Board Condominium Financial Governance

Frequency of Condo Book Audit

L.L. from Litchfield County writes:

Dear Mister Condo,

How often should a condo complex’s books be audited? When they are audited, is the Board required to advise the owners that one has taken place and what the outcome was? Many thanks.

Mister Condo replies:

L.L., unless your condo documents require that the association conduct an annual or periodic audit, there is currently no legal requirement to have one performed in our state. That being said, many associations choose to have their records audited every three to five years or any time there is suspicion of funds gone missing. Larger associations are more vulnerable just because there is so much more money available to be pilfered. Many smaller associations will not take on the expense of having an outside CPA firm conduct an audit because there just enough money to be worth auditing. If the money coming in and the money going out look to be in good order, that is enough for most small and mid-sized associations. Larger associations almost always conduct annual or every other year audits because the cost of the audit far outweighs the risk of having a large amount of money stolen. One of the best people to ask is your Association Treasurer. In theory, this officer looks at the association’s cash on hand and savings and reconciles it with bank statements each month. They would be the first to see a problem. If money goes missing or the Treasurer suggest an audit, I would heed the call and get one done. There are several CPA firms here in Connecticut that specialize in auditing the books for condominiums and HOAs. I strongly recommend that use one of these firms with specific industry expertise to assist you in your audit. All the best!

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