Leak Restoration Policy, Process, and Accounting

[Tim Ackley]

Attached are two documents:

1. Leak Restoration + Process
2. Incident Accounting Procedures

The leak restoration and process document was prepared by Matt Spathas and, presumably, approved by the board of directors. Approval must have occurred before I moved to the Vaux in January 2022. Matt and I discussed the approved process in depth and determined that it should be expanded to include the accounting process.

The incident accounting procedures were prepared as an extension to the first procedure in order to capture the accounting process necessary to support the policy. It was presented to and approved by the board of directors during the April 19, 2023 board meeting. The recommendation was to include these procedures as part 4 of the first document.

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Regarding the units 232/132 incident, the unit 123 incident, and any others that occur, Kin Living should immediately establish a receivable account for each. Each account is intended to capture all costs pertaining to an incident. This enables the Vaux to account for the total cost of an incident. 

Next, Kin Living should code all invoices related to an incident to the appropriate receivable account (they are NOT operating expenses). Initial invoices could be for the cost of emergency phone calls, mitigation costs to stop a leak, etc. Later in the process, Kin Living should code all invoices related to restoration work to the appropriate receivable account.

Later, a combination of insurance proceeds and owner payments will be credited to the appropriate account. Ideally, the final balance will be zero. If not, the Vaux will expense the amount as an operating loss due to a water leak (or other cause).

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To date, Kin Living has not created two accounts to capture the costs. I plan to request that they do.

I suspect that some invoices related to work performed to date have been coded to expense. I will follow up and try to identify any invoices. Also, I plan to stress that Kin Living needs to follow the policies. To jog their memory, I plan to send the two documents to them. If they have questions, I will review the processes with them.

Note that work to mediate and restore units may proceed before determination of insurance coverage, responsibility, etc. In my experience, the "who pays" portion of each project may take months of communication. In the meantime, owners need to return to their restored units as quickly as possible.

There is a lot of meat here. Where do we go from here?

Tim

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Tim Ackley

2335 NW Raleigh Street Unit 139

Portland, Oregon 97210

 

Cell: 480-694-7059

Email: tim.ack...@gmail.com