Understanding Finances Reading Between the Line Items

 For a crystal-clear picture of how an association is doing, there are few better  lenses than the community's budgets and financial reports. From an investment  perspective, they show the shareholders, managers, tenants, owners, and board  whether the property is solvent or not. If the numbers add up and the monies  coming in and out balance, you can safely assume everyone is doing their job,  and upholding their financial 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.  

 “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. in East Brunswick. “ 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 association. So here’s a little Financial Paperwork 101.  

 Financial Statements

 Financial statements show the income and expenses for an association. Start by  taking a look at the various governing documents.  

 “Associations often do not have a complete set of governing documents. It is  imperative that this information be available since it provides valuable  information from both a financial and operational standpoint,” says Karen Sackstein, CPA, who has her own accounting practice in Fair Lawn.  

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Getting Financing and Board Approvals

 

Comments

  • I vote at every election, I feel it is my duty. To have the right given to me by the foefhaterrs of the country. In their memory of all the pain and suffering they endorsed to give me the freedom to vote. I always take the time and read over the budget information as well as the candidates, I try to find information regarding them from my neighbors. I also look to see if I know them from any involvement with the school or township activities. Then I make my choice. This year I'm worry because the extra money we received in the one time only from Federal only keep the taxes the same I would have like to see them low our taxes. and next year when we don't receive the extra money we will have to raise taxes twofold