What Did Each Funding Source Actually Pay For?

GoldenSurfTowersCondominium is an independent owner-operated informational website and is not affiliated with or authorized by Golden Surf Towers Condominium Association, Inc.

In Parts I and II, we examined the original $1,021,312 roof project, the subsequent $350,000 additional assessment, and the large balances reported between GST’s Operating and Special Assessment funds.

Now we turn to another piece of the puzzle:

HOW WAS THE ROOF ACTUALLY FUNDED?

GST’s own financial records identify several sources of money connected to roof and parapet work:

Owner special assessments.

Operating funds.

Insurance proceeds.

And potentially reimbursements or other funding associated with the project.

Using several legitimate funding sources is not inherently unusual.

But when multiple sources fund related construction work, there should be a clear reconciliation showing where the money came from, what it paid for, and where each expenditure was ultimately recorded.

THE ORIGINAL ROOF PLAN: $1,021,312

The original roof project presented to owners consisted of:

Original Project Budget	Amount
Roof replacement	$845,820
Engineering	$61,500
Permitting	$21,145.50
10% contingency	$92,846.50
TOTAL	$1,021,312

But owners were directly assessed only $721,312.

The remaining:

$300,000

was supposed to come from available Operating funds.

So from the beginning, this was not simply a $721,312 owner-funded project.

It was a $1.021 million project funded from at least two sources.

THEN INSURANCE MONEY ENTERS THE PICTURE

GST’s audit identifies another source of money connected to roof expenditures:

insurance proceeds from a water-pipe-break claim.

The audit reports:

$430,351 — gross insurance proceeds

$154,711 — attorney fees and costs

$275,640 — net proceeds remaining

The audit then states that these insurance funds were used to fund roof parapet-wall repairs and roof-replacement special-assessment expenses.

That statement is important.

It means insurance proceeds were not merely sitting somewhere unrelated to the roof.

According to GST’s own audit, insurance proceeds helped fund roof-related expenditures.

So now the roof accounting involves not just owner assessment money and Operating funds—but insurance proceeds as well.

$154,711 IN ATTORNEY FEES AND COSTS

There is another number owners should understand.

Of the $430,351 gross insurance recovery, the audit reports that $154,711 was paid for attorney fees and costs.

That represents approximately:

36% OF THE ENTIRE GROSS RECOVERY

leaving approximately 64% as net proceeds.

Whether those legal fees and costs were reasonable cannot be determined from the audit alone.

The audit does not tell owners the fee arrangement, how much represented attorney fees versus other costs, the amount originally disputed with the insurer, the complexity of the matter, or what legal work was required to produce the recovery.

But $154,711 is a substantial expenditure.

Owners should be able to see the documentation supporting it.

What was the attorney engagement agreement?

Was compensation hourly, contingency-based, or structured another way?

How much represented attorney fees and how much represented litigation or other costs?

What amount was originally sought from the insurance company?

How was the $430,351 recovery reached?

And what was ultimately available for actual repairs after all costs?

Those questions do not presume the legal expenses were improper.

They ask owners to examine the difference between the gross recovery announced on paper and the money actually available to the Association.

THE PARAPET: TWO YEARS, TWO DIFFERENT SCOPES

The financial statements report parapet-wall expenditures in both 2024 and 2025.

But the underlying project records distinguish the work.

2024 — INTERIOR PARAPET WORK

The audit reports:

$149,469

in 2024 roof parapet-wall repair expenses funded from insurance proceeds related to the water-pipe break.

2025 — EXTERIOR PARAPET WORK

The records reflect a separate exterior parapet-wall scope associated with the roof project.

The audit reports:

$150,607

in 2025 roof parapet-wall repair expenses recorded in the Operating Fund.

Together, GST’s financial statements report:

$300,076 IN PARAPET-WALL EXPENSES ACROSS 2024 AND 2025

These should not be characterized as duplicate payments merely because the audit uses similar terminology.

The underlying records distinguish the work as interior parapet work in 2024 and exterior parapet work in 2025.

The more important question is how each scope fits into the overall project accounting.

THE EXTERIOR PARAPET DESERVES A CLOSER LOOK

The original roof-project documents are important here.

The approved project materials expressly reference:

roof exterior parapet-wall repairs and roof replacement.

Meanwhile, the audit separately reports $150,607 in 2025 parapet-wall repair expenses in the Operating Fund.

That creates a reconciliation question—not an accusation:

How does the $150,607 exterior parapet expenditure relate to the exterior parapet work contemplated in the original roof project?

Was it part of the original project scope?

Was it additional work?

Was it part of the planned $300,000 Operating contribution?

Was some portion subsequently reclassified?

The contracts, invoices and accounting entries should make that relationship clear.

THEN LOOK AT THE ROOF ACCOUNTING

The audit reports that GST had:

$87,041

in 2024 roof expenses paid from insurance proceeds associated with the pipe-break loss.

