Guidelines for most CIRA (Common Interest Realty Associations) which includes Homeowner Associations, Condominium Associations, Cooperatives, Times Shares, and Community Development Districts (CDDs).
At a minimum, a condominium association is required to prepare a report of cash receipts and expenditures after the end of its fiscal year. Associations may be required to prepare compiled, reviewed or audited financial statements instead of the cash receipts and expenditures report.Which financial statement your association must prepare depends on its total annual revenues, as follows:
Total Annual RevenuesType of Financial Statement Required
$150,000 - $299,999 Compiled financial statements
$300,000 - $499,999 Reviewed financial statements
$500,000 and above Audited financial statements
When calculating total annual revenues, the Association must consider maintenance fees charged to owners for operations and reserves, all sources of other earned association income, and non-recurring sources of revenues including special assessments, insurance proceeds, developer funding, and legal settlements.Therefore even an association with a modest budget may require one of these levels of financial statements any given year.
We recommend you also check your governing documents to see if they require the Association to obtain a higher level of service than Florida law and if the association can waive the requirement. Please be sure to follow the requirements of your governing documents when obtaining a waiver for financial reporting.
Only an independent Certified Public Accountant (CPA) can issue a report on audited or reviewed financial statement. CPA's are your best option in preparing the proper compiled financial statements. If you are not getting the level of service required by Florida Statutes, we recommend you consult with your attorney about these requirements and the board's fiduciary responsibility to obtain the correct level of service, along with the potential consequences of not fulfilling these responsibilities. If you need an audit, review, or compilation, we would be happy to provide you with a proposal for this service. If you would like for us to prepare a proposal for you, please call Percy J. Legendre, III, CPA at (813) 679-1026.
Budgeting & Reserve Consulting Services CPAs can provide Condos and HOAs with a wide range of financial and consulting services in order to help it operate more effectively. A few examples of these services are:
Assisting in the preparation of the associationís annual budget in terms of format and content;
Working with the board to ensure compliance with the Florida Condominium Act regarding budgeting and accounting for reserves ó for future capital expenditures and deferred maintenance;
Advising the board on the methods available for funding the associationís reserve and deferred maintenance funds;
Helping the board of directors fulfill its fiduciary responsibilities by assessing the adequacy of the associationís accounting procedures and internal controls;
Advising the board of directors regarding matters relating to the developer and turnover of control of the association;
Assisting the board of directors in determining that a proper exchange of records occurs when there is a change in management companies;
Consulting with management and the board of directors regarding the associationís computerized accounting operations, software and hardware, banking, cash management and investments; and
Providing assistance with the adjusting and closing of its books and records. This service frequently is rendered in conjunction with the many types of year-end and taxation services we provide.