Powers of the HOA audit commission: what it checks

The Audit Commission is an internal body that is designed to monitor the activities of the HOA.

It is formed from the participants of the partnership. However, members of the board cannot be members of it. During internal inspections, the group draws up an act that must be presented to the general meeting of the HOA. Also, the Republic of Kazakhstan must report to the partnership on the work done. Based on the results of this procedure, a decision is made on the further feasibility of functioning of the audit group.

Audit committee

She carries out periodic inspections of the activities of the board of owners of the association of owners. The regulations establish the rights and responsibilities of the HOA audit commission. In fact, the Republic of Kazakhstan has the right to check any area, for example, financial reporting, the correctness of establishing the amount of mandatory contributions, contractual work, compliance with the rights and legitimate interests of members of the organization.

Legal status

The Audit Commission is not an independent body.

It is subordinate to the general meeting. That is, after the inspection, the group must report to other members of the partnership. At the same time, the Republic of Kazakhstan is not subordinate to supervisory and control authorities.

The legal status of the audit commission is determined not only by the current legislation and the Charter of the HOA. Each partnership develops a separate regulation on the Republic of Kazakhstan. It describes in detail the procedure for creating, the quantitative composition and powers of the group.

Competence

The main scope of the audit commission's competence is specified in Article 150 of the Housing Code (LC RF).

This list includes:

1. Conducting audits of financial activities at least once every twelve months.
2. Presentation to the general meeting of a conclusion on the accounting statements of the HOA and a report on its activities.

A more detailed terms of reference is indicated in the regulations on the audit commission of a particular HOA.

Rights and obligations

To ensure full functioning, the Audit Commission has the right to:

1. Require members of the HOA Board and its chairman to provide any documents necessary for the audit. The specified documents must be submitted to the Commission within the period established by the regulations, from the date of sending the request. It can be either written or oral.
2. Require authorized persons to convene meetings of the Board and an extraordinary general meeting of HOA members in cases where the identification of violations in economic and financial activities that entail a threat to the interests of the partnership requires the resolution of issues within the competence of these management bodies.
3. Receive oral or written explanations from any member of the organization, including the board and its chairman, on issues related to the activities of the HOA.
4. Involve specialists with the necessary qualifications to carry out the audit to carry out the audit.

The main responsibility is to conduct inspections of financial and economic activities, inform the general meeting about identified violations and make proposals to take corrective action against those responsible. This is exactly what the members of the Republic of Kazakhstan are responsible for.

Responsibility

The audit commission is assigned a certain responsibility within the scope of inspections. The disciplinary measures taken are determined by the partnership. Any unlawful actions of auditors may be regarded by the HOA board as a reason for re-election. All members are obliged to treat their activities properly and, if they do not know any questions, turn to specialists.

With the help of inspections carried out by the audit commission, many problems and violations of the work of the governing body of the partnership are identified. The activities of auditors help improve the work of the HOA and prevent a crisis, both financial and ensuring the normal functioning of the governing body. Such commissions make the work of the partnership more transparent and contribute to the favorable living of the owners themselves.

Election procedure

Any decision that affects the interests of the HOA must be made at a general meeting by voting. This also applies to the election of the audit commission. In order to resolve an issue of this nature, it is necessary to organize and hold a general meeting. To do this, the initiator must inform other members of the organization about the time and place of the event. The procedure for notifying owners is determined by the HOA Charter. This could be handing a notice to everyone, sending letters by registered mail. But most often, the relevant information is placed in a place accessible to everyone, for example, in the form of an advertisement in the entrance.

On the appointed day, a discussion of candidates for the group is held. It should be noted that a person cannot be elected to the Republic of Kazakhstan forcibly, since participation in such a body is carried out on the principle of voluntariness.

Homeowners may be candidates. At the same time, each person must reach the age of majority and not be limited in legal capacity, that is, he must be fully functional physically and mentally. The group cannot include members of the HOA board. This is necessary in order to ensure the objectivity of the checks that will be carried out in the future. Otherwise, one of the commission members will have a personal interest in the nature of the result.

The term of office of the group is determined by the general meeting and cannot exceed two years.

Composition of the supervisory body

The supervisory body may include any individual. Most often, auditors are those who are not indifferent to the fate of the house: members of the HOA or owners who are not members of the partnership. The question of approval of participants is raised at the general meeting.

The composition of the inspection structure is elected for a period of up to 2 years. After this time, the owners must meet again to select and appoint new auditors.

When deciding to approve the commission, residents need to know that conducting an audit requires certain knowledge of accounting and economics. Therefore, if among those wishing to become auditors there are accountants, financiers, lawyers and economists, then it is better to vote for them.

In the absence of representatives of these professions among the applicants for this position, the selected members of the commission have the right to involve specialists in the work.

A person who has already been elected to the position of auditor may be included in the commission again at the next election, but no later than after 3 years.

The supervisory inspection consists of a chairman, who is elected by its members, a secretary and other participants. The chairman organizes the audit process, convenes meetings, and signs audit reports.

The secretary draws up minutes of meetings, signs documents together with the chairman and provides the necessary documents on behalf of the auditors to authorized persons.

Who cannot be a member of such a structure?

The number of auditors cannot include the chairman of the HOA, as well as the founders of the organization. People holding these positions are interested parties, which means an audit with their participation cannot be objective and legal.

Objectives of activity

The main goals of the work of the Republic of Kazakhstan arise from its powers. First of all, this is an audit of the financial and economic activities of the partnership, as well as control of the process of spending funds available on the organization’s balance sheet. It is important to carry out inspections based on complaints from owners. In this case, the nature of the appeal does not matter. An inspection can be carried out for any violations. The Republic of Kazakhstan also studies the calculations and execution of estimates, remuneration of hired personnel, and monitors the implementation of the rules of the Charter and the norms of current legislation. Finally, the commission checks the correctness of the calculation of the amounts of mandatory payments and contributions.

