Northern Virginia Management, Inc. maintains Associations’ physical and financial assets by successfully addressing the many operational challenges that Association Boards face on a day-to-day basis. Northern Virginia Management, Inc. uses its decades of experience successfully managing properties and working cooperatively with Boards to meet the many challenges of property management.
Northern Virginia Management, Inc. understands that it is the responsibility of the Board of Directors of a Community Association to establish the goals and standards of the community. Once these goals and standards are established, management can then prepare the policies, procedures, and tasks necessary to effectively meet these standards.
Northern Virginia Management, Inc. believes that detailed and up-to-date records and procedures will help maintain the Association’s physical and financial assets. Consequently, Northern Virginia Management, Inc. will develop an operations manual specifically tailored for Homeowners Association. The operations manual will encompass the following important documents and programs for Homeowners Association to use on a daily and/or scheduled basis.
Northern Virginia Management provides the Associations we manage a number of financial reports on a monthly basis. Several of these are highlighted below.
The Balance Sheet outlines assets, liabilities and equity in an easily read, standard accrual accounting format. Supplementary schedules to the balance sheet are provided as appropriate showing details of investments and fixed asset and equity accounts.
The Schedule of Sub Accounts breaks down the Association’s reserve funds into specifically earmarked items (such as sidewalks and roof replacements). These schedules are amended monthly to include contributions and disbursements for that month.
The Working Capital and Capital Replacement identifies each month’s accounts, their maturity interest rate, and current contribution and balances.
Accrued Expenses are a listing of the accruals, which have been made for major expenses which have been incurred, but for which cash has not yet been expended.
The Comparative Summary of Income and Expenses provides a point of comparison between actual monthly income and expenses to amounts budgeted for that month, and also the status of year-to-date income and expenses compared to the budget. Many kinds of expenses, such as utilities, fluctuate over the course of the year. These variable expense items are detailed in a month-to-month projected schedule and result in the greatest possible degree of budget analysis and comparison.
The Monthly Spread Report displays actual expenses year-to-date and budgeted expenses for the balance of the fiscal year, giving the Board the tools to make sound financial decisions on a monthly basis.
The Schedule of Open Invoices is a listing of any invoices, which are unpaid at the end of the month. Accounts Receivable Status lists all co.-owners with a balance in their account at month-end. The details for any delinquent balances are shown here.
Monthly Disbursement Summary lists every disbursement made for the month including payee, account number charges, and amount and check number.
Monthly Cash Receipts is a detailed listing of all cash received during the month including all miscellaneous cash receipts and the account which was credited. In addition, a preliminary General Ledger is reviewed each month by the Community Manager and accounting personnel before preparing financial statements. This preliminary review together with reconciling the bank statements allows for any corrections resulting in more accurate financial statements. The speed and accuracy of Northern Virginia Management, Inc.’s accounting system is outstanding. Additionally, within 30 days of an Association’s fiscal year-end, all records are ready for the annual audit. At the close of an Association’s fiscal year, a cumulative general ledger as well as an audit adjustment sheet, balance sheet schedules, bank statements and reconciliation’s, a trial balance, and copies of contracts, etc. are provided. These tools are used by the Association’s auditing firm during their review of finances. Any adjustments made by the auditor are then incorporated by Northern Virginia Management, Inc.’s accounting department to ensure accuracy and consistency. An additional feature is Northern Virginia Management, Inc.’s ability to adapt the chart of accounts to suit the Association’s specific needs.
Northern Virginia Management, Inc. has an ongoing, effective delinquency program. After reviewing the Association’s governing documents, Northern Virginia Management, Inc. makes recommendations for implementing a delinquency policy, if one does not exist. If one does exist, Northern Virginia Management, Inc. will follow it. Northern Virginia Management, Inc.’s standard procedure for handling delinquencies is that after the 10th or the 15th of the month, depending on the Association’s policies and governing documents, Northern Virginia Management, Inc.’s accounting department generates and forwards a delinquency notice to the owner. A late charge is applied, if permitted. If funds have not been received in another 15 days, it is then followed up by a second delinquency notice. After that time, depending on the policy of the Association, records are turned over to the association’s collections attorney. Collection action then becomes a legal matter and advice is rendered for acceleration of fees, if provided, foreclosure against the unit, or other legal remedies.
