A Few Good Reasons For An Audited Financial Report of The Spadina Condominium Corporation

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Auditors

Condo corporations generally have a contract with an auditor who works on behalf of corporations independently of boards of directors and management companies. An owners’ search committee can select an auditor and present this choice to the AGM. Whatever the process of selection, the auditor has to be elected at the annual general meeting.

Auditors cannot be removed by boards or managers or replaced unless they resign between annual meetings. An auditor who resigns has to be replaced but the replacement has to be elected at the next annual meeting of owners.

What’s the Auditor’s Role?

The role of an auditor is to verify the corporation’s accounts (work orders, invoices, contracts) against the financial statements and yearly budget. The auditor must examine the minutes of meetings held by boards to make certain that boards have duly approved expenditures, as well as new and existing contracts.

In addition, the auditor has to:

  • Ensure that the board is complying with the reserve fund study
  • Verify that the level of reserve funds follows the general outline of the board’s implementation of the recommendations contained in the study
  • Verify that revenues and expenditures are based on proper by-laws
  • Provide a written auditor’s report before each annual meeting so that this report is included in the AGM’s package of documents that owners receive before the meeting
  • Report findings and conclusions to the board and owners at the annual general meeting
  • It is suggested that owners be able to approach auditors and be assured of confidentiality–because auditors are accountable to the Corporation and not to the board exclusively.  It is important to note that, as per Section 34(3) of the Condominium Property Act, a Corporation consists of all persons who are: (a) owners of units in the parcel to which the condominium plan applies.

The average residential unit owner of the Spadina Condominium Corporation, based upon information provided by the Board of Directors, may very well be demanded, to commit themselves to cash calls of approximately $35,000 to $40,000 over the next twelve months. The cost of an audit at about $60 per resident, is a very small price to pay for full transparency of how their money is being spent.