HOA Finances Review

My question is this, is there a standard by which HOA financials are to be provided to members request?

5 Months ago, I requested HOA financials and provided a link to the Indiana HOA Law and was denied with a single word “NO”. I requested again with the link and attempted conversation to discuss why I’m, a 8yr member in good standing, being denied and was denied again, “NO, I wont do it” from the president.

A complaint was filed with Indiana Attorney General, and I’ve been notified this is now an investigation and due to backlog will be several months before the case is reviewed. The Attorney General’s office also contacted the HOA board of the complaint. This was discussed at the HOA annual meeting and board members emphasized the huge cost to provide financials... ”..and you, the members, will pay for it, and it’s not reflected in the budget”

A member of the HOA board contacted me for a face-to-face meeting to understand what I’m looking for, we met, and I responded in writing with an itemized list. The property management company, also a resident of the HOA and best of friends with the board, has provided me the financials in a pdf file containing 2 years of financials with 5024 pages.

I’m reviewing the 5024-page pdf file and finding it difficult to navigate and print what I need and refuse to buy over 10 reams of paper. The pdf files are disorganized and not grouped together by category or year, some files are duplicated, missing statements and mislabeled files, and some files are oriented correctly while many are oriented/rotated left or right, bank statements with most transaction information redacted, and utility bills include many many pages of advertisements. I’m being charged the maximum allowable by the property management company that prepared the financial review and I don’t know how much the HOA is paying. My portion of the bill is due in a few days.

I know HOA should follow GAAP accounting principles, is there a standard to how HOA financials are presented to the owners? Given the problems I’ve had with the HOA board and, the resident property manager, I assume they want to make it as difficult as possible.

Thank you,
Frustrated HOA Member. BTW, I served on the board 2020.

There’s no standard that I’m aware of, although this board isn’t making things easy for themselves or anyone else to deal with disorganized records. This is how the documents you need to keep forever (e.g. board meeting minutes) get lost, while there are boxes and boxes of stuff that’s no longer necessary.

This board needs to take a long look at how it organizes its records and then work with the property manager on getting them together. They also need a document retention and destruction policy that would address things like the records homeowners are allowed to inspect (this should be addressed in your documents – read them), a retention/destruction list showing what can be tossed after X number of years (in accordance with the IRS for tax information, warranties, etc.), instructions on how documents should be destroyed (you don’t just toss them in the trash), where permanent records should be kept (not in a garage), and so on.

This policy should be put together with the association’s master policy and your association attorney to ensure nothing’s missed. It could also include instructions on how homeowner requests should be handled, such as paying for the costs of photocopying. I believe state law says those costs should be reasonable, but that may be subject to debate, depending on how much you ask far and the manpower needed in putting it together.

You asked for two years of records, but you would have been better off in specifying what you needed. As Melissa said, start with the “why” – for example, if you wondered what line items in the budget have increased the most during the last two years, looking at board meeting minutes and the income-expense statements may have been all that was necessary. You wouldn’t need specific utility bills – if the income expense reports are broken out by line item, you can see month to month if those costs are steady or jump due to colder weather in January.

Reviewing PDFs of this size is a pain – you could try opening up the page thumbnails panel and then try to move the documents around so similar pages are in the same spot, say pages 1-24 are the annual balance sheets. Otherwise, you may have no choice but to get PDF software that will allow you to separate the pages and then combine similar items , such as all the board meeting minutes, reserve study, balance sheets, etc. There may be people at a printing shop that can do this for you, but it could be costly.

After you wade through all that, take note of your observations and tell the board about the challenges of going through this stuff, suggesting (strongly) that they consider working with the property manager in establishing a formal policy. Better yet, volunteer to do some of the research to see if there are vendors that can organize the files for the association – it may cost at the front end, but will make everyone’s life easier after it’s done.

I don't know if there's a "legal" standard, but ur HIA has posted the monthly financials on the Owners Portal of our MC's s website for several years now. I assume this practice is widespread. Therefore, there is no charge to owners to review financials.

Our are about 80 pages long each month and, as a long time-board member I the monthly Balance Sheet the most, paying special attention to reserves expenditures (we have 3 reserve funds).

I also read the Disbursement Report when expenditures on the balance sheet appeared anomalous. Here , we. can see exactly what the expenditure was for. I like this because sometimes the PM uses a new firm to do certain tasks, and this report tells me what their business is and what they, for example, repaired.

Your were on the board (only?) for one year in '20, so you're familiar with that year, right?

(In Calif, owners may only request the past two + the current financial records. And ewers may not demand that records be compiled, e.g., send me the charged for all move-in/out for the past two years.

There is no standard.

Some provide balance sheets.
Mine has a spreadsheet.
Others might simply have a check register.