The budget establishes the financial lifeline of the community. The budget process is one of the most important activities that Northern Virginia Management, Inc. Associates and the Board work on each year.
The budget is broken down into both short-term and long-term finances. The short-term budget is the yearly financial plan for the Association’s operating budget. Long-term planning is achieved through the development of a comprehensive and accurate replacement reserve schedule, which summarizes the Association’s anticipated major capital expenditures over an extended period of time.
The budget process is a collaborative effort between the Board, Committee and the Community Manager. The Community Manager provides all the information from a variety of sources, including Northern Virginia Management, Inc.’s accounting department, on-site personnel, Board members’ meeting minutes, and Committees. This coordination allows the Community Manager to take a global approach to the budget, to develop what he or she feels to be in the best interest of the Association. Since the Community Manager has a working knowledge of the budget process and the Community, he or she will be more sensitive to budget guidelines through the upcoming fiscal year.
The ultimate goal of the budget process is to ensure a healthy and financially stable community, in addition to providing specific guidelines and objectives for the Board and Northern Virginia Management, Inc. Associates to follow.
The Monthly Management Reports are provided to the Board prior to the Board meeting and is divided into two main sections. The first section concerns the financial condition of the Association, and the second section, the management action items.
The financial section of the Management Report updates the Board on the Association’s condition both in monthly and year-to-date formats. It outlines all cash accounts, investments, and monthly income and disbursement. Detailed explanations on budget variances are also given. In addition, this report includes updates on all co.-owner delinquencies.
The second section of the Management Report informs the Board about all activities that have taken place during the past month. The Management Report updates continuing programs, and presents information and recommendations for new programs. The Report catalogs all essential items for Board action.
Northern Virginia Management, Inc. will work closely with the Board to implement a long-term financial plan and to prepare a reserve fund budget to replace capital items in the common and limited common elements of the Association. Northern Virginia Management, Inc. will also help the Board to insure that its reserve and operating funds earn the highest available interest in accordance with the Association’s governing documents and the Virginia Homeowners Act. Northern Virginia Management, Inc. will transfer funds from the operating account to the reserve account in accordance with the Association’s reserve fund schedule.
All funds will be established and maintained in a separate account. Northern Virginia Management, Inc. Associates will not commingle Association funds in the financial accounting procedures or banking transactions.
Northern Virginia Management, Inc. will use the accrual method of accounting for Sample Homeowners Association.
All invoices are sent to Northern Virginia Management, Inc.’s office. First, Sample Homeowners Association invoices are sent to the Property Manager for approval. If there is a discrepancy, the Manager will contact the vendor for verification. Second, all invoices are compared to the budget category to which they are applied. Approved invoices are then forwarded to Northern Virginia Management, Inc.’s accounting department for payment. Northern Virginia Management, Inc. pays no invoice unless it is certain that it is accurate, reasonable and approved by the Association’s Manager. Northern Virginia Management, Inc. assures the work has been completed to the satisfaction of Sample Homeowners Association.
On a weekly basis, Northern Virginia Management, Inc. Associates will have all invoices coded according to the established chart of accounts and operating budget for Sample Homeowners Association. Twice a month or as directed by the Board, Northern Virginia Management, Inc. will then process them for payment, and systematically file them. Copies of the checks with appropriate invoices will be grouped together and filed by month. Each month a designated Board member (who is usually the Treasurer) will receive the previous month’s paid invoices for review.
Payments are processed using the MICR system as described in Section 2.1 of this proposal to write checks. The Association’s logo and check account numbers are encoded on the check at the time it is written. This system is very secure because it eliminates (1) the need to store blank Association checks in the office; (2) the possibility of using the wrong checks, i.e., mistakenly using one Association check for another Association’s bills; and (3) handwritten checks (accounting information must be in the computer before a check is issued). Additionally, this computerized system saves the Association money because there is no cost to the Association for checks.
Northern Virginia Management, Inc. Associates has greatly reduced the delinquency and aggravating paperwork associated with collecting assessments through its Automated Clearing House (ACH). ACH is an electronic transfer of funds by the Federal Reserve Banking Commission from one bank account to another. Funds are handled like checks, but only banks can initiate ACH electronic transfers.
