The owners elect a board of directors for the Association to represent their interest in the ownership of the common property. Often these boards contract with a professional management company to manage the association on behalf of the owners.

Both the management company and the board of directors have a fiduciary responsibility to the owners of the property. To fulfill this fiduciary responsibility it is imperative that the board engage a firm highly qualified in providing professional accounting services to the Association.

McGovern & Greene LLP is such a firm.

We have assembled a team of professionals whose backgrounds include a former CFO for one of the largest suburban Chicago condominium management companies, a former architect with a CPA and MBA from The University of Chicago, a foremost expert in forensic accounting and white collar crime, and a Construction Damages financial expert. All supplemented with accounting, tax, and financial investigation consultants. Our vast experience uniquely positions us to offer a comprehensive suite of services to common interest realty associations.

Audit, Review, and Compilation
of Annual and Interim Financial Statements

Auditing is a multifaceted process developed by the accounting profession for the examination of financial statements by CPAs. It consists of gathering and evaluating evidence to test the conformity of the financial statements with accounting principles generally accepted in the United States of America. An audit offers homeowners and mortgagors reasonable assurance that the statements representing an Association’s financial position and the results of its operations are in conformity with those principles.

Audits are by no means just for large, publicly-held companies. The financial statements of many community associations are audited regularly. Audits add credibility to financial statements and provide a type of assurance to an Association’s homeowners. Audits also provide information that is important to management when making critical decisions.

McGovern & Greene LLP also offers review and compilation services. In performing reviews, we apply certain analytical procedures to an Association’s financial statements and make certain inquiries of management. Review procedures, which are substantially less comprehensive than those performed in an audit; enable us to express limited assurance on the conformity of the financial statements with generally accepted accounting principles. In compilations, we format financial information supplied by you into financial statements but do not express any assurance on the statements.

Tax & Management Advisory Services

As tax advisors, we prepare tax returns for the Association and assist them in developing their tax planning strategies to achieve tax economies. We represent Associations before taxing authorities and provide tax consulting services on a broad range of financial and investment decisions.

In response to the changing needs of common interest realty associations, we continuously review the breadth and depth of our management advisory services. We are increasingly playing a vital role in assisting Associations to improve the use of their resources and increase their efficiency. Our technical knowledge and Association experience provide the basis for a broad range of management advisory services, such as:

Analysis and projection of current and future replacement
reserve funding requirements;

Counseling and assistance on annual budget development;

Review of records during developer turnover;

Educational seminars for boards of directors and general membership;

Expert testimony and litigation support services on behalf of the Association;

Investment counseling for Association funds; and,

Human resource allocation.

Developer Turnover Examinations

Upon turnover of the property from the developer to the realty owners, the Board of Directors has a fiduciary responsibility to its members to review the finances of the Association. Oftentimes, the developer has under funded reserve accounts, used Association funds to pay their own expenses and subsequently left the Association financially strapped. Our professionals can assist the Board to determine if such conditions exist. In addition to assessing the finances of the Association, we can review the documents to be turned over and ensure that the developer is in compliance with state statutes. Other procedures may include:

Inventory records and documents before turnover to the homeowners.

Review and recompute assessments to ensure that assessments have been both billed and collected properly.

Examine member and developer/converter assessment amounts.

Examine cash disbursements of the Association for propriety.

Analyze financial statements and prepare proofs of cash for all cash accounts; ascertain the balances of other current asset amounts such as utility deposits, unexpired insurance premiums, and other sundry assets.

Prepare a schedule of outstanding obligations, past due amounts for collection, and review contracts and prepare abstracts for the Association’s legal counsel.

About McGovern & Greene LLP

McGovern & Greene LLP is a leading provider of forensic accounting, litigation, and business consulting services to both private and publicly held corporations. From serving as a sounding board to assisting with long-range planning and operational improvements, the professionals at McGovern & Greene LLP offer the type of sure-handed financial guidance and responsiveness that assists in keeping companies moving toward profitability and success.

The driving force behind McGovern & Greene LLP’s Common Interest Realty Services is Craig L. Greene, CFE, CPA. Since 1979, Mr. Greene has been actively involved with the audit, management, and evaluation of realty associations. He is a member of the Community Association Institute, and has supervised or performed hundreds of engagements for condominium, townhome, and home owner associations.

Contact Us

To learn more about how McGovern & Greene LLP can assist your common interest realty association, contact Craig L. Greene, CFE, CPA by calling 312.692.1000 or email craig.greene@mcgoverngreene.com

© 2010 McGovern & Greene LLP