financial flickr courtesy of www.SeniorLiving.orgThis question comes up a lot from our association clients. The short answer to the question is “yes.”

When are they due?

Under Florida law, community associations are required to provide owners with an end-of-year financial report. Specifically, within 90 days after the end of the fiscal year, or annually, as provided for in the bylaws, the association shall prepare and complete a financial report for the preceding fiscal year. The financial report must be mailed or hand delivered to the address last provided to the association, upon written request from an owner.

Are formal audits required?

The type of financial report the association is required to prepare will vary, depending on the number of units in the community and the association’s annual revenue. The provisions contained in the association’s governing documents will also govern the reporting requirements.

If an association’s governing documents do not require that an audit be conducted annually, then owners may vote to prepare a less expensive report of cash receipts, expenditures, and related documents, in lieu of an audit. However, if the governing documents require that an audit be prepared annually, the association cannot waive such requirement by a vote of the owners.

Bottom Line

It is important for association boards to review their governing documents to ensure they are meeting all reporting requirements. Moreover, to the extent an association’s governing documents require an annual audit be prepared, an association should evaluate whether it is cost-effective to keep such provision, and may consider amending its governing documents to remove the requirement.

Photo Courtesy of www.SeniorLiving.Org under Flickr Creative Commons License