On Fri, 21 Oct 2005 18:42:55 -0400, Tony Tedesco
wrote:

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.


My own thoughts on the matter are that if you are this concernesd,
that it may be worth the peace of mind to have an outside auditor go
over things to be safe.

I havbe no idea of the cost but with that kind of money, i think it
would definitely not be out of line to do one especially if there is
no prior record of one having beend one.

I am president of a 22 unit condo with a budget a hell of a lot less
than yours..grin..and if I had to handle that sort of cash flow, I
think I'd want an occasional outside audit just to cover my own rump
if there were ever questions.

Especialy if say, several years from now, someone else did one and
found shortages, you might be the one left holding the hot potato.

It's a largely thankless job and those who voted for you could wel
lturn and rend you if something goes wrong, so I'd give some serious
thought to getting it done..that's a lot of money and people do get
tempted to skim and sometimes decimals simply leap about the page.

Jim P.