DRAFT
Finance Committee Meeting
January 15, 2008
Present: Finance Committee (FC): Jean Strub, John Frisch, and Bill Trzyna
Board of Directors (BOD): Don Horan and Jack Mounts
Community Center Social Account:
Bill Tryzna, lead for this subcommittee, took the Quick Books Pro soft ware and documentation home and worked with it to familiar himself with the software. He then worked with Ann Jones to understand the existing set up and the deficiencies in the output for accountability purposes. Bill established a new data base (new company name) for 2008; with Customers for all Social travel, events and activities. This will allow the software’s job costing capabilities to track income and expenses by activity. Bill and John Frisch will continue working with Ann to close out her 2007 bank account and activities so that beginning balances can be recorded in the FRCA accounting records.
Offsite backup of the Quick Books Pro data base has been accomplished by John Frisch in the past by downloading a copy onto a flash card and taking it home. However this download function is no longer working properly so a copy of the data base is updated weekly on the Community Center server. While this provides a backup it is in the same facility and an off site backup is needed. Bill and John will discuss with Denzel Willis what other options are available to create a backup that can be maintained off site.
Contracting Forms & Procedure:
Don Horan modified the existing Request to Seek Contractors and Request to Award Contract forms and FRCA Procedure for Contracting and requested Finance Committee comments.
Since Sanya Ham, lead for the Contracts subcommittee, would not be able to attend this meeting she and Jean Strub met off site to discuss the revised procedures. The Finance Committee will develop a Check List/Approval form to add to both stages in this process. Each of these forms will provide a checklist of the specific financial requirements for that stage; i.e. adequate Statement of Work, etc. The forms will also provide for the Finance Committee’s recommendation of approval or disapproval. If the recommendation is for disapproval then specific reasons/justification will be detailed on the form.
This form will act as a cover sheet and the entire package will be forwarded electronically to the Board of Directors via the Treasurer.
All contracts, new as well as renewals, must be reviewed by the Finance Committee from a financial perspective.
Collection Policy Update: The old policy the FRCA had established when managed by Koger was reviewed and commented on over the past couple of weeks via email. Recommended changes and comments were provided to the Treasurer, Don Horan on December 31, 2007. The biggest change was to limit AMS sending notices when amounts due are less than one months assessment. We didn’t think it made sense to pursue collection of $6.85 late fees when AMS currently charges $5 for every reminder letter and $20 for demand letters.
Committee Charter: The existing charter for the Finance Committee was discussed and deemed to be adequate without change. However, there appear to be some impediments to the committee being able to complete the activities as outlined in their charter. The most critical is not receiving contracts for review prior to their being finalized. Obtaining copies of signed contracts, even after the fact, has been an ongoing challenge. Additionally the ability to “review insurance policies for adequacy” was not possible since the Finance Committee was not consulted when a new insurance contract, under a new company, was finalized late in 2007 and has not as yet received a copy of the policies. Although there is some question about the value the finance committee could add to determining the adequacy of insurance coverage. Don Horan stated that he will get a copy of the insurance policy to us. His goal is also to insure the finance committee receives all future contracts for review per the revised contracting procedures.
Meeting with AMS:
Toni Brown, Jake Bernard, Don Horan and Jean Strub went to the Fairfax office of Armstrong Management Service (AMS) earlier today to discuss concerns over some accounting practices. Present from AMS were Larry Ellis, Regional Director-Southern Region, Susan Manch, Regional Area Manager, Dennis Emison, Director of Accounting, and Suzanne Allen, financial team member assigned to FRCA. A list of the issues of concern was sent to AMS earlier and they were well prepared with information and recommendations for corrective actions.
Late payment of bills – AMS has agreed to pay of all fees resulting from late payments. Once new credit cards are obtained, with Corporate ID#, those bills will be paid immediately upon receipt by AMS. Ann Jones and Sylva Southwell, the only two card holders, will be requested to scan in all receipts and submit to AMS every Thursday morning electronically using a transmittal with a breakdown of expenses by account code. The monthly insurance bills will be paid immediately by AMS, without submitting to Sylva for approval. Direct debit will be initiated if agreeable with the insurance carrier.
Internal personnel problems were the cause of the problems noted in untimely deposits of the monthly Replace Reserve allocations, which will be electronically transferred the 1st Wednesday of each month and all related journal entries will be also recorded at that time. A template had already been developed to insure consistency in these ACH and accounting transactions.
Current CD rate information will be forwarded by AMS to Don, Jean and Paul Rankin each Friday between now and early February. The funds from the CAB CD maturing on January 31st will be electronically transferred to the BB&T Money Market Account on February 1st. BoD approval will be requested based on the January 18th rate informal as to number, amount and duration; some latitude will be requested as to specific bank which will be determined based on rate information provided on February 1st.
Coupon books had to be sent to all FRCA members residing in the Villas because AMS and the Firstrust Bank did not have written authorization from the home owners to electronically collect the monthly assessments. Authorization slips were included with the coupons. No late fees will be incurred by these residents in January or February due to the timing of the notification and authorizations.
There is an annual Assessment Processing Fee of $5 to the FRCA for every homeowner regardless of how they pay their assessments.
There was agreement on all sides that no retroactive account adjustments will be allowed. Also, no new accounts will be established during the year unless first approved the FRCA Finance Committee.
Payroll taxes were being paid by the payroll service, ADP, using the wrong account #. AMS had a letter from the IRS with the correct account # and statement that payments to the wrong account will be transferred to the right one, with no penalty. The state portion of payroll taxes will be corrected in a like manner.
The December financial statements will be restated when estimates of the total cost of the December water damage can be developed as well as the portion that is expected to be paid by the insurance company (established as a receivable). Any final adjustments to those estimates can be made as part of the 2007 audit which is required to be completed and submitted to the BoD no later than April 30, 2008.
Budget: Dan Owens, Jean Strub, John Lynch and Paul Rankin (via conference call) met on January 10, 2008 to develop a strategy for development of the 2009 annual budget recommendation to the BoD. The basic concepts and plan of action were discussed in detail. A presentation will be made to the BoD late February or March. Since this strategy will require some actions on the part of the BoD and interaction with all FRCA committees, BoD approval of this approach will be requested.
Prepared by:
Jean Strub
1/21/2008