Monthly Financial Statementds - Subject to Change?

When are the monthly F/S considered closed and not subject to change?

The MC has referred to these statements as interim financials that are subject to changes until the annual audit. In other words, the MC claims they can change any F/S any number of months (two - three - six - whatever) after the fact.

From what I remember, the G/L is a reflection in time (done chronologically) and if any corrections need to be made, it has to be done in the current OPEN month referring to the past error(s).

I've searched online and can't find something that addresses this issue. Can anyone point me in the right direction?

The Accrual method

So say that an invoice was not even received for a few months. Work done in May - invoice received in August - paid in September.

May, June, and July F/S already posted on the website. Are you saying it's okay to go back in time and post the new invoice to the already closed month of May?

This then throws off the numbers in the June and July financials, doesn't it?

I was always told (no matter what method) that you should not go back in time. Entries should be recorded in the current OPEN month and refer back to the proper month. Just like the auditor's adjusting entries, say for 2014. Audit not done until May but the 2014 F/S are already closed so the entries are made in the current month.

In my experience, the books for the year are not closed until after the adjusting entries are made and the audit is completed.
Monthly financials are never exact.
If the priority is to show expenses in period they occurred, then prior months can be adjusted under accrual accounting.
From an accounting perspective, method is acceptable as long as it is consistently applied.
If you want to see cash impact, look at Statement of Cash Flows.

Linda

I would suggest that you put in a bid to run the association from top to bottom, because, it appears, anything anyone does is not up to YOUR standards.

My understanding is that a Board accepts and does not approve a Treasurers report or the financials.

Once an financial review or audit is done by a third party.

I recall having to correct a 2010 report done by someone else when errors were discovered by the CPA in 2012.

Linda,

Understand that how books are to be kept and how they are actually kept (based on the understanding of the individual keeping them) may be two very different things.

I've seen ledgers that are nowhere near acceptable accounting practices.
However, the amounts on those ledgers were mostly accurate (it just took a long time to figure out what was happening).

I've seen ledgers that were done in a textbook style.

I've seen Associations only use ledgers for their account receivables (lot ledgers) and the checkbook as the general ledger.

Basically what I am saying is that the books will be kept how the individual who is keeping them desires.

Have you simply offered to serve as Treasurer even though you are not elected to the Board?
This would allow you to keep the books the way you desire (however, as an Officer and not a Director, you would not have a vote in any decision).

My take, too, Richard & JohnC. Luckily for Linda, Tim has supreme patience.

I think I can understand Linda's position.

There is an identified an issue within the Association.

Linda has taken the time to not only point out this issue but also provided an method to correct it.

Instead of acknowledging the issue and taking steps (be they the one suggested by Linda or a different option) the Board simply dismisses the whole thing.

This would make anyone in a similar position frustrated.

Now it could be that the issue isn't as bad as Linda perceives.
It could be that the issue is worse then the Board perceives.
It could simply be that there are personality conflicts that can't be gotten past and nobody is listening.

Linda,

I was successful in stopping an assessment increase in my Association. This was done by education of the members through newsletters (not just one, but several newsletters). At the meeting, others asked questions of the Board. Some asked the same questions that I raised in my newsletter. The point being, I (as a single individual who, from the Board perspective, had an axe to grind) could be easily dismissed. When others are bringing up the same issue, the Board could not dismiss them as easily.

With your meeting around the corner, if you want to try and educate the membership, you need to get newsletters out right after Thanksgiving. I'd suggest at least 2 issues, perhaps three, in the time you have. Make sure you don't simply point out the issue but offer options on how to address it. Have a summary of all of those to hand out at the meeting as well. Then wait and only bring issues up if others don't take the lead. That is what worked for me.

LindaS27
Some good advice above.

Maybe you could try looking for the "matching principle" - as howsoever conventioned by your state's accounting professional body - to address accruals in condos & HOAs. How much is untimely failure to restate in a 'matched' accrual format so that users of the F/S can gain a meaningful enough understanding ? Maybe a significant variance in the conventions state by state . . .