| FINANCIAL REPORTING |
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UNDERSTANDING A COMMUNITY ASSOCIATION'S FINANCIAL STATEMENT The Association's Financial Statement reflects the financial condition of the Association for a certain period of time (Monthly, Quarterly, Semi-Annually or Annually). The first step at the end of each month is a reconciliation of the Bank Accounts to ensure that each transaction is properly accounted for. C. Allen Properties then prepares monthly financial reports for the Board of Directors. The report is comprised of the following: Accounts Receivable and Prepaid Fees Report This is a summary of any unit owner who is delinquent in paying their fees or has prepaid fees in advance. If delinquent, an explanation is given stating the steps that have so far been taken to collect the fees i.e., sending the pre-lien letter or turning the matter over to legal counsel. Balance Sheet The Balance Sheet provides a summary of the financial condition of the Association as of the end of each month. Assets are shown such as "Current Assets" including all bank account cash balances and "Other Assets" such as Maintenance Fees receivables, prepaid insurance and prepaid expenses. Current Liabilities are shown, such as prepaid Maintenance Fees, accounts payable and any debts. Long term liabilities include the monies in the Reserve Fund set aside for capital expenditures planned in the future. The Reserve Fund account balance for each expense category is reflected. Income Statement The Income Statement we provide shows Actual Expenses versus the Budgeted Expenses and shows the variance between the two. The Boards of Directors receive a Current Month-To-Date report of income and expenses and well as a Current Year-To-Date report. The income includes accrued Maintenance Fee Assessments, Bank Account Interest, and any other income received. The Expenses are broken down by budget categories. It's a comprehensive report that gives the Directors a valuable tool to track expenses versus the budget. Check Ledger Each month a Check Ledger is sent to the Board showing each expenditure; Date, Check Number, Vendor, Explanation of Expense and Amount. At C. Allen Properties we recognize the importance of keeping the Board of Directors completely up-to-date on all financial matters. We encourage communication, questions and involvement and we strive to provide reports that are comprehensive yet easy to read and understand. If you have any questions about your community association's financial status please don't hesitate to contact us! Lonna Allen, Accountant |