Create progress by actually accomplishing something, rather than talking about it.
Non-board-member homeowners should ask tough questions. They are entitled to request records and to lobby for a financial audit.
Transparency should always be of utmost priority for board members, especially in areas related to finance. Any form of concealment begs suspicion.
Any board member, officer, or management company that conceals records and financial transactions should be suspect. Best practice would mandate association finances to be transparent to the homeowners at all times.
The monies belong to the homeowners as a whole.
Be vigilant about your HOA’s accounting practices. Be informed and demand transparency.
But our HOA did... The previous board paid some of the tax occasionally, sometimes they did not. Why didn't anyone on the previous Board have the business sense to realize the HOA did not pay tax on the real estate within a planned community that is owned by the association?
UPDATE: 5/6/2019, Finance Committee has adopted another of our ideas regarding bank reconciliations (well, better late than never).
"Finance Committee Notes 4/26/2019: "Committee member obtaining copies of recent HOA bank reconciliations from CCM to review and verify and will review them quarterly in the future." (See note above dated 5/6/2019).
Yep, for the last two and half years the Board has allowed the management company to reconcile our bank statements (not a good practice).
Over a year (2017-2018) of HOA financial statements and accounting procedures were not being thoroughly reviewed, the Finance, Budget & Insurance Committee ("Committee") had no access to the HOA's online bank account, and they were not reconciling our monthly bank statements.
(Source: audit correspondence and the HOA Board's "Guest Speaker", September 20, 2018 Board Meeting)
*We're not kidding, this was actually said by an accountant regarding a $94,170 error.
We presented a proposal to the HOA Board of Directors on June 1, 2018. We have had no acknowledgement or response from the Board. The Board promised to "get back to us." We have been waiting for a response.
UPDATE 12/2018: The December, 2018 Finance, Budget & Insurance Committee Meeting Notes indicate that a "possible 2019 project" could be the "review of all contracts and whether to establish a contract review sub-committee ."
WHY ARE WE DELAYING SOMETHING SO IMPORTANT? WHY IS THE FINANCE COMMITTEE MISAPPROPRIATING OUR PROPOSAL?
WE NEED NEGOTIATING AND CONTRACT REVIEW HELP NOW! The Contract Review and Negotiating Committee needs to be led by competent, experienced and skilled negotiators whose only focus is successful negotiating, review and execution of contracts. This Committee will also monitor and enforce vendor contract compliance.
Treasurer: "The proposal made by <the landscaping company> for lawn care did not include either Aeration or Lime application. It is correct that the verbiage including these items was included in the formal contract and that it was overlooked by both parties when it was signed." [emphasis added]
Advocacy Response: When executing a formal contract, sound business judgment dictates that the person signing the contract thoroughly read the contract and be aware of its contents. Landscaping is the HOA’s largest expenditure, shouldn’t that warrant some scrutiny of the contract? The contract was addressed to the management company. So, you’re telling us that neither the management company or the board president (signatory) caught the mistakes in the landscaping contract? Since the board is always concerned about homeowners following the community’s bylaws, it is important to note Article 4.8 Execution of Documents. This bylaw requires that contracts over $5,000 be executed by any two officers of the Association. The original contract was only signed by one officer. Did I hear someone say fiduciary duty... ?
Treasurer: "When this error was discovered, it was the Board’s belief that attempting to hold <the landscaping company> to provisions of a contract that both parties agreed were not to be part of the contract but were mistakenly inserted in the final document made no sense from a legal, ethical or business standpoint."
Advocacy Response: The board took no action on the contract until a homeowner, on March 3, 2018, discovered the “mistakenly” inserted provisions (your words) in the landscaping contract. The board did not reply until March 7, 2018. They responded with yet another CYA excuse. How much was the HOA charged in legal fees to come up with this explanation? What makes no sense from a “legal, ethical or business standpoint” is committing $295,242.00 of homeowner’s money via an incorrect and poorly executed contract.
Treasurer: "As a reciprocal show of good faith <the landscaping company> did brush hogging at the end of last year at no charge to Sewickley Ridge. It was also agreed to remove these items in the renewals."
