LydiaW (Maryland)
Posts: 6
Posts: 6
Posted:
I was wondering if anyone knows a HOA auditing firm that practices in the Maryland, Washington, DC or Virginia area? any advice will be greatly appreciated.
Thank you,
Thank you,
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HOA Auditors
Started by LydiaW • 14 replies • 334 views
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NA1 (Massachusetts)
Posts: 190
Posts: 190
Posted:
Do you know board members of some neigboring HOAs that might be able to help?
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
What NA1 said. You could also Google HOA auditors to see who's in your area. Since HOAS are non 0r9fit organizations, an accounting firm with experience working with non-profit organizations may also becable to help you.
PS - we're not allowed to use the names of actual vendors or communities (read the posting rules on the upper right side of the first page).
PS - we're not allowed to use the names of actual vendors or communities (read the posting rules on the upper right side of the first page).
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Lydia,
I would use the language "Forensic Audit" when looking. We had one done in my Cal. HOA. I did not think it was needed personally but we decided as a board to get it done about 10 years ago. It was not as expensive as I thought it would be. If I recall it costs us about 4K for a just under 1 million annual budget.
Good Luck
I would use the language "Forensic Audit" when looking. We had one done in my Cal. HOA. I did not think it was needed personally but we decided as a board to get it done about 10 years ago. It was not as expensive as I thought it would be. If I recall it costs us about 4K for a just under 1 million annual budget.
Good Luck
LoriM15 (Florida)
Posts: 1,009
Posts: 1,009
Posted:
Unless you are looking to verify some kind of illegal activity, you don't need or want a forensic audit. They cost a fortune, take a lot of time, and are usually unnecessary.
We have an audit of our finances done each year, just like any normal public business would. We use a CPA firm that has a person who specializes in non-profits (HOAs, COAs, schools, charities). Most larger CPA firms have a company that does this. It's good practice as an annual audit can uncover some issues with missing funds or unwise practices (like cash handling or credit cards).
In Florida, both COAs and HOAs with revenues over $500,000 are required to get audited financial statements. It's not cheap, but I consider it a "CYA" for the board in case anyone accuses us of mishandling funds.
We have an audit of our finances done each year, just like any normal public business would. We use a CPA firm that has a person who specializes in non-profits (HOAs, COAs, schools, charities). Most larger CPA firms have a company that does this. It's good practice as an annual audit can uncover some issues with missing funds or unwise practices (like cash handling or credit cards).
In Florida, both COAs and HOAs with revenues over $500,000 are required to get audited financial statements. It's not cheap, but I consider it a "CYA" for the board in case anyone accuses us of mishandling funds.
MarkM19 (Texas)
Posts: 1,459
Posts: 1,459
Posted:
Lori,
Sorry but I disagree with using the PMCs auditor. Remember when Authur Anderson CPA reviewed the books of Enron for years? When the auditor is that close to the PMC it is nothing more than a glance at the books and a stamp of approval. This normally gets done annually as you stated. If the board has any questions about the book a third unaffiliated party should be hired that takes a deeper look.
We really only know the very minimal details about this case. If it is serious I would see if the board wanted a forensic review and if it is just a second opinion, I would select a outside vendor.
Sorry but I disagree with using the PMCs auditor. Remember when Authur Anderson CPA reviewed the books of Enron for years? When the auditor is that close to the PMC it is nothing more than a glance at the books and a stamp of approval. This normally gets done annually as you stated. If the board has any questions about the book a third unaffiliated party should be hired that takes a deeper look.
We really only know the very minimal details about this case. If it is serious I would see if the board wanted a forensic review and if it is just a second opinion, I would select a outside vendor.
LoriM15 (Florida)
Posts: 1,009
Posts: 1,009
Posted:
Sorry if there was some confusion on my post. We don't use any auditor associated with our PM. We hire an outside audit firm.
Audits are not fool proof. I was on the board of a large non-profit where we discovered the CFO was using the organization credit card for many private expenses and he also set up a dummy company and ran some renovations through it, doubling the expenses. There was an audit done every year and they didn't catch it. If your internal controls aren't any good, your audit isn't going to be either.
Audits are not fool proof. I was on the board of a large non-profit where we discovered the CFO was using the organization credit card for many private expenses and he also set up a dummy company and ran some renovations through it, doubling the expenses. There was an audit done every year and they didn't catch it. If your internal controls aren't any good, your audit isn't going to be either.
TimB4 (Tennessee)
Posts: 21,061
Posts: 21,061
Posted:
Lydia,
If I recall correctly, you started this search at the end of 2022.
