Question: Since many (most) airparks are property owner’s associations of some kind or another, and since these associations charge money as dues, and since these dues are used by officers of the association to manage the business of the associations – how often are/should the books of the association be audited?
Answer: This is another of those questions for which a single response is difficult to provide.
First, the requirements for maintaining a homeowners’ association account probably is spelled out in the covenants, conditions and restrictions that established the organization in the first place. Violation of those agreements could place the association’s management in legal troubles.
However, being practical is also important, in my mind. If an association collects $5,000 in dues and assessments from its members in a year and spends virtually all of it on airpark expenses and has a decent set of books, does it make any sense to hire a CPA firm to conduct a full-blown audit that can cost a couple thousand dollars? Not to my thinking.
If your association has 100 members and the income is considerably higher – say $100,000 or so – well, that might make the audit more understandable.
What I would like to see is an annual or semi-annual financial report to the association board of directors, available to all members, that outlines all the income and all the expenses and the account balance. The bills and payments should be available to an auditing committee of the membership. Assuming all this is accomplished, hiring an accounting firm to verify the records should be relatively painless, from a financial standpoint.
Finally, if I was coming in as the association’s treasurer (or otherwise handling the finances) I would certainly want some type of audit of the books to show how much is in the account and what bills are due at the time the books are handed over to me.