Why Are Clubs Required to Report Their Financials Quarterly?

The simple answer is, this is the request of our outside independent Certified Public Accounting Firm, Brabo and Carlsen.

The longer answer has to do with the old EIN issue. So here is the history:

Last year, the Finance Advisory Committee came to the board and stated there were problems with getting the clubs to turn in their annual financial statements. That is a requirement of the clubs and after repeated attempts to get all clubs to turn these in -- the Board finally told the clubs that they could:

1. Turn in their financials as required
2. Get their own EIN number instead of using the HOAs.

Having clubs get their own EIN number would have relieved the our Home Owner's Association of any tax liability for any club accounting. Some clubs collect $100K or more a year.

The Clubs overwhelmingly objected to the notion of getting their own EIN number and so were then required to account for their funds to the HOA to be included in our tax returns. If a Club refused to either get their own EIN number or account to the HOA, they would need to be disbanded as the HOA could have had problems with the IRS.

Brabo and Carlsen, the outside independent Certified Public Accounting Firm, has requested that the clubs submit their financials quarterly, because there are 60 clubs and this way they can track them and spot any issues along the way rather than having to wait until end of the year (December).

If you look at the financials you will see that in 2014 SCSH clubs generated revenue of over $400,000. This a significant amount of money to explain to the IRS.