Finance Advisory Committee – March 2024

By Robert Jester
Chair, Finance Advisory Committee

As published in The View, March 2024:

Question of the Month: Why do we have a Finance Advisory Committee?

The reality is that a five-person board cannot do everything that is necessary to carry on the day-to-day business of this Association. The board needs attorneys, management services from Desert Resort Management, auditors, reserve study experts, and advisory committees to assist it in doing what is necessary for this Association to function properly. One of those advisory committees is the Finance Advisory Committee (FAC), and it has specific duties assigned under its charter by the Board. This article is to highlight those duties so you will better understand what the Finance Advisory Committee does for you, the resident.

The current FAC Charter was approved on September 27, 2021, and contains the following advisory committee obligations:

  1. Meet regularly to analyze and review ALL the Association’s financial statements.
  2. Review the monthly Bank Reconciliations and the investment accounts of all accounts held by the
  3. Review the annual financial forecasts prepared by the Comptroller.
  4. Prepare or review, if prepared by the Comptroller, the Management Discussion and Analysis of the monthly Forecast update.
  5. Advise the Board on Best Industry Practices for the accounting reporting systems and systems of needed internal financial controls.
  6. Advise the Board on the use of Best Industry Practices for the Association’s Annual Report.
  7. Review the Investment Performance on a regular basis and advise the Board.
  8. Assist the Board in the review of all major vendor and provider contracts.
  9. Monitor contract compliance and report discrepancies to the Board in writing.
  10. Assist the Board in the preparation, review, and evaluation of the Association’s Annual Operating Fund and Replacement Fund Budgets.
  11. Review the Association’s annual insurance needs and policies with the broker and suggest changes to coverages, limits, deductibles, and costs.
  12. Meet with the independent accounting firm in preparation for the annual audit and review the engagement letter of the auditor.
  13. Review the Management Letter issued by the independent auditor, which identifies their recommendations for strengthened internal controls and procedures.
  14. Review the Association’s draft tax returns, filings, and supporting schedules provided by the independent accounting firm.
  15. Review the engagement letter for the annual Reserve Study.
  16. Conduct special financial research or analyses at the request of the President or Treasurer for the purpose of improving aspects of the Association’s operations.
  17. Assist the Board in educating SCSH residents regarding the Association’s financial condition.
  18. The committee is to make written recommendations to the Board on the selection of professional service firms for the Association, i.e. accountants, auditors, attorneys, etc., including management companies for golf operations, F&B operations, and the Association’s management firm.
  19. The FAC has a Financial Advisory Sub-Committee that assists the FAC in the review and analysis of all monetary requests for purchases or projects that exceed $5,000, per the Association’s approved Procurement Policy.
    • All reviews and analyses of matters are reported to the Board as a recommendation by the FAC. The Board makes all final decisions.
    • The Board Liaison for the FAC is the Treasurer of the Association.
    • All direction by the committee to Association staff is required to be made through the Association General Manager.

I hope this provides you with a clear understanding of the duties of the FAC and why we are the “Financial Watchdog” for the residents of this Association.

Contact the author at finance@scshca.com.