Are My Co-op's Maintenance Charges Fair?

Dear Ali;
The co-op I live in also runs a hotel along with residences, and our maintenance charges are on the high side. How can I ensure that hotel costs are not being lumped in and shared with residents? Is it common for there to be an audit around this?
A: You have the right, as a shareholder, to receive a copy of your co-op's financials every year! And, as a shareholder, you should know how to read them. (Note to first-time co-op buyers: You'll want to find out whether your building's reserve fund is strong, so pay close attention to point number four below.)

For your specific hotel question, five things to be aware of:

1. Building financials tend to come in when they come in. Unlike public company financials, which have to be filed by March 31 for businesses that run on a regular January-December fiscal year, co-op financials for the previous year often show up in the summer -- and can run as late as the fall! If you want a more up-to-date take, you'll have to go to board meetings and ask questions.
2. Income and expenses will be on a building's profit-and-loss statement -- which for my building has the high-falutin' name "Statement of Operations and Accumulated Deficit." But what you'll see on this statement are just very general categories: "repairs and maintenance," for instance. The good stuff is in the notes. What if, for example, your building has to pay for the major expenditure of a new roof? There should be a footnote about that.
3. I don't run a hotel, but my guess is that a lot of the cost is in personnel. So to look at those expenses, you'll especially want to look for a supplementary schedule that talks about payroll, worker's compensation, etc. It should be attached at the end, after the notes.
4. In a building that has high maintenance fees, one specific thing you'll want to check is the size of the reserve fund. (You'll find it under "assets" on the Balance Sheet.) The easiest rule of thumb is (Reserve Fund + Available Cash)/Number of Apartments. If the fund is low -- maybe just a few thousand per apartment -- it's a sign that your maintenance will probably increase when it's time to replace the boiler.
5. At the beginning of the financial statements, there's probably an "audit letter" -- a letter from the CPAs who prepared and/or audited the statements. This letter can be eye-glazingly boring, but don't skip it. Sometimes you can be tipped off to impropriety by a note towards the end where the auditors say "such-and-such information was not provided" or "the usual supplementary information about thus-and-so isn't included."