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HOA is lying about budget

Started by JeremyM3 • 11 replies • 1068 views

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JeremyM3 (North Carolina)
Posts: 122
Posted:
Our HOA recently sent out the 2018 Budget, and included a copy of the 2017 Budget to Actual Expenses. Along with an expense statement for 2017.

The problem is, on the expense statement, there's a line item saying we spent $2705 in legal fees for the year. On the 2017 Budget under "Actuals" it says we spent $0.

I've raised this issue to the Board and they ignore me. I've posted the information on our community Facebook group, and they've deleted my post and switched the group to requiring Admin approval for all posts.

Here are the 2 pages in pictures so you can see for yourself:
Expense Statement: https://i.imgur.com/AaFo3kN.png
Budget: https://i.imgur.com/HlHHZaN.png

What would you do in this situation?
JeremyM3 (North Carolina)
Posts: 122
Posted:
Our "Net Income" on our budget is wrong also because of this. It's showing a much higher # than in reality.

Also is an HOA even allowed to have income?
TimB4 (Tennessee)
Posts: 21,061
Posted:
Quote:
Posted By JeremyM3 on 12/08/2017 2:02 PM

What would you do in this situation?

I'd exercise my right and ask to see the invoices for the checks written.

However, I would also approach the situation with an attitude that I'm simply not understanding the documents vs. accusing the volunteers who put the reports together are lying.

DouglasM6 (Arizona)
Posts: 724
Posted:
Quote:
Posted By TimB4 on 12/08/2017 2:26 PM
Posted By JeremyM3 on 12/08/2017 2:02 PM

What would you do in this situation?


I'd exercise my right and ask to see the invoices for the checks written.

However, I would also approach the situation with an attitude that I'm simply not understanding the documents vs. accusing the volunteers who put the reports together are lying.


Agreed, it's all in the delivery.
RichardP13 (California)
Posts: 3,868
Posted:
The two don't match up, why? The numbers were taken from two different times. Look closely at ALL the numbers.
BenA2 (Texas)
Posts: 1,273
Posted:
"Also is an HOA even allowed to have income?"

Income is any money coming in to the HOA so they have to have income.

There are some standards in doing financial reports but they can be different. I agree with approaching this with the attitude that you may not understand the reports and give them the opportunity to explain it.
JeremyM3 (North Carolina)
Posts: 122
Posted:
Richard, please point out my error because I'm still not seeing it. I believe you are mistaken.
RichardP13 (California)
Posts: 3,868
Posted:
Based on what I see, the budget for 2018 was prepared in August 2017 while the revenue and expense statement is through 12/6/2017. So legal could have occurred AFTER August. Put the two side by side.
JeremyM3 (North Carolina)
Posts: 122
Posted:
Quote:
Posted By RichardP13 on 12/08/2017 5:46 PM
Based on what I see, the budget for 2018 was prepared in August 2017 while the revenue and expense statement is through 12/6/2017. So legal could have occurred AFTER August. Put the two side by side.

I'm looking at them side by side. Where do you see the budget was prepared in August 2017? I don't see "August" or an "8 for August" date in either picture.
RichardP13 (California)
Posts: 3,868
Posted:
In addition, you income for assessments is based on accruals, not actuals. Expenses are actuals, thus you have a modified accrual bookkeeping systems.
JeremyM3 (North Carolina)
Posts: 122
Posted:
I now see why you say the budget was done in August. Thank you.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By JeremyM3 on 12/08/2017 2:02 PM
Our "Net Income" on our budget is wrong also because of this. It's showing a much higher # than in reality.

Also is an HOA even allowed to have income?

As Ben mentioned, of course the HOA has income, profit is what it isn't supposed to have.
Escaped former treasurer and director of a self managed association.

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