Audits

My Association Bylaws requires annual Independent Audit, but there was no audits. The board violated. What should homeowners do to proceed this? Thanks.

Civil Code §1365. Financial Records and Reporting
(c) A review of the financial statement of the association shall be prepared in accordance with generally accepted accounting principles by a licensee of the California Board of Accountancy for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of the review of the financial statement shall be distributed within 120 days after the close of each fiscal year.

Even though CA only requires an annual review for assocaitions with budgets of more than $75,000, your documnts call for a higher standard. An audit require certain specific tests to be performed. It is not a review, nor is it a compilation. The docs call for an audit, and unitl they are changed, they should be having an annual independent audit.

Write a note to the board asking why they chose to willfully violate the Bylaws, putting the association at risk and assuming the liability for errors or misuse of funds. Shake'em up. And then suggest they amend the bylaws to allow for periodic reivews or compilations, instead of audits.

Fore more info, go to:

www.davis-stirling.com

then select Index of Topics, and then Audits

Joe

If that is fact, then your assn should definitely have a CPA-conducted audit for the year these funds went missing and perhaps each year forward if the same board members and prop manager were in control.