J.S. from Fairfield County writes:
Dear Mister Condo,
Is there a statute that governs how often a condo association needs to be audited? If so how often does this need to occur?
Mister Condo replies:
J.S., as you know, I am not an attorney. However, I am unaware of any statutes that require a condo association to be audited, other than in the initial stages of developer transition when the developer actually stops overseeing the condo and turns it over to the homeowners association for their own governance. In a larger association such as the one you live in, it would just make sense to have third party perform an audit every so often just to assure all unit owners that the money is going where it is supposed to. I have heard every other year and even every third year as reasonable suggestions. I have also heard of associations that conduct full audits if there is to be a change in management. This is done to protect not only the association but also the incoming and outgoing management company. CAI recommends an independent audit “every few years” according to their handout entitled “Preventing Fraud and Embezzlement”. You can download a free copy at http://www.caionline.org/info/help/Documents/Preventing%20Fraud%20and%20Embezzlement.pdf.