Last March the RSF Association hired a new Controller, Don May, and announced the transition to more accurate accounting practices after an audit revealed a $1.6 million discrepancy in reserves. The new practice, known as full-accrual accounting, was done to help prevent the likelihood of future reporting errors.
Over the past year, May and his colleagues created a monthly balance sheet for the Association, automated the accounting process and reporting systems to modern conventions, brought in a new auditing firm that specializes in Association accounting, separated the Property Fund to better track operations, and improved many day-to-day accounting methods.
“The impact of these improvements has been more timely, reliable and relevant information. Better information leads to better decisions, resource allocation, validation of fund balances and identification of possible cost leaks,” May says.
Even though it was challenging to clean up the balance sheet while establishing a stable accounting system, May explains he was fortunate to rely on long-term Association staff.
“We are effectively helping the Board manage more from a business perspective” he adds. “The Association is clearly solvent, strong and healthy from a financial perspective.”
While the Association was financially strong when May started in 2015, his office has made it easier to provide “a more accurate real-time presentation of the details” through accrual accounting, he states.
Furthermore, through the renegotiation of interest rates with Union Bank, May reports “the Association will save $25,000 in interest annually and another $125,000 overall with a more aggressive pay-down schedule.”
Over the next five years, May expects the Association’s finances to remain on the right track.
“We also see long-term benefits for all residents with property values being enhanced through a number of initiatives, including fiber broadband, cell service and Village revitalization,” May concludes.