Understanding Your Finances Reading Between the Line Items

 For a crystal-clear picture of how a co-op board or condo association is doing,  there are few better lenses than the community's budgets and financial reports.  From an investment perspective, they show the association board, property  managers, the unit owners/shareholders and tenants whether the property is  solvent or not. If the numbers add up and monies coming in and out balance, you  can safely assume everyone is doing their job, and upholding their financial  and fiduciary duty to the community. If the property is in the red, it’s important to determine why that is, and what needs to be done differently to  turn the situation around and restore solvency.  

 Maintaining and updating the accounting of their property is one of the primary  responsibilities of a board—one that is all-too-frequently neglected, according to the pros.  

 “I think the place to start would be to, to steal from the late Sy Syms—and the message is that an educated board member is the best board member,” says Jules C. Frankel, CPA, from the certified public accounting and consulting  firm of Wilkin & Guttenplan, P.C., with offices in New York and New Jersey. “And that doesn't mean that a board member should be interfering with a managing  agent or what the management company is trying to do. But that a board member  has a fiduciary responsibility, should understand what's going on, and  therefore help protect the property and the property values for their  particular condo or co-op.”  

 It’s important to understand each financial document and its purpose so you can  have a better understanding of exactly what’s going on in your building board or association. So here’s a little Financial Paperwork 101.  

 Financial Statements

 Financial statements show the income and expenses for a building board or an  association.  

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2 Comments

  • After reading the above article, two things come into mind that something is amiss in our Queens Co-op. The treasurer is the only person that sees, reviews and signs off on all bills that our site manager/resident/shareholder submitss for approval, and the management company signs a lll of our checks, and when I question the procedures, I was reported to the board presidents, by the same assistant site manager. The same treasurer was awarded the purchase of a foreclosure unit, after the first purchases was declined by the board, and is currently gutting the unit and having major work done. I asked the lead man that was doing the electrical work, if I could enter, which he allowed me to do. Later that day I stopped by the co-op office and asked I assistant site manager who reviews the "alteration agreement" and she said the site manager, and once again I was reported to the Board president, which was brought up at our last board meeting, and it became an "issue" especially when other shareholders are asked to submit inordinate documents, before being approved. It appears that whenever I ask questions and/or concerns obstacles are put into place the latest being a "code of ethics" form that I'm being asked to sign, which in essence will not allow me to perform my fiduciary responsibilities. Suggestions please Thank you
  • Our Treasurer has takev over25k in cash with drawals from our bank account and UHAB non profit orginization representative Yalanda Rivera has assist the majority of shareholders which is 3 members to keeping this Boardmember as the Treasurer and not hold her accountable how do the other 2 shareholders make remove her from the board and hold her accountable there are only tota of 5 shareholders 2 of the shareholders are friends with the Treasurer and chose to get on board to protect her what can the other 2 members do about this