Financial Management for Community Management in Sarasota & Manatee Counties, FL
Financial Management Service Offerings:
Annual Budget and Reserve Preparation
BUDGET PREPARATION – This includes the preparation of a draft of the Association’s proposed budget for review by the Budget Committee and/or the Board. The estimates used are based on an evaluation of the needs of the Community and research into any anticipated rate adjustments. AMI provides line item comparisons of current budget and projected year-end results to help review the proposed budget. Detailed budget assumptions are listed identifying the purpose and bases for each budget item.
RESERVE ANALYSIS (LONG-RANGE PLANNING) – This includes compiling information provided by contractors, the Board or in-house experience to create a reserve schedule. Because the Board is responsible for the accuracy of the costs and economic life remaining, an independent outside engineer or reserve analyst should be retained to provide confirmation of this data.
Financial Statements and Reports
FINANCIAL REPORT PREPARATION – Monthly statements are prepared on a modified accrual basis. The statements are prepared on a Fund Accounting Basis as required by the AICPA guidelines for Community Associations. Also included are the schedules of income, expense, delinquencies and comparison to budget monthly and year-to-date.
Establish and Maintain Bank Accounts
BANKING AND FINANCIAL INSTITUTIONS – AMI has worked with most banks in the two county area, as well as a number of brokerage firms for the maintenance of operating accounts and reserve investments. Associations are not limited to use only predetermined financial institutions. AMI has always maintained separate accounts for its clients’ reserve accounts apart from the clients’ operating funds. AMI maintains close working relationships with major banks in the area, as well as provides alternative investment vehicles for investing reserve funds. AMI has a bank that will provide a lock-box system at no charge, pay interest on operating accounts, and waive all service charges no matter how small the balance.
Collect and Deposit Assessment Fees
ASSESSMENT COLLECTION – Assessment collection includes preparing and mailing of annual, quarterly, or monthly assessments notices, invoices, or coupons and the subsequent updating of the owners’ account when payment is received. Deposits are made daily or every other day depending on volume. A number of the banks AMI deals with have agreed to provide a lock-box system to collect payments.
Follow up on Delinquent Accounts
DELINQUENCY FOLLOW-UP – Delinquency follow-up includes sending of past due statements mid-month and at the end of the month until the account is 60 days past due. At this point the account is turned over to the Association’s attorney for a lien to be filed. Thereafter, AMI works with the Association’s attorney towards the successful collection of past due balances.
Timely Review and Payment of Obligations
INVOICE PAYMENT – Invoice payment includes preparing laser cut checks, obtaining proper signatures and mailing checks. A copy of the check is filed along with the invoices in individual vendor files. Invoices are paid twice per month.
INVOICE APPROVAL – Invoice approval includes checking invoices against the Board approved contract amount, checking the amount against the budget, and verifying that the work or service was performed in a satisfactory manner and coding invoices by proper account number.
PAYROLL ACCOUNTING FOR ON-SITE PERSONNEL – This includes preparing the payroll on a bi-weekly basis, preparing and filing all payroll tax reports, making all payroll tax deposits for all on-site personnel, and tracking of vacation time and sick leave. This service is handled through a staff leasing company under contract with AMI and includes health insurance.
Maintain Individual Owner Account Records
Direct Preparation of Tax Returns
TAX RETURN PREPARATION – The preparation of state, federal income tax (using either an 1120 or an 1120H Federal return) intangible and tangible returns, will be coordinated by AMI through an independent CPA firm. AMI has worked with most CPA firms in the two county area and has negotiated favorable rates for tax return work.
YEAR-END FINANCIAL REPORT – Year-end statements are prepared on a full accrual basis. The statements meet the requirement of the State of Florida for Condominium Associations, if the State’s requirement for a Compiled, Reviewed or Audited statement is waived by the members.
YEAR-END AUDIT, REVIEW OR COMPILATION – This work must be done by an outside independent State Certified Public Accountant. AMI can assist the Association in the selection of the Accounting Firm and will help the Accountant at our office in the performance of the Audit, Review or Compilation. Advance preparation by AMI’s accounting staff in providing summary schedules, reports, locating requested data, and responsiveness to questions expedites the CPA’s work resulting in lower fees.
Outlined below are brief summaries of key services that further explain the AMI level of professionalism and service.
AMI has established strict financial controls to assure financial security through a number of important checks and balances. Financial responsibilities are divided among different AMI employees. Separate personnel approve invoices, prepare checks, complete financial statements, and sign checks. All checks require two (2) signatures. Typically, arrangements are made that one (1) signature on operating account checks are made by the Management Company and one (1) by the Board representative. AMI recommends that both signatures on reserve accounts be those of Board representatives. Bank reconciliations are completed monthly and may be included in the financial package and original bank statements can be inspected by the Board during the normal business hours.
Organization of Association Records
AMI maintains Association files at their office in an organized and accessible manner. AMI is very responsive to requests for historical documents from Board members and Association members. AMI maintains financial history and vendor files that include the original proposal and contract, as well as individual invoices throughout the relationship with the individual contractor. This avoids the necessity of tracking through many months of financial statements to locate individual invoices. Similarly, individual unit owner files are maintained that contain the original evidence of ownership, all correspondence received from and mailed to the owner, including any delinquency letters, and service requests.
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