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All Things Financial (BTW – Financials are FUN!!)

All Things Financial (BTW – Financials are FUN!!). Presenters: Gayle Cagianut, Cagianut & Company Patty Cathcart, Jimenez & Company. We will take questions during each topic We need to limit the number of questions in order to have time to get through everything

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All Things Financial (BTW – Financials are FUN!!)

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  1. All Things Financial(BTW – Financials are FUN!!) Presenters: Gayle Cagianut, Cagianut & Company Patty Cathcart, Jimenez & Company

  2. We will take questions during each topic • We need to limit the number of questions in order to have time to get through everything • Keep the questions as general as possible so that many can relate • We will stay after for specific questions • Go ahead – you can try and stump us. • Have fun!! Rules for Today

  3. GAAP • We will address • Tax • We will address • Legal – especially California Civil Code • Get a legal opinion!

  4. How much time is spent on the Treasurer’s report each Board meeting? • Does the manager and/or Board really review the financials before the meeting? • Are “real” financial items discussed or is it just a routine reading of the balances? • Be honest!! Financial Matters Matter

  5. 10 questions to ask • Is the cash protected by FDIC/US Govt? • If not FDIC insured, does the Association have an investment policy? • Does the bank statement & reconciliation agree with the cash balance on balance sheet? • Are there old, outstanding items on the recon? • Is there a large AR balance? • If so, has the Board addressed collection measures? • Have they consider a bad debt allowance or write-off? • Does assessment income agree with budget? • Is there other unusual income? E.g. settlements, insurance proceeds, etc. • Are there expenses that are significantly over or under budget? Are the checks or expenses that are unusual? Reading Financial Statements

  6. Balance Sheet Replacement Fund (Reserves) • Look to Reserve Study • Percent Funded • Funding Plan Operating Fund (Members Equity) • CAI/Industry standards • 1-3 months of operating expenses • Contingencies & Cash Flows How much $$ is enough??

  7. Categorizing reserve vs. operating expenses • Use of reserve money for operations • Due Between Funds – documenting repayment • Borrowing and not repaying Reserves vs. Operating

  8. How do I account for a unit that has been foreclosed on by the Association – as we wait for the bank? • How is rent recorded? • What about the monthly assessment? • What other accounting and tax issues are there? Foreclosed Units

  9. What is the difference between an audit and a review? • California Civil Code requirements vs. Governing Documents • Why would you choose to have an audit if a review is okay? Audit vs. Review

  10. 1120 vs. 1120-H • What are the differences? • When is one better than the other? • What is Revenue Ruling 70-604 and why should I care? Tax Options

  11. Your Questions Anything Else Financial???

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