Re: Annual audit ? Bookkeeping? Reserve studies? | <– Date –> <– Thread –> |
From: Sharon Villines (sharonsharonvillines.com) | |
Date: Thu, 22 Dec 2011 16:47:15 -0800 (PST) |
On 22 Dec 2011, at 5:56 PM, Joani Blank wrote: > does your homeowner's association have an > annual audit by a CPA? And if so, what is the > approximate cost of that audit? We do and it is in the neighborhood of $2,000 for the tax return and the audit. I think we negotiate for two years at a time which may make it a little less. Very expensive in my view because we have a management company that handles our finances and internal people who review the accounts. But we have also changed management companies four times and each time the financial records have been less than clear. Thousands of dollars have been unaccounted for — not always missing, sometimes in our favor. So part of the reason for the audits is to be sure the books are straight. We now have a treasurer who works in the DC budget office and a new management company that seems to be much more on the ball in terms of accounting so maybe an audit won't be necessary every year. But we also have a member who used to work for the FDIC so he is pretty conservative. > If you do not have an annual audit, your bookkeeper > undoubtedly reviews the year's financial affairs in > order to provide a report to all the homeowners. He or > she may also file a tax return for you and complete any > state reports required of homeowners' associations in > your state. We do have a management company that handles condo fees, late payments, bill paying, etc. The current one has been producing excellent monthly reports. I'm hoping this will lead to a reduction in the cost of audits and tax returns. > Does > your state require that your HOA have a [replacement] > reserve study every X years? If so, how often are you > supposed to have one? Do you have a reserve study as > often as required by law OR have you had reserve > studies, but less frequently (if less frequently, about > how often)? Finally, again, how much do you typically > pay the person who does the reserve study. DC does not require a reserve study but as I've said elsewhere there are two reasons to do a study — to be sure you have the savings to maintain your facility, and to help you plan and manage maintenance. The information in a good reserve study is invaluable in many ways. We use it, for example, as a double check on how much things should cost. We do both a replacement (capital) and a maintenance study. The maintenance study tells us how much the painting might cost. I had an aunt who sold and invested in real estate in Hawaii — mostly condos. She also taught real estate law and wrote a textbook on it. She was adamant about reserve studies every three years with financial updates annually. There are times when you might go 5 years but you have to do the annual financial updates to be sure interest rates and construction rates haven't risen or fallen dramatically (as they have recently) or you have spent dramatically more or less than projected. We paid $5,000 for the first reserve study with our current company because they had to come in and analyze everything carefully — all the HVACs, construction plans for pipes, etc., measure fencing and balconies — all that stuff. The annual financial update, I think is in the range of $300-500. They just run the numbers in their computer and print out a report. The subsequent site visits are $3,000. They do a visual examination of everything, but not look at the interior of the HVACs — stuff like that. They also look at the figures for what we have upgraded, added, replaced, etc. (I keep a spreadsheet of those that they work from). Our numbers are run on a 100 year basis. If your study does not extend at least 50 years, you will not have enough time to save for replacing your roof and major infrastructure features. They won't all go out at once and some may never go out but having the money in the bank is always the best choice if you want to maintain affordability and housing for low income households who cannot come up with large sums of money or lose their homes just because the association didn't budget well. Sharon ---- Sharon Villines Takoma Village Cohousing, Washington DC http://www.takomavillage.org
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Annual audit ? Bookkeeping? Reserve studies? Joani Blank, December 22 2011
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Re: Annual audit ? Bookkeeping? Reserve studies? Diana Carroll, December 22 2011
- Re: Annual audit ? Bookkeeping? Reserve studies? Diana Carroll, December 22 2011
- Re: Annual audit ? Bookkeeping? Reserve studies? Lou Lieb, December 22 2011
- Re: Annual audit ? Bookkeeping? Reserve studies? Sharon Villines, December 22 2011
- Re: Annual audit ? Bookkeeping? Reserve studies? Sharon Villines, December 22 2011
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Re: Annual audit ? Bookkeeping? Reserve studies? Diana Carroll, December 22 2011
- Re: Annual audit ? Bookkeeping? Reserve studies? R Philip Dowds, December 23 2011
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