Audits are Expensive and Should Be Done Selectively.
An audit is an extensive and methodical examination of all of the books, records and accounts that support the financial statements. In most circumstances, they are costly and time consuming. However, it is often prudent to audit the HOA books and records whenever a developer turns over a community to the homeowners to verify that the developer has fulfilled its obligations to the association, and won’t leave unit owners holding the bag for any unpaid fees. Or an audit may be need if misappropriation of funds by an association or management company is suspected or a community is transtioning from self-management to a management company and experiencing extreme financial hardship. In those case, a forensic audit must be performed to determine exactly where the money has been going.
A Review is a Less Expensive Alternative to an Audit.
A review is a report of limited assurance stating that the accountant is not aware of any material modifications that need to be made to the financial statements in order for them to conform with Generally Accepted Accounting Principles (GAAP). The accountant must perform sufficient inquiry and procedures to give a reasonable basis for that conclusion. A review is a more affordable alternative for most associations and should be sufficient in most cases.
When governing documents talk about “audit,” it generally refers to some level of independent review of the books by a CPA. Depending on the size and complexity of your HOA, an audit may be overkill and may not be warranted. Rather than perform an annual audit, the Board may elect to perform an annual review.
Whether your HOA decides to do a review, a compilation, or a full blown audit, we think it is a good idea to do on an annual basis. Some HOA governing documents require it, others are silent on this point.
There are a variety of qualified CPA‘s in the Atlanta area that can do this work for your Atlanta HOA. Why is this a good idea? The easiest answer is a simple one: it’s smart, prudent policy. Even if you are confident in your Atlanta HOA management company, it is a good idea to do this as it shows the membership that you are being thorough in your desire to ensure the HOA’s funds are tended to in an appropriate manner. Regardless of whether you do an audit, make sure you review the financial reports you get from your property management company each month.
We are happy to provide financial report training to any of our clients. We’ll explain what the GAAP rules are and why we adhere to them in your financial reporting. We’ll also explain the rules of double entry and much more. If you are interested in getting more information on our financial report training webinars please contact us by going to our website at http://www.riversidepropertymgt.com.
Posted in acworth neighborhood, association, Atlanta, Community Management, Condominium, HOA, HOA Board, HOA Budget, hoa liability, homeowner dues, Homeowners Association, Kennesaw, Marietta, professional association management, property management, Real Estate, Reserves, Vinings
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On behalf of CAI’s Legislative Action Committee, I wanted to alert you about an important piece of legislation we are promoting in Georgia. The proposed bill (number not yet assigned) establishes that, at the time of a foreclosure sale on residential property, the new homeowner shall take title to the property subject up to six months worth of homeowners or condominium owners association fees, if any such fees are due at the time of foreclosure.
This legislation is vital to our HOA’s and COA’s, many of which are suffering significant losses because these debts remain unpaid at the time of foreclosure. When such dues remained unpaid, every member’s property value suffers! This bill is a reasonable compromise with lobbyists for the bankers and realtors, who rejected our prior proposal. However, both of these groups maintain that they will not support any legislation that holds the purchaser responsible for any outstanding homeowner’s association fees.
Our advocates at the Capitol have asked that we reach out to our legislators and ask for their support of this important bill. Please call and email the Chairmen of the House and Senate Judiciary Committees, whose information is provided below.
Representative Wendell Willard
Chair, House Judiciary Committee
Senator Bill Hamrick
Chair, Senate Judiciary Committee
Please also reach out to your local Representative and Senator, whose contact information can be located by typing your zip code into this link – http://www.votesmart.org/. When you contact them, please identify yourself as a constituent and tell them you are in support of proposed legislation to protect a property owners association‘s right to collect fees due at the time of foreclosure. Please contact them as soon as possible!
Thanks in advance for your support of this effort.
www.riversidepropertymgt.com (678) 866-1436
Via Email from:
P.O. Box 2943
Peachtree City, GA 30269
Posted in acworth neighborhood, association, Atlanta, Community Management, Condominium, Georgia, HOA, HOA Board, hoa liability, HOA manager, Homeowners Association, Kennesaw, Marietta, professional association management, property management, Real Estate, Reserves, Vinings
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