26 Feb Preparing an Association’s Financial Reports

For many condominiums and homeowners’ associations, the end of the calendar year is also the end of the fiscal year. This means that associations should be well on their way to completing their statutorily required financial reports.

Unless a different date is specified in the bylaws, Florida condominium and homeowners’ associations have 90 days after the end of their fiscal year to prepare and complete or hire someone else to prepare and complete the association’s financial report for the preceding fiscal year. Once completed, associations have 21 days to either provide a copy of the financial report to unit owners and members or notify them that they can request a copy free of charge. This entire process must be completed no later than 120 days after the end of the fiscal year.

Though all financial reports must be prepared in accordance with generally accepted accounting principles (GAAP), the manner in which a financial report is prepared usually depends on the association’s total annual revenues. Financial reporting requirements are determined by statutory revenue thresholds, which were changed in 2013. These thresholds are the same for both condominium and homeowners’ associations.

• Associations with total annual revenues of less than $150,000 must prepare a report of cash receipts and expenditures
• Associations with total annual revenues of $150,000 or more, but less than $300,000, must prepare compiled financial statements
• Associations with total annual revenues of at least $300,000, but less than $500,000, must prepare reviewed financial statements
• Associations with total annual revenues of $ 500,000 or more must prepare audited financial statements

Condominium associations with fewer than 50 units and homeowners’ associations with fewer than 50 parcels must prepare a report of cash receipts and expenditures, regardless of their total annual revenues.

Though associations may vote to change their financial reporting requirements, the process is technical and strict requirements must be followed.

To learn more about your obligations as a board member, take our affiliate’s recently updated online course Condominium Operations: A Primer for Board Members, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

To learn more about your obligations as a board member, take our affiliate’s recently updated online course Condominium Operations: A Primer for Board Members, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

If you would like to discuss how Setnor Byer Insurance & Risk can serve you and your association, please contact us. Clients of Setnor Byer’s Condominium Program enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group and Unit Owners’ Report Line, as well as our affiliate’s Board Member Education Certification.

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