Because of an audit recently completed for the years 2014, 2015, and 2016, on our HOA books by an interested homeowner, some potentially troubling discrepancies and facts are coming to light which every property owner should know. This will be the first installment of information for you, the property owner paying assessment fees to our HOA. There will be additional information coming shortly.
The first item of discussion is about Spectrum Property Management Fees paid by our HOA board to Spectrum:
- 1099’s provided by Spectrum for the years 2014, 2015 and 2016 summarize what Spectrum was paid each year for management fees. Spectrum has stated clearly in writing their fees come from two categories on our HOA financials 1) Management Fees and 2) Admin Fees. Additional validation of that information can be found by clicking here . Look at the breakdown below:
2014 – Management Fees and Admin Fees = $79,122 (according to our HOA financials)
1099 to Spectrum was $140,567.00. A discrepancy of over $61,000.
2015 – Management Fees and Admin Fees = $75,987 (according to our HOA financials)
1099 to Spectrum was $126,052. A discrepancy of over $51,000
2016 – Management Fees and Admin Fees = $71,286
1099 to Spectrum was $90,738. A discrepancy of over $19,000
Total discrepancies based on Spectrum’s statements (provided again by this link) that only the line items on our HOA financials which say Management Fees and Admin Fees cover their fees are over $141,000.00 in the last 3 years.
Spectrum’s basic contract indicates an annual fee of $40,000.00 to be paid to them for management of Timberwood Park. It also allows for additional billing for additional services. However, even considering what was provided as the 2 categories for which they receive payment, there is a huge discrepancy which has no explanation at this time. Is this good management of our HOA dollars by our HOA board?
2. A further statement written into the Spectrum contract which both Spectrum and the HOA board signed, allows for every project which is over $75,000.00 to provide Spectrum with a 2.5% management fee. By example, and not even discussing projects we have already paid for, if the clubhouse were to be built today and costs around $1,000,000.00 according to our current management contract with Spectrum, they (Spectrum) will be paid $25,000.00 as a fee on the project in addition to the projects other costs. Is this good management of our HOA dollars by our HOA board?