Summary of Finance Committee Meeting of 6 June 2006

Present:

            Finance Committee:  Phyllis Benaman, Tom Cindric, John Frisch, Don Horan, John Lynch, Paul Rankin, Jean Strub

            Board of Directors (BoD):  Mal Malo, Bill Nosal, Toni Brown, Jackie Richards

Contract Reviews:  The only pending proposal was the Property and Grounds Committee’s for flowers and shrubs to be planted in various places in Falls Run.  The BoD members present said no action by the Finance Committee was needed and that the proposal would be considered by the BoD at their 7 June working session.

 Expected action by the Finance Committee during the contracting process was reviewed.  The Finance Committee will review the Request to Bid, including its statement of work and cost estimate, for completeness and reasonableness.  If the BoD approves the Request to Bid, proposals will be sought by FRCA’s management company.  After proposals have been received, evaluated, and ranked by the initiating committee, the Finance Committee will review the recommended proposal(s) for contractual issues, constraints, and implications.  The Finance Committee will generally not determine the affordability of the proposed contract.  Affordability will be determined by the BoD.  In specific cases, the Finance Committee may become more involved if requested by the initiating committee or the BoD.

 Monitor FRCA (Koger) Account:  On 26 May Mal Malo, Paul Rankin, Jean Strub, and Don Horan met with Jeff Koger, CFO of Koger Management, at Koger Management’s Fairfax office to discuss the quality and accuracy of the monthly financial reports and overall financial management.  It was a very productive meeting.  Jeff Koger had been given a list of our issues, concerns, and questions before the meeting and he had gathered relevant copies, as well as original documents, to support our discussions.  We had requested a copy of every invoice since 1 January 2006, and these were all provided and are presently being analyzed by Jean Strub and Paul Rankin.  We had requested the name of a person in the accounting department that we could go to for quick answers to specific questions; three names were provided.  We had been frustrated by constantly changing monthly financial reports over time.  We verified that this was caused by error correction inserted into the records for the month the error occurred.  From now on error correction will be inserted into the records for the month when the correction is made.  We were concerned about apparent ATM-based charges against the FRCA account.  We learned that the charges had nothing to do with ATM withdrawals, but were actually legitimate use of a debit card by Activities Director Ann Jones.  These charges will be properly identified on future reports.  We were concerned about the large amount of money due to the FRCA and listed as “Accounts Receivable”.  We learned that the general $130 monthly assessment from the villa residents is not paid directly to the FRCA account, but to the Villas account.  Periodically the Villas BoD transfers all of the general assessments for a month, ~$26,000,  to the FRCA account.  This transfer had not been made for a couple of months, which caused the alarmingly high figure for “Accounts Receivable”.  BoD Treasurer Mal Malo will look into getting a more timely transfer of the Villas’ assessments into the FRCA account.

 When analysis of the invoices for January 2006 to the present is complete, a list of errors will be given to Koger Management for correction.

  Monitor Community Center Account:  At present, details of purchases made by Ann Jones with the FRCA debit card are not known to Koger Management.  All they see is a general description of the purchase, i. e. merchant and total amount.  Ann has invoices to support the debit card transactions.  Phyllis Benaman and John Frisch will set up a new Quicken account to record details of each purchase made with the debit card so this detailed information can be provided to Koger Management for inclusion in the FRCA financial records.  

Quicken-based checks are now being written against the Community Center Account.  This seems to be going smoothly.  It replaces the need for manual writing of checks, which will save time and eliminate a source of error.

 Budget:  A new, preliminary chart of accounts which are more relevant to Falls Run than the accounts presently used by Koger Management has been prepared by John Lynch, Tom Cindric, Jean Strub, and Don Horan.  The new chart was briefly discussed and changes suggested.  It is expected that the 2007 FRCA budget will be based on a new chart of accounts, and that the management company will begin using it for financial records on 1 January 2007.

 As the Finance Committee prepares the FRCA 2007 budget, it will be useful to get information from all FRCA committees concerning projected 2007 expenses and income associated with new or expanded activities in 2007 in their areas of responsibility.  It would also be desirable to have interaction with other committees after a preliminary 2007 budget has been prepared.