Workers Compensation Insurance Advisory






August 8, 2013

Mr. Scott Ghertner
Ghertner & Company

Our agency often provides a minimum premium worker's compensation
insurance policy to an association with no specific estimated payroll exposure. This should be considered an excess or fail safe policy in case any small tradesman or temporary labor were hired without the appropriate insurance.

The Tennessee Department of Labor governs worker's compensation, and the intent is to have all workers in the contracting classes protected.
In the property management field, two payroll classes generally apply for any employees. First, code 9012 is assigned primarily to clerical and outside sales staff and others engaged in property management activities.

 Code 9015 applies to care, custody, and maintenance of premises. Thus, minor contracting work can often be included in this class, which will generally carry lower rates than general contractor classes, such as carpentry, plumbing, roofing, etc.
We strongly recommend anyone hired by the Association or Ghertner and Company provide their own worker's compensation policy and provide a certificate of insurance before commencement of work.

Worker's compensation policies are subject to audit at expiration, and all 1099's must be provided along with certificates of insurance. Otherwise, a premium charge will be incurred for all labor not covered. The rate charged will be determined by the work performed, but Code 9015 is often the lower rate that can be used.
We are glad to discuss this important coverage at any time.
Sincerely,
Robins Insurance Agency, Inc.
Bruce C. Robins, CPCU, ARM, CIC
President






July 11, 2013



Mr. Scott Ghertner
Ghertner and Company
50 Vantage Way, Ste 100
Nashville, TN  37228

Dear Scott,

With the implementation of the Tennessee worker’s compensation law for contractors, many small contractors are opting to exclude themselves from worker’s compensation coverage in order to save money.  It is very important to collect a copy of the state exemption from the contractor and be sure the contractor doesn’t have any employees.  A family owned business can exempt up to three family members under the law and and proof of exemption should be obtained for all three.  If the contractor has even one employee then he must purchase worker’s compensation insurance unless he is doing work directly for a homeowner.  If you do not obtain an exemption form then you must collect a certificate of insurance showing proof of worker’s compensation or their 1099 payroll will be included the Homeowner’s Association’s workers compensation audit and the Homeowner’s Association may experience negative losses as a result.  It is also important when issuing a 1099 that labor cost be separated from  materials cost for each job or the total cost will be picked up at audit.

Our agency recognizes that Ghertner manages many condominium and homeowner association communities that operate under their own legal entity name.  As has been our agency practice for many years, we recommend each association or entity purchase a separate worker’s compensation policy with payroll on an “if any” basis.   This policy will protect the Association in the event a property hires someone to do work rather than going through the property management company.  This will also serve to protect in the event a contractor allows his coverage to lapse and has an injury while working for the property. 

I hope this helps clarify the new law as respects your operations and we would be happy to answer any questions you may have.

Sincerely,



 James A. Rothberg


Audits, Reviews, and Cash Accounting

Submitted by Roger D. Perry, P.C., Certified Public Accountant


Why have and Audit or Review? 

 What do the Governing Documents say?
What is the difference?

 Levels of Financial Reporting Services:

 Audit Services -Provides the highest level of financial statement assurance. Audits are engagements where a CPA provides an opinion about the fairness of a financial statement that has been prepared according to generally accepted accounting principles (GAAP). The general structure and document requirements of an audit are governed by the American Institute of Certified Public Accountants (AICPA) and the Auditing Standards Board and are subject to strict peer review standards.

 Review Services -Provides only limited assurance about the financial statements. Although a review is also governed by the AICPA and subject to peer review standards, it is substantially less in scope than an audit. It consists principally of inquiries of entity personnel and analytical procedures applied to the financial data. The limited assurance is in the form of negative assurance whereby the CPA will report that he is unaware of any material modifications needed in order for the financial statements to be in conformity with GAAP.

 Compilation Services -Provides no assurance about the financial statements. A compilation is an engagement where the CPA presents, in the form of financial statements, information that is supplied by the entity and performs few procedures outside file documentation. The accountant's report provides no assurance and clearly states that the financials are the entity's presentation.
Why Cash Basis of Accounting?

 Cash Basis vs. Accrual Basis of Accounting:

 Cash Basis -Revenue is recognized when received (when fees are deposited into the bank) and expenses are recorded when they are paid in cash. The most straightforward basis of accounting to practice and to understand.

 Accrual Basis -Revenue is recognized when it is realized/earned/due without regard to when payment is received and expenses are recognized when incurred, without regard as to when payment is made. This method provides a better matching of revenues to expenses but requires specialized accrual based accounting procedures (integrated accounts receivable and accounts payable details).

 Why Cash Basis for Interim Financial Statements:

 Financial statements should be easy to read. They should set forth the financial information in a clear, precise and informative manner. On an interim basis, cash basis financial statements can be more timely generated and can be understood by the majority of homeowners.


Lunch & Learn Workshops - Video Library


Ghertner & Company is pleased to announce that videos of our workshops for Board members are now available online!  Each video is about 60 minutes long, and can be viewed at one time, or during several visits to the video library.

As you probably know, we have been offering free workshops at our Nashville offices and other locations for several years.  Most have been Tuesday lunch and learns, and some have been in the evenings or on Saturday mornings – all are scheduled in an effort to make them as convenient as possible for the owners who serve on community Board of Directors.

Many Board members have told us that they are not able to attend the workshops in person, and would like to be able to view them on line.  For this reason, we have been video-taping our workshops, and we now have a very good selection of videos in our library.


We hope you find our video library helpful. If you have any comments, or suggestions for topics you like us to cover in our Volunteer Leadership Series, please let me know. 


To access the video library, click on the link below.



Kathleen Sutherland, AMS, PCAM

Vice President Training and Technical Services

Virginia Graeme Baker Safety Act - Swimming Pool Main Drain Recall


Submitted by Taylor White, Langley and Taylor Pool Corp.


As you all know, there has been a recall of main drains for swimming pools.  If the drain covers in your pool or in-ground spa were installed before December, 2008 and are not compliant with the VGB Pool & Spa Safety Act, your pool or spa is NOT affected by this recall. Most of the drain covers affected by this recall were manufactured or sold after December 19, 2008.  Please see below the criteria in how it applies to your swimming pools.  Please know this is a voluntary recall and not mandatory - for now.  Make sure your drains are VGB-compliant in the first place.

The CPSC (Consumer Product Safety Commission) is the governing force behind the recall. Know that revisions have historically been made to the VGB Act and can be made at any time. 

The recall applies to the following:

  • If the spa/wading pool/kiddie pool is less than 24 inches in depth AND has a single main drain or even a system with multiple drains, the recall applies.
  • If the body of water (no matter of depth) has a single main drain, the recall applies.
The recall does NOT apply to the following:

  • Pools with gravity main drains/filters
  • Pools with dual/multiple main drains
  • Drains that were installed prior to December 19, 2008
  • Channel drains
  • 24-inch drains or larger
  • 9"X36" drains
Remember, this is a VOLUNTARY recall. An authorized installer must install the drain covers and the pool is to be registered with the manufacturer to make the installation.

For additional information about the Virginia Graeme Baker Pool & Spa Safety Act, Click here.



Ghertner & Company Named Nashville's Top Accredited Managment Orginazition

Ghertner & Company has been named the Accredited Management Organization (AMO) of the Year in 2012 by the Greater Nashville Chapter of the Institute of Real Estate Management (IREM). As outlined by IREM, the top international industry organization for real estate management professionals, firms receiving this award have achieved the highest level of performance, experience and financial stability in their field.