HOA and Condominium Association Audits in Florida: A Board Member’s Guide

Homeowners’ associations and condominium associations are entrusted with member assessments and the stewardship of community assets. Independent financial reporting can help boards meet statutory, governing-document, lender, or member expectations while giving decision-makers clearer information about operating activity, reserves, and financial position.

Determining the required level of service

Florida community associations may be subject to financial reporting requirements that vary based on revenues, governing documents, member action, and the type of association. An audit, review, compilation, or cash-receipts-and-expenditures report may be relevant depending on the circumstances. Boards should confirm the current requirement with association counsel and a qualified Florida CPA before the reporting deadline.

What an association audit examines

An audit commonly includes procedures related to assessments receivable, cash, reserve funds, investments, prepaid expenses, property and equipment, accounts payable, contracts, insurance, payroll or management expenses, revenue recognition, special assessments, contingencies, and the presentation of fund information. The auditor also considers relevant controls and tests selected transactions and balances.

Reserve funds and special assessments

Boards should maintain clear records supporting reserve designations, statutory or governing-document restrictions, reserve studies, transfers, expenditures, and any votes affecting funding. Special assessments require complete board authorization, member communications, billing records, collection information, and documentation of how the proceeds are restricted and used.

Audit-readiness checklist

Provide reconciled bank accounts, bank confirmations, assessment rolls, aged receivables, approved budgets, board minutes, reserve schedules, investment statements, invoices, contracts, legal correspondence, insurance information, tax filings, management-company reports, and support for significant transactions. Reconcile management reports to the general ledger before fieldwork begins.

How boards can improve the process

Designate one board or management contact, establish a realistic schedule, respond to requests through a secure portal, and review the draft statements and footnotes as a board. Communicate known disputes, fraud allegations, legal matters, related-party relationships, and unusual transactions promptly.

Talk with SAS Assurance

SAS Assurance provides independent assurance services to Florida organizations from Orlando and Apopka. Our goal is a clear, well-managed process and useful communication with the board. Visit https://www.sasassurance.com/contact-us to discuss the appropriate financial reporting service for your association.