[Marriedguy]

I'm on the Board of Director, of a Co-op apartment building in Yonkers, NY. We currently have a managing agent and accountant firm. The accountant firm actually works for the managing agent. The managing agent is responsible for paying collecting our rent (maintenance fees), depositing it and then paying for the corporations expensive. What services so we expect from this accountant firm?

I'm going to suggest that the corporation change accountants because it’s close relationship to the managing agent. But also believe we are not getting go service. We are in March and we have yet received 2007’s audit or a proposed budget for 2008.
:confused:

Any input will be help thanks. Very concern shareholder and board member.

[ScottGem]

What input do you want? Sounds like you are a conscientious board member.

[Marriedguy]

I wanted to know what services an accountant firm provides. For an example our mortgage for the building has to be paid. The managing agent in this case drafts the check and sends it out. This accountant firm, is it there job to keep the record of this transaction? Or make sure the mortgage is paid? Do they file our taxes?

The only correspondence, I has a shareholder receive from this accountant firm is document for our individually tax deduction. Yearly audit which is always a year behind when we do receive it.

[ScottGem]

An accounting firm will audits the books and/or keep the books, but generally just audit them. They will also prepare financial statements and tax returns.

Generally the day to day entry of transactions is handled by a bookkeeper ro organization treasurer.

[Marriedguy]

Thanks for the input. Great! Our treasurer doesn't know the difference between a debit card and credit card.

[morgaine300]

The person working inside the company does not always have to know all the accounting rules. That is, you can hire a bookkeeping to do the work in Quickbooks or something like that, to get the daily transactions done. Then the accountant can do the month-end and year-end work. It's not uncommon for a manager at a company to do the day-to-day stuff and just send it over to the accountant. Although getting together with the accountant for appropriate ways to do things and what type of info they need is very useful. It's difficult to do the work if the person doing the day-to-day transactions doesn't have a clue. But they don't need to know debits and credits.

(Just as example, a manager of a restaurant once would do the daily sales sheets, already divided up among food, beer, etc, because this came from the cash register summaries, and then a list of all the payouts. He put this into Excel daily, summed everything, and then we got a printout of that. It was then our job to turn this into debits & credits in the accounting software.)

The accountant isn't necessarily responsible for doing things like entering your monthly checks (mortgage payment or not), unless that's the agreement you've made. They should, however, be responsible for making sure during year-end that the correct portion is coming off the mortgage principle and correct portion being charged to interest, etc. An accountant is generally NOT responsible for things like making sure your payments get made. That's the company's responsibility. (i.e. accountants take records and put them together into statements -- they aren't there to make sure you pay your bills on time.)

It does, however, sound like you need a new accountant if work is getting that far behind and you're getting so little information. Unless there's some lack of communication as to what is required of the accountant. As a general rule, the company does day-to-day work and the accountant does month-end, quarter-end and/or year-end work, usually including statements and taxes. And you should get a copy of all this. It's then your responsibility to still pay anything due and get it there on time. If things are running late, the accountant should be filing for an extension. But... you can make any agreement with the accountant you want about what they should or should not be doing, as long as you both agree to it.

It might be beneficial to hire an experienced bookkeeper who can do all the monthly stuff, payroll, bank rec's, etc. It might cost more than a lower-level one, but in the long run might save money if you involve the costly accountant less. A "treasurer" is not a bookkeeper. (Though I do wonder what exactly it is your treasurer is doing.)

[Marriedguy]

What is a reasonable monthly charge for this service? My issue is this. We are small building we at most may have 20 deposits and on average 10-15 transactions this would include mortgage, con edision, insurance , etc. So what I understand the accountant is just putting this data in Quickbooks and running query report at the end of each month & one at the end of the year. And I thought the treasurers was the corporations accountant?

[Lon]

Generally the managing agent provides bookkeeping services. The accountant prepares the tax return and the annual statement. Both the accountant and the managing agent work for the building. Because the accountant is providing some form of assurance on the financial statements he should not be doing bookkeeping. If you have any questions send me a message. I am a CPA and former VP of a co-op board in Fleetwood and Former president of a co-op board in Manhattan.

[Marriedguy]

From what I'm gathering it depends on the board the tasks the board assigns. I'm pretty certain that an accountant firm will pay our bills for us if we paid them enough. I understand that they are both working for the building we have a Managing agent agreement that states exact what they are responsible for. However, we don't have a contract agreement for the Accountant Firm. The managing agent sent me memo on their letterhead. On this letter head it has a list of there staff members and I noticed that one of there employees' is also Partners of the Accountant firm. If this not a convict of interest it is bordering dangerously close.

