Co-op management question
We live in a small (5 unit) co-op, and we don’t use any kind out outside management company. The only problem is this — although we’ve lived here for 3 years we have never seen any kind of financial statement other than year-end tax documents. There is 1 tenant who is in charge of keeping…
We live in a small (5 unit) co-op, and we don’t use any kind out outside management company. The only problem is this — although we’ve lived here for 3 years we have never seen any kind of financial statement other than year-end tax documents. There is 1 tenant who is in charge of keeping track of maintenace payments, bills, banking etc., and there’s no other review of any of the finances. Does this seem odd to anyone else? I get shot down whenever I suggest a more formal accounting system (i.e., monthly statements or even an outside accountant). Am I being crazy or is this a bad situation? Does anyone else have a similar arrangement?
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.
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.
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.
Year end summary of revenue/expenses in addition to tax filings, yes.
Monthly reports, no way.
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.
I am the treasurer of a small condo, as you describe. It is perfectly reasonable for all members to expect to receive a year-end summary (in addition to the tax docs), which should include broad categories for expenses.
12:12, I appreciate your point regarding the hassle of bookkeeping and the fact that it is in the bookkeeper/shareholder’s interest to do the right thing. Unfortunately, though, no oversight can lead good people astray. OP has every right to ask for a bit more detail on this business in which s/he is part owner.
Thanks for the comments — I feel better knowing others have similar setups. I should clarify that this all came up b/c we recently raised maintenance to what for me adds up to well over $100/square foot, and I started to wonder where all this money is going. I did volunteer to take on some of the responsibility, but this woman did not seem to want help. I’ll look into getting Quickbooks, that sounds like a good idea.
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.
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.