Summary of Finance Committee Meeting of 2 January 2007
Present:
Finance Committee: Phyllis Benaman, John Frisch, Sanya Ham, Don Horan, Jean StrubBoard of Directors (BoD): Mal Malo
Investment Strategy: We have a $100,000 CD at CAB (#275000369) maturing on 25 January 2007. These are Replacement Reserve funds. The 2005 Mason & Mason report projects no major need for replacement reserve funds until 2014. Therefore, the Finance Committee recommends that the following action be taken by the Board of Directors to reinvest the money in that CD:
1. Have Armstrong Management prevent the CD from automatically renewing and take control of the money for FRCA on 25 January.
2. Have Armstrong Management then invest $100,000 in a two-year term CD at the highest rate of interest available from a good sample of FDIC insured banks, but excluding CAB. CAB is to be excluded to reduce our funds in CAB which exceed FDIC's coverage limit.
3. Have the remainder of the funds from the CD deposited in the Replacement Reserve account to be established by Armstrong Management as part of the transition process.
Finance Committee Administrative Items: Members of the Finance Committee expressed their confidence that there is no need to seek additional volunteers for the committee at present. However, if somebody volunteers, an offer to help should be favorably considered. The present meeting schedule, first and third Tuesday of each month at 3 PM, is still satisfactory to the members. Therefore, there will be no change in the meeting schedule. However, there is hope that we will be able to ultimately drop to one meeting a month. Members of the committee expressed no need to change the focus of the Finance Committee, and so we will continue as we have in 2006.
Monitor Community Center Account: It is not known whether the 2007 version of Quickbooks Pro has been obtained. This software will provide greater capability in management of the Community Center account. If it has not yet been obtained, it should be obtained as soon as possible. Phyllis Benaman has been able to monitor the Community Center account activity up to October 2006. Phyllis plans to examine the activity through the end of 2006 over the next few weeks. It was decided that no formal, external audit of the Community Center account is needed, and that Phyllis’ examination of the account records will suffice to ensure that the records are complete and accurate. Mal requested that the Finance Committee make an annual report to the Board of Directors attesting to the accuracy and completeness of the Community Center account, and making recommendations for improvement where needed. The target date for this report is the end of January 2007.
Monitor FRCA Account: Comparison of the Visa debit card statements with Ann Jones’ records still has not progressed beyond August 2006 because subsequent statements have not been received from Koger Management. Mal will contact the bank which provided the debit card and try to obtain statements for September through the cancellation of the debit card in December 2006. If these statements are received, John Frisch will complete the comparison with Ann’s records. Whatever comparisons John has completed will be turned over to Goldklang, Cavanaugh, and Associates, who have been contracted to do the 2006 audit. Then Goldklang, et al. can make the necessary adjustments to the 2006 financial records based on the debit card information.
Text descriptions of the expected types of items to be charged against each expense account of the chart of accounts were discussed. This information will be used to code the invoices to ensure that each expense is charged against the appropriate expense account. A final set of descriptions was identified and Jean Strub will make the final changes on the chart. Mal will then send the corrected set of account descriptions to Armstrong Management. After Armstrong Management’s on-site manager codes the invoices, members of the Finance Committee plan to review the invoice coding prior to their return to Armstrong Management for data entry and payment. Jean Strub and Don Horan are both available for this review.
The 2005 audit still has not been completed as of 24 December 2006. The primary problem seems to be the inability of Goldklang, et al. to obtain all of the necessary documents from Koger Management. Lawyers are involved.
The contract for the 2006 audit has been awarded to Goldklang, et al.
Contracts: During December, the BoD contracted Goldklang, et al. to perform the audit of the 2006 financial records of the FRCA account. Also during December, the BoD contracted Mason & Mason to perform a new replacement reserve study for the Falls Run Community.