KNOWLEDGE BASE · FINANCE
The audit committee (kascommissie): what it does and how
Every year, the board accounts for the money of the VvE (owners’ association, Vereniging van Eigenaars). The audit committee (kascommissie) checks on behalf of all owners whether the figures are right. That builds trust, and it protects the board as well.
What is the audit committee?
The audit committee is a small group of owners who check the financial statements for the past year. They look at the balance sheet, the income and expenditure account and the notes. They then report their findings to the general meeting (ALV, algemene ledenvergadering). Based on that, the ALV decides whether to approve the annual accounts.
What does the law say?
An owners’ association follows a rule from Dutch law on associations. The board presents the statements for the past financial year to the meeting for approval. If the association does not have them checked by an accountant, the ALV appoints a committee of at least two members every year. Those members may not be on the board. The board must give the committee all the information it asks for and show it the books and bank statements.
The board must also keep the accounts for seven years. So the audit committee can ask for older records if needed.
Source: Article 5:135 of the Dutch Civil Code (Burgerlijk Wetboek, BW), which declares Article 2:48 BW applicable; retention duty in Article 2:10 BW. See wetten.overheid.nl and wetten.overheid.nl (in Dutch).
Who should be on it?
You do not have to be a bookkeeper. It does help if someone has a feel for figures and is not afraid to ask questions. Preferably choose two people who are not family members or housemates of a board member. Many associations rotate the members every few years, so there is always a fresh pair of eyes. Also appoint a reserve member, in case someone is unavailable.
How to go about it
- Plan in time. Meet a few weeks before the ALV. That leaves time to ask questions and get answers.
- Request the documents. Think of the annual accounts, the bank statements for all accounts, invoices, contracts and last year’s budget.
- Check the balances. Do the bank balances on 31 December match the balance sheet? Is the reserve fund in a separate account?
- Take samples. Pick a number of expenses and find the invoice and the decision behind each one. Was the expense needed, and was the board allowed to make it?
- Look at the contributions. Have all owners paid? Is there a list of arrears, and is something being done about it?
- Compare with the budget. Large differences are not necessarily wrong, but do ask for an explanation.
- Write a short report. State what you checked, what you found and what you recommend.
The report and the discharge
At the ALV, the audit committee reads out its report or shares it in advance with the meeting documents. It often recommends approving the annual accounts and granting the board discharge (decharge). Discharge means the ALV approves the policy pursued by the board, as far as it appears from the documents. If the committee found something that is not right, it should say so clearly and recommend how to fix it.
Tips for the board
- Keep tidy accounts all year round, with the invoice and the decision for every major expense.
- Keep all documents in one place, so the committee does not have to search.
- See the audit committee not as a check born of distrust, but as help. Approved accounts protect the board too.
Arrange this in Ledenhuis
In Ledenhuis the agenda item “Annual accounts and audit committee report” is ready when you plan the ALV. You add the documents to the document library and choose per document who may see it. The first year is free, with no payment details needed.