financial statements: 5 things every board member should know

Financial Statements: 5 Things Every Board Member Should Know

1. How much is owed to the cooperative?

This information is also referred to as “Accounts Receivable” and represents rent that is owed by members to the co-op. You can find this on the Balance Sheet, under the Assets section. 2. How much money is in each of the cooperative’s bank accounts?

Also listed on the Balance Sheet, under the Assets section – the co-op likely has an operating account (or it may be called the checking account), a capital reserve account (savings), and a real estate tax escrow account (short term savings to pay taxes). 3. How much is being spent on capital expenses?

The capital reserve bank accounts should increase every month, as reserves are put away and saved. If the account is decreasing; ask why? Are funds being spent on approved projects? 4. Is there a deficit or a surplus this month? This year?

This can be located on the income statement (or sometimes called a profit and loss statement). At the end of a period, after all the revenue has been recorded, and all the expenses have been recorded, is there a positive surplus, or a negative deficit? 5. How much money does the cooperative owe to vendors?

This information is also referred to as “Accounts Payable” and represents money that is owed to outside vendors. You can see this on the Balance Sheet, under the liability section.

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A B D

Task to Complete: Summer Assigned to Completed DateCommunicate with board any concerns

Monitor daily water use

Monitor street lights and common lighting (quarterly)

Monitor drainage areas (quarterly) and report if cleaning or repair is needed

Procurement:Solicit bids for snow plow removal

Contracts:Execute tree contract - W9, certificate of insurance

Execute drainage contract - W9, certificate of Insurance

Execute roadway contract - W9, certificate of insurance

Execute electrical contrac - W9, certificate of insurance

Execute all equipment and community building contracts - W9, certificate of insurance

Execute any capital improvement contracts - W9, certificate of insurance

© 2008-2015 ROC USA, LLC

Happy Housing Cooperative Inc. Procurement Policy

The following policies and procedures shall be followed when a cooperative purchases equipment, materials, supplies, property, or services from an outside source.

I. General Policy

A. No Conflict of Interest. All Directors, employees, or agents who participate in the selection or acceptance of

a contract for equipment, materials, supplies, or services must comply with the cooperative’s conflict of interest policy. No director, employee, or agent will participate in the selection or acceptance of a contract involving a conflict of interest without the approval of the Board. “Conflict of interest” includes situations in which the employee, family member, or Board member has a financial interest in the business or individual selected for the contract.

B. No Purchase of Items for Personal Use. No director, employee, or agent who participates in the selection or acceptance of a contract for equipment, materials, supplies, or services shall use such items for personal use.

C. No Receipt of Gratuities. No director, employee, or agent shall solicit or accept gratuities, favors, or anything of value from contractors, potential contractors, or parties to agreements with the cooperative.

D. No Purchase of Items Not Approved in the Budget. No director, employee, or agent shall solicit or accept any equipment, materials, supplies, or services that have not been approved by the Board of Directors in the annual budget without prior approval of the Board, or the Membership according to Corporate Bylaw article 10.2 Section B.

E. Document Cost Analysis. The cooperative shall conduct a cost analysis and document the analysis in the procurement files in conjunction with every purchase, which may include but is not limited to an internet search, calling several retailers, comparison of retailer advertisements, etc. The procurement file should include a justification for the lack of competition if competitive bids or offers are not obtained.

F. Contract with Winning Bidder. If a contract is competitively bid, the cooperative will enter into a contract with the winning bidder that specifies the equipment, materials, supplies, property, or services to be purchased and the payment terms.

G. Evaluate Each Contractor. The cooperative will evaluate each contractor at the completion of each contract. The evaluation will be utilized to make decisions to award future contracts.

II. Acquisition Procedure The cooperative will conduct all procurement transactions in a manner that maximizes opportunities, increases quality, and reduces the cost of purchase. The cooperative reserves the right to reject any bids or offers, if deemed to be in its best interest.

A. Pricing Procedures. One of the following procurement procedures shall be utilized for all purchases of equipment, materials, supplies, property, or services involving amounts over $500:

1. Open Market Inquiry. The cooperative will inquire in the open market to ensure an advantageous price and quality. The file shall document the inquiries made and offers received.