Advocacy Response: “Reciprocal show of good faith?!” (More homeowner’s $$ paid for legal wording). The brush hogging occurred last year, a considerable length of time before you were made aware of mistakes in the contract. A one-time brush hogging service for two or three select locations in the community is hardly equal consideration for not providing community-wide aeration services.
And who decided we did not need aeration services? Even the latest transition document provided by the Transition Accountability Committee lists aeration as a requirement for remediation of poor turf conditions.
Treasurer: "As for the renewal, the contract clearly states that the services provided in 2018 would be the same as 2017 at the same price. As noted above, the addition of brush hogging services, which was done free of charge in 2017, is included as an addendum in the 2018 contract. This is common business practice and in no way, reflects an improperly renewed contract."
Advocacy Response: Again, common business practice is to read a contract before signing it. No modifications to the contract are in writing. The addition of brush hogging services is not an addendum, in the legal sense. (You may want to get some of that HOA money back you spent on legal advice.) Brush hogging was not in the original contract which is the one used for renewal; aeration and lime application services were in the contract that was never appropriately modified. The board approved the extension (their words) with no mention of the removal of aeration and lime application services at the Special Board Meeting 2/10/18.
Treasurer: "As to the note that there was not a current certificate of liability for the dates of this contract is incorrect. There was and is in the contract binder located at the clubhouse a current certificate of liability."
Advocacy Response: When the contract was initially reviewed by a homeowner there was not a certificate available or it was “misplaced” in one of the sealed, plastic cover sheets that the documents are placed in to make copying or scanning the documents inconvenient and difficult.
All of 2017 until we made this discovery in August, 2018, the signatories for the HOA's bank accounts and over $50,000 in CD's at a local bank were the management company owner and her son.
(Source: HOA bank account statements)
There are no limits on the HOA check amounts that can be signed by the owner of the management company. (Source: management company owner and check copies.)
Community documents require that contracts over a certain amount must have 2 signatures. Some contracts from 2017 had only 1 signature, leading to questions of the contract's validity.
The management company uses online payment services for only one account. All other expenses are paid by paper checks, signed by the management company owner.
Both the Board and management company maintain too many hard copies of documents and storage practices are less than secure. Developing an electronic storage and document management plan is recommended.
There appears to be a lack of proficiency in QuickBooks software usage.
(Source: management company owner, check register, observation at Clubhouse)
The balance sheet errors were reported to the Finance Committee and management company late last year (2017) and the Treasurer received documentation of the errors on June 1, 2018.
As of September 21, 2018, no corrections have been made.
The HOA does not have its own membership cards to the membership-only warehouse clubs or an Association credit card.
Most of Sewickley Ridge HOA's supplies are purchased from the warehouse clubs. Our money is used for the purchases and the management company receives the money from the yearly reward programs for the purchases. Since it's the HOA's money doing the buying; shouldn't the HOA receive the monetary "perks"?
Also, the management company owner uses her personal credit card to purchase items for the HOA and then bills us for the amounts. Again, it is our money making the purchases and the management company receiving the credit card rewards.
(Source: management company owner)
SUMMARY OF MAJOR ISSUE:**
The HOA brings legal action against residents because their patio exceeded size requirements set forth in ARC Committee Rules.
At the time the patio was built (2014) there was no Architectural Review Committee.
January 2016: the Board (still TOA-controlled) initiated the formation of an Architectural Review Committee (ARC).
At least 11 other patios in the community exceed the 16-foot limitation.***
Other residents whose additions were part of their contracts with TOA did not need ARC/Board approval and were permitted to install larger patios and other improvements that were not in compliance with the community’s governing documents.
*Source: Monthly Financial Statements
Board Meeting, October 10, 2019
**Source: Arbitration Documents
***Source: ARC Meeting Minutes, 2017-2019
ARC Variances/Requests for Modification, 2017-2019
Plus an additional $10,000 in the budget for "Landscape-Other."
As of September 2018, $6,623.05 has been expensed for "Landscape-Other."
But we can't afford to aerate?
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