Bay Shore Condominium Estates Homeowners Association. Independent Review Report. December 31, 2011

Transcription

1 Independent Review Report December 31, 2011

2 Table of Contents Independents Accountants Review Report 1 Financial Statements Statement of Financial Position 2 Statement of Activities 3 Statement of Functional Expenses 4-5 Notes to the Financial Statements 6-8

3 INDEPENDENT ACCOUNTANTS REVIEW REPORT To Management Bay Shore Condominium Estates Homeowners Association N Bay Shore Lane Milton, WI I have reviewed the accompanying statement of financial position of Bay Shore Condo Association (a homeowners condominium association) as of December 31, 2011, and the related statement of activities, and functional expenses for the year then ended. A review includes primarily applying analytical procedures to management s financial data and making inquiries of Organization management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, I do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. My responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require me to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. I believe that the results of my procedures provide a reasonable basis for this report. A statement of cash flows for the year ended December 31, 2011, has not been presented. Accounting principles generally accepted in the United States of America require that such a statement be presented when financial statements purport to present financial position and results of operations. Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. Hagen CPA, LLC 4525 Woodgate Drive Janesville, WI September 11,

4 Statement of Financial Position period ending December 31, /31/2011 Assets Operating Replacement Total Fund Fund All Funds Current Assets Cash-Checking $ 30,059 - $ 30,059 Cash-Savings $ 129,389 - $ 129,389 Certificate of Deposit $ 16,203 - $ 16,203 Long Term Assets (See note 2-Property & Equipment) Taxes on interest income (not required to maintain GAAP depreciation) Total Current Assets $ 175,651 Total Assets $ 175,651 Liabilities and Net Assets Net Assets Unrestricted Net Assets $ 175,651 - $ 175,651 Total Net Assets $ 175,651 Total Net Assets and Liabilities $ 175,651 See accompanying notes and Accountant's Review Report 2

5 Statement of Activities period ending December 31, /31/2011 Operating Replacement Total Fund Fund All Funds Revenues, Gains, and Other Support Condominium Dues $ 100,530 $ - $ 100,530 Pier Assessments $ 3,402 $ - $ 3,402 Fall Boat Storage $ 1,238 $ - $ 1,238 Financing Fees Received $ 74 $ - $ 74 Interest Income $ 212 $ - $ 212 Total Income $ 105,457 Gross Profit $ 105,457 See accompanying notes and Accountant's Review Report 3

6 Statement of Functional Expenses period ending December 31, /31/2011 Operating Replacement Total Fund Fund All Funds Grounds Expenses Lawn Mowing, Trees & Shrub Trimming $ 8,163 $ - $ 8,163 Lawn Fertilization and Weed Control $ 920 $ - $ 920 Spring Cleanup $ 100 $ - $ 100 Blacktop Sealant $ 940 $ - $ 940 Signs $ 47 $ - $ 47 Miscellaneous Grounds Expense $ - $ - $ - Snow Removal $ 3,129 $ - $ 3,129 Total Grounds Expenses $ 13,299 Building/Maintenance Expenses (IBM) Insurance $ 10,051 $ - $ 10,051 Building Maintenance $ 10,457 $ - $ 10,457 Miscellaneous Building Maintenance Exp $ - $ - $ - Well Blowout $ 828 $ - $ 828 Quality Testing $ 154 $ - $ 154 Gas/Electric $ 2,755 $ - $ 2,755 Sewer/Sanitary District $ 298 $ - $ 298 Building Power Wash $ 2,907 $ - $ 2,907 Building Pest Control $ 2,050 $ - $ 2,050 Total Building/Maintenance Expenses $ 29,500 Pier Related Expenses (PBR) Pier/Ramp/Boat/RV Storage $ 6,701 $ - $ 6,701 Total Pier Related Expenses $ 6,701 See accompanying notes and Accountant's Review Report 4

7 Finance, Legal, Audit and Budget Exp(FLAB) Accounting/Tax Prep $ - $ - $ - Legal $ - $ - $ - Office Supplies $ 12 $ - $ 12 Bank Charges $ 81 $ - $ 81 Copy Expense-Finance Committee $ - $ - $ - Postage $ 88 $ - $ 88 WI Annual Report $ 10 $ - $ 10 Reimbursement of Dues (Treasurer) $ 1,440 $ - $ 1,440 IRS-Tax $ 9 $ - $ 9 Miscellaneous Expense $ 50 $ - $ 50 Total FLAB Expenses $ 1,690 Pool Related Expenses Maintenance/Chemicals $ 4,290 $ - $ 4,290 Miscellaneous Supplies $ 331 $ - $ 331 Party/Social Expense $ 311 $ - $ 311 Permit/Fee/Inspection $ 275 $ - $ 275 Pool Phone $ 188 $ - $ 188 Sporting Equipment $ 20 $ - $ 20 Total Pool Related Expenses $ 5,415 Total Operating Expenses-2011 $ 56,604 Net Income-2011 $ 48,853 See accompanying notes and Accountant's Review Report 5

