Financial Management for Nonprofit Organizations, 3rd Edition

APPENDIX 9ACASE STUDY: KIAWAH ISLAND COMMUNITY ASSOCIATION*

• Size: 4115 properties
• Age: 26 Years
• Location: Kiawah Island, SC

Kiawah Island is a National Community Association of the Year Award (NCAYA)–winning community in South Carolina. In addition to the board and management's dedication to community spirit and service, they also pay particular attention to financial operations.

Governing Documents. The community's governing documents provide certain guidelines related to the association's financial activities. Financial statements are prepared per the accrual basis of accounting and prepared according to the fund reporting method. Using the accrual method ensures observance of limitations and restrictions on the use of financial resources that the governing documents require. The association board and staff also prefer to have an annual audit conducted because it gives the members a level of confidence that is not possible with a review or compilation. When all is said and done, the board and the staff want their work scrutinized to the fullest extent.

Bank Statements. As per the association's Financial Controls Manual, the association's treasurer and controller's assistant reconcile Kiawah Island's bank statements monthly. This allows the association to regularly monitor its assets. The individuals responsible for reconciling the bank statements do not have check-signing authority. Authorized signatories on all bank accounts are the board treasurer, the general manager, ...