What exactly does an audit cover?

The commission's inspection covers the following areas of activity:

• control over the activities of the management bodies of the partnership;
• accounting and control of the partnership’s expenses and the appropriateness of their spending;
• control of proper accounting and financial activities of the partnership;
• monitoring the actions of governing bodies in accordance with the HOA charter;
• ensuring the safety of funds.

An audit of the activities of an HOA is not particularly difficult, but if members of the commission have a number of questions about the details of the activities of the partnership, it is better to contact audit firms that conduct audits for a fee.

Conducting an audit

The main function of the Republic of Kazakhstan is to conduct an audit. This procedure is implemented both as planned and in the event of unforeseen circumstances that require an inspection.

During the event, the following areas of the HOA's activities should be checked:

1. Safety, technical condition and use of assets, operations for their receipt and expenditure.
2. Timely and complete calculation of depreciation of fixed assets.
3. Preservation and use of material assets, as well as operations for their receipt and expenditure.
4. Compliance with established prices and tariffs for housing and communal services.
5. Calculation of payments for real estate to owners and users.
6. Determination of the amount and adjustment of remuneration for service personnel.
7. Carrying out cash and banking operations.
8. Storage and use of strict reporting forms.
9. Payments to resource-providing and service organizations, budgetary and commercial structures.
10. Financial condition of the partnership.
11. Accounting and reporting reliability.

After completion of such an event, an act must be drawn up and presented to the general meeting.

Reasons

A detailed list of circumstances that are grounds for conducting an audit is not established by the current regulatory legal acts. According to the general rules, an inspection can be scheduled, that is, carried out during the period determined by the general meeting, or unscheduled. In the latter case, the grounds most often are complaints from the owners. They are connected with the violation of the powers of the HOA board.

Examples are: unjustified increases in payments and contributions, poor sanitary conditions of common areas and surrounding areas, untimely repairs and replacement of broken equipment. Each complaint is subject to a preliminary investigation. In this case, an audit is carried out even in cases where a person has suspicions that his rights have been violated. The inspection is carried out to establish or refute the fact of misconduct.

It should be noted that both one owner and the entire partnership have the right to initiate an audit.

Checking act

Upon completion of the audit, a report must be drawn up. For this, you can use regular office paper.

The text of the document must reflect the following information:

1. Date and place of execution of the document.
2. Information about the composition of the audit commission. This indicates the last name, first name, patronymic of each person, as well as who is the chairman, secretary and members.
3. Information about qualified specialists who were involved in the implementation of the procedure.
4. Time of inspection.
5. The grounds for carrying it out are a plan or a complaint received.
6. Which areas were revised?
7. The nature of the identified violations.
8. The requirements of which regulatory legal acts were violated.
9. The amount of damage caused.
10. Commission proposals.

The act must be signed by all members of the Republic of Kazakhstan.

Activity report

Another mandatory document that the audit commission must present to the general meeting is an activity report. It is drawn up and provided based on the results of the commission’s work. The contents of the document should reflect information not only about the commission, but also a list of activities carried out as part of the audit.

Procedure for provision

The report is provided after the audit is completed. Also, this information can be considered at the final general meeting held once a year. The report itself is submitted by the Chairman of the Republic of Kazakhstan. In practice, postal or Internet forwarding is not used. In this case, certified copies of the report can be prepared for the general meeting. And the original can be left in the commission. During the review process, each member of the HOA can ask questions or make suggestions to improve the work of the commission. The results of the review of the report are documented in a protocol.

It should be noted that re-election of the commission is possible if during the meeting facts of violation of the legislation of the Republic of Kazakhstan are established. In such cases, members of the HOA can attract third-party specialists, under the terms of a service agreement, to analyze the work of the audit commission.

Content

The content of the report is similar to an inspection report. It must contain the following information:

1. Document's name.
2. Name of the HOA commission.
3. The period of activity for which the Republic of Kazakhstan reports.
4. Date and place of execution of the document.
5. The normative act on the basis of which the commission acted.
6. Areas of HOA activity that were subject to inspection.
7. What information were the members of the commission guided by?
8. General characteristics of the residential area and surrounding area.
9. A system used to collect taxes from property owners.
10. Financial condition of the partnership.
11. Source of funds.
12. The total amount accrued for the use of real estate and housing and communal services.
13. Existing debt. In this case, data is reflected for each owner.
14. Information and salaries of service personnel.
15. The status of paying taxes, that is, whether there is a debt or not.
16. Composition of fixed assets.
17. Identified violations.
18. Commission proposals.

The report is signed by the Chairman of the Republic of Kazakhstan. Let us note that the commission’s proposals should not be limited only to the choice of measures to influence the perpetrators. It can be recommended, for example, to send service specialists for additional training.

How to draw up the final act?

The act consists of the following parts:

• the name of the act is indicated;
• date of its preparation;
• introductory part of the act;
• descriptive part;
• conclusions and offers;
• signatures of the audit commission.

FOR REFERENCE: The name of the act is necessary to understand the composition of the document (what is being discussed). The date of drawing up the act must be the same as the date of the audit.

The introductory part includes the specified goals, objectives and grounds on which the audit was carried out . Often, such a basis is an order from the director or a general decision of a meeting of shareholders. A list of those members of the audit commission who can check the activities of housing cooperatives and chairmen according to the attached list is indicated, as well as a list of documents subject to verification.

The narrative is important to indicate the facts established during the verification process. The commission sums up the results of the inspection and makes proposals as needed. The act is signed by all members of the commission.