Did you ever find one a year ago?
If I recall correctly, you started this search at the end of 2022.
Did you ever find one a year ago?
LydiaW (Maryland)
Posts: 6
Posts: 6
Posted:
Hi everyone, I appreciate all of your feedback.
Tim84, I have received proposal from two companies that weren’t affordable for my community - $5000 per audit. We’re a small community with 198 homes with two parks (1 playground) and a small budget. The cost of audits have gone up tremendously. We were paying $1600 3 years ago and now the cost is $5000 per audit.
Tim84, I have received proposal from two companies that weren’t affordable for my community - $5000 per audit. We’re a small community with 198 homes with two parks (1 playground) and a small budget. The cost of audits have gone up tremendously. We were paying $1600 3 years ago and now the cost is $5000 per audit.
TimB4 (Tennessee)
Posts: 21,061
Posts: 21,061
Posted:
Unless an audit is required, you might ask for a financial review.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
You may want to look a bit more. Also see what details you really need for the audit. Maybe there are less options since only had an audit not long ago. Maybe a health check type audit that maybe do not need a lifespan numbers on equipment.
It is higher now but maybe look for smaller firms.
It is higher now but maybe look for smaller firms.
Former HOA President
WendyM5 (North Carolina)
Posts: 1,522
Posts: 1,522
Posted:
you can get hundreds of quotes by using freelance websites.
for example post something like this:
I am president of a non profit Home Owners Association, with annual finances of approximately $xxx,000. We need to hire a company to do a financial audit. Attached is a sample monthly report we get from our management company. We would need 12 of these, a years worth, audited.
also attached is an excel cvs detailed general ledger file (ask mgt company for this!)
The monthly report is pretty long since we have xxx accounts and pay xxxx utility companies and vendors, but it is pretty straight forward. Attached is a sample one month report.
Please give approximate price for such a service.
We are not worried about misuse of funds, but if you catch anything that would be greatly appreciated. Our bylaws require us to do this yearly.
you can get overseas companies to do an audit for $500. if your bylaws require someone local or CPA then you can filter the possible freelancers by seraching for VA or DC or whatever. takes some time, but might be worth the savings.
for example post something like this:
I am president of a non profit Home Owners Association, with annual finances of approximately $xxx,000. We need to hire a company to do a financial audit. Attached is a sample monthly report we get from our management company. We would need 12 of these, a years worth, audited.
also attached is an excel cvs detailed general ledger file (ask mgt company for this!)
The monthly report is pretty long since we have xxx accounts and pay xxxx utility companies and vendors, but it is pretty straight forward. Attached is a sample one month report.
Please give approximate price for such a service.
We are not worried about misuse of funds, but if you catch anything that would be greatly appreciated. Our bylaws require us to do this yearly.
you can get overseas companies to do an audit for $500. if your bylaws require someone local or CPA then you can filter the possible freelancers by seraching for VA or DC or whatever. takes some time, but might be worth the savings.
vis ta vie
DeanJ
Posts: 1,786
Posts: 1,786
Posted:
Quote:
Posted By LoriM15 on 03/01/2024 8:17 AM
Unless you are looking to verify some kind of illegal activity, you don't need or want a forensic audit. They cost a fortune, take a lot of time, and are usually unnecessary.
We have an audit of our finances done each year, just like any normal public business would. We use a CPA firm that has a person who specializes in non-profits (HOAs, COAs, schools, charities). Most larger CPA firms have a company that does this. It's good practice as an annual audit can uncover some issues with missing funds or unwise practices (like cash handling or credit cards).
In Florida, both COAs and HOAs with revenues over $500,000 are required to get audited financial statements. It's not cheap, but I consider it a "CYA" for the board in case anyone accuses us of mishandling funds.
Unless you are looking to verify some kind of illegal activity, you don't need or want a forensic audit. They cost a fortune, take a lot of time, and are usually unnecessary.
We have an audit of our finances done each year, just like any normal public business would. We use a CPA firm that has a person who specializes in non-profits (HOAs, COAs, schools, charities). Most larger CPA firms have a company that does this. It's good practice as an annual audit can uncover some issues with missing funds or unwise practices (like cash handling or credit cards).
In Florida, both COAs and HOAs with revenues over $500,000 are required to get audited financial statements. It's not cheap, but I consider it a "CYA" for the board in case anyone accuses us of mishandling funds.
Just because you had a clean audit of the financial records does not mean the board didn’t steal any money. It just means they weren’t obviously stupid in how they did it.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Conspiracy theory much?
Former HOA President
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