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FINANCIAL REPORTING
Financial reporting
in homeowners' associations is regulated by Florida Statutes FS
720.303(7). HOAs are required to make financial reports -- reports
vary by size of the association -- available to members not later than
120 days of the fiscal year ended.
Parcel owners have the right, by vote of minimum 20%
of the voting interest, to change the report to a higher level than
required by statutes -- see below.
A copy of the financial report can be distributed to
the members or -- if the board so chooses -- a notice an be sent to the
members that a copy is available upon request.
But please remember, even an audit is NOT A FORENSIC
AUDIT -- and even the beat auditor can only report according to the
documents given to the auditor. Bad actors could get away with
embezzlement, even if the financial report shows no signs of any
wrongdoing.
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FS 720.303(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. Financial reports shall be prepared as
follows:
(a) An
association that meets the criteria of this paragraph shall
prepare or cause to be prepared a complete set of financial
statements in accordance with generally accepted accounting
principles as adopted by the Board of Accountancy. The
financial statements shall be based upon the association's
total annual revenues, as follows:
1. An
association with total annual revenues of $150,000 or
more, but less than $300,000, shall prepare compiled
financial statements.
2. An
association with total annual revenues of at least
$300,000, but less than $500,000, shall prepare reviewed
financial statements.
3. An
association with total annual revenues of $500,000 or
more shall prepare audited financial statements.
4. An
association with at least 1,000 parcels shall prepare
audited financial statements, notwithstanding the
association's total annual revenues.
(b)1. An
association with total annual revenues of less than
$150,000 shall prepare a report of cash receipts and
expenditures.
2. A
report of cash receipts and disbursement must disclose
the amount of receipts by accounts and receipt
classifications and the amount of expenses by accounts
and expense classifications, including, but not limited
to, the following, as applicable: costs for security,
professional, and management fees and expenses; taxes;
costs for recreation facilities; expenses for refuse
collection and utility services; expenses for lawn care;
costs for building maintenance and repair; insurance
costs; administration and salary expenses; and reserves
if maintained by the association.
(c) If
20 percent of the parcel owners petition the board for a
level of financial reporting higher than that required by
this section, the association shall duly notice and hold a
meeting of members within 30 days of receipt of the petition
for the purpose of voting on raising the level of reporting
for that fiscal year. Upon approval of a majority of the
total voting interests of the parcel owners, the association
shall prepare or cause to be prepared, shall amend the
budget or adopt a special assessment to pay for the
financial report regardless of any provision to the contrary
in the governing documents, and shall provide within 90 days
of the meeting or the end of the fiscal year, whichever
occurs later:
1. Compiled,
reviewed, or audited financial statements, if the
association is otherwise required to prepare a report of
cash receipts and expenditures;
2. Reviewed
or audited financial statements, if the association is
otherwise required to prepare compiled financial
statements; or
3. Audited
financial statements if the association is otherwise
required to prepare reviewed financial statements.
(d) If
approved by a majority of the voting interests present at a
properly called meeting of the association, an association
may prepare or cause to be prepared:
1. A
report of cash receipts and expenditures in lieu of a
compiled, reviewed, or audited financial statement;
2. A
report of cash receipts and expenditures or a compiled
financial statement in lieu of a reviewed or audited
financial statement; or
3. A
report of cash receipts and expenditures, a compiled
financial statement, or a reviewed financial statement
in lieu of an audited financial statement.
An association may not prepare a financial
statement pursuant to this paragraph for consecutive fiscal
years.
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