Inlet Beach Club Policies/Procedures

A 46 UNIT CONDOMINIUM COMMUNITY IN PALM BEACH SHORES, FLORIDA


  120 Inlet Way, Box #108, Palm Beach Shores, Florida 33404
  Phone: 561-863-6242    

Policies & Procedures: 

Financial Policies & Procedures 6-1-06

Below are the Financial Policies for the IBC. These P&P’s should be reviewed and updated at least once per year in October, prior to the new budget being prepared.

Controls / Approvals / Coding of Charges

In an ideal control situation, IBS would have separation of duties so different/separate people were placing orders for goods and services; another person verifying that materials were received or services provided; another person matching invoice to receiving report (materials) or “services provided”; and finally, another person(s) signing and sending checks to vendors /suppliers. This is not practical for IBC, give the part-time staffing of IBC and part-time residence of IBC’s Board. However, the below outlines procedures that should be followed.

1.      Ordering & Verification of Goods & Services – All orders for goods or services for IBC
         should be initiated by the IBC Property Manager, with the exception of administration
         services (insurance, accounting, etc.) which will be authorized by the Board. Controls
         are as follows:

a.      Budget Check – Whoever is ordering goods or services must be sure the
         financial commitment is consistent with the budgeted amount; if not or
         there is a risk of over expenditure, the IBC President or Treasurer must
         approve and find an off setting lower expenditure in another budget category.

b.      Delegation of Authority Levels – The Property Manager can commit for
         individual expenses up to $1,000 per item/service, that are not covered by
         existing contracts, based on his best judgment of value/service and assuming
         the expense has been covered in the approved budget. Any other single
         expenditure over $1,000 should be put out for 3 bids, with the Property Manager
         selecting the best value among bidders and placing the order. Exception to the
        “3 bids” process should be pre-approved by either the President or Treasurer or
        other Board Members if the President or Treasurer is not available and time is of
        the essence.

c.       Annual Contracts – They should be reviewed each year. The Treasurer will
          initiate the review and utilize the expertise of the IBC Property Manager and
          other Board Members.

d.      Verification – The Property Manager is responsible for insuring that all goods
         and services ordered (excluding administrative services) were received and
         consistent with order placed.

2.      Invoice Approvals / Budget Coding – The Property Manager will review all invoices
         received in IBC mailbox and:

  • Approve each invoice by annotating “OK to Pay” and initialing the invoice

  • Assign the correct budget code/account to each invoice, making sure charges are assigned to proper maintenance,  special assessment or reserve account codes

  • Place in “pouch” for weekly pick-up by Accurate Bookkeeping

  • Fax any “exception” or “rush"

    •

  • Invoices to Accurate Bookkeeping for exception handling

3.      Check Issuance – on or about the 15th and 30/th /31st of each month, Accurate
         Bookkeeping will express mail all checks along with coding/approvals to the
         Treasurer to:

a.   Verify /screen for reasonableness of the charges and account coding
b.   Sign check and send to vendors
c.    Return files / paperwork back-up to Accurate Bookkeeping

The Treasurer will advise Accurate Bookkeeping where he/she will be located for mid-month and end of month payment process. In the event the Treasurer will not be accessible he/she will advise Accurate Bookkeeping at least one week in advance which Board member should receive the checks and where to send.

4.      Monthly Budget Reports – on or about the 15th of each month, Accurate
         Bookkeeping will send the following reports to:

Treasurer – full set of monthly and year to date financial and budget reports along with check register detail for each account; Accurate Bookkeeping will send a duplicate copy of these Treasurer Reports to the Property Manager to be filed in IBC office

Board Members– will receive summary level data that will include:

  1. Treasurers Report, summarizing cash accounts and activity

  2. Income/budget comparisons for month and year to date and budget analysis

  3. Summary listing of checks issued; bank transfers and accounts receivables (owners past due)

 5.      Budget and Financial Planning – For financial planning and the benefit of the IBC
          owners of the IBC Board should use the following Budget and Financial Planning
          Schedule. Note effective with the 2007 Budget, the IBC Board will go to a three year
          Budgeting Planning horizon working off:

Updated estimates of the current year

Projected budgets for the two out-front years, done at a higher level (vs. the by line by general ledger account detail used  for current and upcoming year). The out-front estimates will include the different inflation rate estimates that can impact energy vs. insurance vs. labor vs. materials, etc. 

The upcoming year budget will include three key elements:

  • On-going maintenance budget
  • Special assessment needs/analysis
    •
  • Annual Reserve Analysis/update
Timing Mid-October Mid-November Mid-December
Next Year Budget (on-going maintenance; special assessments; reserves) Treasurer sends to BOD BOD discusses changes/adjustments BOD approves and Linda sends fees to owners
Two out-front years

Treasurer prepares

Board discusses changes/adjustments BOD approves and provides directional information to owners; discussed at either Annual Meeting or Budget Meeting

6.      Annual Reserve Analysis & Update – The IBC has 7 separate Reserve Accounts for

          1. Painting the buildings.     

         2. Replace the roof.

         3. Replacing parking area surface.

         4. Replacing the pool.

         5. Replacing pool furniture.

         6. Replacing exercise equipment

         7. Replacing major building elements.

The Reserve and Reserve Analysis needs to be updated each year for proper budget and financial planning.

Below is the timing and procedure on the Reserve Analysis and budget Planning Cycle.

                                          Steps                                                                              Timing

1. Property Manager will get annual, documented updates on the
    replacement cost and estimated useful life on each of the 7 reserve
    items and provide the BOD with a report not later than the end of
    September		 July-Sept.
2. The Treasurer, working closely with the Property Manager and Board, will
     prepare an analysis of reserves, comparing current reserves vs. needed
     reserves and recommend changes to reserves as a past of the
     Budget/Planning Procedure		 Mid-Oct.
3. Board discusses Reserves and other budget items Mid-Nov.
4. Board approves Reserve adjustments as part of the Budget Approval Mid-Dec.
5. Owners are informed of approved budgets including reserves adjustments
    in mid to late December, when budgets are approved and quarterly fees
    are sent to owners.

Mid-to Late
December