Cohousing-L Mailing List: Re: Homeowner's Association - Reserve Audit

[Larry Miller (larry.miller]

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