Yearly Financial Reports

This may seem rather obvious to some but in looking over the last two years of our association's finance sheets I don't think they're correct. All I need to do is add the checking and savings balances for the beginning of the year, add to that figure the total amount of income (condo fees for the year) and subtract all the disbursements (repairs, insurance bills, etc) from the former figure. This SHOULD be the total amount in your checking, savings and reserve funds. Correct?

I don't think I'm missing anything but the figures for the last two years show a shortage of approximately $5,000 each for both years. I want to be sure that I'm not overlooking anything before I open my mouth.

Richard, All I wanted to know was whether this was the correct way to figure the association's yearly balance. I wasn't asking anyone to figure it for me but if I was using the proper procedure.

welcome to the wonderful world of forensic accounting

good luck

you will need much ..... and prayer

the individual who takes care of the books gave each unit owner a spread sheet for 2015. It's divided in half as to credits and debits as well as numbers for each month.
At the beginning of the sheet she shows a beginning balance of $5737.24 in checking and $21078.35 in savings for a total of $26815.59.

As far as credits she has a total of $33080.00. And for disbursements she has listed $37360.96.

There is also a section where she shows the balances. Checking is $1456.88 and savings is $16081.50 - grand total of $17538.38.

If I've done this correctly, we're short $4,996.25. (if not, what am I missing?)

Example:
Invoice comes in on 12.15.2015 for $3,000. Gets logged in as an expense when invoice arrives.
That $3,000 invoice doesn't get paid until 1.25.2016.

A lot depends on how the transaction got accounted for.

Maybe $3,000 expense and $3,000 payment got recognized in 2015.
Maybe $3,000 expense got recognized in 2015 and $3000 payment got recognized in 2016. That will create a discrepancy.

There's always going to be a cut-off date. And there's always the possibility that one or more transactions get split so that part winds up in one year and the other part winds up in another year.

And just like the 2015/2016 year end, you have to consider what transactions straddled the 2014/2015 year end - because those could also affect the cash analysis you are trying to do.

Judith,

Without seeing the actual spreadsheet, it's difficult to say.
If you're willing to share, I'm willing to take a look at it. My e-mail is [email protected]

In general, the obvious question I would have is (and was expressed by others) the total credits actual physical deposits or only what was expected to be received if everyone paid their assessment in full and on time?

If they were actual deposits, there may be an issue.
If they were what was expected, vs. what is actual, this can explain it.

The second question I would have would be if the expenses listed include placing money into the reserves? If it does, what you provided here doesn't help others answer your question, as you need to look at the two accounts separately.

However, the biggest concern I would have is that actual expenses exceed income. Hence the question: did the expected income equal expected expenses when the budget was proposed and how is the Association making up for the difference (some $4,280)?

Again, if your willing to share, e-mail me the info and I will take a look and give you my opinion.

In lieu of that (or even if you do share), you may want to approach the Treasurer with the question "I'm having a little trouble understanding your report. Can we get together sometime over coffee so you can help me understand it?" Don't ask where the money went. Ask what the numbers mean.