"Tony Tedesco" wrote in message
...
On Fri, 21 Oct 2005 21:51:48 GMT, "TKM" wrote:


"Tony Tedesco" wrote in message
. ..
I am a member of a new condominium board that was elected back in May
05, the board consists of 5 members, there are no surviving members
from the last board. We have our property managed by a management
company since 1997, there are 107 units with a yearly budget of
approximately $375,000.00. To the best of my knowledge we have never
had a audit of the management company, they do hire an accountant for
an end of year record of the last years finances. to me this is not a
true audit as in my eyes all they are doing is checking the management
companies arithmetic, and they were not hired or report to the board.
I guess my question is should we be auditing the management company ?
How often ? and under what parameters ? Thanks allot for any
assistance.

How are you set up and what do your condominium association bylaws say?

Ours say that an audit must be done once a year by an independent company
and reported at the annual owners meeting.
We are set up as a non-profit association and the management company is
employed by us to do just what it says -- manage the property. Our condo
board renews the management company contract each year. At some point
they
may decide to employ another company. So, we don't audit the management
company's books; but we do audit our books since that's our money.

TKM


What I was saying is that our management company keeps our books, so
if we don't audit them how do we know they are doing it correctly,
with supporting documentation of expenses, and proper accounting
practices. We are a not for profit and the management company was
hired by the last board they have been our management company for 7 -8
years, and no audit in that time to the best of my knowledge.

Way past time to get an audit. In the meantime, ask the management company
to give your board the monthly bank statements of your condo association
account and question items that you don't understand.

Consider pulling the financial operations from the tasks that the management
companly does and have another company do that. Your board should have a
financial person on it who looks at the accounts regularly. Pay that person
something if the work is extensive.

You have a significant amount of money to manage. Chances are that the
management company is O.K.; but it's good to be suspicious - it's your duty
as a board.

As the treasurer of a local non-profit charity once, I trusted the
"dedicated" office staff and didn't question some cancelled checks for
"postage and supplies" that had ink spilled on them so the amounts couldn't
be read. Turned out that one of the staff had a drug habit and $20,000
later, we found out.

TKM