Ask Gail: What Financial Information Should Boards Be Providing Unit Owners?

Hi Gail:

Question; I asked the management company about looking at the check register for last year and am told it will be very time consuming and I will be billed for the time to get these records together.

Board members should have all pertinent information in their monthly reports broken out into 5 reports. This information should be available to unit owners attending the board meeting as well as available to unit owners who are unable to attend a meeting but submit a timely request for financial information immediately following the meeting. There should be no charge for this since the community association manager can export this information into a PDF.

Financial information if listed correctly on reports in customary accounting forms [normally components of accounting software] will provide full transparency to board members/unit owners. Board members should expect to receive:

  • Balance Sheet
  • Profit & Loss Statement
  • Owner Balances/Aged Receivables [normally redacted for individuals other than board members following compliance for notification of foreclosures etc]
  • Aged Payables
  • Check Register

There are some Board of Directors who also request monthly deposit and bank reconciliation reports.

Unless financials are managed with the “archaic” hand written ledger books”, most, if not all accounting software programs would provide the user to simply choose the “last fiscal year” option and, presto, your report is generated and provided in an excel spreadsheet or a PDF and immediately emailed. Certainly not time consuming and a reputable management company should provide this at no cost since compiling this information through an accounting system should take no more than a matter of minutes.

A community association manager is under contract and works at the direction/guidance of the board of directors. If, however, the board is sanctioning this lack of transparency, a complaint can be filed with the Department of Consumer Protection since this appears to be a disregard/violation of CIOA.

Question: We were asked to approved a budget without getting information, other than a balance sheet, about what it was based on. 

Unit owners should be provided with an Income Statement also considered a Profit Loss Statement showing Income and Expenses. Depending on the date of the annual meeting and your calendar or fiscal year end, the reports may have several columns, for example:

  • Current fiscal year 2013/2014 {10 months]
  • Current fiscal year 2013/2014 Projections for the end of year/12 months
  • Current Budget for each GL [general ledger] account
  • Variance for each GL account [this would provide information for each account and if you are under or over budget.
  • Last, most important, the proposed budget for the new fiscal/calendar year to be voted on by unit owners.

Depending on the accounts for your association, unit owners should be provided with this information for each association account.


One Response to Ask Gail: What Financial Information Should Boards Be Providing Unit Owners?

  1. book a room says:

    Another good article, Gail.

    Poor Consumer Protection is doing its best, but like many state agencies, it has an overloaded staff.

    I also recommend that unit owners demand documents under the Non-stock Corporation Act. The requirements are a bit different and different documents are covered, but that Act provides a court action just to recover documents.

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