Your HOA board is responsible for many important decisions, but one of the most important responsibilities is maintaining the financial health of the association. Although each board member needs to participate in sound financial decision-making, no one is more responsible than the HOA treasurer. It is the treasure’s responsibility to protect the association’s assets, and while these duties and the authority to exercise them are detailed in the HOA’s governing documents and state law, it can still feel like an overwhelming responsibility.
Related: Dealing with Squatters in An HOA Community
Even though we encourage most associations to use a community property management company to help with the details, we wanted to help jump start process by identifying six things to help every treasurer with their decision making process.
- Records. Having accurate and detailed financial records is critical. Without them it’s impossible to know what funds you have to operate the upcoming year with. If keeping detailed records isn’t your thing, an experience HOA management company can help.
- Internal Controls. A treasure’s job is to keep a watchful eye on how and where money is spent. When something seems off, voice concern and get to the bottom of it before things become truly mismanaged.
- Budgets and Reserves. Just like you can’t operate your HOA without proper finical records, you can’t plan for the future without a vision and detailed budget. Every budget should also include a reserves study to make sure community reserves are adequately funded. While budgets take time and attention to detail, they are necessary. Work with the association’s CPA and or property management company to ensure the community needs are accurately reflected in the budget.
- Audits and Taxes. Don’t let these words intimidate you. Every association needs to be periodically audited and taxes are just part of doing business. A treasurer’s job is to liaison between the association, its CPA, and property management company to make sure these processes run smoothly.
- Assessments. While the HOA management company usually collects dues and monitors delinquent accounts, the treasurer needs to be an active participant. Since the treasurer is also a resident in the community, he or she will always have a better idea of what is going on with residents than a management company.
- Collaboration: Ask your community manager or even your association CPA when you have questions. Unfortunately, ignorance is no excuse when you make a mistake.
Although treasure is one of the most important positions on the HOA board, don’t be intimidated. The roles and responsibilities are entirely manageable, especially with support from a qualified CPA and a HOA property management company like Spectrum. If you or your board have more questions about managing your associations assets, don’t hesitate to call!
