Budget Item Question

Started by PegM1 • 8 replies • 536 views

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PegM1 (Pennsylvania)
Posts: 26

Posted:

Our HOA budget has a new item added in August 2020. In the HOA August 2020 Income/Expense financial statement it is shown as a Professional Services expense and is named "Employee Incentive Expense." Our HOA has no employees but we do have a contract with a management company. Has anyone ever seen this type of item, or something similar, in their financial statements? I'm just trying to figure out what it may pertain to. I have reached out and asked our Finance committee and treasurer but cannot get a response. Any insight or information is greatly appreciated, thank you!

AugustinD
Posts: 5,144

Posted:

-- I have not seen such a line item. I have seen line items for bona fide employees of a HOA to attend several day conferences in another state.

-- If there are no employees (as federal law defines employees for tax purposes), then the line item is poorly named, in my opinion.

-- How much is this expense? I would ask the Board at the next open meeting to whom this money is being paid.

-- I suppose it is possible the management company changes its contract and added this to the contract. But if so, I would think this would go into whatever line item covers contractual expenses of the management company.

-- Some boards get cozy with staff, in a one-hand-washes-the-other kind of way. The director speaks highly of staff member X. Staff member X bends rules to ensure the director is re-elected.

ND (PA)
Posts: 792

Posted:

We could all speculate, but the only way for you to know for sure is to get answers to your question from people directly involved in your HOA who do or should know the answer.

If you've been patient for a while with Treasurer and whoever you contacted on Finance Committee, but answers aren't coming quickly enough for your needs, then reach out to any or all of the following with the same questions . . . the Management Company, HOA Board, and/or other HOA Officers.

JohnC77 (California)
Posts: 562

Posted:

It could be a mistake. Depending on the brand of HOA specific software your management company is using, they could have added the wrong line item from a canned chart of accounts.

Are there any monies being budgeted to that line item?

PegM1 (Pennsylvania)
Posts: 26

Posted:

Over $10,000 is budgeted.

JohnC77 (California)
Posts: 562

Posted:

There should be absolutely no excuse why you couldn't get a simple answer to a simple question. It's your money, as well as your neighbors.

I would first ask the board, then the management company. If the answer is fishy, I personally would take alternate steps.

PegM1 (Pennsylvania)
Posts: 26

Posted:

AugustinD:

A belated thank you. You always respond with such helpful insight. It is appreciated!

AugustinD
Posts: 5,144

Posted:

PegM1, I appreciate your kind words. Take care, Augie

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