Do your members understand the co-op’s audited financial statements, even with the auditor’s best efforts at explaining them? The Agency created the Plain-Language Financials so that co-op boards could answer that question with more confidence.
The idea behind the Plain-Language Financials is simple. Restate the audited financial statements in a way that members can understand, even if they’re allergic to numbers. Use plain language instead of financial terms. Show in a visual way where the co-op’s money comes from and where it goes.
When you get your next set of Plain-Language Financials, their clean look will make them even easier to read. The changes may not be big, but they will make a difference.
The financial story of your past year is now right on page 1 in visual form, as well as numbers. No more need to scroll or flip to find out how your co-operative did last year! Page 2 is a simple overview of your co-op’s finances over the past five years, something your audited statements don’t give you. It’s a quick way of comparing how much, if anything, you’ve lost to vacancies from year to year, for example.
Page three shows the milestone you’ve reached at this point in your co-op’s journey. What you own, what you owe and what you’ve saved for the future—it’s all here. With buildings suffering from middle-aged spread and the end of operating agreements in view, your entire membership needs to know how much you’ve set aside for major work on your property. That number is now highlighted to make the information hard to miss.
An annual meeting doesn’t mean much if your members don’t understand the audited financial statements. We’ve said this before, but co-ops should have their auditors file the Annual Information Returns as early as possible. Then you’ll need to send the Agency your audited financial statements and other documents the day after two directors have signed them. That way, you should be able to get your Plain-Language Financials in time to share them with member households before your Annual General Meeting (AGM). Imagine a meeting where no one is left out because everyone can understand what the auditor is talking about. Co-op democracy can shine right there in your co-op.