Summary of Finance Committee Meeting of 23 October 2007
Present:
Finance Committee: Dottie Fields, Nancy Garner, Sanya Ham, Don Horan, John Lynch, Jean Strub
Board of Directors (BoD): Mal Malo
Activity Director’s Travel Account: Starting on 1 January 2008 the Activity Director’s travel account will be included as a separate account within the overall FRCA account handled by Armstrong Management Services (AMS). For budgeting and accounting purposes, income for this account will be identified as “Center Travel & Social Activities Income”, and expenses as “Center Travel & Social Activities Expenses”.
Procedures will have to be put into place to make this new way of operating go smoothly. Following is a concept, not yet adopted, of how this account may be handled in 2008.
1. The present B B & T checking account for this travel account will continue to be used. This checking account will be maintained at $10,000.00 to provide easily and quickly accessible working funds for the Activity Director (AD). The AD will be routinely reimbursed for expenditures from this account to keep the balance at $10,000. Shortly after 1 January 2008, the AD will write a check to FRCA for any funds in this account in excess of $10,000 and send this check to AMS.
2. Detailed records for individual events will be maintained by the AD in the AD’s computer, as is presently done. AMS will only maintain an overall record of account activity.
3. Income: All income will be sent to AMS for deposit into the FRCA’s operating fund. Deposits will be credited to the “Center Travel & Social Activities Income” account. Individual checks will be sent to AMS for deposit. Income received as cash will be deposited in the AD’s B B & T account and a check drawn for the deposited cash amount and sent to AMS.
4. Expenses: The AD will make payments for all travel and social activity expenses by checks drawn from the AD’s B B & T account. Periodically, the AD will send to AMS a record of checks written against the B B & T account. AMS will then reimburse the AD for these expenses by a check written against the FRCA’s Firstrust Bank account. Records of these reimbursements will be debited against the “Center Travel & Social Activities Expenses” account.
5. The $12,000 for “Social” in the 2008 operating budget is completely separate from this Center Travel and Social Activities budget.
Although invited, the AD was not able to attend this Finance Committee meeting to participate in this discussion because of a prior commitment. Over the next several weeks, the concept outlined above will be considered by the AD and Finance Committee members and then discussed again at our next meeting on 27 November. The AD has been invited to the 27 November meeting. We also expect AMS to provide standard procedures that other community associations use for similar arrangements, but these have not yet been received.
FRCA Account: The BoD has made only one modification, an addition of $20,000 for General Repairs/Maintenance, to the committee’s recommended 2008 operating budget. Mal expects that the BoD will adopt this budget at their 24 October session. The adoption of this budget by the BoD will result in an increase in the monthly assessment from $137.00 to $140.00, and a Net Deficit for 2008 of $73,116.
The explanation of Accounts Receivable - Management provided in draft 2 of the 2006 audit was reviewed by FRCA’s legal advisors to see if the words were adequate to support our insurance claim and our case in bankruptcy court. Wording changes were suggested and the BoD will decide further action at its 24 October session. Nancy Garner and Dottie Fields reported that the Villas are still reviewing their 2005 and 2006 audits for the same purpose. They expressed their belief that debts between the FRCA and the Villas due to erroneous payments for each other’s landscaping, insurance, etc. will be clearly resolvable.
The September financial reports from Armstrong Management were discussed. Concerns were expressed about adequate description of items charged against the following three accounts: Landscaping, Electrical Repairs, and General Repairs/Maintenance. [Later review by Jean Strub showed that adequate descriptions of the charges were in the General Ledger, although a few items were charged against the wrong account.] Excessive delay in making the monthly deposit into the Replacement Reserve fund was noted. Late payment on FRCA’s credit cards was also noted. Mal will bring these items to Armstrong Management’s attention.