A.B. from New Haven County writes:
Dear Mister Condo,
Are there any CT states law that require audits be performed on Condominiums?
Mister Condo replies:
A.B., in Connecticut, I am aware of no such law. Some states, like New Jersey, do require audits at certain intervals as a matter of law. It should be noted that all audits are not created equal so even if there were an audit requirement, it would have to be detailed as to what was being audited and how often. Depending on the amount of money in play, an audit is a prudent decision as it provides relative confidence that no association funds are being pilfered. However, since Connecticut is home to so many smaller associations, an audit might be an unnecessary expense and truly unnecessary. If the Board is doing a good job of keeping an eye on the money as to income and expense, an audit might be one more useful tool. If the Board suspects there is money that has gone missing, an audit would be a great way to get some clues as to where the money has gone. I hope that helps.
The Connecticut community I live in is 40 years old. I do not think there has ever been an audit…definitely not in the last 20 years. I am on the board. When this is brought up the treasurer gets adamant and says it is a waste of money. I truly think there should be a financial review or an audit. The rest of the board thinks the treasurer is “God” and if he says no, it’s no. I understand there is no law. How can it be demanded?
Carol, I don’t think you can demand an audit, even if it seems to make sense to you. The Board would have to agree in order to spend the money to request the audit. You might want to ask the Treasurer why an audit is a “waste of money”. Perhaps there is some type of internal “check and balance” that the Treasurer and Board feel is sufficient. However, I agree with you. Even if it isn’t mandated in the state of Connecticut, the low cost of an audit every so often (say, 5 years) would likely go along way in ensuring the Board is practicing due diligence in securing the association financial assets. Good luck!