Summary of Finance Committee Meeting of 19 September 2006
Present:
Finance Committee: Phyllis Benaman, John Frisch, Sanya Ham, Don Horan, Paul Rankin, Jean Strub
Board of Directors (BoD): Bill Nosal, Mal Malo, Toni Brown, Jackie Richards
Koger Management: Bob Koger, Jeff Koger
Monitor FRCA (Koger) Account: Bob Koger and Jeff Koger, respectively President and Chief Financial Officer of Koger Management Group, Inc., were present to discuss finance and computer issues. Every month, the Finance Committee has called many errors in the financial reports to the attention of Koger Management. Correction of the errors was frequently successful, but at other times just generated a new set of errors. Every month, the Finance Committee has requested documentation to help identify the correct financial information. Generally the requested documentation was provided, but with missing items which frustrated attempts to get a clear, complete picture of our finances. When Koger Management went to a new computer application on 1 July to keep our financial data base and generate reports, major disconnects between the old and new data bases and reports were noted. Bob and Jeff Koger described the corrections that have now been made. Unfortunately, the corrections were given the date of the original errors instead of the date that the corrections were made. At a meeting with Jeff Koger in late May 2006, it had been clearly stated that we wanted corrections to bear the date of the correction, not the date of the error. Corrections given the date of the error make pre-correction financial reports useless because the numbers keep changing.
In order to enable the Finance Committee to understand our financial status, it was agreed by Bob and Jeff Koger that they would deliver the following documents by Thursday, 21 September:
· Financial Reports and General Ledger from June 2006 to the present with the ledger showing ALL accounts, whether they had activity or not;
· hard copies of August 2006 invoices;
· hard copy of the General Ledger, showing ALL accounts, from January through May 2006;
· copies of ALL bank statements from 1 January 2006; and
· copies of ALL CDs.
It was again agreed that future corrections or adjustments will bear the date of the correction, not the date of the error, except at the end of a calendar year.
Koger Management will verify the number of single family homes in Falls Run.
A check closing the Merrill Lynch investment account will be received soon. The Kogers were instructed that Koger Management is to open a separate, liquid account paying good interest and deposit the entire check into the new account. This new account will contain only replacement reserve funds. Mal Malo will inform Koger Management how much additional funding is to be put into this replacement reserve account to cover interest earned by replacement reserve funds to date during 2006. This information will be obtained from the bank statements to be delivered by Koger Management on 21 September. This new account is to be opened so that it will be covered by FDIC insurance.
The 2005 audit of the Falls Run accounts at Koger Management is still not complete. Goldklang, et al., the auditors, say they still need information on interest earned during 2005. The Kogers stated that they believe Goldklang, et al. have been given everything they requested. Tax returns have not been filed, although the 15 September due date has passed. Goldklang, et al. have enough information to believe FRCA will owe little or no taxes for 2005, and thus the penalty for late filing will be small, and possibly nothing.
The Kogers left the meeting before any other business was discussed.
Budget: A first draft of a replacement reserve budget for 2007 was discussed and clarifying changes made. It will now be forwarded to the BoD as a proposed budget for 2007. A second draft of the operating budget for 2007 was discussed, and changes made because of new information on a janitorial contract. Although there is uncertainty in the operating budget, primarily because proposals for a management contract have not yet been received and a janitorial contract is in progress, it was agreed that the Financial Committee has done all it can with the operating budget and it should be forwarded to the BoD as a proposed budget for 2007. Before the BoD has to act on the 2007 budget, information on the janitorial contract and proposals for the management contract will be on hand and the budgeted amounts for these contracts can then be adjusted.
Monitor Community Center Account: Matching the Visa debit card transaction records with the Activity Director’s records is still pending.
Desirable record keeping and reporting for the Community Center Account is now exceeding Quicken’s capabilities. Quicken was designed for home use and, therefore, has limited capabilities. It was suggested that the application be changed to Quickbooks, which is designed for small businesses and has appropriate capability. All of the data collected under Quicken can be easily transferred to Quickbooks. John and Phyllis can install Quickbooks, transfer the data, and train Ann Jones in its use.