Accounting Questions

Do you have a reserve fund? If so, it should list the reserve items, so you should check whether the tanks were listed as reserve items. Is this the first time these tanks were replaced, if not, what did tbe board do last time- check your records.

Most of us aren't attorneys or accountants, although there may be some to give you suggestions. I'd suggest sending a private message so he or she could look at a sample ledger, balance sheet and income/expense statement to see what you have. Otherwise, Without looking at any paperwork, I don't know if you get an answer that will help you.

You may be a small HOA, but if you're making purchases like this and don't have a clue where or how to record them in your records, you need to bite the bullet and get an accountant to help you set up a system.

The community association institute website has a number of education materials on many HOA subjects like reserves, HOA finances,, budgeting and more. Invest in a few and everyone shoukd have a look, especially the bookkeeper. Everyone should have their own copy and after you read yours, do some googling for accounting or bookkeeper services in your area and get some quotes. Look for someone who works with HOAs.

in addition to providing consulting services, he or she could provide assistance on setting up computer program to keep up with everything - you can use something like excel, quickbooks or access to save money. You'll also need procedures and protocols to protect the association against fraud and embezzlement, as well as preserving records and be able to pass tye information along to whoever will do tge work after the bookkeeper/treasurer gives up the job (I'll assume that's you).

ShielaH: Yes, we have a Reserve fund, and the tanks were listed. I've already checked our records, and with previous board members,. and this is the first time they were purchased, hence the question.

We already have an accounting system and use QuickBooks. All previous entries, however, have been basic operating purchases or normal HOA income types such as fees, interest, Entrance Fees, etc.. We are 23 years old and are just now in the phase of: Major Repairs and Maintenance

Yes, I know we may need to hire someone and I mentioned that in my question text but wanted to try this first.

I will try 'The community association institute website' This is great info. Thanks. We are in a very rural part of the state. No Accounting firm has HOA experience. I will travel if necessary of course, but again, am giving this a shot first. Our problem with the remaining board members (2 others) and owners is NONE of them want to know anything about our finances (yes, I know!) I DO, HOWEVER, PRINT OUT THE FINANCIALS EACH MONTH, WITH FOOTNOTES. EACH YEAR, I PREPARE AND PUBLISH OUR BUDGET, WITH A 5 YEAR MAINTENANCE PLAN, AND 5 YEAR RESERVE PLAN AND PRESENT THEM FOR APPROVAL AT OUR ANNUAL MEETING.

We lost everyone and there was nothing in place to guide us so we basically started from scratch. To give you an idea of what we've done to get off to a 'fresh' start blessed both by a one time Accountant (virtual-too far away) and our local Attorney, this is what We've done thus far. We set up an Accounting system on QuickBooks and have input all prior year manually prepared records and tied them to our previous year tax submissions. We created year end financials for each year and created a balanced budget for this new current year (my 1st year). We also completed an internal audit of our accounting records resulting in the dismissal of the previous board (via our Attorney and their self assessment). Only the former Treasurer remains here as an owner. We've also prepared our taxes which, thus far, have been simple. We also wrote fiscal policies and procedures with strong internal controls. All were reviewed by the Accountant we hired to ensure we were getting off to the right start who said they were more than sufficient. These policies promote transparency and full disclosure to all owners, and since we are so small, each owner has an individual equal vote for all major expenditures and decisions to include vendor selection if necessary (there aren't many). We also wrote an amendment to include the fiscal policy and procedures so that they are required to be adhered to. We've adhered to GAAP and state condo mandates.

Additionally, We wrote amendments regarding dogs and plantings/decorations so that we are a much less restrictive HOA (than our counterparts in the state). Our Attorney has blessed all such amendments including the policy and procedures.

I appreciate your help.

ShielaH: Yes, we have a Reserve fund, and the tanks were listed. I've already checked our records, and with previous board members,. and this is the first time they were purchased, hence the question.

We already have an accounting system and use QuickBooks. All previous entries, however, have been basic operating purchases or normal HOA income types such as fees, interest, Entrance Fees, etc.. We are 23 years old and are just now in the phase of: Major Repairs and Maintenance

Yes, I know we may need to hire someone and I mentioned that in my question text but wanted to try this first.

I will try 'The community association institute website' This is great info. Thanks. We are in a very rural part of the state. No Accounting firm has HOA experience. I will travel if necessary of course, but again, am giving this a shot first. Our problem with the remaining board members (2 others) and owners is NONE of them want to know anything about our finances (yes, I know!) I DO, HOWEVER, PRINT OUT THE FINANCIALS EACH MONTH, WITH FOOTNOTES. EACH YEAR, I PREPARE AND PUBLISH OUR BUDGET, WITH A 5 YEAR MAINTENANCE PLAN, AND 5 YEAR RESERVE PLAN AND PRESENT THEM FOR APPROVAL AT OUR ANNUAL MEETING.

We lost everyone and there was nothing in place to guide us so we basically started from scratch. To give you an idea of what we've done to get off to a 'fresh' start blessed both by a one time Accountant (virtual-too far away) and our local Attorney, this is what We've done thus far. We set up an Accounting system on QuickBooks and have input all prior year manually prepared records and tied them to our previous year tax submissions. We created year end financials for each year and created a balanced budget for this new current year (my 1st year). We also completed an internal audit of our accounting records resulting in the dismissal of the previous board (via our Attorney and their self assessment). Only the former Treasurer remains here as an owner. We've also prepared our taxes which, thus far, have been simple. We also wrote fiscal policies and procedures with strong internal controls. All were reviewed by the Accountant we hired to ensure we were getting off to the right start who said they were more than sufficient. These policies promote transparency and full disclosure to all owners, and since we are so small, each owner has an individual equal vote for all major expenditures and decisions to include vendor selection if necessary (there aren't many). We also wrote an amendment to include the fiscal policy and procedures so that they are required to be adhered to. We've adhered to GAAP and state condo mandates.

Additionally, We wrote amendments regarding dogs and plantings/decorations so that we are a much less restrictive HOA (than our counterparts in the state). Our Attorney has blessed all such amendments including the policy and procedures.

I appreciate your help.

You have a reserve fund for a reason. It is not uncommon for reserve funds to go to zero when you have large expenditures for roof replacement ect. Your reserve study should account for this with sufficient contributions going forward to replenish the funding for future needs.

I am not an accountant but I will tell you what I do.

3) Buildings equipment and improvements are collectively owned by all the members of the association not the HOA so they are not an asset. The HOA is there to maintain the common ownership.

2) Expensed. You should have two expense categories set up one from your operating budget (like Roof Repair) and the other for your reserve budget like (Roof Replacement). What you describe should come out of your reserve account if you saved up for it

Debit Credit
Roof Replacement 12.500
Reserve Account 12.500

I allocate my reserves to an equity account so the balance should be adjusted. Retained Earnings is also an equity account

Debit Credit
Retained Earnings 12,500
Restricted Reserves - Roof Replacement 12,500

When you close out the year your income summary will wipe out the retained earnings

1) Expensed