Summary of Finance Committee Meeting of 7 March 2006
Present:
Finance Committee: Phyllis
Benaman, Tom Cindric, John Frisch, Sanya Ham, Don Horan, Jean Strub
Board of Directors (BoD): Bill
Nosal, Jackie Richards
Monitor FRCA (Koger) Account:
Jean Strub reported on progress monitoring the Falls Run Community
Association accounts managed by Koger Management.
The Balance Sheet dated 31 January 2006 delivered by Jeff Koger showed a
Net Income in January of $31,490.66, and this number is correct.
The version of the 31 January Balance Sheet delivered on 22 February
shows a Net Loss in January of $2,742.95, but this number is incorrect.
On 28 February, John Frisch, Don Horan, and Jean Strub met with Sylva
Southwell of Koger Management to become familiar with Koger’s financial
processes and to discuss the January financial statements.
A copy of the Chart of Accounts was received; however it does not provide
a description of the accounts. Jean
will work with Sylva to add descriptive information to the document.
Since these accounts are used in Koger’s financial system for other
customers besides Falls Run, existing account titles and numbers can’t be
changed. However, accounts may be
added to capture financial information differently for Falls Run, such as
Workman’s Comp Insurance under Payroll accounts, and adding Replacement
Reserve and Operating Reserve accounts in place of Multi-Purpose Reserve.
We learned that all invoices/billings are received in Koger’s
Fredericksburg
office by the receptionist and a stamp is used to provide a format for
recording the date received and related accounting data on each invoice.
Once Sylva reviews these documents and determines they are appropriate
for payment, she assigns the accounting code to be charged, initials the
document, and circles the amount to be paid.
She transmits approved documents to Koger’s
Fairfax
office for payment and recording into the financial system.
There are two payment cycles each month.
Any subsequent correcting or adjusting of entries are made by the
Fairfax
accounting staff. Monthly financial
statements are prepared by the
Fairfax
accounting staff. Review of the
January financial statements resulted in several follow up actions/corrections
to be performed by Sylva, and by the Fairfax accounting staff (Jeff Koger),
including correction of the Net Income figure for the 31 January Balance Sheet.
Members of the Finance Committee will meet with Sylva to review invoices
received and approved for payment in March.
We plan to visit the
Fairfax
office to follow the financial processes from payment and recording in the
financial system through preparation of the financial statements.
Of particular interest will be any review of the data entered, and how
adjusting/correcting actions are taken.
Monitor
Community Center
Account: Phyllis
Benaman and John Frisch reported progress in monitoring the Community Center
account kept by Ann Jones. This
checking account uses the Quicken application to manage the financial
information. Quicken was installed
on Ann’s computer in June 2005. The
Quicken data and the bank statements have been reconciled from June 2005 to the
present using Quicken’s inherent capability.
Prior reconciliations with the bank statements were done manually.
Quicken can now be used to continue the reconciliation of the bank
statements with the computer data each month.
The register in the check book does not yet agree with the Quicken
information and the bank statements. Work
is continuing to locate and correct the discrepancies.
However, the total discrepancy is small and not a cause for concern.
Although the Quicken data is backed-up regularly, the memory device
containing the backed-up data is kept on site.
A second back-up memory device will be obtained so a copy of the Quicken
data can be kept off site. The Board
of Directors should review the approved signature authority for the checking
account.
Contracts: Sanya Ham
reported on her pre-acceptance analysis of the pool contracts for the outdoor
pool and for the indoor pool and spa. She
said both contracts contained the necessary information and the costs were fair.
She had raised questions about the change from the indoor pool’s
present chlorine system to a salt-chlorine generator system.
Her questions were investigated and resolved.
The proposed contracting guidelines were discussed.
These guidelines will be used in the process of obtaining contracts for
goods and services. The major point
of discussion was the requirement for a cost estimate, since this may be
difficult in some cases. However,
since even a rough cost estimate would be of value in the BoD’s decision to
proceed with awarding of a contract, it was decided to leave the requirement in
the guidelines. The guidelines will
now be forwarded to the BoD for coordination with Koger Management’s
procurement procedures and subsequent approval by the BoD.
Proposed Collection Policy:
The Finance Committee was asked by the BoD to propose a set of procedures
to be followed by Koger Management to collect those monthly assessments which
are or become considerably overdue. The
committee agreed on the following steps:
1. after 30 days, impose a
late fee and interest charges, and send a reminder letter to the owner;
2. after 90 days, send a
letter by certified mail warning that a lien against the property will be filed;
3. after 120 days, file the
lien; and
4. after 240 days, commence
foreclosure.
This proposed collection policy will now be forwarded to the BoD for
review by legal counsel and by Koger Management, and subsequent approval by the
BoD.
Replacement Reserve: A
summary of all contributions to the Replacement Reserve Fund was presented.
A summary of annual disbursements from the Replacement Reserve projected
by the Mason & Mason Report of 2005 was also presented.
A comparison of the two summaries will be necessary to plan an investment
strategy for the community’s Replacement Reserve funds.
