Post by Admin on Feb 28, 2014 22:31:52 GMT -5
(7) FINANCIAL REPORTING.—
Within 90 days after the end of the fiscal year, or annually on the date provided in the bylaws, the association sH all 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 sH all, 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 sH all be prepared as follows:
(a) An association that meets the criteria of this paragraph sH all 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 sH all 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, sH all prepare compiled financial statements.
2. An association with total annual revenues of at least $300,000, but less than $500,000, sH all prepare reviewed financial statements.
3. An association with total annual revenues of $500,000 or more sH all prepare audited financial statements.
(b)1. An association with total annual revenues of less than $150,000 sH all prepare a report of cash receipts and expenditures.
2. An association in a community of fewer than 50 parcels, regardless of the association’s annual revenues, may prepare a report of cash receipts and expenditures in lieu of financial statements required by paragraph (a) unless the governing documents provide otherwise.
3. 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.
Editor Note: SLR's fiscal year was changed in 2011 from October to March 31. This was recommended by the Management Company to coincide with the Management Company's contract.
(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 sH all 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 sH all prepare or cause to be prepared, sH all 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 sH all 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.
(8) ASSOCIATION FUNDS; COMMINGLING.—
(a) All association funds held by a developer sH all be maintained separately in the association’s name. Reserve and operating funds of the association sH all not be commingled prior to turnover except the association may jointly invest reserve funds; however, such jointly invested funds must be accounted for separately.
(b) No developer in control of a homeowners’ association sH all commingle any association funds with his or her funds or with the funds of any other homeowners’ association or community association.
(c) Association funds may not be used by a developer to defend a civil or criminal action, administrative proceeding, or arbitration proceeding that has been filed against the developer or directors appointed to the association board by the developer, even when the subject of the action or proceeding concerns the operation of the developer-controlled association.
Within 90 days after the end of the fiscal year, or annually on the date provided in the bylaws, the association sH all 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 sH all, 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 sH all be prepared as follows:
(a) An association that meets the criteria of this paragraph sH all 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 sH all 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, sH all prepare compiled financial statements.
2. An association with total annual revenues of at least $300,000, but less than $500,000, sH all prepare reviewed financial statements.
3. An association with total annual revenues of $500,000 or more sH all prepare audited financial statements.
(b)1. An association with total annual revenues of less than $150,000 sH all prepare a report of cash receipts and expenditures.
2. An association in a community of fewer than 50 parcels, regardless of the association’s annual revenues, may prepare a report of cash receipts and expenditures in lieu of financial statements required by paragraph (a) unless the governing documents provide otherwise.
3. 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.
Editor Note: SLR's fiscal year was changed in 2011 from October to March 31. This was recommended by the Management Company to coincide with the Management Company's contract.
(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 sH all 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 sH all prepare or cause to be prepared, sH all 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 sH all 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.
(8) ASSOCIATION FUNDS; COMMINGLING.—
(a) All association funds held by a developer sH all be maintained separately in the association’s name. Reserve and operating funds of the association sH all not be commingled prior to turnover except the association may jointly invest reserve funds; however, such jointly invested funds must be accounted for separately.
(b) No developer in control of a homeowners’ association sH all commingle any association funds with his or her funds or with the funds of any other homeowners’ association or community association.
(c) Association funds may not be used by a developer to defend a civil or criminal action, administrative proceeding, or arbitration proceeding that has been filed against the developer or directors appointed to the association board by the developer, even when the subject of the action or proceeding concerns the operation of the developer-controlled association.