Accountability and Financial Management of our HOA

Craig Osborn

A month ago, on April 17, I promised as the sole remaining board member after the resignations of the others, to set up a series of dedicated Q&A sessions for HOA topics because there are many questions that we all have a right to get answered.  Two of those Q&A sessions have been held, a third is happening tonight, and others are scheduled over the coming weeks, for all of us to be able to ask our questions.  One of those sessions, scheduled for June 3, is on the topic of financial management. 

As our new CFO (since April 25, 2018), I take my role seriously in providing better transparency of the money for all of us, as the owners.  It’s our money, and we deserve accountability.  You can expect far better transparency than has been given in the past.  We have been paying for years, and we deserve better information about what is happening with our money. 

On April 30 our independent financial audit of the HOA’s books as of December 31, 2017 was completed by the independent audit firm, and I made sure our HOA posted it online immediately the same day.  The report shows on page 3 that $174,790 of the HOA funds being held in the Operations Fund was due “to” the Replacement Fund as of December 31, 2017. 

In our May 3 open HOA board meeting, a question was asked by a home owner about that item as of December 31, 2017.   It’s a great question, and rather than wait a whole month, I promised to have at least an initial answer within two weeks.  It’s our money.

Here’s that initial answer as promised, and more details are continuing to be gathered for the complete answer by our new professional accountants (CiD Consortium) as they continue receiving turnover from our prior management company NCM, which was in place for all of 2017, the year covered by that audit report.  At this time the accounting records have been partially transferred, but a number of questions and requests for information asked by CiD are still pending complete answers and information from NCM. Based on the records transferred so far, CiD has explained that per NCM’s records the $174,790 was not a movement of money.  It represents the total amount planned to be transferred in 2017 to our Replacement Fund.  The $174,790 was a budgeted reserve allocation that was still waiting (as of 12/31/17) to be transferred.  It was a $114,790 budgeted allocation plus $60,000 additional reserve allocation.  The total $174,790 was scheduled to be transferred during 2017, but remained in our Operating Fund (awaiting transfer) at the end of 2017.  In fact it was still waiting on April 8, 2018 when the CFO resigned. 

After receiving this answer, as our new CFO I immediately authorized the transfer to correct it. 

This is another reason why the financial audit was helpful – it pointed out the remaining action needed to complete the transactions intended to be done in 2017.  That’s why I advocated to have this audit done, and it’s already showing that it was a good step because it pointed out the delay in authorizing that 2017 transfer and the need for this corrective action. 

This is also why I set up that dedicated Q&A session specifically for any questions about financial management of our HOA, which has been scheduled for June 3.  Our accounting firm (CiD Consortium) and board members are currently planning to be there.

There was also a question about interest accrual, which is in progress, and I’m very open to any new questions from any home owners, so we can be confident that our HOA’s records (after any necessary corrections) will be entirely complete and accurate, as we would expect.  Please feel free to ask more questions that you may have – using either our new online suggestion box or at our open Q&A session June 3, or at any open HOA board meeting, or via the regular suggestion box at our Clubhouse if you prefer.  

I plan to continue using our accounting firm to identify any other corrective actions that may be needed, along with the 2017 independent audit report.  I will also advocate for a full financial audit of our 2018 records, to be conducted in early 2019, and to continue with such audits every year going forward, to give us much better transparency of our HOA.  It’s our money.

Craig Osborn
Chief Financial Officer (CFO) since April 25, 2018