Condo Media - July 2013 - 43

by Marsha Elliott and
Sam Tomasetti, CPA

ust as the federal and state
governments are dealing with
how to balance their budgets
and what they can reasonably ask
their stakeholders to contribute, condominium board members are dealing
with the same issues. As unit owners are
examining their personal finances, they
are also looking at where their monthly
condominium fees are being spent and if
they are being spent wisely. This added
scrutiny can make for a difficult term of
service for volunteer board members.
Most of the time, people want to work
together to get the best possible results,
and to that end, transparency in financial dealings goes a long way toward
getting everyone as close to compromise
as possible. However, this year we have
seen an increase in the concern that unit
owners have for how the financial affairs
of their associations are being handled
or, in some cases, not handled.
We have heard this concern regarding financial information provided in
self-managed settings and in independent third-party management situations.
The complaint is that the information
provided does not always meet transparency requirements at the highest level
with the related support available on
demand. In this article, we will be revisiting the tried-and-true fundamentals of
disclosure that all associations need to
keep their financial houses in order.
In supporting financial transparency, the following items should be on
everyone’s checklist:

Annual Budget

This is the financial model for the coming year. It is a critical document because
it brings together all the divergent financial viewpoints of the association membership. It reflects all the hard work and
compromise that a board must achieve
to obtain agreement and the permission
to ask for funding from the unit owners. It should reflect numbers but also
the assumptions that went into arriving

at the numbers. If an association has a
December year-end, this process needs
to be put on the schedule in August to
allow enough time for a vetted budget to
be finalized for the coming year.

should also provide a beginning and
ending balance for both the operating
and reserve funds so that the association knows how much cash is available
after the monthly activity.

Monthly Activity Summary

Check Register/
Disbursement Report

This summary should discuss significant
and relevant issues related to financial
data, including a list of all significant
unresolved financial issues past, present,
and future, thereby giving each meeting
a sense of purpose and also providing a
general recap of the monthly activity to
the reader of the financial package.

Cash Flow Report: Operating
and Reserve Funds
The cash flow report should include
a summary of the cash received and
the cash spent over the past month. It

The check register should include the
vendor, the check date, the amount
paid, and a description of the transaction. It is important to review the
check register each month to verify that
board-approved expenditures are being
paid and the fixed operating costs such
as water, insurance, and electricity are
being paid monthly. If there are transactions on the check register that look
unfamiliar, find out why. If there are
fixed monthly expenses that have not
been paid, inquire about them.

Representing Condominium Associations, Homeowner
Associations and Management Companies throughout
New Hampshire and Northern Massachusetts.
Providing representation in all areas of condominium
law from drafting and execution of condominium
instruments, amendments, collection of assessments to
litigation from trial through appeal.
For specific questions and to find out how we can
service your particular needs, please contact our office
and speak with one of our attorneys.

(603) 627-5997

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Manchester, NH 03104

(603) 742-1052
3 Webb Place
Dover, NH 03820

(800) 828-3200

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www.fenigeranduliasz.com
Serving clients in all of NH and northern MA
Condo Media • July 2013

Condo Media - July 2013

Table of Contents for the Digital Edition of Condo Media - July 2013