Answers to common questions about HOA treasurer reports

Date Published : Oct-07-2021

Written By : Kim Brown

HOA treasurers work to maintain the financial integrity of their association. Treasurers are largely responsible for managing the HOA’s money, as well as reporting the financial status of the association to other board members.

    

Download our treasurer report template

        

What does the treasurer do?

Most of us have not served as a treasurer, which may be why so many people believe they just count the money and pay bills. However, a treasurer’s duties go far beyond those tasks. They are responsible for maintaining financial records, monitoring delinquencies, preparing budgets, and managing investments. They also work closely with the HOA’s CPA to arrange audits and ensure taxes are filed properly.

        

Keep financial records

Financial and accounting records are maintained by the treasurer, unless the HOA has asked a property manager to do some or all of that work. They also make sure records are properly saved and stored so that others can review them, and make sense of them, later on.

        

Watch for abnormalities or problems  

Treasurers look for abnormalities in how the funds are handled, such as a very large purchase without a receipt or invoice. Treasurers don’t control the HOA’s finances by themselves, but they can weigh in on financial matters and how money is spent.

        

Budget

The HOA’s annual budget is prepared by the board treasurer (unless a property manager looks after this task). They often work together with a CPA, and will collaborate with the HOA manager to make sure the budget reflects the community’s needs, realities, and values.

The purpose of the annual budget is to make sure the HOA has enough money to cover the year’s expenses. It is also needed to calculate owners’ dues. If there is an increase in expenses (which there almost always is), then dues will likely be increased as well.

        

Audit

The accounting and financial records of the HOA should be audited regularly. The treasurer will make sure this happens. An audit is a comprehensive inspection of the association’s accounts. It is performed by a third party. An audit determines if the documents and numbers recorded by the association reflect its financial reality. Although some states may not require audits, others have made it a legal requirement.

        

What is included in a treasurer’s report?

A treasurer’s report is not meant to overwhelm the board. It should be as accurate as possible, but should not list every transaction. Any treasurer’s report (not just for HOAs) should include: 

  • The name of the organization/association
  • The period for which the report covers
  • The cash balance at the beginning of the period
  • The income received during the period
  • The expenses paid during the period
  • The cash balance at the end of the period
  • The signature of the treasurer

HOA treasurer reports will vary from one community to another, and that’s okay. As long as the important numbers are there, the report can be organized however the treasurer and board see fit. Many HOA reports will contain a:

Balance sheet. The balance sheet will feature assets and liabilities, and will provide an accurate total of the HOA’s current assets.

Profit and loss statement. This item will include the association’s income along with the expenses. It may be helpful to have a budget listed to identify any variances.

Owner balances. An owner balance summary report lists all homeowner accounts, no matter their balance. The total should match the figures in the receivables and prepaid sections.

Payables report. This section includes all outstanding bills that the association owes, up to the end of the report’s end date.

Homeowner deposits. Providing board members with an owners’ deposit report gives them a breakdown of the homeowners’ standings and totals the actual income they have received from them during a specific timeframe.

        

How must reports be presented?

Treasurers may have the option to present their reports verbally. However, this depends on state laws and your governing documents.

Many HOAs require the treasurer to provide a written copy of the report to the board. Even if it isn’t mandatory, the treasurer’s report should always be in writing. This ensures that the information is always available, and board members can take time to review the report. They might miss something, or misunderstand a figure if they only have the ability to listen to the report. Ideally, board members will receive the report about a week in advance of the meeting so that they have time to look at the numbers and prepare questions, if necessary.

The treasurer will give a verbal report during a board meeting. The presentation can be brief, but any significant or unusual items should be addressed.

        

How often must reports be presented?

The treasurer’s report can be submitted monthly, bimonthly or quarterly. It may be sufficient to report at each board meeting, depending on the community’s preferences and rules.

These reports must be submitted more frequently than other reports because the numbers help the entire board make informed decisions, and catch small issues before they develop into large problems.

        

What happens after a report is presented?

The report does not require any action by the board unless it is of sufficient importance (for example, an annual report to be referred to auditors).

The board secretary should be given a copy of the treasurer’s report so that they can attach it to the minutes. It would be very challenging for the secretary to write down numbers as they are being read aloud.

If the association uses property management software, or has an online document storage system, the secretary or property manager should add the report to the appropriate folder as well.   

        

Simplifying the treasurer’s report

Treasurers can standardize reports by creating a “master” digital or paper form. Then, each time a report is due, they simply fill in the blanks where the numbers go. Having a template saves you time and ensures consistency. Not all members serve on the board for more than one term, so having these types of forms available make the transition process much smoother.  

If you are new to the board, don’t be afraid to ask the previous treasurer for tips and advice. They may help you avoid a rookie mistake.

        

Conclusion

HOA treasurers help to keep the entire association in good financial standing. Think of them as the community’s financial managers. Treasurers must maintain accurate financial records and have the ability to identify and communicate issues or abnormalities if and when they arise. In self-managed communities, many of the day-to-day financial responsibilities are handled by the treasurer as well. They may be responsible for ensuring association funds are collected, disbursed, invested and reported accurately.

A treasurer’s report is a document that captures the HOA’s expenses and revenue for a certain time period. It helps the entire board understand if the association is underspending or overspending, as well as if most owners are paying dues on time.

Reports shouldn’t be more than a few pages long, unless it is for an annual meeting. The treasurer should try to present the most important figures. The entire board should be able to understand the report just by looking at it. While reports may be presented orally, they should always be in writing. When you’re working with HOA money, you always want to leave a paper trail.      

Download Template

Download our free treasurer report template

Let us bring the answers to you.

We’ll make sure the leading HOA/condo news, trends and tips get to you first.

Confidential and Secure.Privacy Policy