To implement ACH, Association members must provide the Association with written authorization to transfer funds from their bank account to the Association’s operating account. This is done by providing a standard agreement for Association members to sign that includes the amount to be transferred, frequency and dates, and pertinent information about members’ bank accounts. For the first ACH electronic transfer, the banks do a test run. Funds are then transferred automatically after Northern Virginia Management, Inc. supplies the Association’s bank with an up-to-date database from members’ standard agreements via modem.
Northern Virginia Management, Inc. is confident that members of Sample Homeowners Association will like ACH electronic transfers. The Association will use fewer fee coupons, deposit books, stationary, and stamps. Delinquent letters will decline in number and administrative costs will go down as well. Association members will enjoy paying by ACH because it saves time, energy, and brings them peace of mind. They no longer have to worry about assessment dates and the postal system. All they need to do is record payments in their check registers.
Northern Virginia Management, Inc. will work closely with the Board to develop and maintain specific and comprehensive specifications on file for all contracts. To ensure that contracts will provide Sample Homeowners Association with outstanding services and at current value, Northern Virginia Management, Inc. recommends that they be competitively bid on a regular basis. Northern Virginia Management, Inc. will aid the Board in writing contract specifications for competitive bidding; assemble bid documents with specific information about the required repairs, improvements, or property maintenance; submit recommendations to the Board; and assist the Board in evaluating contractor bids and proposals.
Northern Virginia Management, Inc. will establish and maintain a computerized list of contracts, including the name of the contractor, a brief description of services to be performed, and the commencement and expiration dates. Northern Virginia Management, Inc. will notify the Board 90 days in advance of the expiration or rollover deadlines. Northern Virginia Management, Inc. recommends that only contracts with specific termination dates be executed and rollover deadlines not be considered.
Northern Virginia Management, Inc. will establish and maintain a computerized list of warranties, including company name, description of item or service, terms of warranty, and expiration date. Northern Virginia Management, Inc. will notify the Board 60 days in advance of expiration of warranties.
Northern Virginia Management, Inc. will review existing and new maintenance contracts as required or directed by the Board, including annual maintenance contracts for landscaping, cleaning, trash hauling, and other recurring matters. Northern Virginia Management, Inc. will also inspect work in progress on a regular basis to ensure that it is being done efficiently and in accordance with contract specifications.
Northern Virginia Management, Inc. is committed to innovation and quality property management because we always focus on four factors that are critical to the success of all Associations.
Superb Financial Management: Northern Virginia Management, Inc. uses generally accepted accounting principles and a widely accepted computerized financial management software and general ledger system to track Association transactions and prepare operating and reserve budgets. Northern Virginia Management, Inc. also works closely with Association Boards to prepare long-term financial plans, reserve fund budgets, and ensure that reserve and operating funds earn the highest interest available in secure accounts.
Economical Operational Management: Northern Virginia Management, Inc. helps write contract specifications and ensures that work is done promptly according to the contract. Northern Virginia Management, Inc. also submits monthly reports to the Board based on its periodic inspections of Association property. Northern Virginia Management, Inc. will work with the Board to develop comprehensive specifications on file for all Association recurring contracts. All contracts will be competitively bid on a regular basis to ensure that the Association receives the best return for its investment. Northern Virginia Management, Inc. will also work closely with the Board to develop an updated operations manual and other documents that will promote efficiency and cost-effectiveness.
Professional Owner Information Maintenance: Northern Virginia Management, Inc. maintains association records in its database, with backup copies off-site, and makes this information easily available to Associations. Northern Virginia Management, Inc. also creates and maintains database files about Association mortgages and notifies mortgagees about Association events in accordance with its bylaws.
Frequent and Timely Communications: Northern Virginia Management, Inc. organizes special meetings and produces informative newsletters and timely maintenance updates. Northern Virginia Management, Inc. will also provide legislative and court updates on such topics as Association operations, fee collections, architectural rules, and parking regulations.
The above-mentioned factors enforce Northern Virginia Management, Inc.’s commitment to innovation and quality property management as well as incorporating how Northern Virginia Management, Inc. will use its many years of successful experience managing multi-family residential properties in northern Virginia. This will improve Homeowners Association’s efficiency and effectiveness, reduce operations costs, and upgrade the quality of its services.