In 2025, it reports another:

$45,000

in roof expenses paid from Operating.

And then:

$1,116,672

in roof expenses related to the assessment that were recorded in Special Assessment III and subsequently reclassified to the roof special assessment.

Finally, owners received another:

$350,000 ROOF SPECIAL ASSESSMENT

in September 2025 for additional project costs.

PUT THE RECORDS SIDE BY SIDE:

Amount	What GST Records Describe
$1,021,312	Original roof-project budget
$721,312	Original owner special assessment
$300,000	Planned Operating contribution
$430,351	Gross pipe-break insurance proceeds
$154,711	Attorney fees and costs deducted from insurance recovery
$275,640	Net insurance proceeds
$87,041	2024 roof expenses paid from insurance proceeds
$149,469	2024 interior parapet expenses funded from insurance proceeds
$150,607	2025 exterior parapet expenses recorded in Operating
$45,000	2025 roof expenses paid from Operating
$1,116,672	Roof expenses recorded in SA III and reclassified
$350,000	Additional 2025 roof special assessment

THESE NUMBERS SHOULD NOT BE ADDED TOGETHER.

Some are funding sources.

Some are expenses.

Some are components of larger totals.

Some may overlap.

And some represent accounting reclassifications rather than additional cash expenditures.

Adding them together would potentially create a false project total.

Instead, they should be reconciled.

📘 FINANCIAL TERMS OWNERS SHOULD KNOW

GROSS VS. NET PROCEEDS

Gross proceeds are the total amount recovered before fees and expenses are deducted.

Net proceeds are what remains after those deductions.

GST’s audit provides a good real-world example:

$430,351 Gross Insurance Recovery

minus

$154,711 Attorney Fees & Costs

equals

$275,640 Net Insurance Proceeds

So saying GST recovered $430,351 is not the same as saying GST had $430,351 available to spend on repairs.

RECLASSIFICATION

A reclassification changes where a transaction is reported in the accounting records.

It does not necessarily mean money moved between bank accounts.

For example, moving a roof expense from one accounting fund to another may change how the expense appears on the financial statements without creating a second expenditure.

That is why financial analysis must distinguish between:

cash movement and accounting movement.

WHAT OWNERS ACTUALLY NEED

This investigation should not be about creating the largest possible number.

It should be about producing the correct number.

For every major roof and parapet expenditure, the Association should be able to show:

VENDOR

↓

CONTRACT / CHANGE ORDER

↓

WORK PERFORMED

↓

INVOICE

↓

PAYMENT

↓

BANK ACCOUNT

↓

FUNDING SOURCE

↓

ACCOUNTING CLASSIFICATION

Then reconcile the entire project.

How much did the roof actually cost?

How much did the interior parapet cost?

How much did the exterior parapet cost?

How much did owners pay through each special assessment?

What did the original $300,000 Operating contribution pay for?

What did insurance pay for?

What did Operating pay for separately?

What was reclassified?

What was reimbursed?

And after all insurance proceeds, assessments and other funding were applied:

WHAT WAS THE FINAL NET COST TO GST OWNERS?

That is the number owners ultimately deserve to know.

SHOW THE SOURCES.

SHOW THE USES.

RECONCILE THE PROJECT.

SOURCES

• Golden Surf Towers Condominium Association, Inc. — 2025 Audited Financial Statements, including disclosures concerning insurance proceeds, roof-replacement expenditures and roof parapet-wall repairs.
• Golden Surf Towers Condominium Association, Inc. — Approved 2025 Budget and Roof & Engineering Project Special Assessment, including the original $1,021,312 project budget, $721,312 owner assessment and $300,000 Operating contribution.
• Golden Surf Towers Condominium Association, Inc. — 2024–2025 roof/parapet project records, distinguishing the interior and exterior parapet scopes.
• Golden Surf Towers Condominium Association, Inc. — 2025 Monthly Financial Statements and General Ledger Records.
• Golden Surf Towers Condominium Association, Inc. — September 2025 Additional Roof Special Assessment Documentation.

DOCUMENT & ANALYSIS NOTICE

This article is based on Association records and other source materials presently available. It distinguishes documented facts from calculations, analysis and unresolved questions. Numerical similarities, accounting discrepancies, unexplained transactions or control weaknesses do not by themselves establish fraud, theft, misappropriation, intent or personal benefit. Some amounts discussed may overlap, constitute components of other amounts, or represent different accounting classifications or funding sources rather than separate expenditures. Additional records may provide legitimate explanations or require correction of this analysis. Relevant documentation or corrections are welcome for consideration.

NON-AFFILIATION

GoldenSurfTowersCondominium is an independent owner-operated informational website and is not affiliated with, authorized by, sponsored by, endorsed by, or operated on behalf of Golden Surf Towers Condominium Association, Inc., its Board, management, or agents. For informational purposes only.