Some boards run an audit every year, while others stretch it out over two or three years. Other HOAs don’t know when they are supposed to do it; they just wait until something doesn’t feel quite right.
So, how often should your HOA be audited?
There's no one-size-fits-all answer, but here’s the usual pattern:
- Larger HOAs get audited once a year
- Mid-sized boards go every two years
- Smaller self-managed HOAs often use a three-year cycle
These are just starting points, and your state law might demand more. Your bylaws set the terms, and your reserve fund could have doubled since your last audit.
SSL looks at the whole picture (not just what's on paper) and can help give you a clear answer on what makes sense for your situation.
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What Should Influence Your Audit Schedule?
As mentioned above, some HOAs tick along fine for years on the same audit cycle, and then one year, everything can change. It could be a larger budget or a few raised eyebrows at the AGM.
The timing of the audits doesn’t have to stay fixed just because it’s always been that way. These are the sorts of changes that can bring that schedule forward:
- Board members step down or rotate out
- Your annual budget looks bigger than last year’s
- You’re planning renovations, such as a new clubhouse roof or resurfacing the pool
- Homeowners start asking for more financial transparency
One HOA we worked with doubled its reserve budget in less than a year. A few major repairs were delayed, and the funds continued to grow. On paper, things looked great, but no one had checked the records in a long time as they were on a 3-year cycle.
Once they hired SSL, we reviewed their accounts and noticed a few issues. One issue was that a contracted payment had been missed, and a deposit had been logged in the wrong place. These were nothing serious, but just enough to cause confusion. We transitioned them to annual audits to provide the board with a clearer view of their financial records and increase their confidence when presenting to homeowners.
Legal Rules That Dictate Frequency
The law sets some audit schedules.
California state requires any HOA with annual revenue exceeding $75,000 to undergo a financial review every year. In Florida, that threshold jumps to $500,000. Other states have their own cutoffs and conditions, which change over time.
That’s just at the state level, and your own HOA’s governing documents might set tighter rules. Some boards are required to conduct a full audit annually, regardless of their budget size or complexity.
This is where things slip. Rules or the board might change, and it's easy to assume someone else has already checked the legal requirements. This is precisely why you need SSL, as we stay on top of those changes and flag everything that affects your audit timing. If there are any changes to your state law or bylaws, we’ll notify you.
Is an HOA Audit Worth the Cost?
A standard HOA audit typically costs around $3,000, which feels like a significant amount of money, especially for smaller associations. Some boards put off audits because the cost puts them off, but the price of skipping one can end up being much higher.
For example, there was an HOA that hadn’t conducted an audit in years. Everything seemed fine until a homeowner started asking questions. When the board couldn’t give clear answers, things got complicated. They spent weeks going through paperwork and holding late-night meetings just to catch up. The HOA could have prevented this with one well-timed audit.
Let’s compare it to the potential consequences of not having one:
- A $10,000 error in the reserve fund
- A misfiled vendor contract results in paying twice
- Legal bills if a homeowner raises a financial complaint
- Dozens of hours of unpaid board time spent untangling old records
What Type of HOA Audit Do You Need?
The type of audit you choose often shapes how often you’ll need to do one.
SSL doesn’t believe in over-auditing just to tick a box. We review your numbers and history to recommend the optimal format and timing. We’ll help you choose what fits your situation.
Full HOA Audit
If you choose a full HOA audit, a licensed CPA checks every line of your financials. It's often a legal requirement once your budget grows. Large HOAs tend to book once each year to stay on top of things.
Financial Review
A step down in detail, but still handled by a CPA. Great for identifying issues without having to review everything. Mid-sized boards run one every couple of years.
Compilation
This is a summary, not an investigation. A compilation gives you a handy overview of your numbers. Perfect for smaller HOAs that want something on file to stay on top of things.
How Long Does an HOA Audit Take?
One reason boards delay audits is the fear that it will take over their calendar, but in most cases, the timeline is much shorter.
A standard audit usually takes 2 to 4 weeks. This depends on the size of the HOA and how organized your books are. Reviews and compilations can be quicker. What slows things down is missing paperwork or unclear records, but that's something we can help tidy up in advance.
SSL has worked with boards who were dreading the process, only to find it was all wrapped up before the next time we had a meeting with them.
Ready To Work With Us?
HOA audits can feel like a headache, but they don’t have to.
SSL cuts out all the confusion. You’ll get a straight answer and a team that knows this stuff inside out.
SSL takes the time to understand how your board operates and what changes have occurred since your last review. That way, you get advice that fits your situation.
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