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Can Members request Bank Account records?

Started by AdamL1 • 12 replies • 712 views

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AdamL1 (UnitedStates)
Posts: 559
Posted:
Wondering if this is beyond the scope of normal HOA records available to members. I've started to notice some 'odd' transactions on old financial statements, like a $9000 line item that says "other account" that then disappears from balance sheet, never to be accounted for again.

I'm wondering if its within my rights as a member to get the bank account #'s and monthly statements to do some investigation about where these transactions are going.

What do you think? I expect the Directors and Officers will circle the wagon and stonewall me when I ask about this level of detail.
BarbaraT1 (Texas)
Posts: 821
Posted:
Bank statements are a reasonable request.

But you may want to ask about the $9,000 first. It’s not uncommon for items to appear on a balance sheet one month and not the next. Where it went wouldn’t appear on the balance sheet but would be reflected in the general ledger.
KerryL1 (California)
Posts: 14,550
Posted:
It also depends on the a state in which you live. It seems like most permit Owners to have access to such statement. But you may have to put your request in writing, you may have to stat why you want them.

Your bylaws or CC&Rs might also jhae something about records requests.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Adam if one just requests all bank statement it might be considered a witch hunt and could be denied. I suggest you just chase one expenditure at a time.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By AdamL1 on 02/11/2022 9:47 AM
Wondering if this is beyond the scope of normal HOA records available to members. I've started to notice some 'odd' transactions on old financial statements, like a $9000 line item that says "other account" that then disappears from balance sheet, never to be accounted for again.

I'm wondering if its within my rights as a member to get the bank account #'s and monthly statements to do some investigation about where these transactions are going.

What do you think? I expect the Directors and Officers will circle the wagon and stonewall me when I ask about this level of detail.
The only statute that I think is applicable here is the Idaho Nonprofit Corporation Act. By my reading, the only financial records the HOA corporation is obliged to maintain, and which you are entitled to inspect, are "appropriate accounting records." In my opinion, this does not include bank statements.

Hey, I thought you had gotten the hang of checking the nonprofit corporation statutes for any given state? Was there something in the statute you did not understand?

AdamL1 (UnitedStates)
Posts: 559
Posted:
that's what I'm looking for opinion about....is tracking down and cross-checking bank statements part of "appropriate accounting records"....its a bit of a grey zone.
AugustinD
Posts: 3,698
Posted:
Quote:
Posted By AdamL1 on 02/11/2022 3:34 PM
that's what I'm looking for opinion about....is tracking down and cross-checking bank statements part of "appropriate accounting records"....its a bit of a grey zone.
To me, bank statements are not accounting records. Instead, bank statements are part of the raw data that may support the accounting records.

You can certainly ask for the last 12 months or so of bank statements, citing the "accounting records" statute sections. The HOA can say no or, who knows? Maybe the HOA will hand them over.

I do not know why you need the account numbers. I would not blame the HOA for redacting them.
AugustinD
Posts: 3,698
Posted:
I take back my prior post. I googled for whether a proper definition of "accounting records" includes bank statements. It appears so. E.g. see https://www.accountingtools.com/articles/2017/5/7/accounting-records

But the HOA may still resist by saying, "The HOA does not consider bank statements to be 'appropriate accounting records'." There's some wiggle room for the HOA.

Do your Bylaws or CCRs say more about the records to which you are entitled?
BillD16 (Texas)
Posts: 971
Posted:
Quote:
Posted By AdamL1 on 02/11/2022 9:47 AM
Wondering if this is beyond the scope of normal HOA records available to members. I've started to notice some 'odd' transactions on old financial statements, like a $9000 line item that says "other account" that then disappears from balance sheet, never to be accounted for again.

I'm wondering if its within my rights as a member to get the bank account #'s and monthly statements to do some investigation about where these transactions are going.

What do you think? I expect the Directors and Officers will circle the wagon and stonewall me when I ask about this level of detail.

I don’t know the specifics of your situation, but I’m a Treasurer and I get Financial statements from our PMC and I actively look for ‘unusual’ items like you describe. I don’t know what The Law says about it, but if you came to me asking about a questionable $9000 line item, you would command my undivided attention and I would get you an answer.

That’s just me - if you’ve got a Board that’s doing something questionable with the HOA accounts, I dunno. I think Barbara mentioned asking the Board about the specific transaction? And that seems like a good place to start.

BillD
HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”
PatJ1 (North Carolina)
Posts: 568
Posted:
- Was the "other account" an Asset or a Liability Account?
- Keep in mind that a bank statement is not a tell all. Adjustments within Balance Sheet accounts do not always show up in bank statements.

True story - Our water bills were usually around $4,500/month. In reviewing our monthly F/S, I noticed a huge spike one month. Summer months bring higher bills, but not that high. I asked to see records, wasn't specific enough, and was presented with useless information. I was later appointed to the board. During our audit, our utility bills were flagged with a question by the accountant.

Internal audit found a $4,500 payment to our water utility was posted to someone else's account. We brought this finding to the utility thinking the $ was long gone, 1 year later the utility corrected their error and posted the payment to our account.

We could have recorded that "expected" refund on our B/S to keep track of it with another entry to an expense item. This skews budget amounts for current year, but it's not forgotten about. Once utility posted the payment, the recording on our balance might seem to someone to have disappeared.
LaskaS (Texas)
Posts: 1,025
Posted:
pat great job!. i love that you followed up and all the way through.

I can't tell you how many times board members volunteer to do something, and the first roadblock they come to, the drop the ball and it's never discussed again. uggggggggggggggggggg
LaskaS (Texas)
Posts: 1,025
Posted:
pat great job!. i love that you followed up and all the way through.

I can't tell you how many times board members volunteer to do something, and the first roadblock they come to, the drop the ball and it's never discussed again. uggggggggggggggggggg
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
We provide bank statements pdf, etc on our how google drive. if someone is doing something shady, we want it to be found.

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