Are you a board member of a large scale community association? Are you reviewing your large scale community association accounting? You may refer to yourself as a Large Scale Association, A Planned Unit Development (PUD) or just a Planned Community. You may be a residential homeowners association, or condo community or maybe a mixed use community with both residential and commercial properties. Are you interested to see how your planned community financial operations stack up against your peers? We have reviewed a 2016 Survey of Large Scale Communities by Community Associations Institute that may provide some accounting insights.
Community Associations Institute (CAI) defines a Large Scale Association as having all of the following characteristics: 1) provides municipal services, 2) has over 1000 lots, units or acres and 3) has an operating budget of $2,000,000 or more. Most of these identify as a planned community and have sub associations.
Community Associations Institute (CAI) estimates as of 2016 that there are 6,000 to 9,000 Large Scale Associations in the US. CAI conducted a survey in 2016 of Large Scale Associations which reached a small part of these communities.
Over half of Residential, Resort/Residential, Private Club and Mixed use Large Scale Associations use staff members only for their management-related services. Half of age restricted Large Scale Associations use Staff Members and a Management co/ Third Party.
Of the Large Scale Associations (LSAs) that reported having a management company or third party, a large majority of them reported that the management company and/or third party handles financial management and general administration. (financial management: residential communities 95%, age restricted 100%, resort/ residential 77.8%, Private Club 80%, mixed use 100%).
Of those LSAs that reported having a management company or third party, most said that the management company or third party are members of CAI: Residential 90%, Age Restricted 90%, Resort/Residential 88.9%, Private Club 80%, Mixed Use 100%.
All Large Scale Associations reported that their annual financial reports are examined by a CPA.
Almost all audit reports completed by LSAs are reviewed by a CPA. Review and Compilation reports for the most part are not examined by a CPA.
A majority of LSAs use a third party reserve specialist. Most LSAs reported that their staff or management services company do not perform their reserve study.
Click on the link to read the entire survey.
If your Large Scale Association accounting or Planned Unit Development accounting is not as efficient as you would like, may not have features to make it easier to manage or it may be costing you too much money. Maybe you are about to have turnover of key staff? Community Financials has a plan to help large scale communities. To find out how we can help and receive a proposal schedule a free consultation so we can learn more about each other.