Key Elements An HOA Board Should Consider Regarding The Budget For 2019
Posted on December 5, 2018 8:00 AM by HOA Sites
Categories: HOA Website
Determining the budget is an integral part of the fiduciary duty that comes with being a board member. In addition to this, there should be a means of ensuring the fees and assessments are not only appropriate but also fair. 2019 is quickly approaching, and the budget should be prepared as soon as possible so the board has adequate time to deliver a comprehensive financial plan. This post examines a few important budget-related items to review.
Proper budgeting requires that an assessment of the HOA’s current financial situation be done first. Therefore, it’s necessary to examine the HOA’s end-of-year financial statements, including the balance sheet and the income statement. If you notice that expenses are more than the income, then next year’s budget should address that issue by cutting costs.
Contracts With External Parties
Start by assessing all the existing contracts and evaluate if your association will continue to benefit from them next year. Keep in mind the wants versus the needs and the financial capability of the HOA. Similarly, consider the value of the services you receive from your current suppliers. For instance, is the community website manager doing a great job or do you need to replace them?
The task of calculating the homeowners’ fees is quite easy. All you need to do is add up the contributions from the annual reserve and operating expenses then divide the total by the number of homeowners. However, the formula may vary depending on your HOA’s unique needs. Get a financial expert to help you compute some reasonable figures and use the community website to keep homeowners informed.
Preparing the budget is one of the most important duties the HOA board has to fulfill as it affects many key areas. For the HOA to be financially sound in 2019, it’s essential that preparations begin early and board members work together to come up with an accurate budget!
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