By:  Jeremy Newman CPA. - Newman Certified Public Accountant PC.

• ​Engagement Letter – Sign Early

Obtain Board approval of the CPA’s engagement letter three to six months before year end and transmit to the CPA.

• Scope Changes – Early Communication

Let your auditor know as early as possible if there has been a change in the scope of the audit. Scope changes include management/accounting transitions, new special assessments, new loans, new litigation.

• Documentation Flow

Ensure all of your documentation is in place.  You should have documents to support every transaction, and every balance sheet account. Ensure documents and reports are provided to the auditor as completely and as early in the process as possible. Gather, save, and share documents related to significant transactions.

• Irregular Transactions

The auditor will need supporting documents for non-regular transactions such as laundry rent/commission agreements, cell tower leases, other rental income leases, insurance claims – reimbursements and expenses, special assessments, loans.

• Investments

If your association has investments in treasuries, mutual funds, stocks, bonds, municipal bonds, the auditor will need to determine market value and cost, together with realized and unrealized gains and losses. Ensure you obtain a transaction history report for the whole year from the investment advisor or brokerage. For income tax purposes, it is vital to present accurate gain or loss amounts. Often, brokerages provide annual tax reports which should be provided to the auditor and tax return preparer.

• Changes in Management

Obtaining all accounting report, transaction documents, agreements, contracts, governing documents and many other documents from prior management is vital to successfully completing an audit; let alone completing an audit efficiently. We recommend a checklist is used to ensure all association reports and documents are transitioned.

• Responses to Auditor Inquiries

Complete and timely responses to auditor inquiries can ensure the audit is completed efficiently and with less email exchange.

• What are Typical Causes for Incomplete Audits?

Missing bank or investment statements, incomplete insurance claim documentation, prior management incomplete records, incomplete responses, poor tracking of special assessment activity.

• Concluding the Audit

Upon provision of the draft audit report, auditors also provide boards and management with a representation letter.  The representation letter is from the board and management to the auditor. Auditors cannot release final audit reports is the representation letter has not been signed and returned to the auditor.

• The Good News

We can walk you through every step of the audit process.  Our goal is to make the audit experience as easy as possible for you. Audits do not need to be challenging. Communication and complete documentation are vital.

restricting or preventing a member of the association from displaying the flag of the United States on residential property within the association. This means that an American flag is allowed to be displayed.
 
This does not mean any U.S. Flag can be displayed in the Association. This act only allows protection for the traditional, red, white, and blue, 13 stripes and 50 stars flag, “Old Glory”, originally designed by Miss Betsy Ross herself. The act does NOT protect variations of the U.S. flag.
 
Please note that even though federally you can display a U.S. flag, the Association still has the ability to reasonably restrict the time, place, and manner of where you display the flag. This means that you should check your Association’s rules if you are ever unsure about whether your flag is allowed. These restrictions would be found in your Community Association’s governing documents, which usually include the Declaration of Covenants, Conditions, Restrictions and Easements (CC&Rs), Bylaws, and any other rules and regulations adopted by your community.  ​

​I’m certain that there are many communities (another word “associations”) out there that are getting ready to do improvements around their properties during this perfect season such as resurfacing asphalts, exterior building painting, entrance water feature renovation, etc. Of course, summer projects come with the question of “Are we adequately funded for these projects”. Preparing a bucket list of summer projects will help the association properly evaluate the timeline of project items/components that “need to be completed” and when funds are ready and become available for the project.
 
Funding options are varied depending on the community association’s financial status. The most common options are:

1. Reserve (Saving) Fund Account
2. Special Assessment- additional assessments that are needed for planned/unplanned repairs/replacements (not budgeted as part of the annual operating expenses).

​By Ella Cox

As the U.S. reopens, many community associations are continuing to navigate conversations with residents about COVID-19 vaccines. Since there is so much information surrounding them, navigating the myths and truths has been an ongoing challenge for board members and community managers.
When the vaccine rollout started in December, some community associations took initiative by partnering with health care providers to organize clinics where vaccines were administered on-site to residents as they became available. Others set up neighborhood-wide carpooling events for residents without transportation to help them get to a vaccination site.

Read the full article here...
article courtesy of ​ HOA Resources

Let’s talk about Association Volunteers! 

Who doesn’t love and appreciate anyone willing to help out?!  Of course, we all do, but is our Association covered?
Typically, we all hear the term “Workers Compensation” and immediately think that would only apply to businesses. “We don’t have any ‘employees’”, “we hire independent contractors”.  How does this apply to my Homeowners’ Association? 

