HaroldK (South Carolina)
Posts: 1
Posts: 1
Posted:
Looking for an answer, to have our treasurer turn over books to be audit, that he won't give us.
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No audit wanted
Started by HaroldK • 16 replies • 1581 views
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JohnK3 (Pennsylvania)
Posts: 967
Posts: 967
Posted:
Harold,
Do your documents require an annual outside audit? Are you on the Board? If at least one answer is yes, time to bring the hammer down, esp. if your documents outline the typical duties of the Tres.
Do your documents require an annual outside audit? Are you on the Board? If at least one answer is yes, time to bring the hammer down, esp. if your documents outline the typical duties of the Tres.
LindaH8 (Maryland)
Posts: 1
Posts: 1
Posted:
Tell him he dose not have a choice. And if he refuses vote him off the Board and call an atty.
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
If your treasurer doesn't want to turn over information for an audit, then you need to have that audit. I don't think requirements in your documents play a part here. You need an audit.
JohnK3 (Pennsylvania)
Posts: 967
Posts: 967
Posted:
Kirk,
Documents are important.
Let's say an audit costs $1,000. If not required by the documents, who's going to determine the necessity, and who's going to pay for it?
Documents are important.
Let's say an audit costs $1,000. If not required by the documents, who's going to determine the necessity, and who's going to pay for it?
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
Quote:
...Let's say an audit costs $1,000. If not required by the documents, who's going to determine the necessity, and who's going to pay for it?
If not required, then the BOD (or the membership at large) decides. And the HOA pays for it of course.
Just because your documents don't specifically require an audit doesn't mean the BOD can't order one. And if the BOD orders an audit then the treasurer does not have the authority to withhold records for any reason (including he doesn't think it needed).
But I personally think that if the BOD has properly decided for an audit and fails because of resistance from the treasurer, then every member of the BOD has failed their fiduciary responsibility. In fact, the treasurer resistance to giving up the documents after a properly called for audit raises giant red flags to me. I want to know why. And I would move quickly to verify how much money is in the HOA accounts at the start of any resistance.
Audits should be done for two reasons:
1) To prove honest people honest.
2) To catch problems in your book keeping before the cause the appearance of impropriety.
The thing is that people make errors. And volunteers can make many errors in their keeping of records. But not doing things right is not always the same as being dishonest. But having an audit will catch the little things and set them right before they become big (and often expensive) things.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Quote:
Posted By HaroldK on 08/13/2008 10:28 AM
Looking for an answer, to have our treasurer turn over books to be audit, that he won't give us.
Looking for an answer, to have our treasurer turn over books to be audit, that he won't give us.
Harold,
I would suggest you contact an attorney to write a letter to the treasurer demanding all the financial records be turned over to the board Pres. or Sec immediately. If he does not comply with this written demand, the board can enter into a legal action.
If this person was appointed/voted as Treasurer by the board members, I would also suggest he be removed from that position immediately. The board should be able to do this by a vote of the board members. This person can continue until his term is up as a member-at-large. To remove him from his board position would require a vote of the members.
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Harold, I don't know whether or not you need an audit but you definitely need to have the financial books reviewed. If the Treasurer will not turn over the books then the Board can remove the Treasurer from that office but not from the Board. So look into the cost of an audit vs a financial review and make a motion at a Board meeting for one or the other. Ask the Treasurer if they will assist; if not the Board should vote to replace the Treasurer.
EllenS1 (Florida)
Posts: 1,148
Posts: 1,148
Posted:
Removal of a board member does not necessarily require a vote of members. If the docs provide the board can remove this member.
SusanW1 (Michigan)
Posts: 5,202
Posts: 5,202
Posted:
Make sure there is a motion passed by the Board that indicates there WILL be an audit, WHEN, WHERE, and WHO will conduct it and WHO will attend. The Secretary should plan to attend, along with the Treasurer.
The company or person conducting the audit will give you a list of items needed for the audit.
