Hi,
An HOA audit should be quick and boring. It becomes slow, expensive, and ugly when the auditor requests records the association cannot produce. After a few board transitions or changes in property management firms, that is often exactly what happens.
It almost always traces back to the same things: missing monthly or annual financials, missing backup for important line items, reserve transfers nobody documented, and a management company or treasurer that changed without the records fully following. By the time the deadline hits, the people who actually handled the money are gone, and the auditor is billing double to reconstruct it.
A clean audit runs on organized records. This is what yours needs, in one place:
- Bank statements and monthly reconciliations
- Reserve-fund activity, with every transfer documented
- Assessment receivables – who owes what, and what’s been collected
- Vendor invoices and contracts
- Board and committee meeting minutes
- Loan and insurance documents
- Prior financial statements and tax returns
When those aren’t ready, here is what the association actually pays for it:
- Higher fees – the auditor bills for every hour spent chasing documents and explaining differences
- Blown deadlines – late financials, and missed filing dates your bank, governing documents, or state imposes
- A qualified or withheld opinion – if the evidence isn’t there, the auditor can’t give the clean opinion your lenders and buyers rely on
- Owner distrust – nothing erodes a board faster than “we’re not entirely sure where the money went”
The fix isn’t a better audit, it’s books that are audit-ready all year. That is what we keep in place for HOAs – reconciliations done monthly, reserve activity documented as it happens, and records organized so that when audit season arrives it is a handoff, not a three-month scramble. Start early and the whole thing gets shorter and cheaper.
Reply to this email by Friday and we will set up a free 15-minute call with one of our senior audit professionals. Send us your two most recent bank reconciliations, and we will tell you how audit-ready your association actually is.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com