💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

AdamD1 (Indiana)
Posts: 179
Posted:
So we have a newish Board member who does things on his own, unfortunately. Recently, he submitted RFPs to lawn care providers which the scope of work went beyond what the Board has authorized him to seek bids on.

Alternatively, he has always been opposed to a full audit, despite it being in our governing docs that one must be conducted annually. He then would only accept an "Audit Lite" where it wasn't a full audit, and would naturally be at a lower price point. We talked with our attorney who advised us to do a full audit this year, with future audits being the "audit lites". At our April board meeting, he was authorized to seek three bids for the full audit, which presumably he has not done.

Our next Board meeting is tomorrow and on the agenda half way down I have "2017 Financial Audit" as an slated item so we can go over any potential bids that he was supposed to have solicited. The Board member just emailed the Board stating:

"Greetings,
I have ACCOUNTANT, our accountant, coming to the meeting tomorrow evening at BOARD MEETING LOCATION. I told ACCOUNTANT that we would let him talk at the beginning, 7 o'clock and could leave as soon as we got answers to any and all questions regarding the topic of an AUDIT of the HOA finances. I hope that meets with everyone's approval. Thank you."

So he is springing this on us 24 hours before our Board meeting, that is already chock full of agenda items.

How would you proceed?!?!?!?!?
TimB4 (Tennessee)
Posts: 21,059
Posted:
At the meeting, ask the CPA how much an audit would be.
Thank him for his proposal, ask it be put in writing, and let him know the board will let him know when the contract is awarded.

Then, solicit additional bids on your own vs. having the Treasurer do it.
AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By TimB4 on 04/30/2018 2:31 PM
At the meeting, ask the CPA how much an audit would be.
Thank him for his proposal, ask it be put in writing, and let him know the board will let him know when the contract is awarded.

Then, solicit additional bids on your own vs. having the Treasurer do it.

I guess I'm frustrated because that sounds fine on my end, but I'm sure the Board member who invited the accountant will want to ask numerous questions and just eat into valuable time. I was under the impression that since the Board has already voted upon the issue, it is dropped unless it's to present a bid for what the Board approved. Anything else would just be wasting everyone's time!
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Adam

I understand your frustration about a BOD Member arbitrarily inviting the accountant. I myself would be pi$$ed.

With this said, you say are not opposed to an audit so as Tim said, smile and have the accountant give you costs to perform such.

At the end of the BOD Meeting, I would call he BOD into Executive Session and try to place the rogue BOD Member in his place.
AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By JohnC46 on 04/30/2018 7:25 PM
Adam

I understand your frustration about a BOD Member arbitrarily inviting the accountant. I myself would be pi$$ed.

With this said, you say are not opposed to an audit so as Tim said, smile and have the accountant give you costs to perform such.

At the end of the BOD Meeting, I would call he BOD into Executive Session and try to place the rogue BOD Member in his place.

Yes I'm not opposed to the audit. In fact, I was instrumental in pushing for it! I believe the Board member invited the accountant to this meeting to try to persuade us to do the "audit lite" even though our attorney recommends the full audit based upon our governing docs and the fact the Board has already voted for and approved the full audit (this Board member abstained from voting).

It's frustrating because our meetings last a loooooong 2 hours and at our last meeting we didn't even finish the agenda! We already have a chock full one for tomorrow night, and now this yahoo decides to invite our accountant, which you know will take up at least 15 mins if not more. Yeah I'm pissed!

Still haven't responded to the Board member. Waiting to settle my nerves a bit before I start typing up a response.. if I even do write one.
RichardP13 (California)
Posts: 3,868
Posted:
Exactly, who is running the show there? The president is the one who should be setting and finalizing the agenda. Others should have input, but ultimately, one person should decides what is to be discussed.

I have handled a number of audits and unless it is a forensic audit, it is pretty much a review, but with a few more dollars to it. Someone who know HOA accounting can solved what I think you're looking for by a review of the general ledger.
AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By RichardP13 on 04/30/2018 8:15 PM
Exactly, who is running the show there? The president is the one who should be setting and finalizing the agenda. Others should have input, but ultimately, one person should decides what is to be discussed.

I have handled a number of audits and unless it is a forensic audit, it is pretty much a review, but with a few more dollars to it. Someone who know HOA accounting can solved what I think you're looking for by a review of the general ledger.

So would you mind saying what you'd tell to this Board member if you were me?
RichardP13 (California)
Posts: 3,868
Posted:
Adam

Are you the President of the association?
SueW6 (Michigan)
Posts: 814
Posted:
The HOA accountant should not conduct the audit or even find someone to conduct the audit.

You need an outside source to do that.

A full audit EVERY year? That is quite an expense. What size is your HOA and how many members?

AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By RichardP13 on 04/30/2018 10:23 PM
Adam

Are you the President of the association?

