|
THE WAR OVER FINANCIAL REPORTING
By
Jan Bergemann
Published
December 21, 2012
Year
after year the war over financial reporting starts again in many
community associations.
Make
no mistake, the
Florida
statutes regulating financial reporting are clear – and
detailed – unlike many other provisions in the statutes.
FS 718.111(13) and FS
720.303(7) explain in detail how financial reporting
should be handled.
Here
is the wording of FS
720.303(7):
(7) FINANCIAL REPORTING.--
Within 90 days after the end of the fiscal year, or annually on
the date provided in the bylaws, the association shall prepare
and complete, or contract with a third party for the preparation
and completion of, a financial report for the preceding fiscal
year. Within 21 days after the final financial report is
completed by the association or received from the third party,
but not later than 120 days after the end of the fiscal year or
other date as provided in the bylaws, the association shall,
within the time limits set forth in subsection (5), provide each
member with a copy of the annual financial report or a written
notice that a copy of the financial report is available upon
request at no charge to the member.
For
the complete provision please go to:
http://www.ccfjfoundation.net/HOAFS720.303-2010.htm#(7)
FINANCIAL REPORTING
The
wording for condos in FS
718.111(13) is nearly identical.
So,
why is it that many boards and the hired service providers often
plainly ignore these laws – and even ignore specific requests
by owners to obtain copies of the documents that the association
is by law required to mail out for free within a certain
timeline?
Many
owners will claim that the board has something to hide,
something the financial reporting might reveal. Make no mistake,
even the audited financial statements required for associations
with total annual revenues of $400,000 or more are in reality no
forensic audits. Financial shenanigans are still easy to hide.
The
next best explanation: The board members either don’t know
better, or know that nothing will happen to them if they ignore
the laws. So, why bother? The worst scenario – for condos
only: The association gets fined for ignoring the existing
financial reporting laws. But the fine would be paid from the
association funds – and then it’s still time to blame the
owner who blew the whistle at the Bureau of Compliance. HOA
members would even have to file a lawsuit to enforce these
provisions.
Make
no mistake: It’s more common in our society to blame the
person who reported the violation of laws than it is to hold the
persons who actually violated the laws responsible for their
actions. Some board members have no problems to blame these
“whistleblowers” in the association newsletters, claiming
they are responsible for the fine the association had to pay.
My
recommendation to the owners who live in associations where
board members have such a bad attitude: Remove these board
members at the next annual election, because they are wasting
your hard-earned money. If they are unwilling to follow the
laws, they have no business being members of the association
board.
The financial reporting provisions are there for a reason. Every owner should have the opportunity to see where his/her money is being spent. Is that really too much to ask for?
Our
bloggers will take a well deserved vacation until after the
holidays when we will be back with more educational blogs.
I
wish you and your family a Merry Christmas and a Happy New Year!
My
wish for the NEW YEAR? Let’s make sure that our HOA Reform
Bill gets enacted in the upcoming legislative session, so we
will see fewer association wars in the future!
Even
my cats are already in a holiday mood…
|