If this Treasurer ignores the passed motion, remove him and work with your local sheriff dept. to get the books.
Do you know why he refused to present the financial data for audit?
The company or person conducting the audit will give you a list of items needed for the audit.
If this Treasurer ignores the passed motion, remove him and work with your local sheriff dept. to get the books.
Do you know why he refused to present the financial data for audit?
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Quote:
Posted By EllenS1 on 08/13/2008 3:13 PM
Removal of a board member does not necessarily require a vote of members. If the docs provide the board can remove this member.
Removal of a board member does not necessarily require a vote of members. If the docs provide the board can remove this member.
True but only when the Bylaws allow the Board to remove a Board member AND this do not conflict with your state's nonprofite act.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Quote:
Posted By RogerB on 08/13/2008 6:58 PM
Posted By EllenS1 on 08/13/2008 3:13 PM
Removal of a board member does not necessarily require a vote of members. If the docs provide the board can remove this member.
Removal of a board member does not necessarily require a vote of members. If the docs provide the board can remove this member.
True but only when the Bylaws allow the Board to remove a Board member AND this do not conflict with your state's nonprofite act.
Board members are elected by the members of the assn and can only be removed from office by a vote of the members, except for certain circumstances (past due assessments, missing a certain number of board meetings are two reasons that come to mind). I doubt the assn bylaws would allow a board member to be removed for the reason this treasurer may be considered for removal. An officer that has been appointed/voted into office by the board can be removed by the board. Some assn's elect the officers in which case they cannot be removed by the board.
JohnK3 (Pennsylvania)
Posts: 967
Posts: 967
Posted:
Quote:
Posted By KirkW1 on 08/13/2008 12:37 PM
...Let's say an audit costs $1,000. If not required by the documents, who's going to determine the necessity, and who's going to pay for it?
If not required, then the BOD (or the membership at large) decides. And the HOA pays for it of course.
Just because your documents don't specifically require an audit doesn't mean the BOD can't order one. And if the BOD orders an audit then the treasurer does not have the authority to withhold records for any reason (including he doesn't think it needed).
But I personally think that if the BOD has properly decided for an audit and fails because of resistance from the treasurer, then every member of the BOD has failed their fiduciary responsibility. In fact, the treasurer resistance to giving up the documents after a properly called for audit raises giant red flags to me. I want to know why. And I would move quickly to verify how much money is in the HOA accounts at the start of any resistance.
Audits should be done for two reasons:
1) To prove honest people honest.
2) To catch problems in your book keeping before the cause the appearance of impropriety.
The thing is that people make errors. And volunteers can make many errors in their keeping of records. But not doing things right is not always the same as being dishonest. But having an audit will catch the little things and set them right before they become big (and often expensive) things.
Kirk,
Well stated, and I agree, esp. as to a Tres who won't hand over the goods. A giant red flag, indeed.
We recently amended our ByLaws as follows:
>>>Bylaw 3.2(a) is amended to state, in part: All books and records shall be kept in accordance with good and accepted accounting practices, and the same may be reviewed at least once a year by an independent accountant retained by the Executive Board who shall not be a resident of the Community or a Unit Owner at the discretion of the Executive Board or at the direction of a majority of the Unit Owners who shall be polled each year for their vote. The cost of such review shall be a Common Expense. This Amendment shall apply to fiscal years 2007 and forward.<<<
The effect was to make audits optional rather than required. Why? $1K is over 5% of our annual dues and our books are so simple a caveman could do them...as demonstrated by me being the S/T.
About every six weeks, we provide Membership with running totals of EVERY expense paid amd EVERY deposit made. At year's end, we'll of course provide the final numbers and match them against our two bank accounts as of 01 Jan 09 with a printout. Currently, they balance down to $0.02. Yesiree, two cents.
Assume that remains the same. Would you, as a BOD or a member, spend $1K for the pair of reasons you listed above?
NOTE: Our D&O policy covers defalcation after a, conveniently, $1K deductible.
