Unless you have a degree in accounting, your first board meeting could come as a bit of a shock. You probably knew board members oversee the finances of the corporation, but who knew there were so many records to produce and filing deadlines to meet?
Whether or not you have a management firm handling the affairs of the corporation, according to Jules Frankel, CPA and principal of the East Brunswick, New Jersey-based accounting firm of Wilkin & Guttenplan, P.C., “Everybody on the board, whether you are a financial expert or not, has a responsibility to understand how you come up with a budget for the building and to make sure that the monies that are being expended are appropriate for your building.”
In other words, you’ve got to know what’s in the books and reports of the corporation. And really, you should have some idea of what forms need to be filed with whom and when to file them and the penalties for failing to meet deadlines.
Looking at the Essentials
The Financial Statement: Everyone knows a corporation must issue a financial statement, typically audited by an independent accounting firm. And every building complies, right?
“Some do not,” says Victor Rich, a partner with RSM McGladrey, a Manhattan-based financial consulting firm. “A smaller building might want to take a chance, just to save a couple of bucks.” Problem is, “they would get into trouble if something came up—the board could be deemed negligent.”