8 Notes to the Financial Statements period ending December 31, 2011 This summary of significant accounting policies of Bay Shore Condominium Estates Homeowners Association (the Company) is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Note 1-Organization The Association was created in 1996 with the building of the Bay Shore Condominium Estates community development. There are six unit owner buildings with forty eight individual units that are owned and maintained by the individual owners. There are common areas that are shared by all of the owners, and dues paid by the owners helps the upkeep. There is a common heated pool, equipment house, washroom, and a common pier in the center of the community. The Association is self managed, with the Board of Directors being elected, and serving the terms decided in the by-laws. The Association is responsible for all upkeep on common areas, whereas the individual owners are responsible for repairs/maintenance to their individual units. Note 2-Summary of Significant Accounting Policies Fund Accounting The Associations governing documents provide certain guidelines for governing its financial activities. To ensure observance of limitations and restrictions on the use of financial resources, the Association maintains its accounts using fund accounting. Financial resources are classified for accounting and reporting purposes in the following funds established according to their nature and purpose: Operating Fund-This fund is used to account for financial resources provided by owner dues, and are available for the general operations of the Association including the upkeep of all the common areas. Replacement Fund-This fund is used for any expansion, renovation or reconfiguration of any common areas that are the Associations responsibility. The funds come directly from the operating fund, and are accounted for when the need arises. When additional funds are needed in excess of operating funds, then each owner will be charged an equal amount. Payments can be made to the association in installments if necessary. See Accountant's Review Report 6

9 Prepaid Expenses There are no prepaid expenses, as insurance is paid monthly January through September. Property and Equipment Property owned by the Association is the common center pier, pool, pool house, and all common areas that all individual owners get to use. There are also 16 individual piers that are owned/operated/maintained by the individual owners, and not the responsibility of the Association. The Association at its discretion can alter, or dispose of any equipment that it chooses, and retain the proceeds from the sale, or incur the costs from the replacement fund. Income Taxes The Association is classified as an 1120-H Homeowners Association for both federal and state income tax purposes for the year ended December 31, The Association is subject to specific rulings and regulations applicable to Homeowners Associations. Note 3-Commitments, Contracts and Other Matters The Condominium Association has one year contracts to have snow removed, and the lawn occupying the grounds taken care. The one year contracts can be renewed for another full year, and are typically done. Note 4-Committees The Association is currently self-managed by the volunteer elected Officers consisting of a President, Vice President, Treasurer and Secretary. The Officers are not compensated by the Association for such service, although a provision for compensation of Officers exists in the Declarations that can be exercised by the Officers at their discretion. The Officers then appoint volunteers to oversee the following committees: Financial, Legal Audit and Budget (FLAB) Grounds Insurance and Building Maintenance (IBM) Pier, Boat and RV Storage (PBR) Pool and Social The Officers retain the right, without the voting consent of the owners, to contract with a professional property management organization if they deem it in the best interest of the Association. The additional costs incurred if any shall be split equally amongst all owners. See Accountant's Review Report 7

10 Note 5-Declarations/By-laws/Rules Amending The Declarations/By-Laws/Rules may be amended periodically by the Association, but it requires a 66.66% favorable vote by owners to allow passage of any proposed changes. Rules may be added, deleted or changed by the Officers at any time. Note 6-Owner Dues Unit owners are expected to pay their monthly dues by the 10th of each month. Each owner has an equal share of common operating expenses which is % shared to equal 100%. The monthly dues account is at $100,530 for Note 7-Insurance Property Insurance-The Association maintains insurance for each unit and the common areas, excluding the owners personal property. This insurance covers fire, vandalism and malicious mischief on a repair and replacement cost basis for an amount not less than the full replacement value of the insured property. The Association shall be named insured as trustee for each of the owners in the percentage established in the Declaration Liability Insurance-The Association maintains comprehensive general liability insurance against all claims commonly insured against and in such amounts the Association deems suitable. The minimum limits for bodily injury and property damage is One Million Dollars ($1,000,000). The policies shall contain standard coverage for the errors and omissions of the Association Directors and Officers. This policy contains "severability of interest" endorsements which precludes the insurer from denying a claim based on the negligence of the Association or another owner Fidelity Insurance-The Association maintains fidelity coverage against dishonest acts by any person responsible for handling funds belonging to the Association Administration-The Association will pay any and all premiums for insurance out of the operational expenses. The Association shall act as the trustee for the purpose of obtaining insurance coverage, and for the receipt, application and disbursement of proceeds. All insurance is obtained from generally accepted insurance carriers meeting guidelines established by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation Unit Owners Insurance-Insurance for the individual owners shall be at the cost of the owner and not the Association. If requested by the Association the owners must submit copies of their individual coverages, and are also encouraged to submit copies of the disclosure materials to their insurance carriers in order to ensure adequate coverage for their personal coverages. See Accountant's Review Report 8