Board members normally receive unaudited financial statements monthly or quarterly at or before their board meetings. The association's management company usually generates them. The following are normally included:

• Balance sheet
• Income Statement/Cash Flow Statement
• Delinquency Report
• Check Register
• Check Copies
• Copies of Paid Invoices

Boards have a legal duty to review their association's financial records. There is nothing in the Davis-Stirling Act about approving unaudited monthly financials. Although boards often approve monthly financial statements, doing so involves some risk since interim financials are a work in progress, and the board could be approving inaccurate numbers.

Industry practice is to have minutes reflect that "A monthly financial report was submitted to the Board." "The Treasurer's report was given." or "The Board received an interim financial statement along with the Treasurer's report." When the Treasurer's report is given, no action is required by the board, i.e., there is no need to make a motion. The same is true for committee reports. The board does not approve-committee reports; it "receives" them. Also, committee reports (and interim financials) are not made part of the minutes unless there is an important reason t,o do so, or the board wants to include them.

Membership Review. Boards should routinely include a summary of the "Treasurer's Report" in their minutes and then post it for membership review.

Annual Financial Statement

An Annual Financial Statement is a report on the financial activities of an association. When reviewed by a Certified Public Accountant for publication to the members of an association, it should contain the following:

• Accountant's Report (Nature and scope of work, Management's Responsibilities, Auditor's or Accountant's Opinion or Conclusions, and any other matters of importance)
• Balance Sheet (Assets, Liabilities, and Net Worth)
• Revenue and Expense Statement
• Cash Flow Statement (Explains the change in cash and investments (reserves) from the beginning of the year to the end of the year)
• Full Disclosure Notes (Specifically GAAP mandated_plus client-specific issues)
• Mandatory Supplemental information regarding Major Repairs and Replacement obligations and funding plan (reserves).