Question: At our Condominium Association, how do we know whether we need a review or an audit for our year-end financial report? Are we allowed to have a vote to waive that report every year?
ANSWER: For a condominium association, Section 718.111(13), Florida Statutes provides the following year-end financial reporting requirements:
1. A Condo association with total annual revenues of $150,000 or more, but less than $300,000, shall prepare compiled financial statements.
2. A Condominium association with total annual revenues of at least $300,000, but less than $500,000, shall prepare reviewed financial statements.
3. A Condominium association with total annual revenues of $500,000 or more shall prepare audited financial statements.
(b)1. A Condo association with total annual revenues of less than $150,000 shall prepare a report of cash receipts and expenditures.
A majority of the members present at a meeting at which a quorum is present can vote annually to reduce the reporting requirement. However, an association cannot waive the financial reporting requirements of the Law for more than 3 consecutive years.
It is important to note that the dollar amounts in question are based on the total annual revenues of the Association. If you have a special assessment in a fiscal year, it could push the level of the year-end report into the next category. According to local CPA’s who know Association accounting, the special assessment funds are considered to be revenue in the year the money is spent, and not the year the money is received.