In 2006 and part of 2007 I was the vice president of this board. During, my service the President and now good friend (Gus) explained to me that this same managing agent defaulted on the mortgage for about a year. My response natural was “and why are we still using this company?” He answers you really don't know this board. There are two people (we call them King and Queen) that are on this board that no matter what logic you throw at them they will vote against changing managing agent. And to add insult to

This managing agent saw a great opportunity for to put about $1000.00 in a money market account. He convenient forgot to tell the board. When the Gus notice that something didn't add up they questioned him and he admitted that he got the missing funds in a money market account. The rate was so go he didn't want us to pass it up, so he didn't this without the board knowledge. The Board decided to let it go. Then several months later the when they asked who the market account was doing? The managing agent says what money market account?

During one of the board meetings I brought these issues up and try to make this managing agent accountable. The King tells explains these incidents happened in the past and we as a board can not go back and correct the past board mistakes. We should focus on the future and where this building is going. Then he tries to move on the next topic. I can't let this stand so I bring it up again and now I'm the son of Satan.

When Gus resigned as the President they told me that I wouldn't automatically become the President my resignation was handed in same day. Worse mistake could have made. The King and Queen has don't nothing for the building and now refuse me access to the finanical records of 2007.

[ScottGem]

As a stockholder (this is a coo-op not a condo, right?) you can sue the board to make financial records available. As officers of the board, the King and Queen have a fiduciary responsibility to make sure the building is run properly. As such they can be personally held responsible for malfeasance.

You need to review the bylaws about succession of officers.

[Marriedguy]

Thanks Scottgem your on point with this advice. I can't give you a greenie for some reason. I know they are seriously violating the NYS BCL, as a shareholder I'm entitled to see the records, minutes of the meeting and other corporate documents. The Bylaws which is part of our Offering Statement there is a whole story about the Offering Statement.

Some shareholders have one and others don't. My unit was purchase via foreclosure by Mr. Smith, he never received a copy. Then I come along and purchase my unit from Mr. Smith. During the closing we my lawyer asks for the document. Mr. Smith doesn't know where this document is because he never received one. At this point the person who represents the managing agent stops the closing proceedings and Mr. Smith is calling home trying to find this document. About 10-15 minutes later Mr. Smith tells everyone I don't have the document. The person representing the managing agent explains Mr. Smith that he can't close without this document and they will provide a copy of this document for a small fee of $500.00. This is not including the transfer fee $550, review of recognition agreement, $250 and other minor mandated fees. All parties agreed to continue our closing and after we would make arrangements for me to get a copy of the document.

Gus had his copy which he loaned to me and I was in the process on creating a digit form (pdf) this was painstaking and I told ask the board could we get funds for Staples or Office Depot to do this for us. King, Queen, and the Prince (queens son, he is a shareholder got his co-op via foreclosure) decided that it was not a good idea. 3 votes against 2 we lose. Then I suggested that we get Staples or Office Depot to make paper copies for us which of course would cost less. Queen says no she works in an office and she will make copies for everyone. I give the copy to her and she made copies. Since, I was no longer on the board and making waves they gave those copies to the managing agent which in turn he sells for $500.00

We had the annual meeting only because I told that they had to have one. I asked president at the entrance to the building, when were we having our annual meeting? With a puzzled look on her face she answers umm, what annual meeting? I tell her that we have to have an annual meeting each year to decide who will be Board and discuss building finances , etc. She replies: Oh that meeting, I get touch with the board and I'll get back to you.

At shareholders annual meeting: only one person voted for me to be president, vice president, treasurer or secretary.

President: good man wants change and upset with 2007 board's actions.
Vice: follower whatever King and Queen goes.
Treasurer: King.
Secretary: Queen's son
Director: Queen
Director: Ex-Vice president also wants change wished I stayed on last year. They always out voted him.
Director: Satan himself me.

[ScottGem]

I used to live in a Mitchell Lama Co-op in NYC and my mother was on the board and served as secretary. I had my own unit for a few years. So I know a bit about this.

Charging $500 for a copy of the offering statement is unconscionable. Its highway robbery.

The thing to remember here is that your building is a corporation. It has to be run like any corporation. Stockholders have rights. I would go around to all the stockholders with a petition calling for new board elections and getting rid of the King and Queen. Simply explain to thse people that you believe the building is being mismanaged and that will mean higher maintenance fees. If they want make sure their maintenance fees are being used properly then they NEED to get involved.

[Marriedguy]

Great, thanks I'll update everyone on the situation. I just received the report for 2007 today let me look this over.

[morgaine300]

Well, this has gotten beyond my knowledge and you've got two people with co-op experience, so I'm going to stay out of this. :-) But just wanted to say I feel really sorry for you and this situation. I've been in the middle of things like this, with people like this, except in less serious situations. Sometimes you feel like the only sane person.

I wish you luck and would be interested to know how this comes out.

[Marriedguy]

Yeah, thanks. Since they lived here for the last 22 years and I been here about 3 years they feel their answers trump mines. However, today's meeting actually went well. The president loaned me his offering plan and I ran off a copy of it, and now I'm in the process putting it into pdf format.