Where's the money?

Started by DennisG7 • 9 replies • 571 views

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DennisG7 (Georgia)
Posts: 155

Posted:

Our Community Club House suffered some roof and water damage recently. The insurance folks came out and looked at it and sent the HOA a check for about $12-$14K ( Not sure about the amount as it has not been made public). Anyway, the repairs have been made and everything appears to be back in order. What I have not found is where this insurance settlement and payment to the HOA shows up in any of our income statements. When a check/settlement is made to the HAO shouldn't it appear in out monthly income/expense report? Also, there is no record of any payments made to the contractor(s) that did the work.

Before I go off half-cocked I wanted to get your thoughts on this. Are insurance settlements not counted as income? Are repairs costs not counted as an expense?
Thanks.
DennisG

NpS (Pennsylvania)
Posts: 4,216

Posted:

Only thing I can think of is that the settlement amount and the repair payments were processed through the Reserve account instead of the Operating account. If so, might not show up in income statements you typically get.

Sikubali jukumu. Read all posts at your own risk.

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By DennisG7 on 07/29/2019 5:13 AM
Our Community Club House suffered some roof and water damage recently. The insurance folks came out and looked at it and sent the HOA a check for about $12-$14K ( Not sure about the amount as it has not been made public). Anyway, the repairs have been made and everything appears to be back in order. What I have not found is where this insurance settlement and payment to the HOA shows up in any of our income statements. When a check/settlement is made to the HAO shouldn't it appear in out monthly income/expense report? Also, there is no record of any payments made to the contractor(s) that did the work.

Before I go off half-cocked I wanted to get your thoughts on this. Are insurance settlements not counted as income? Are repairs costs not counted as an expense?
Thanks.
DennisG

The check would be deposited into the account for which the payments were made. Depending on your situation, the payments could have been made straight out of the reserve account.

SheliaH (Indiana)
Posts: 6,964

Posted:

In our community, the money would likely be deposited in reserves and then the repairs paid that way, and that's where you'd see it and the repairs.
Try looking in that portion of your income/expense account first. If you still don't see it or have questions, go to your BOARD and ask them for details on the transaction. Why haven't you already done that anyway?

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This isn't income and shouldn't be reported as such. Like everyone else, it's probably in your reserves account. What are you suspicious of? A board member cashing the check and paying out of their own pocket? Otherwise, it looks like the issue was fixed and everyone paid. Of course the HOA should show the deductible they paid to the insurance company. That too should be in Reserves.

Former HOA President

RichardP13 (California)
Posts: 3,868

Posted:

Quote:

Posted By MelissaP1 on 07/29/2019 4:50 PM
This isn't income and shouldn't be reported as such. Like everyone else, it's probably in your reserves account. What are you suspicious of? A board member cashing the check and paying out of their own pocket? Otherwise, it looks like the issue was fixed and everyone paid. Of course the HOA should show the deductible they paid to the insurance company. That too should be in Reserves.

Sorry, it is recorded as income to offset the expense. There wouldn't be deductible shown, as it is deductible from the proceeds.

If you don't know how this is done, I wouldn't be giving incorrect information.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By MelissaP1 on 07/29/2019 4:50 PM
This isn't income and shouldn't be reported as such.

It is absolutely income. Just not income in the Operating account.

Financial Reporting for the Reserve account is just like it is for the Operating account.
There's a Balance Sheet. There's also a Statement of Income and Expense.

If the OP wants to see the money coming in (income) and the money going out (expense) on the Reserve Account, then he should ask for the Statement of Income and Expense for the Reserve Account.

Sikubali jukumu. Read all posts at your own risk.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By MelissaP1 on 07/29/2019 4:50 PM
This isn't income and shouldn't be reported as such.

Roll Tide.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By GenoS on 07/29/2019 7:03 PM
Roll Tide.

Roll Over Beethoven.

Sikubali jukumu. Read all posts at your own risk.

DennisG7 (Georgia)
Posts: 155

Posted:

OK. I need to do a little more research. I'm NOT suggesting that a BOD member cashed a check. We have spent thousands of dollars on projects and trying to track the money is sometimes very difficult. The BOD and management company refuse to audit our books, which has never been done in the 18 years we have been around, that's nearly $2,000,000. This is a BIG check and I can't seem to find any record of it. Perhaps it is in the Reserve Account. Thanks again.
DennisG

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