If you want to find out about the history of a town, region or country, head to a museum or look it up on the Internet. If you want to find out about your family’s history, look at your photo album, whether it’s in a book or online. And if you want to find out your medical history, well, good luck!
But if you want to find out about past financial records of a condo or co-op development, that history is comprised of all sorts of documents, financial records, minutes of meetings, election results, invoices, and other records that are kept from year to year. How are these records kept, and what are the most important pieces of the “historical record” for board members and managers? The answers are complicated, but fortunately, financial professionals can help.
What You Should Know
To begin with, what is the minimum financial information that board members should know and understand about their buildings? While boards need a financial professional in their corner, that doesn’t mean that there’s not some basic information that they should know and understand on their own. Obviously, the accountant or other expert can’t be there all the time!
Most professionals agree that there's a list of documents that are essential to keep on-hand and up-to-date at all times. These include shareholder or unit-owner arrears, cash balances, unusual items such as special repairs or overtime, long-term unpaid invoices, reserve activity and balances, profit-and-loss statements (also called income statements), accounts payable, accounts receivable, subsidiary ledgers, bank reconciliations, check registers, general journals, open liabilities, expense and income vs. the budget, and major capital projects coming up. That's quite a list.
Rick Montanye, CPA, of the Uniondale-based accounting firm of Marin & Montanye LLP, says many of these items are contained in a monthly report provided by the managing agent, which is reviewed by the treasurer or other board members each month. “The treasurer then reports those financial activities to the balance of the board at a monthly meeting,” he says. “In general, the board members should be apprised of any shareholder or unit owner arrears issues, cash balances, unusual items such as special repairs or overtime in a particular month, reserve activity and balances, and any unpaid invoices that are over 30 days.”