Page 12 - CooperatorNews New Jersey Summer 2021

12 COOPERATORNEWS NEW JERSEY
—SUMMER 2021
NJ.COOPERATORNEWS.COM
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•
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•
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•
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tony.nardone@cp-management.com
973.376.3925
www.cp-management.com
agement company is. Th e best run buildings
have good, involved board members and
great managers, but you should still seek pro-
fessional advice.”
Wollman also warns against homespun
audits, and points out that most bylaws re-
quire that an audit be done annually—and
conducted by a certifi ed accounting fi rm.
Sackstein says that the fi nancial auditing or
review process should be a collaborative eff ort
between the association’s accountant, man-
ager, and board. If there is a serious concern
about fraud, she recommends hiring a pro-
fessional team to examine forensics to ensure
they get it right.
Scott Piekarsky, a partner at the Hacken-
sack-based law fi rm Phillips Nizer, cautions
boards: “Th e whole idea behind an audit is to
have an outside impartial professional review
and test the books and records. It’s the highest
level of accounting review, and must be done
by the proper outside accounting fi rm. By not
doing that, anything else quite frankly is just
not an audit. Th erefore, the board would be
shirking their fi duciary duty and responsibil-
ity. Th ey could be compelled to do so if one
fi led suit.”
In the fi nal analysis, vigilance is the key to
maintaining the fi nancial health of your co-op
or condominium community. Th at vigilance
requires a team and a plan. Th at team in-
cludes accountants, auditors, managers, cost
specialists, and board members. Reliable pro-
jections of expenses and regular monitoring
of those projections against real expenditures
are crucial to catching any fi nancial leakage.
In the long run, vigilance is more eff ective
than wishful thinking. In business—and
that’s what your community is—unexpected
bumps in expenses are usually the result of
poor monitoring, not one-time blips on the
economic horizon.
■
A J Sidransky is a staff writer/reporter for
CooperatorNews, and a published novelist.
WHERE...
continued from page 11
harm than good.”
“Th e truth,” adds Wollman, “is that with
an autocratic board, I’m usually dealing with
the president only. Lots of times, just deal-
ing with one person makes it easier for me to
manage the building in certain respects. From
the perspective of the board, though, it can
lead to second-guessing from others in the
building if things don’t go well. People don’t
care what’s happening and how it happens—
when it works well. When things go awry, that
changes. In truth, this type of board approach
is poor governance, even if it generally works
well on a practical level.”
Wollman suggests that a bigger problem
is when people get on the board to pursue a
personal agenda. Th at’s defi nitely not helpful,
and can lead to problems in decision mak-
BOARD STYLE...
continued from page 8
ing and confl ict with other board members
and residents. Overall, he says, collaborative
boards take longer to make decisions—which
is not to suggest that it takes forever, but that
issues are vetted more thoroughly, which is a
good thing. “Th ere are a lot of opinions in the
room,” he says. “Sometimes a stronger party
can control the group. It’s also more time con-
suming, but better for the building. Collabo-
ration leads to less second-guessing, since it’s a
group making decisions, and not just one per-
son. If the board is truly democratic, it’s easier
when board members see residents in the el-
evator and are confronted with a question.”
Board Evolution
Can a board’s culture and governance style
change over time? Th e answer is yes, and that
stylistic change can be the result of several dif-
ferent factors. Most likely, the change is a result
of new board members with diff ering views
on management style joining the board and
infl uencing how it operates. Another possibil-
ity is that existing board members themselves
evolve over time, learning from their mistakes
and perhaps becoming more comfortable in
their positions.
“It’s important from
the outset to train
members to look at
the bigger picture, and
not at their personal
agendas.”
— Janet
Lepson-Sedaka
“Turnover is certainly the most common
driver for stylistic changes,” says Hughes.
“Th is can be accelerated if these changes come
on the heels of individuals who got on the
board to ‘fi x’ something that the community
perceived as being wrong. Of course, hope-
fully the manager is coaching, listening, and
engaging the board on how to mitigate these
risks, but they may happen regardless. If so,
there is some technique in how the manager
can help a potentially antagonistic individual
get up to speed on new and previously confi -
dential information that may have driven un-
popular decisions by the old board. Certainly,
helping them have a voice can reduce the risk
of contention and help them save face.”
Wollman concurs; style evolves over time
through fundamental changes on the board,
people coming and going, and new leader-
ship. “I have a client who is the board presi-
dent of one building. He has strong views and
can control the board, convincing its mem-
bers that he has better ideas. Style and views
will alter dynamics in a building sometimes.
Views on money will alter style as well. Say the
building needs a new roof. Some on the board
may not want to spend the money, and would
continued on page 13