HOA audit levels and costs?

Started by JdW • 7 replies • 612 views

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JdW (Texas)
Posts: 40

Posted:

From what I understand, most HOAs do "compilation" audits as they are much cheaper than Review and (real) Audits.

I am seeking comments on other board experiences with the different audit levels and the costs and the processes involved to get documents to a CPA.

TimB4 (Tennessee)
Posts: 21,061

Posted:

We do financial reviews with a cpa.

No issues getting documents back and forth, email is your friend.

If I recall correctly, the cost was around $2,500. 130lots,self managed, excel for tracking payments.

For others who may not know the differences between an compilation, review or audit, see the following thread:
Subject: Financial Audits, Reviews or Compilation Which do you use? (old thread, links within that thread may or may not work)

SheliaH (Indiana)
Posts: 6,964

Posted:

Our experience is similar to Tim's. I don't remember the cost, as I've been off the board for some time, but we have a property manager who makes sure the auditor gets whatever's needed.

Once you've decided what type of audit you want (reading the article Tim mentioned is a start), keep in mind the cost will also depend on the services your community provided and it's size. The more services and the bigger the community, the more money may be involved. Of course, you must do your due diligence by asking for references and checking them, checking if complaints have been filed and how they were resolved.

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

AugustinD
Posts: 3,698

Posted:

JdW, from prior threads of yours, this is a condominium, correct? At one of my condominiums, around 2016 the cost of a non-full blown audit was over $11,000. I think it was a "financial review" that was done. The CPA was a polite, just the facts kind of gal. I thought her input was excellent.

I would expect a CPA's inspection of the books (at whatever level; compilation, review, audit) requires a lot more time and effort for condominiums compared to single family home HOAs. This is due to the infrastructure being more extensive and complicated at a condominium.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By JdW on 09/03/2021 12:09 PM
From what I understand, most HOAs do "compilation" audits as they are much cheaper than Review and (real) Audits.

I am seeking comments on other board experiences with the different audit levels and the costs and the processes involved to get documents to a CPA.

Our audits cost approximately $1,500 per year to keep us in compliance. Depends on the state and the complexity of your HOA organization

MaxB4
Posts: 3,513

Posted:

There are essentially four types of HOA reviews:

1. Compilation
2. Review
3. Audit
4. Forensic Audit

In California, unless the governing documents state otherwise, a review is required if the annual gross income is over $75K.

Here is a link to an article, How much does an HOA audit cost? 5 Tips to lowering your fees. https://hoatax.com/how-much-does-an-hoa-audit-cost/

My associations pay $1500 for the review and $2000 if the CPA is doing the taxes also.

KerryL1 (California)
Posts: 14,550

Posted:

We have an Audit done every year on a fairly complex budget with three reserve accounts. This year it cost $1,536.

AugustinD
Posts: 3,698

Posted:

Regarding the high (relative to others) cost of the CPA's financial review to which I alluded above: I wonder if it was so high ($11,000, give or take), because in the 25 year history of the condo, the condo had never had a CPA do any kind of compilation, review or audit.

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