Protocol for review of records

Started by ShelleyD • 13 replies • 1272 views

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ShelleyD (Florida)
Posts: 42

Posted:

Can someone tell me what is the most professional way to ask our treasure permission to conduct a review. Our board is very secret about all business that is conducted and they make all there decisions behind close doors. The residence have no access to board minutes they are only e-mailed to board members. If we in fact do get copies of the records should they be taken to common ground like CPA, attorney instead of just someones house which I think is a bad idea. The treasurer had been asked before by letter and was not acknowledged. Any help or advise is greatly appreciated.

SusanW1 (Michigan)
Posts: 5,202

Posted:

You don't need "permission" - it's your right.

Ask to see the minutes of the meetings, including all attachments, for the last 6 months. The treasurer's report will be an attachment (hopefully, since it is just filed for audit)

You may have to get an appointment with the secretary to do this. You can request copies of the papers, too, although you may have to pay copying costs.

As a member, you are allowed viewing of all your HOA paperwork.

Your annual meeting also should have provided an audited Treasurer's report.

What kind of HOA are you? (condo? neighborhood?)

ShelleyD (Florida)
Posts: 42

Posted:

Thank you for your reply. We are a HOA. Can't I ask for the actual receipts or is the proper thing to get copy's?

SusanW1 (Michigan)
Posts: 5,202

Posted:

You can ASK for an itemized expenditure for each category, along with a Revenue/Expense statement and a Balance Sheet, but don't be surprised if seeing invoices is denied.

All espenditures are approved by the Board and/or the membership when and if it approves the budget. If $5000 is budget-approved for landscaping, then that's what can be spent. Why do you want to look at certain invoices?

JeanneK3 (Maryland)
Posts: 562

Posted:

You may need to go to where the records are kept to see actual receipts. I think you are right in following through with this; when a board is as secretive as yours it means they have something to hide.

SusanW1 (Michigan)
Posts: 5,202

Posted:

I disagree. At our meeting, the last thing on the Agenda is approval of bills. Each one is called out. These can all be traced back to either motions passed OKing the expenditure, or the invoice is part of an approved line item budget.

We need more information on the particulars.

If this person thinks that one certain expenditure needs to have some light shone on it, then she can request information about that. The answer may be in the minutes. But unless she states a good reason she wants to preview the actual invoice, then she probably won't get it.

ShelleyD (Florida)
Posts: 42

Posted:

You mentioned a budget. This HOA has 203 homes and gets $800.00 per home and there is no budget. Can you believe that! They never ever had one. When they need more money they just tell us to pay more whether we like it or not. There is no signed contracts for anything they just say call so and so and have them do the work. I am in charge of maintenance for our board and I am going in front of them at the end of the month because our landscaper bill's us for whatever he feels like doing and I just received a bill for something that he did not do and is demanding payment. I have rallied several residence to back me. I was told by the President that the contract was rolled over so I e-mailed everyone on the board to find out who rolled it over and when did this take place and no one wants to answer. I also asked for all of the minutes for 2008 and they will not respond to my request. I was able to get minutes from 2004-2007 and found lots of dirt. Our board is so mean to people in our community I almost hate the thought of finishing my term with such ignorant people. I was voted in as Director in May 2008 and the landscaper was already doing the work so I did not question it but made sure that I kept an eye on what was being done in the neighborhood since he tried to send invoices last year for lawns he said he cut for vacant lots when in fact the neighbors were cutting them. The President agrees with me regarding the work not being done but our sneaky treasure sees it otherwise. We get a bill in the mail for our maintenance fee and the board is sent a bill reduced 50% which is not suppose to happen. I paid my fee 100% so they are black balling me for that I'm sure. Isn't it our right to see the actual invoices so we can do our own checks and balances. I have a committee together to take this task on that are very qualified business people.