Vice president though acting president as our former president resigned a couple months ago. SO, I chair the meetings until a victim... errr.. volunteer decides to join us.
AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By SueW6 on 05/01/2018 4:45 AM
The HOA accountant should not conduct the audit or even find someone to conduct the audit.

You need an outside source to do that.

A full audit EVERY year? That is quite an expense. What size is your HOA and how many members?


Our attorney said this would not be a conflict of interest, since our accountant acts like a neutral third party in our set up.
AdamD1 (Indiana)
Posts: 179
Posted:
Spoke to the Board member.. the hot head.. he cursed at me over the phone and told me that the Board needs to hear the accountant b/c we do not need a full audit. Despite the Board discussing this item for the past few months and voted for the full audit. I told him we can't keep rehashing items the board has already voted upon. This is going to be a nightmare tonight. Wish me luck!
BarbaraT1 (Texas)
Posts: 821
Posted:
Your board member is behaving inappropriately, and you did the right thing. He needs to be relieved of the job of getting bids on anything, since he has proved himself incapable of following any agenda other than his own.

If there are homeowners at the meeting, it might be interesting to ask him to explain for the record why he is so vehemently opposed to an audit. Is he trying to hide something? There is no such thing as an "audit lite". That's a review, and it would only verify the math of your financials and doesn't audit anything except the accountant's ability to do arithmetic.
JanetB2 (Colorado)
Posts: 4,219
Posted:
So what happened at the meeting???
AdamD1 (Indiana)
Posts: 179
Posted:
Quote:
Posted By JanetB2 on 05/02/2018 9:35 PM
So what happened at the meeting???

UPDATE: The accountant was there on time and I suggested we spend 10 to 15 minutes to entertain his "sermon" then we would just have a late start for our regular meeting. The accountant took about 20 or so minutes to explain he believes a full audit is not needed for our HOA (funny thing, he said ethically he couldn't do it for us since it would be a conflict of interest). So naturally he proposed a "Financial Review" which he CAN do (and charge us for) which isn't as thorough as the full audit.

I was polite and so were the other Board members, thanked him for coming, then moved on with the agenda. When the agenda item of "Audit" came up, the Board member tried to persuade the Board to do the Financial Review. We reminded him our attorney suggested we do a full audit now, then an "audit lite" thereafter.

The Board member became rather irate, and while he didn't curse (like he did with me on the phone) he was very aggressive with the two other Board members who tried to explain why the Board decided what it did. At best, he was rude. At worst, he was aggressively confrontational. I just let them hash it out (the other Board members remained cool as a cucumber) so it would show the true colors of that Board member.

Ultimately, nothing has changed. A full audit is slated and I requested our PM procure 3 bids for the service, not our irate Treasurer/Board member.

THANK YOU SO MUCH FOR ALL OF YOUR ADVICE!!!!
BenA2 (Texas)
Posts: 1,273
Posted:
I don't see a big problem with allowing the accountant to speak but I would not allow it. I would respond to the board member that you would like to stick to the already full agenda and that the accountant presentation is not on the agenda.

If guests are normally allowed at meetings, there is nothing wrong with the accountant attending but I would not allow the presentation. If a question comes up and you know there is an accountant present, there is nothing wrong with asking their opinion.

I also would not accept a bid from an accountant before you solicited any.
GenoS (Florida)
Posts: 4,276
Posted:
Quote:
Posted By AdamD1 on 05/03/2018 8:09 AM
I just let them hash it out (the other Board members remained cool as a cucumber) so it would show the true colors of that Board member.

That's the way to do it.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Quote:
Posted By AdamD1 on 05/03/2018 8:09 AM
Posted By JanetB2 on 05/02/2018 9:35 PM
So what happened at the meeting???


UPDATE: The accountant was there on time and I suggested we spend 10 to 15 minutes to entertain his "sermon" then we would just have a late start for our regular meeting. The accountant took about 20 or so minutes to explain he believes a full audit is not needed for our HOA (funny thing, he said ethically he couldn't do it for us since it would be a conflict of interest). So naturally he proposed a "Financial Review" which he CAN do (and charge us for) which isn't as thorough as the full audit.

I was polite and so were the other Board members, thanked him for coming, then moved on with the agenda. When the agenda item of "Audit" came up, the Board member tried to persuade the Board to do the Financial Review. We reminded him our attorney suggested we do a full audit now, then an "audit lite" thereafter.

The Board member became rather irate, and while he didn't curse (like he did with me on the phone) he was very aggressive with the two other Board members who tried to explain why the Board decided what it did. At best, he was rude. At worst, he was aggressively confrontational. I just let them hash it out (the other Board members remained cool as a cucumber) so it would show the true colors of that Board member.

Ultimately, nothing has changed. A full audit is slated and I requested our PM procure 3 bids for the service, not our irate Treasurer/Board member.

THANK YOU SO MUCH FOR ALL OF YOUR ADVICE!!!!


Sounds like you all handled it well.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here