3 Questions To Ask Regarding How The HOA Board Manages Finances

Aside from keeping the homeowners association website up-to-date, a vital duty of the HOA board is to maintain precise financial records and reports.  Through those, members are able to see an overview of how the community is utilizing the funds and how financial projections are being achieved.

The board is in charge of making many financial decisions which includes setting fees, determining assessments, and figuring out how the money should be allocated.  As a contributor to HOA funds, you have a right to know how the money is being utilized and the following questions will help you in the future.

 

In many cases, a management firm is in charge of the accounting and financial reports, though there are some associations that prefer to handle these tasks internally.  First, determine who’s responsible for these duties so you know where to address your concerns.  The way accounting is managed varies from one association to the next so keep this question in mind.

 

When you see the history of how the HOA has been collecting fees over an extended period of time, you will get an idea of how efficient the funds are being managed.  For instance, if a large sum has been collected; that should reflect in the HOA’s development projects unless there have been costly expenses.

 

A board that analyzes financial reports regularly shows they are serious about keeping the community in a good financial state.  The three most critical statements you should ask about are the income and expense statement, the cash flow statement, and the balance sheet.

Most of the time, efficient HOA boards have commonly asked questions regarding financial management posted to the homeowners association website.  For that reason, homeowners are encouraged to go to the website first since many questions have already been addressed there.