Treasurer’s
Report By Randy Dence Monday, April 25,
2016
At the November 18, 2015 Yorkshire Hills Homeowners
Association (YHHA) meeting Randy Dence was elected to replace Clarke Macy as
Treasurer. The role of the Treasurer is to be the custodian of the funds and
the financial records for YHHA. The Treasurer will be responsible for
coordinating the development of the proposed annual budget and for preparing
and giving the annual financial report on the financial status of the
association. The treasurer will ultimately be responsible for insuring that the
financial records of the association have been maintained properly in
accordance with sound accounting practices.
YHHA is a tax-exempt organization as described in Internal
Revenue Code (IRC) section 501(c)(4). To be so described by the IRC, a
homeowners association must primarily serve the community rather than the
private interest of its members.
The members of the YHHA board of directors and each officer
of the Association have a fiduciary relationship with the members of the
Association. This fiduciary relationship requires the members of the board to
act in good faith and in the best interests of the members of the Association.
It means that board members must exercise due care and diligence when acting
for the community, and it requires them to act within the scope of their
authority.
Financial
Review
1. YHHA Insurance
Policy
The current policy is with Kemner-Iott agency in Adrian, MI.
The insurance carrier is Auto-Owners Insurance. The Association has used them
for our insurance for at least 10 years. In 2006, the cost of the policy was
$868 and it has since risen to $1,129. I have been informed by the agency to
expect another increase in July when the policy is to renew.
The policy is twice the price of competing insurance
carriers and includes unnecessary coverage (equipment breakdown coverage) and
premium adjustment (upcharges with no coverage).
The Treasurer has procured two suitable bids from Nationwide
and State Farm Insurance at less than $650 per year. The Nationwide insurance
proposal provides twice the liability and Directors and Officers coverage ($2
Million). The Nationwide proposal will also cover our entire bank balance for
employee fidelity…employee theft is not covered currently with Auto
Owners.
Recommendation:
Move our insurance to Nationwide (on renewal) – opt for
$1Million coverage plus the employee dishonesty at a total yearly cost of $550.
This would save the Association over $600/year.
- The Insurance Policy Quote
will be submitted for the minutes when available.
2. General Accounting
Review
My review found several areas to improve the fiscal policies
and record keeping of the Association. Additionally, we have forfeited our
non-profit corporate status for neglecting to file the required annual Reports
and Fees with the State of Michigan.
> The Letter from the State of Michigan has been included
for the minutes.
Treasurer’s
Recommendations:
> Develop a workable budget, keeping in mind the needs,
requirements and expectations of the community.
> Consolidate accounts for simplified reporting and
record keeping.
> Completed. Savings Account was
Closed and all Funds transferred to the Associations’ Checking Account.
> Increase efforts to collect delinquent assessments.
Publicize and enforce rules and penalties.
> Authorize legal action (Lien) against owners who do not
comply with the rules.
> Determine proper assessment – in line with covenants
and budgeted projects.
> Appoint (Social /Gardening/Welcoming) committees and
delegate authority to them for non-board related activities.
> Select an attorney to the Association Board if
possible.
> Inform Association members of board decisions and
transactions. Provide more transparency and accuracy in communications.
3. Financial
Status
TCF
Savings ***7461 Amount
Balance
12/31/15 $.14 $
3,091.61
3/28/16 ($
3091.61) $
0.00
3/31/16 $.07 $ 0.07
4/21/16 Acct. Closed
--------------
TCF
Checking ***9156 Amount
Balance
12/17/15 $
21,634.56
12/18/16 ($
2.00) $
21,632.56
12/31/16 Deposit $ 240.00 $ 21.872.56
1/18/16 ($
2.00) $ 21.870.56
3/9/16 Deposit $80.00 $
21,950.56
3/16/16 ($
2.00) $
21,948.56
3/28/16 Transfer $ 3,091.61 $
25,040.17
A copy of the most recent TCF checking account has been
submitted.
Randy Dence, Treasurer YHHA