© 2008-2015 ROC USA, LLC

2. Request for Competitive Quotes. The cooperative will request competitive quotes, orally or in writing, from at least three different sources. The file shall document each invitation made and offer received.

3. Formal Proposal Procedure. The cooperative will solicit competitive responses through a formal bid procedure. Bids will remain sealed until the time designated in the proposal. All requests for proposals shall contain the phrase “Equal Opportunity Employer.”

B. Document Prices. The cooperative shall maintain files on all quotations solicited and offers or bids

received and any criteria for selection. In all instances in which the lowest bid is not awarded in the contract, justification for the selection must be contained in the file.

III. Property and Equipment Policy

When purchasing property (both real estate and equipment), the following procedures must be followed:

A. Title in the Name of the cooperative. All property purchased belongs to the cooperative and title vests with the cooperative.

B. Property Inventory. A list of all property owned by the cooperative shall be kept showing the type of property, identification number, original cost, and depreciated value. The inventory list must be completed at the time of purchase and annually at the end of the cooperative’s fiscal year.

C. Insurance Coverage. The cooperative will maintain insurance coverage for all property owned by the cooperative and maintain documentation of each policy in a safe deposit box.

This policy was approved and adopted on ______________________. The foregoing is a true and accurate account, attested by, ________________________ Secretary

