Treasurer’s Report Year-End Audited Financial Statement Comparison

Treasurer’s Report

By Mike Breslin SRCA Board Treasurer

All members of the board are responsible for the associations overall financial health; but the treasurer has specific duties to protect the associations assets. These duties and the authority to exercise them are found in the associations governing documents and also in state laws. It’s a big responsibility, but fortunately the manager helps with many of the detailed internal controls. Treasurers keep an eye on how the funds are being handled. For example, a treasurer would raise a red flag if a check made payable to Cash showed up in the association’s books.

Records: Treasurers maintain financial and accounting records – or see to it that they are securely and properly retained, perhaps by the manager.

Audits: Association financial and accounting records need to be audited periodically. It’s the treasurer’s job to ensure that a CPA undertakes this important activity at regular intervals.

Budgets: Treasurers are responsible for preparing the annual budget. That doesn’t mean they actually crunch numbers or develop spreadsheets rather they work closely with the association manager or CPA to ensure the members’ values, preferences and needs are reflected in the budget.

Insurance: Treasurers make sure the association has adequate insurance of all types – casualty, fidelity, worker’s compensation and other necessary protections.

Investments: Treasurers are watchdogs for the association’s investments. They make sure investments are sound and do not jeopardize the principal. Boards generally have investment policies that guide their investment decisions, and it’s the treasurer’s job to see that the policy is followed.

Assessments: Collecting assessments and monitoring delinquent accounts is typically a service provided by a manager or management company. The treasurer, however, keeps a close eye on the delinquencies and alerts the board to problem areas.

Reserves: Treasurers ensure that the association periodically conducts a reserve study and that it’s adequately funded in the annual budget.

Taxes: The treasurer is the board’s liaison to the association’s auditor and CPA. The treasurer monitors the progress of the annual audit and make sur ethe appropriate tax returns are filed on time.

In short, the association Treasurer’s job is to maintain the integrity of the association’s finances.

The Finance Committee along with staff have worked very closely with our outside independent auditors, Butler-Hansen, PC who recently completed our annual audit as required by the governing documents of SRCA. They conducted the annual audit in order to obtain reasonable assurance that the financial statements were free of material misstatements and to assess the accounting principles used. They evaluated the overall financial statements and line items presented in our reports and established that SRCA’s books and financial records are in good order and no issues were found. Their conclusion states “in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Scottsdale Ranch Community Association as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.”

At a recent meeting with our auditor, I asked if there was anything that we should be doing to improve our staff who are responsible for the day-to-day maintenance of all our operations. Their response indicated that the way we operate could be a

Revenue:

Regular Other

2020 Actual 2021 Actual

1,555,905 1,555,905 390,757 509,144

Total Revenue: 1,946,662 2,065,049

Expenses:

Landscape Maintenance 544,853 595,975 Lake Maintenance 106,657 129,651 Building Maintenance 90,110 94,027 Administrative/Office 676,549 766,308 Recreational Activity 42,812 52,179 Communications 8,412 9,517| Capital Expenditures 93,614 212,014 Contingency 4,314 8,137 APS Power Project -- -General Reserve Expenses 34,207 103,512 Bad Debt 1,911 1,284

Total Expenses: 1,603,439 1,972,604

Total Income: 343,223 92,445

Depreciation (89,245) (86,492) Gain on Sale of Equipment 0 0

Net Income (Loss): 253,978 5,953

(Figures taken from Audit Report as Reported by Butler & Hansen, PC)

model for all HOAs and we could be at the top of the list using best practices.

As Treasurer and Chairman of the Finance Committee, I am most happy to report that SRCA ended 2021 in a strong and healthy financial position and your association has adequate reserves, proper financial record keeping and effective systems in place to maintain the highest level of service to the community in the years ahead.