HOA-CPA Services

We provide four CPA services for Home Owners Associations:

  1. Financial Statements
  2. Taxation
  3. Budgets and Reserve Funding
  4. Consulting

HOA-CPA Services

Financial Statements


Audits are generally the highest level of service rendered by an independent CPA in terms of the extent of work performed and the level of assurance given. They are performed in accordance with generally accepted auditing standards (GAAS). This service includes tests of the accounting records and such other auditing procedures as the CPA deems necessary. Because a detailed examination of all transactions is not performed, there is a risk that errors, irregularities and/or illegal acts, including fraud, may exist and not be detected. Under California law, community associations must, each year, have an audit or review if gross receipts exceed $75,000.


Reviews are generally the second highest level of service rendered by an independent CPA in preparing yearend financial statements.  In a review, the financial statements are subjected to analytical review procedures and inquiry as a means of insuring compliance with generally accepted accounting principles (GAAP). Under California law, community associations must, each year, have an audit or review if gross receipts exceed $75,000.


Compilations are generally the lowest level of assurance rendered by a CPA associated with the financial statements. Compiled financial statements are appropriate for those situations in which conformity with GAAP is desired without the need for the greater assurance given in an audit or review. In addition, California requires corporations with gross receipts in excess of $10,000 to prepare and distribute to all owners the year-end financial statements of the corporation on an annual basis.

Agreed Upon Procedures

In this type of engagement, the association and the CPA agree on the accounts to be looked at and the procedures to be performed. The CPA’s report reflects such agreed upon scope of work in addition to his/her findings. This service may be appropriate, and more cost-effective, when a “full audit” is not necessary.


Income Tax Returns

Understanding the appropriate elections and documentation requirements necessary to the most effective election of federal tax form (1120 or 1120H) as well as understanding the intricacies of federal and California income tax law and exempt organization filing requirements. Just because your articles of incorporation say that your association is organized as a California non-profit mutual benefit corporation does not mean that the Internal Revenue Service and California Franchise Tax Board have granted your association exemption from income tax-something that is next to impossible for a homeowner association to get.

California Exemption Applications

How to successfully get your association an exemption from the $800 a year minimum franchise tax imposed on California corporations.

Income Tax Notices

Expertise in working with both the Internal Revenue Service and Franchise Tax Board to resolve income tax notices as well as the taxing authorities’ examination of previously filed tax returns. Successfully represented almost two dozen associations with their IRS tax return examinations (also known as IRS audits).

Other Tax Areas Of Expertise

  • Federal Exempt Organization Forms 990 and 990T and California Form 109
  • Local business tax returns (San Francisco for example)
  • Property tax returns and the frequent erroneous assessment of property tax by counties
  • Payroll tax returns
  • Sales and use tax returns
  • IRS Form 1099s
  • Tax credits such as solar energy, energy efficiency or fuel tax
  • Tax planning and research

Budgets And Reserve Funding

Assessments and Reserve Funding Disclosure Summary

An annual California Civil Code disclosure requirement. This disclosure requirement was initiated by the California Association of Realtors. This document primarily summarizes information contained in the annual pro forma operating budget, and adds further disclosures on replacement reserve funding.

Per Unit Per Month Assessment Computations

This is required by the California Civil Code to be disclosed in both the assessments and reserve funding disclosure summary and the pro forma operating budget each year – for each different unit type if assessments are not equal for all units. For associations with variable assessments (e.g. those that vary, in whole or in part, by square footage), they must be computed each year in accordance with the formula(s) in the association’s governing documents .

Pro Forma Operating Budget

An annual California Civil Code disclosure requirement. This is the primary budget disclosure document for California community associations, and is required to be prepared on the accrual basis of accounting. Under the accrual basis of accounting, the annual wearing out of reserve components is disclosed as an expense even if there are no (cash basis) reserve expenditures projected for the coming budget year.

Replacement Reserve Funding Plan

Information from annual update of the reserve funding plan (which is usually a 30-year cash flow projection of replacement reserve receipts and expenditures) is required to be disclosed in both the assessment and reserve funding plan, and the pro forma operating budget. It is not generally sufficient, under the California Civil Code, to simply rely upon repeated disclosure of information contained in a reserve study which may have been prepared once every 3 years.


Consultation Services

Including association annual meeting attendance and/or presentations, Board meeting attendance and/or presentations, inspector of election services, computation of per unit per month (PUPM) assessments, computation of special assessments, etc.

Document Imaging And Storage

For critical financial and other documents, including financial statements, income tax returns, year-to-date general ledgers, governing documents, etc through our HOA-Info division. Documents may be made available through our internet-based Web Portal service.

Educational Services

In addition to Board and annual meetings, we conduct a variety of specialty seminars for community association managers and Board members. See also the popular Community Association Treasurer’s Handbook and Community Association Articles Index under the HOA-Publications tab at the home page.

Expert Witness And Litigation Support Services

The partners at Levy, Erlanger & Company, CPAs have more than three decades of service in these areas, including case preparation, deposition and trial testimony in a wide variety of areas and industries. With respect to community associations, the most frequent service involves disputes between the association and its developer, and the association and its members.

Information Services

We can assist associations in networking with similar associations based on size, age, type of development, location and other factors through our proprietary database of 49,000+ California community associations. Likewise this, and our proprietary database of 900+ California community association management companies can be useful to vendors in the industry contemplating direct mail advertising campaigns or specialty seminar programs. Financial surveys that we conduct can also be of interest when comparing the financial activity of one association with other similar associations. See also the popular annual Community Association Statistics Book under the HOA-Publications tab at the home page.

Marketing Services

Proprietary databases of California community associations (49,000+) and community association management companies (900+) are available to associations, managers and industry vendors and others for marketing and research purposes, with some restrictions. See also “information services” above.