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PatriciaS
(Florida)
Posts:12
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| 10/19/2006 9:16 PM |
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| Our community has not had an audit since the 80s. They are going to do an audit now under pressure at $4,000. However, they have decided to do audits back 7 years because that is all that they need to do. Translation $28,000 at best. I have a feeling once they start to go back a few years finding the data will be more labor intense; thus higher costs. Is there any organization that a member could report this to? This is total disregard for our bylaws as well as state law. Do the HOA have to file with the irs? Thasnks |
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Patricia S |
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LizJ
(Florida)
Posts:34
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| 10/19/2006 9:53 PM |
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I am not a professional, just a member of a homeowners association in FL learning as I go.
You didn't mention your state or whether your are a condo or homeowners association. FL has a statute that sets the requirements for the level of review of financials based on the total annual revenues of your community. If your revenue is below $200,000, for instance, you do not need a full blown, formal audit unless your governing documents state otherwise. The greater your community's annual revenues, the greater the level of formal audit required. If you are in FL, it is in Chapter 723 of the FL Statutes. I have personally just gone through this exercise because our governing document specifically that "an annual audit by a CPA" is mandatory and the President and Treasurer don't want to do one. |
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BrianB
(California)
Posts:1748
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| 10/19/2006 10:07 PM |
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| most HOAs must file with the IRS, because they get income. Most (small) HOA's don't end up paying taxes, but they still must file each year. |
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GlenL
(Ohio)
Posts:1468
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| 10/19/2006 10:56 PM |
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| Also check your CC&R's, ours mandates a yearly audit. |
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RogerB
(Colorado)
Posts:3725
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| 10/20/2006 7:04 AM |
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Posted By PatriciaS on 10/19/2006 9:16 PM
Our community has not had an audit since the 80s. They are going to do an audit now under pressure at $4,000. However, they have decided to do audits back 7 years because that is all that they need to do. Translation $28,000 at best. I have a feeling once they start to go back a few years finding the data will be more labor intense; thus higher costs. Is there any organization that a member could report this to? This is total disregard for our bylaws as well as state law. Do the HOA have to file with the irs? Thasnks
Patricia, to provide accurate info please include:
What state? What type association? Does the Declaration require an audit? If so, how often and do the HOA financial transactions justify a $4,000 annual audit? Should you amend the Declaration to have the choice of doing a financial review? What is the justification for an audit which goes back 7 years?
Yes, the HOA has to file taxes with the IRS and usually with the state each year. Filing taxes is not related to an audit or a financial review.
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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VickiT
(North Carolina)
Posts:1
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| 10/22/2006 6:09 AM |
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| I'm currently President of a small homeowner's association in North Carolina for single family homes. Our annual income is less than $15k. I can't find anything in the declarations requiring an audit. We have never done one or filed any taxes to the best of my knowledge. Where can I find the information that will define our responsibilites? |
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JosephW
(Michigan)
Posts:787
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| 10/23/2006 9:18 PM |
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Vicki,
Here's the section of the law for NC regarding financial records. If your documents don't reuire an "audit", they may require an independent review of the books. Even if it doesn't mention this, you will still want to have someone qualified at least review the books and handle the taxes.
47F‑3‑118. Association records.
(a) The association shall keep financial records sufficiently detailed to enable the association to comply with this Chapter. All financial and other records, including records of meetings of the association and executive board, shall be made reasonably available for examination by any lot owner and the lot owner's authorized agents as required in the bylaws and Chapter 55A of the General Statutes. If the bylaws do not specify particular records to be maintained, the association shall keep accurate records of all cash receipts and expenditures and all assets and liabilities. In addition to any specific information that is required by the bylaws to be assembled and reported to the lot owners at specified times, the association shall make an annual income and expense statement and balance sheet available to all lot owners at no charge and within 75 days after the close of the fiscal year to which the information relates. Notwithstanding the bylaws, a more extensive compilation, review, or audit of the association's books and records for the current or immediately preceding fiscal year may be required by a vote of the majority of the executive board or by the affirmative vote of a majority of the lot owners present and voting in person or by proxy at any annual meeting or any special meeting duly called for that purpose.
Joe |
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Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
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