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Habitat Magazine Business of Management 2021

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Board Talk: A Conversation About Monthly Financials

What monthly financials do you get as a board director?

PK

I’m a new board director, and I was wondering if other directors could tell me what monthly financials you get for review. I was told by a fellow shareholder, who also has another home, that board members at his other residence get the following information below. I have not been given this information monthly, except I was shown a comparative budget from 2009 thru 2012, budgeted vs. actual and a profit and loss budget vs. actual for January through June. I feel we should be getting more reports from our manager monthly, like the ones below, but our board has never gotten these in the past. Need help here.

This is a sample of what another board gets each month; look familiar to most of you?

1. List of bad debt – back rent as well as back maintenance amounts showing the person in arrears and how much 30/60/90/120 days out

2. Balance sheet for the prior month showing current assets and liability

3. Operating account income statement that shows income and operating expenses as year-to-date actual vs. budgeted, the variance, and the yearly budget totals

4. Disbursement register that shows the accounts, with descriptions, posting date, invoice number, invoice date, and amount

Dianne Stromfeld

Since a board director is charged with making most of the decisions for the shareholders, they certainly should be entitled to receive all four items and then some. If elected board members are not entitled to all financial and legal information, who is? It sounds as though some people have anointed themselves the “chosen few” and want to have all the financial and legal power to themselves. In your case, the management company, since they seem to be deciding what you can and cannot have. Not a good way to run a board, in my opinion. You were elected by your fellow shareholders, the management company was hired to work for the board – not the other way around. Good luck.

PK

We don’t have a management company. Our manager was hired by us and answers directly to us. I will speak to the treasurer and see if they get this info. Maybe they do and not the rest of the board. I’m pretty sure I know the answer to this. I think our board is just not aware of what they should be getting and the manager, because he wasn’t asked, isn’t providing the info. I have my work cut out for me. I appreciate your comments.

Dianne Stromfeld

Since you hired the manager, did you give him a job description to be certain that everything necessary is being accomplished? Perhaps a conversation with a lawyer outlining what should be in a management contract would be a good idea. Good luck.

PK

Thank you, Dianne. I need to see where the job description would be kept. Someone else suggested I find this with regard to the hours that he is supposed to work.

JG in NYC

The board (or at least the board treasurer) should get all four items listed. If not, ask at your next meeting. Since the board should be involved in preparing the budget, you should at least have that already. If you’re not involved, you should be. The treasurer in my building also gets copies of all paid bills and must approve, before payment, those bills outside of normal recurring, utility, mortgage, payroll.

PK

I will speak to our treasurer and see if she gets these. We don’t have a management company. We hired our own building manager, and I think we didn’t or don’t have a good idea of what we are supposed to be getting in general. Thank you for your time in responding.

PK

I know the treasurer reconciles invoices, but these items are not so certain. My request was brought up, but there was not a clear answer so I sent a further email stating that we should have these monthly by the sixth for review and that I need them to perform my duties as director. I will stay on it. I’m not comfortable not having these documents. Like JG, we hired our manager and I feel the board was not aware of what they needed to ask of the manager so if he says he was never asked for these, it may be true and I plan on changing this way of handling things.

Dianne Stromfeld

Good for you for taking the bull by the horns. I know the experience of being a director can be daunting and most learn by experience, but there are some seminars offered and you should check with your local board of Realtors and other organizations, a co-op/condo one, if it exists, to help you get some answers. Hope it all goes well from here on.

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