Maryland - time limit to have audits complete

Started by IrisH1 • 3 replies • 1546 views

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IrisH1 (Maryland)
Posts: 1

Posted:

Right now we have a due date of April 30th of each year to have the audited financial statement of operations and balance sheet for the previous year? Is this typical? An auditor suggested changeing the bylaws to 180 days. Is there a rule in Maryland that dictates the due date for audits to be complete? Thank you.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Iris,
I don't know about Maryland and you should check your HOA laws there first.
My Florida HOA is required by Statutes to have an audit because of the large amount of income and expenses. We use April 30th as the date for it to be completed with the reasoning that as long as the accountant (CPA) has all of the paperwork for doing the taxes, he can easily save information for the audit. This is the statement from the Statutes. You will need to read your own documents to see if they address auditing by requirement

720;303 "FINANCIAL REPORTING"

(a) An association that meets the criteria of this paragraph shall prepare or cause to be prepared a complete set of financial statements in accordance with generally accepted accounting principles as adopted by the Board of Accountancy. The financial statements shall be based upon the association's total annual revenues, as follows:

1. An association with total annual revenues of $100,000 or more, but less than $200,000, shall prepare compiled financial statements.

2. An association with total annual revenues of at least $200,000, but less than $400,000, shall prepare reviewed financial statements.

3. An association with total annual revenues of $400,000 or more shall prepare audited financial statements.

(b)1. An association with total annual revenues of less than $100,000 shall prepare a report of cash receipts and expenditures.

2. An association in a community of fewer than 50 parcels, regardless of the association's annual revenues, may prepare a report of cash receipts and expenditures in lieu of financial statements required by paragraph (a) unless the governing documents provide otherwise.

EverettC (Maryland)
Posts: 90

Posted:

Iris,

None of the Maryland statutes governing common ownership communities (Condo Act, Homeowners Act, Cooperative Housing Act) require that audits be completed. Only Section 11-116 of the Condo Act mentions audits at all - audits must be completed if 5% of the unit owners request, but no time frame is specified (and can be requested only once a year).

Check your governing documents to see if they require an audit and, if so, when they must be completed.

As a practical matter, having them completed by April 30 means that the auditor must do them during tax season, when auditors are probably busy with tax preparation or audits for small businesses if not personal income taxes. and are probably charging higher fees than if they are allowed a couple more months to complete the task. You might check with your auditor how much the cost is if completed by April 30 and how much if done by June 30.

Our HOA by-laws state we shall cause an audit to be done at the close of each fiscal year, but do not specify how quickly they must be prepared,and we require the auditor to complete the job within 180 days after the close of the fiscal year.

Everett

JeanneK3 (Maryland)
Posts: 562

Posted:

I believe Everett C is correct. I don't know of any COC law that addresses the timing of audits.
Jeanne

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