Inlet Beach Club Policies/ProceduresA 46 UNIT CONDOMINIUM COMMUNITY IN PALM BEACH SHORES, FLORIDA
120 Inlet Way, Box #108, Palm Beach Shores, Florida 33404
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.
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:
– 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.
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
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.
Verification – The Property Manager is
responsible for insuring that all goods
and services ordered (excluding administrative services) were received and
consistent with order placed.
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
– on or about the 15th and 30/th /31st of each
Bookkeeping will express mail all checks along with coding/approvals to the
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.
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:
Treasurers Report, summarizing cash accounts and activity
Income/budget comparisons for month and year to date and budget analysis
Summary listing of checks issued; bank transfers and accounts receivables (owners past due)
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
|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||
|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.
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
|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
|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.