So, if we commission an audit, we're out $1K. If we don't, and it turns out me and the rest of the BOD has robbed the HOA blind, the max cost to the HOA is $1K.
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
First, the cost of the audit should depend on the complexity of the situation. But having said that if the system is very easy, no I wouldn't look for an annual audit. I would seriously consider having at least an consultation with an account every two or three years though. Part of this is that they will catch little things and make sure that you are in compliance with your rules.
For instance, if you have any property that depreciates, are you depreciating it correctly? Are you always placing expenses into the correct bucket?
These are very minor issues, but if you have the minor issue extending for years, then someone down the road may find a major headache in trying to correct the issues.
For instance, if you have any property that depreciates, are you depreciating it correctly? Are you always placing expenses into the correct bucket?
These are very minor issues, but if you have the minor issue extending for years, then someone down the road may find a major headache in trying to correct the issues.
DarylR (Washington)
Posts: 4
Posts: 4
Posted:
As the Treasurer Elected for 2008, we are still trying to get the prior Treasurer, 2004-2007, to produce the Income records for those years. All I got,handed to me on 6/21/08, were the copies of the paid bills, deposit records, cancelled checks and an aging report. The Pres has called her and we sent a letter requesting the records. The interesting thing to me is that she has yet to pay her dues from 7/1/08! HMMmmmmmm! My main prob is that the rest of the Board and especially the Pres, her next door neighbr, don't want to rock the boat. I have told them I will resign and file a complaint with the State if some Immediate action isn't taken. But they don't seem concerned????
As the Past Pres told me, "She's a FINE CHRISTIAN women!"
As the Past Pres told me, "She's a FINE CHRISTIAN women!"
SusanW1 (Michigan)
Posts: 5,202
Posts: 5,202
Posted:
So you are unable to verify REVENUE for that time?
Some groups have a financial secretary who does all the billing, etc for the dues/assessments. This person works with the treasurer and keeps track of ALL members' obligation to pay.
Some groups have a financial secretary who does all the billing, etc for the dues/assessments. This person works with the treasurer and keeps track of ALL members' obligation to pay.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Quote:
Posted By DarylR on 08/24/2008 10:23 PM
As the Treasurer Elected for 2008, we are still trying to get the prior Treasurer, 2004-2007, to produce the Income records for those years. All I got,handed to me on 6/21/08, were the copies of the paid bills, deposit records, cancelled checks and an aging report. The Pres has called her and we sent a letter requesting the records. The interesting thing to me is that she has yet to pay her dues from 7/1/08! HMMmmmmmm! My main prob is that the rest of the Board and especially the Pres, her next door neighbr, don't want to rock the boat. I have told them I will resign and file a complaint with the State if some Immediate action isn't taken. But they don't seem concerned????
As the Past Pres told me, "She's a FINE CHRISTIAN women!"
As the Treasurer Elected for 2008, we are still trying to get the prior Treasurer, 2004-2007, to produce the Income records for those years. All I got,handed to me on 6/21/08, were the copies of the paid bills, deposit records, cancelled checks and an aging report. The Pres has called her and we sent a letter requesting the records. The interesting thing to me is that she has yet to pay her dues from 7/1/08! HMMmmmmmm! My main prob is that the rest of the Board and especially the Pres, her next door neighbr, don't want to rock the boat. I have told them I will resign and file a complaint with the State if some Immediate action isn't taken. But they don't seem concerned????
As the Past Pres told me, "She's a FINE CHRISTIAN women!"
Daryl,
So you're missing the financial statements, budgets and tax returns for 3 years? What about the member files that have the accounting for all assessments paid? Can't you just send her delinquency notices w/o getting approval from the board? If she continues to refuse to turn over all the records the BOD can have an attorney sending her a demand letter. She has no right to these records and the board should not let this go just because they "don't want to rock the boat" because after all "she's a fine christian woman". IMO, if she was such a fine christian woman she would have turned over all the records w/o being asked to do so! In fact, that's what I would have responded back to the Past Pres.
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