First, let’s understand what coverage Workers Compensation provides. 

Workers’ Compensation is provided to protect employers for work related injuries to their employees.  The benefits can be medical expenses and income compensation that is provided to the employee, regardless of who is at fault. 
Workers’ Compensation coverage should be utilized by any Associations that have direct employees and indirect employees such as board members, volunteers, and committee members.

Of course, you are still wondering why would my Homeowners’ Association need this?  

​by Phoebe E. Neseth, Esq.

Close to 80 million U.S. households have an animal in their home. Pets come in all shapes and sizes and provide companionship to their respective families, but there also are animals that play an important role in the lives of people with disabilities and mental health issues by assisting with day-to-day activities or giving emotional support.
In honor of May being National Pet Month, we offer a summary of what constitutes an assistance animal, laws and regulations that apply to their ownership, and the approach community associations can take to rules and regulations specific to these animals.
Federal laws such as the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA), as well as state and local laws govern assistance animals in community associations (commonly known as homeowners associations, condominiums, and housing cooperatives.) Assistance animals are categorized in three groups:

• Service animals. Specifically trained to work or perform tasks for individuals with physical disabilities.
• Therapy animals. Provide psychological or physiological benefit to individuals or groups in a clinical environment.
• Emotional support animals. Provide comfort to people with mental health issues.

​Read the full article here
article courtesy of CAI Advocacy Team

A Reserve Study is a financial plan for funding the future replacement of major common area components in an association.  Roofing, exterior paint, streets, and pools are some examples of common areas that are shared by homeowners in an association.  Maintaining these common areas in order to preserve or improve the property values requires setting aside a portion of your association fees into a reserve fund. A Reserve Specialist gathers essential information from the association’s board or manager in addition to conducting a site inspection that aids in quantifying common area components as well as determining the estimated remaining life of each component.

The Reserve Specialist looks at things like the total of cash reserves currently set aside, the condition and remaining life of each component and the estimated current replacement cost of major components. He then prepares a budget for the association's reserve fund to ensure that when the major components have reached the end of their useful life there is money to replace or repair the component.

​We have learned association meetings have changed over the last year. In 2020 we saw many Associations push back meetings in the hopes of being able to still meet in person at a later date. Most associations had to adapt due to local gathering restrictions and in-person meetings were not possible.  

As time went on, many HOA’s started using online meeting platforms to allow “face to face” meetings. This has drastically changed the meeting landscape for associations with both positive and negative outcomes.  
With the shift to a more technology-based platform for meetings, we probably won’t be seeing them go away, at least any time soon, even with gathering restrictions being lifted.

There are a lot of benefits to an online meeting format; owners from other locations can attend, trends show that meetings are shorter, managers/staff save time from commuting and have an improved work/life balance, and ownership attendance has increased, helping keep more people informed.

Like with everything, there are negative effects as well; relationships can be harder to foster, voting is more complicated, it is harder to ensure everyone has a chance to be heard, secret attendees (people that can’t be seen) and for some, an online style meeting is not feasible.

Regardless of the pros and cons, meeting format has changed, and it is important to establish clear guidelines on how meetings will be handled moving forward. Below is a list of items managers/boards should review while putting procedures in place for future meetings.

PLEASE NOTE: these are general suggestions and may not be applicable to your HOA. You may want to review with your HOA attorney before making any adjustments to meeting procedures.

As the COVID-19 vaccine rolls out across the country and more people receive their shot, CAI board members are seeing a new trend: Vaccinated residents who do not want to wear masks. The evolving topic of mask wearing continues to create many questions and concerns for board members.
Even as more people receive their vaccine, COVID-19 guidelines remain the same: handwashing, social distancing, and mask wearing. New Centers for Disease Control and Prevention guidelines allow fully vaccinated people to gather indoors in small groups. They can also meet with unvaccinated people from one other household.
However, vaccinated residents still need to take precautions. They are encouraged not to gather in large groups and should wear a mask in public spaces and around high-risk individuals, according to the CDC.

​By Leigh Norman

In 2016, more than 3 million older Americans were injured due to a fall, according to the Centers for Disease Control and Prevention, and falls alone led to more than $50 billion in medical costs in 2015. With common causes of falls being snow and ice, more associations should evaluate their snow removal policy to prevent a costly liability lawsuit this winter.Edward Hoffman Jr., partner and co-founder of Barrow|Hoffman in Pennsylvania and a fellow in CAI’s College of Community Association Lawyers (CCAL) who practices insurance defense litigation for community association liability claims, responded to a few questions on snow removal policies.

Read the full article here
article courtesy of HOA Resources