ShelleyD (Florida)
Posts: 42

Posted:

I just went through all the minutes from 2004-2007 and the only thing listed in the financial report is the number of people who have not paid their fee and that total and who they are suing for non payment and that total. They have how much is in general account, bond money for home projects, dredging account, and total. I did find one time where the treasurer lists in the financial report that he wants to purchase a laptop and Quick books software to aid in record keeping no budget or mention of it. The next time you see the software and laptop mentioned was in the end of year check register. No quotes, no approval, just went out and bought it. This happened June 2007 and nothing in any of the minutes at all after that. We then see it listed in the March 2008 check register.

JeanneK3 (Maryland)
Posts: 562

Posted:

Shelley: This is called stealing. Get rid of them.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Or sloppy minutes, procedures or bookkeeping. Hard to tell.

In any case, you should try to have an audit ASAP. A good auditor will back-track each expenditure (chedk) to either a motion or allowed budgeted item. (Be sure to get an auditor that specializes in HOA accounting)

Hopefully, the report to the Board will tell them of their sloppy ways.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By ShelleyD on 09/10/2008 4:25 PM
I just went through all the minutes from 2004-2007 and the only thing listed in the financial report is the number of people who have not paid their fee and that total and who they are suing for non payment and that total. They have how much is in general account, bond money for home projects, dredging account, and total. I did find one time where the treasurer lists in the financial report that he wants to purchase a laptop and Quick books software to aid in record keeping no budget or mention of it. The next time you see the software and laptop mentioned was in the end of year check register. No quotes, no approval, just went out and bought it. This happened June 2007 and nothing in any of the minutes at all after that. We then see it listed in the March 2008 check register.

Shelly,

You mention the treasurer's report as reported in the minutes. That is much different than the actual financial statements which should be produced each month. That is what you need to take a look at before you can make any accusations. Secretary's don't always take accurate minutes and the treasurer doesn't always give a good treasurer's report. If you want to "review" the financial condition of the assn, you must request copies of all the financial statements, the check register, the invoices and contracts. I wouldn't concern myself with meeting minutes, at least not in the initial stage of a review. Do you have bookkeeping or accounting experience?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Susan,
Give us a short course on what an auditor will normally check. You mentioned a good auditor will back-track each expenditure against either a motion or allowed budget item. Soes this include some sort of notation on checks as to project. I would guess nearly all associations carry Discretionary Funds, how are they handled? Also what can you tell us about some sort of Standard Accounting Procedure Auditors use to "Quck-check" the books for informational purposes. I think someone mentioned that "Screening Test" on this site sometime back.
Thanks.

SusanW1 (Michigan)
Posts: 5,202

Posted:

You asked:
"Does this include some sort of notation on checks as to project."

A numbered Chart of Accounts is pretty standard. If expenditures for landscaping are all coded as category 600's, then it is easy to track; office supplies as 800's, etc. etc.

There are many computer programs out there that make it all very simple. I am not in the fianancial field, but I do help with the audit review.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By RobertR1 on 09/10/2008 8:01 PM
Susan,
Give us a short course on what an auditor will normally check. You mentioned a good auditor will back-track each expenditure against either a motion or allowed budget item. Soes this include some sort of notation on checks as to project. I would guess nearly all associations carry Discretionary Funds, how are they handled? Also what can you tell us about some sort of Standard Accounting Procedure Auditors use to "Quck-check" the books for informational purposes. I think someone mentioned that "Screening Test" on this site sometime back.
Thanks.

Robert,

Actually what the auditor (CPA) checks for is determined by what type of procedure he is performing. There are 3 types of procedures: compilation, review and audit, each with its own requirements.

Susan mentioned the chart of accounts and the numbering system. Any good bookkeeper will have a chart of accounts set up, but not all will assign a number to them, unless the bookkeeping system is computerized. At any rate, either the number of the account or the name of the account will be written in the check register. This info is used to "trace" the transaction. All transactions should be double-entry. This means, all income received will be debited to cash and credited to an income account and all expenses will be debited to an expense account and credited to cash. This is how the books are kept in balance.

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