Re: Friendly Audit / Accountant or CPA Advice Needed
From: Philip Dowds (
Date: Sat, 8 Sep 2018 03:34:22 -0700 (PDT)
In MA, audits are required for HOAs of 50 units and greater; under that number, 
audits are optional — and we cancelled our $3K audit program a decade ago, when 
we concluded that our audits were not syncing with our books.  I am neither a 
bookkeeper nor accountant, and certainly have no expertise in what CA requires 
of HOAs (although I’ve heard that CA has some of the most rigorous requirements 
in the nation).  But over time I’ve developed working knowledge of Quickbooks 
and other double-entry bookkeeping.  I’ve also had a chance to take a look at 
the budgeting practices of maybe 20 cohousing communities.  At Cornerstone, we 
too do our own bookkeeping, and occasionally consult an accountant about things 
tricky.  My main comment would be …

Accounting exists mainly to provide quick and accurate answers to the financial 
questions that are interesting and important to you.  Thus there is no single 
correct way to set up a chart of accounts.
      On the income side, most of your money comes in from the monthly dues, 
and the income accounts can be very simple.  But if for some reason your 
community owns a rental property or runs a small farming operation, then you 
ought to be recognizing that cash flow in separate accounts.
      On the expense side, maybe all your money is allocated to, and spent at 
the discretion of, committees — so maybe a chart of accounts subdivided 
according to committees is what’s most useful to you.  Or, maybe your expenses 
are organized around functions — utilities, building repairs, insurance, 
activities and training, etc — and so that’s the best way to set up your 
accounts, AND plan your annual budget.
      Maybe some costs or collections are distributed differentially, like, 
from the apartments to the townhouses, or from market-rate units to 
below-market units.  If so, the design of your accounting system should factor 
this in.

A good accountant can help you customize something like Quickbooks into a 
format that asks and answers the questions important to you.  Clearly, there 
should be close correspondence between the budget you consense annually and the 
books you keep monthly.  But don’t expect there to be a cookie-cutter template 
that’s right for cohousing.

Philip Dowds
Cornerstone Village Cohousing
Cambridge, MA

mobile: 617.460.4549
email:   rpdowds [at] <mailto:rpdowds [at]>

> On Sep 5, 2018, at 1:10 PM, lamaiacoleman--- via Cohousing-L <cohousing-l 
> [at]> wrote:
> Hi,At Southside Park Cohousing, in Sacramento, CA we self-manage our HOA 
> including our bookkeeping, accounting and taxes. Wonderful, dedicated 
> volunteers do the books, etc, but they have no formal training, so we 
> (including them) are seeking someone to: look at how we are keeping the 
> books; make sure it makes sense and if not recommend changes to the way we do 
> it; and make sure we aren't doing anything unintentionally totally wrong. 
> I've been trying to research what we need is called and where we'd find 
> someone to hire to do this. I assume we need a CPA?  And I'm guessing we need 
> an audit, although the intent might be different than a typical audit?  
> However, I've also discovered that there are many different types of 
> financial review and don't know what level we need.  I've gone through the 
> archives and it seems some communities have hired people to do something 
> similar, but they didn't say what exactly the service was or how they chose 
> who to hire for it.  In terms of costs related to audits mentioned in the 
> archives, I've seen a range from $500 to $5000- a huge range!  I'm not sure 
> what accounts for the difference.
> I'd really appreciate any advice or recommendations along with approximate 
> costs.
> Thanks!
> Lamaia PS- I contacted ECHO-CA and we aren't members so they won't advise us.
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