Your role in the engagement
Each association is a separate engagement. It has its own engagement letter, signed on behalf of that association, and its own report. The board remains responsible for the association's financial statements. Management keeps the books and records that the statements are drawn from.
When an association is managed, the manager usually does much of the day-to-day work of the engagement. You gather the records, answer questions about transactions, and bring board-level questions to the board.
Year-end records we request
Requests vary with the association and the level of report. An audit draws on more support than a review or a compilation. Most engagements start from the following:
The full list, grouped and printable, is on the documents and records checklist.
Timing across associations
A management company's associations rarely share one fiscal year-end. Each one has its own statutory deadlines, measured from its own year-end. Florida requires the annual financial report to be completed within a set period after year-end and then delivered to owners. The outer delivery limit differs between condominiums and HOAs. See Florida reporting deadlines.
A few things help when you are planning across a portfolio:
- Know each association's fiscal year-end and required level. Include both when you request a proposal, so the engagement can be planned around that association's deadline.
- Plan owner votes early. If owners will vote to use a lower level of report, a condominium vote must take place before the fiscal year ends. See changing the level of the report.
- Close the books promptly after year-end. The engagement can only move as fast as the records are ready.
- Remember the tax return. The association's federal return uses the year-end figures, so it follows the financial statements.
The Feldman One client portal
Once an association engages us, records are exchanged through our secure Feldman One client portal. Upload documents there rather than sending them by other means. The portal keeps the association's files together and lets both sides see what has been provided.
Please do not send financial documents through the website's proposal form. That form is for requesting a proposal only.
Answering our questions
Questions are a normal part of every engagement. What we ask depends on the level of report:
- Compilations. Questions about how transactions were recorded, and any information needed to present the statements and notes.
- Reviews. Inquiries and analytical questions, such as why an expense changed from the prior year or the budget.
- Audits. Requests for invoices, contracts, and approvals for selected transactions. Banks are asked to confirm balances directly, and the association's attorney is asked about legal matters.
Clear, written answers with the supporting document attached are the most useful. If a question is really one for the board, such as a commitment or a legal matter, say so and bring it to the board.
At the end of an audit or review, the board signs a representation letter on behalf of the association, confirming that the records and information provided were complete.
What helps an engagement run smoothly
- Reconciled bank accounts. Every operating and reserve account reconciled through year-end, with old reconciling items cleared or explained.
- The owner ledger. A year-end owner ledger or aged receivables report that agrees with the general ledger, with prepaid assessments shown and delinquent accounts' collection status noted.
- The reserve schedule. An updated reserve schedule or reserve study, with reserve contributions, interest, and spending recorded in the reserve fund. Amounts the operating and reserve funds owe each other should agree on both sides.
- Minutes. Minutes for every board and owner meeting in the year, and for meetings after year-end, in one place. They show approvals for contracts, special assessments, and reserve spending.
- Year-end cutoff. Invoices for the year recorded in the year, and unpaid bills at year-end listed.
- Contracts and insurance. Current copies of major vendor contracts and the insurance policies in force.
The checklist has a short preparation section that covers these steps.
Next step
To request a proposal for an association you manage, share its type, number of units or parcels, fiscal year-end, and approximate annual revenue. The board makes the engagement decision, and the engagement letter is signed on the association's behalf. The engagement process explains each step.