GOVERNANCE TASK

Property or

Financial

Manager /

Bookkeeper

Board and/or

Committee

TA

ProviderAttorney

Create and adopt Governance Policies: X

Board Policy X

Conflict of Interest Policy and Disclosure Form X

Ground Rules for Participation Policy X

Communications Policy X

BOD Code of Ethics X

Develop and Adopt other Policies: Website, R.V, E-communications (as

applicable and/or optional)X

Provide Policy templates and assist with development X

Review Conflict of Interest Policy and Disclosure Form and BOD

PolicyX

Review other Board Policies as needed X

Provide Access to financial records, in accordance with bylaws X

Ensure Compliance with Laws and Regulations X

Develop and utilize Legal and Regulatory Compliance Checklist X X

Review Healthy ROC Dashboard / take corrective steps as needed X

Provide Healthy ROC Dashboard and assist with assessment X

Complete and submit ROC Capital Annual Report X X

Respond to valid petitions from the membeship X

Train/ Coach / Support

Develop Meeting Agendas X

Take and prepare Minutes X

Prepare Meeting Notices

Posts/ Sends out Meeting notices in accordance with bylaws

Train/ Coach / Support X

Appoint Nominating Committee for election X

Provide Nominating Committee Policy template; asssit with development

and approval X

Develop/ Adopt Nominating Committee Policy X

Form Ad-hoc Committee to plan and coordinate Annual MeetingX

Provide clarity for Member in good standing, unless provided in

BylawsX

Ensure proper Meeting notice to members, agenda, Sec of State

report, financials, and all other required docs per the bylaws X


Develop and adopt Community Rules Enforcement Policy &

ProcedureX

RESIDENT-OWNED COMMUNITY MANAGEMENT MATRIX - GOVERNANCE & GENERAL

BUSINESS

Meeting Agendas & Minutes

Annual/Special Meetings

Community Rules Enforcement

1 (c) 2012-2014 ROC USA, LLC

Create Rules Enforcement Committee and Committee Policy as

applicable

Provide Rules Enforcment templates and assist with developmentX

Review Rules Enforcment Policy / Committee Policy X

Accepts Complaint Forms from Members

Inspects for Rules Violations - weekly, bi-weekly, monthly

Verifies Rules Violations/Follow-up after time to cure

Send Rules Violation Notices

Documents Violations, actions, corrections & keeps records

Charges Fine for non-correction, as applicable

Monthly reports to the Board

Initiate Expulsion from Membership, if applicable

Makes final decision to evict/remove membership X


Facilitate access to ROC USA marketing services X

Manage Website, as applicable

Develop / Adopt Website Policy X

Provide Website Policy template X

Appoint Web-site Liaison to ROC USA Communication staff X

Identify appropriate advertising opportunities and publications

Places advertisements; distributes information, as directed

Provide marketing training, in-fill training (as needed) X

Respond to all web-site inquiries and coordinates with Membership

Committee for applicant materials and screening

Provide reports to Board on inquires in outcomes

Show vacant homes / spaces / rentals as needed


Applicant Screening

Appoint Membership Committee X

Develop / Adopt all required member screening documents: X

Membership Committee Policy X

Credit Report Policy X

Creditworthiness Criteria X

Criminal Background Criteria X

Application Procedure X

Additional Household Member Policy X

Renter Screening Policy X

Provide all policies/procedure templates and supporting

documents. Assist with developmentX

Review Policy and Procedures X

Provide Fair Housing and Applicant screening training X

Receive Fair Housing and Applicant Screening Training X

Adopt Action Outside of a Meeting protocol X

Coordinate preparation and handing out of applicant packets

Receive completed applications and materials

Secure Credit Reporting Services/ pull credit & criminal reports

Marketing

2 (c) 2012-2014 ROC USA, LLC

Determine if applicants meet eligibility criteria in accordance with policies

of the board

Make recommendation for approval/denial based in policies

Send letter of approval/denial

Coordinate approval/denial of additional household members

Coordinate approal/ denial of renters

Sign Policy and Procedure Acknowledgment Form

Provide on-demand applicant screening training and consulationX


Develop/Adopt a Record Retention Policy X

Assist with development of Record Retention Policy and Filing

SystemX

Review Record Retention Policy X

Provides ROC docs X

Set up a Filing System, as per Record Retention Policy X

Legal Records

Attested BOD/Annual/Special Meeting Minutes

Signed Code of Ethics

Signed / Attested Governing docs (Articles, Bylaws, Rules, OA/

Leases/Membership Agreement)

Membership List

Non-member List

List Membership “in good-standing”

Loan Agreements and supporting docs (Commitment Letter, Mtge.

Security, etc.)

TA Contract

Vendor Contracts

Other contracts

Sec. of State Good Standing Certificate/annual renewal

License w/Board of Health; renewals

Records of ROC legal actions

Insurance policies/renewal

List of Commercial Units / Occupants / Leases

List of Rental Unit / Occupants/ Leases

Copies of statute, ordinances, regulations relating to MHC

ownership & operation

Copies of statute, ordinances, regulations relating to ROCs, non-

profits, or member ROCs;

Financial Documents: TIN /2 yrs. of Budget / All Financial

Reports / Audit / YTD Budget to Actual / Reserve Account

Statements / AR/AP re: carrying charges and membership fees /

Payment Plan Agreements /Property Tax reciepts

Proof of compliance with any public subsidy / grant provider covenants

Licenses – health, building permits, Certificate of Occupancy, etc.


Record Maintenance and Retention

3 (c) 2012-2014 ROC USA, LLC

Contract with attorney to represent ROC in all legal matters X

Authorize one BOD member to interact with attorney on matters

not related to evictionsX

Act as liaison between attorney/ financial manager and board and keep

BOD informed on all evictions

Work with Attorney on Evictions


Legal

4 (c) 2012-2014 ROC USA, LLC

SAMPLE PROPERTY MANAGEMENT REPORT

DATE

FINANCIAL:

1. Total receivables

2. Total payment plans

3. Total lots moving towards eviction

4. Total homes for sale

5. Total vacant park owned homes

6. Number of park held mortgages late & status of legal

7. Approval of any non-recurring expenses

TENANT SCREENING

1. Any applications to be voted on by BoD and PMs recommendation of denial or approval

a. Credit Check: passed

b. Criminal Record report: passed

c. References called: all good

d. Debt to Income Ratio: passed

MAINTENANCE

1. All work completed

2. Pending work orders

3. Review of any bids needed BoD approval

4. Update on any emergencies

RULE ENFORCEMENT

1. Update on any walk-through inspections

2. Update on number of outstanding violations

3. Update on number of violations corrected

OTHER: