Obtaining financial data

Started by RobertG • 8 replies • 1947 views

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RobertG (Arizona)
Posts: 505

Posted:

As a member of an HOA, I may request a copy of financial data about the HOA. State law requires the HOA (or property manager) to produce the report within 10 days. The property manager has stated that they won't give the data until after the board meeting since it has to be "approved". I don't believe in the idea of a board approving financial data as that is contrary to rules such as Robert's. But the board doesn't have any rules. The real question is, when do other HOA's release financial data?

RogerB (Colorado)
Posts: 5,067

Posted:

Robert, I would provide a copy of that state law to the Board with a request (with copy to the PM) that they comply with the law regarding your request for copies of the financial records. The PM may have a directive from the Board which they are following.

RobertG (Arizona)
Posts: 505

Posted:

My real question is not how to get the HOA to comply, but is it unreasonable to ask for the report as soon as the property management company closes the books for the month?

If I ask the board, I know the answer. They have consistently decided that the financial report must be approved by the board, just like the minutes.

WilliamT (Arizona)
Posts: 489

Posted:

It takes a certain amount of time for the MC to complete the books after the close of the month. Typically they will send distribute the financials to the board in a board pack that is in preparation for the months meeting.

The treasurer should review all of the financials to check for errors, and make a report to the board. The board may elect to approve them, or to send them back for correction.

Once they approve them, they are the official financial records for that month. It is good that the board is checking and approving the financials.

The minutes are not official until they are approved by the board, and should never be distributed until they are approved because errors and omissions may have been made, and the approval process gives the opportunity to catch those errors.

Once the financials are approved by the board, then after you request them they have a certain amount of time, depending on the laws of your state, to provide them to you.

RogerB (Colorado)
Posts: 5,067

Posted:

Robert, your request is not unreasonable. However, as long as your Board is complying with the law and the HOA's controlling documents they can establish whatever procedures they chose. Perhaps they will provide financial reports with the understanding that they are not approved.

Several HOAs we manage are single family homes where the Board meets once a quarter. Meanwhile, their financials and most other records are available for viewing and copying within 5 working days after receiving a written request by an owner.

RobertG (Arizona)
Posts: 505

Posted:

To both RogerB and WilliamT:

On what basis do you believe a financial statement requires approval of the board? Robert's Rules specifically states that it is NOT approvalable, only the audit is. I have yet to find an accounting practice that would close the month's books and then later go back and change an entry. They may find an error, but they would just make a correction in the next month’s accounts. Thus, there is nothing that needs approval, it is what it is. I personally believe this is one of those concepts that boards have practiced that is, in fact, erroneous.

I would agree that the report of the Treasurer can be "accepted", but that just means everyone heard his comments.

WilliamT (Arizona)
Posts: 489

Posted:

Roberts Rules does not govern an association. It only spells out certain guidelines for parliamentary procedure. State law and the governing documents of the HOA govern the HOA.

I think it is an excellent practice for the board to make sure that the financials are in order. And they can request the MC to correct the books now, instead of waiting a month.

What if the bank accidentally credited your assessments to another HOA with a similar name. This happened to us one time. This happened because the treasurer did not check the financials.

In our case we plan to have an annual Compilation, instead of an annual audit which is more expensive. So it's important for the treasurer or a committee to take the time to do a monthly audit of the books.

In my opinion, the monthly or annual financial records are available to the members after they are complete, and the board should have the right to say when they are complete and ready for distribution.

SS11 (Arizona)
Posts: 7

Posted:

It is now Feb 2018 and I have not received the financials for 2017. I have requested them 2 times and our property manager just says the board has not approved them yet.
I was on the board a few years ago and we always approved them timely.
Is this right for someone to withhold this information? People want to know where there monthly HOA fees and special assessments are going to.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

SS This is an old post. It may be better to create a new post. The advice here is very good. However, things have changed in the years this was posted in 2006.

Former HOA President

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