One of the fundamentals of community management is the HOA accounting. As a Board Member, you may or may not have a background or experience in reading and understanding financial reports. Here are some things every board member should know about HOA Accounting. Read the article……………..
Homeowners association and property management group in legal conflict over financial agreement (PA)
A local homeowners association believes its former management company did not live up to a monetary agreement both parties agreed to be bound by, and seeks to obtain a number of related financial records through the lawsuit it has filed. Middletown Crossing Homeowners Association of Gradyville filed suit in the Delaware County Court of Common […]
HOA Accounting | Understanding Different Methods Available
There are three main methods of accounting that HOA’s use. These are GAAP accounting (accrual accounting), cash-based accounting and modified accounting. As an HOA board member, it is important to have an understanding of the three methods that are used, their effects on financial reporting and the advantages/disadvantages of each method to your HOA. […]
Condominium audits uncover four common issues
With few exceptions, the Condominium Act of Ontario (the act) requires an independent auditor to perform an annual audit of the financial statements of a condominium corporation. Sections 60 and 71 underline the rights and responsibilities of an independent auditor. It’s important for unit owners to understand that an independent auditor does not prepare the […]
HOA Funds Transparency
Just about any situation can deteriorate when there is no transparency. This is true in any business setting, including an HOA. With good transparency, homeowners know exactly the direction in which their neighborhood is heading, which leads to less problems. Read the article……………..
The Doctrine of Accord and Satisfaction
Should you or should you not accept a payment for less that the full amount owed when it is indicated to be for full payment? It is always best to not accept a check for less that the full amount owed if there is any chance that it can be interpreted as being accepted as […]
The “Rep” Letter: the Biggest Little Three-Letter Word in Your Annual Audit
Before the accountant completes the annual audit of your co-op’s or condo’s financial records, the board and the managing agent will be asked to sign a letter acknowledging that they, not the accountant, have primary responsibility for the financial statements and that to the best of their knowledge the statements are correct. Read the article………….
3 Basic Association Accounting Concepts HOA Board Members Should Know
Making and sticking to a budget is not a hard concept for someone to understand. You bring in X amount of dollars each month and you have X amount of bills to pay. The amount of your income is spread out to cover your monthly expenses. Theoretically your income determines the expenses you can afford, […]
What is the Best Accounting Method for Your HOA?
As an HOA board member, it can be difficult to determine which accounting method is appropriate for your community. If you choose the wrong type, you could be looking at added stress and problems down the road. And since switching accounting types mid-year is not a good solution—you would be left with a headache of […]
Top 5 Community Association Financial Fails
As a CPA (and HOA board member) who has been providing tax and audit support to community associations for over 15 years, I work mostly with communities and property management companies that are well-run and trying to stay that way. However, every once in a while I run into a situation that causes a double-take. […]
A More In-Depth Look at HOA Accounting
As you may well know, being a member of the Board of Directors for your homeowners association means having an immense financial obligation to your community. Your job will become convoluted by illegible or inaccurate financial reports and records, which—if you are not prepared—can be overwhelming. Because of this, it is essential that you’re able […]
Beginner’s Guide to HOA Finance, Budgeting, and Accounting
When it comes to interpreting your HOA management company’s financial reporting, it’s helpful for HOA members to understand the accounting process used by their management company, especially if they wish to maintain and manage community funds in a practical manner. Below, you’ll find a guide to some basic accounting terms and concepts used by HOAs […]
Simplifying the Accounting for Your Homeowners or Condo Association
It is the time for some condominiums and HOA’s to do many of their budgets. For many people, budgets look like a mess of meaningless numbers. But, like it or not, the Board is responsible for understanding what those numbers mean so you can guide the financial course of the HOA. Read more…….
Accrual Accounting vs Cash Accounting
As HOA accounting specialists, we are often asked about the differences in cash and accrual accounting systems. If you’re not familiar with accounting methods, this topic is a great place to start learning. Currently, both cash and accrual accounting methods are widely used by community associations. In some states, however, corporations (including community associations) are […]
Understanding CPA Service Levels: Compilation, Review and Audit. A Primer.
The controlling documents of most co-ops and condominium associations outline the requirement for the preparation of your financial statements. In addition, several states have minimum financial statement requirements. It’s important for boards to understand that there are different levels to what a Certified Public Accountant (CPA) reports. Here’s a primer for condo and co-op board […]
Understanding CPA Service Levels – Compilation, Review and Audit
The By-laws, CC&R’s or other controlling documents of most community associations delineate the requirement for preparation of financial statements of the Association. In addition, several states have minimum financial statement requirements. Read More……
Why you should pay special attention to closing your books this year
I’ve been posting the condo and HOA news for over 8 years now. During the first 6 years, I might have run across 3 or 4 cases of people stealing from an association. During the last 2 years, I’ve seen over 20. And most of them haven’t been for small amounts. The scams were often […]