Audit Information

Hi,
I need to get information about auditing the books for our HOA.
Our dues will be 400.00 starting in september and we have nothing to show for it. We think there has been a long history of the board members taking our money and we really need to get this fixed.
How do I go about getting the books audited with no charge to the community? I dont even know if thats possible but I thought I would ask.
Thanks,
MJ

At no charge? Sounds like Mary should volunteer to go over the books. (wink)

Mary,

What makes you think the board members have been embezzling funds? That's quite a strong accusation to make w/o any hard facts to justify it. However, it seems to be a standard claim by many HOA members especially when the dues rise and the BOD is noncommunicative. In all too many cases the members really don't have a clue about how much $$$ it takes to run an assn. Following is a listing of some of the costs involved:

1) Management Co fee (if you are not self-managed);
2) landscaping fee (fee for landscaper plus repairs/maint of irrigation system, tree maint, shrubs and flowers replacements, weed control,etc.);
3) utilities;
4) insurance;
5) attorney fees;
6) administrative fees (mgmt co fee, web hosting, bank charges, postage, office supplies, meeting room exp, storage fees, bad debt exp, social activities, etc;)
7) state & fed taxes;
8) maintenance fees (playground equip, exterminating exp, fence or wall repairs,etc).

If your assn has amenities (clubhouse, pool, etc) and/or lakes there will be alot of additional costs associated with maintaining them. My assn has 12 lakes to maintain which takes a big chunk out of our yearly budget. Last month the expense totaled $28,000, of which $8,000 was for elec. The month before there was a $25,000 emer. repair of a pump.

Have you checked your bylaws and state law to see if an annual audit is a requirement? Do you even know if the board has had an audit or a review performed recently? Have you taken a look at the financial statements?

Mary - start by asking for copies of the latest approved budget, Year to date Revenue/Expenses and Balance Sheet. These things should be provided to you in a matter of minutes. (pay for the copies)

Actually, these things should be in the posession of any board member on a monthly basis, so you might ask a board member.

Has your group ever had an audit? A board member can motion to have the books audited. It is somewhat expenseive, so you may want an audit review.

What specifically are you looking for? You have made some serious accusations.

Mary is right. In most cases a homeowner has no ideal what it takes to run an HOA. Your HOA is a business and a good Board will treat it as so. In Arizona we have it stated in the law that we have to have a review. And the HOAs I run all have this review every year. Check your laws and then go to the Board and management with your concerns as a homeowner. You can always bring suit to force the Board to follow the CC&Rs and laws of your state.