Co-op management question

You have no idea what a hassle doing the books for this small business can be. You're lucky someone in the coop is willing and able to do it. It is also very expensive to have outside bookkeeping (we pay $175/mnth) and accountant services (over $2k/yr). Recognize that it is not in the other shareholder's interest to do a bad job and they have a legal fiduciary responsibility. Annual reports are what shareholders in most businesses get. You should trust them. If you want to see the accounts every month offer to take over the job of treasurer yourself, but be prepared to prove to all that you are capable.

Posted by: guest at March 14, 2008 12:12 PM

If the person doing the books has quickbooks he/she can generate monthly/quarterly reports. quickbooks costs about $400.00 and can be very useful in this situation.

Posted by: guest at March 14, 2008 12:44 PM

Even in the smallest of coops/condos, there should never be just one person handling all aspects fo the the financials (no matter how much of a pain it is). There must be oversight and transparency. It's your home/investment, and you will be responsible if anything is not kosher, and you cannot plead ignorance. This person may be doing a fantastic job, but you have a right and an obligation to find out how your coop is being run and your money spent. What if this person dissapears? Do you have a coop board? Raise these issues at your next meeting or with your coop president (in writing). And check out the CCNY website (Coops and Condos of NY) for more info. They have great classes for small buildings.

Posted by: guest at March 14, 2008 2:22 PM

Year end summary of revenue/expenses in addition to tax filings, yes.

Monthly reports, no way.

Posted by: guest at March 14, 2008 2:23 PM

Even in the smallest of coops/condos, there should never be just one person handling all aspects fo the the financials (no matter how much of a pain it is). There must be oversight and transparency. It's your home/investment, and you will be responsible if anything is not kosher, and you cannot plead ignorance. This person may be doing a fantastic job, but you have a right and an obligation to find out how your coop is being run and your money spent. What if this person dissapears? Do you have a coop board? Raise these issues at your next meeting or with your coop president (in writing). And check out the CCNY website (Coops and Condos of NY) for more info. They have great classes for small buildings.

Posted by: guest at March 14, 2008 2:25 PM

I am the treasurer of a small (4 unit) coop. We pass the job around every 2-3 years, so everyone gets a chance to know the inner workings of our finances. We have an accountant, but we have a high level of trust in the building. None of us have experience being treasurer of any other organization, and the job is a pain, but we are all invested in the building. None of us would want it to fail, and if anyone was cheating, the truth would come out soon enough.

My recommendation is to keep it simple. Monthly statements sound wildly excessive, but you should have an accountant, and it's fair to pass that around to all the owners.

Posted by: guest at March 14, 2008 4:01 PM

I agree that annual reports are fine.

BUT, you should know why the maintenance was raised and it has nothing to do with the financial reports. There should be monthly meetings and all shareholders should try to attend. Your board in this small building should include a rep from every apartment. Don't you do that? At these meetings, everyone should "report" on their area (finances, recycling, building repair, social, mail, whatever) and here you would learn that the taxes have gone up or that heating costs are crazy or you need to start building a bigger reserve because the furnace will have to be replaced in a couple of years.

Posted by: guest at March 14, 2008 4:36 PM

We meet less than we should... um, like once a year. But nothing gets decided without the full approval of everyone, which is usually not hard. The maintenance cannot be changed in our building without a full discussion by every apartment. We should be meeting one every three or four months, but if anything happens, there's always a flurry of emails.

Make sure somebody takes good minutes at the meeting. But again, I don't think it's necessary to meet once a month. With five apartments, I would not want to leave anyone out of any meeting.

But it's YOUR building. If you want to meet once a month, then you should be able to find common ground with the other owners.

Posted by: guest at March 14, 2008 4:43 PM

My 4-unit used Microsoft Money - there's a check register in the program that the treasurer entered all the checks and deposits into. From there, you can slice and dice the data and print out a variety of reports.

When I took over as treasurer, I printed out a report that listed every single expenditure and deposit, by month, and by category and brought copies to every board meeting. So people would look at the report and ask questions about any expenses and we'd discuss them.

I'd print various year-end reports to give our accountant after year-end to do our taxes, and I'd also pass out the yearly summaries to the rest of the board. I did it when we met, so I was there to answer any questions. That was sometimes monthly, and sometimes less frequently, depending on how often we felt the need to meet, when doing projects. The basic monthly expenses don't really change - it's the contractor and repair expenses that are unusual.

Doing the reports is really time-consuming (the previous treasurer got tired and didn't do any for over a year), but it is very useful info - not only so people can see where the money goes, but for future planning.

Posted by: guest at March 14, 2008 5:22 PM

We have monthly reports generated for our 5-unit co-op. Sort of excessive but we do have monthly meetings and everyone does at least glance at the reports. we do, however, pay an outside accounting firm about 2k a year, but it's probably money well spent. At minimum, I'd say, you should get a detailed yearly accounting done by a 3rd party.

Posted by: guest at March 14, 2008 9:14 PM

I do the bookkeeping for an 84 unit building. I have the cheapest quickbooks available, $90. at office Depot. It works perfectly. I print out a monthly invoice for all residents on the first. I also provide a monthly balance sheet which is available at the meetings. It is about a 30 minute job once a month. No biggy. I make the deposits weekly and post payments and pay bills. Almost all the bills are auto debit from our account but we always have a few extras. If I lived in any coop or condo that was not able to provide a monthly balance sheet I would be very worried.....I am also a resident and do not charge for this. It is not rocket science and is really very easy to do with modern technology. At least 3/4 of the residents get their satements by e-mail.

Posted by: guest at March 14, 2008 9:28 PM

To OP,

I would hire an outside person to do this work, and maybe audit some past year's statements - what would you do if, heaven forbid, something happened to this lone person who controls your financial statements? Or if there were a fire that destroyed all of the documents pertaining to the building?

I would also think hard about John Ife's post at 8:42. It's sad, but unfortunately true, that a good percentage of our population will steal and be deceitful if given the chance.

To 9:28, I can't believe that an 84 unit building doesn't have professional management. seems crazy to me...

Posted by: guest at March 15, 2008 11:31 AM

It is just as likely that the maintenance went up because expenses on all things are going up a lot for all coops and condos. Don't jump to conclusions about someone doing illegal things just because you lack information if you don't have evidence of illegal things - that's dumb. Just get the information - you all should be getting it. Spend your time working on that rather than coming up with fantastic scenarios - it's more productive. And it is more productive to try to work with the people in your building than to demonize the person doing all the work. I'm sure you realize that your maintenance would go up even more if you hired an outside accountant - totally unnecessary in such a small coop (brklyn girl's suggestion that it looks more professional aside) - the only thing you need an accountant to do is your taxes. No reason to pay for an annual statement. You can type one up, or print out the yearly information from a computerized system, and it looks just as professional. The annual budget of a small cooperative is quite small, easy to understand, and transparent. Work to get the information shared among the board/owners. But there's no reason to be a jerk about it. Coopers should remember that more often - life would be nicer.

Posted by: guest at March 17, 2008 10:38 PM