|Re: Homeowner's Association - Reserve Audit||<– Date –> <– Thread –>|
|From: Larry Miller (larry.millercharter.net)|
|Date: Sat, 3 Jan 2009 15:06:28 -0800 (PST)|
Please answer the following questions 1) When did you last hire a professional audit firm to conduct the audit? We hired a firm in 2006 to do an initial audit. We worked closely with the firm to insure that all items were included and were reasonable. California requires a new reserve study every 3 years. We will be doing another this year. 2) Were you happy with the product and service they provided? Yes. We asked for some modifications to the draft report and those were appropriately made. Some limited experience over the next several years showed that his cost estimates were quite reasonable. 3) How did you go about choosing the firm? Several firms were contacted after an Internet search and proposals were requested. Prices varied substantially. The lowest bidder was interviewed over the phone and the decision was made to use that firm. 4) Was the information they provided clear and understandable? Yes. However, they are constrained by state law to recommend a rapid full funding approach. That appeared to be overly expensive in the first 10 years and we opted for a more gradual approach to achieve a high level of funding. We considered planned special assessments to be unacceptable. 5) Were there any lessons learned from the experience of hiring an audit and receiving it? Yes. The quality of an audit is likely to be more based on the involvement of one or more knowledgeable residents than on the choice of auditor. The auditor MUST do a site visit, but a resident liaison person will be more knowledgeable about the community and be able to provide some input. Life cycles and replacement costs are likely to come out of the same book, regardless of the auditor. Pick the lowest price auditor that will do an on site visit and with whom you can establish a good working rapport. Also have an involved finance group willing to work with the auditor. Also, be prepared to discover, if this is a first audit, that insufficient funds have been going to reserves and dues will need to increase. Larry Miller Oak Creek Commons Paso Robles, CA
- Homeowner's Association - Reserve Audit Douglas G. Larson, January 3 2009
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