit as we are only 50 houses with an annual budget of 22,500. A review would be between 750 and 2,000 which is a bit steep but the Homeowners would like an independant evaluation of the books and accounting practices.

The thing that most Homeowners don't realize is that very few audits find theft or mistakes; those are usually only found years later when something has been going on for a while.
BjW1 (Florida)
Posts: 24
Posted:
SO AN AUDIT IS NOT DONE BY THE TREASURER BUT AN INDEPENDANT FOR A FEE?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Most member prefer an outside third party audit. That cost money to complete. I am not sure I would trust my own treasurer to handle the responsibility. What if they are the one's with their hand in the till? Do you think that would show up in an audit?
I believe audits are similar to hiring a detective to find out if your spouse is cheating on you. Basically, if your already suspecting cheating, there's already signs of trouble somewhere.

Former HOA President
JosephW (Michigan)
Posts: 882
Posted:
Do a search on "audits" and "Money trail" and you'll find explanations of the different types of reviews and when you should have them.

Joe

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KentS (Maryland)
Posts: 12
Posted:
Audits of financial statements for homeowner associations, condominiums, and timeshare organizations follow the American Institute of Certified Public Accountants "Auditing & Accounting Guide for Common Interest Reality Associations." The auditor would have to be licensed and independent of the entity that they are auditing to satisfy audit standards. That said, a Treasurer or a financial committee of the HOA can perform financial reviews of the organization and report their findings to the owners. Just don't call the review an audit. Still, any review done by the Treasurer, since he will be reporting on his/her own actions, may not be fully accepted as valid by the homeowners even if it was done properly.

Mayland CPA

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