HOA board members have various fiduciary duties to complete every year. These duties include preparing and presenting yearly budgets.
Preparing the yearly budget of your homeowners’ association takes plenty of energy and time. However, presenting this budget is a different undertaking. Sadly, not all people know how to do this right. Fortunately, the HOA board can get help from their HOA manager. With the expertise of a management services provider, budget presentation will be seamless. Below are some tips to effectively present an HOA annual budget:
Ensure a Comparison Column is Included
When presenting an annual budget, consider having a comparison between the expenditures of the previous year and the upcoming year’s anticipated expenditures. Homeowners are visual and can benefit from seeing how the fund will be allocated. Your HOA board must show where the homeowners’ dues are going. Otherwise, homeowners can lose trust in the board and this can hinder the progress of the association.
Ensure Budget Accuracy
This can be done by having several members of the board review the budget. This ensures that upcoming changes are all correct and everything has been accounted for. Usually, homeowners don’t respond positively to changes in the budget later in the year that the board could have presented while the initial changes were being made. Your board should secure its budget.
Explain Upcoming Changes
If there are upcoming budgetary changes, the board must explain this clearly to residents. This can be done by including some notes on the budget comparison chart. This will help homeowners understand the plan of the board. In return, they will support the decision of the HOA board.
Seek Outside Expertise
Often, the board does not need assistance from a third party to ensure compliance with laws. But if your budget has problems the board cannot resolve, it’s best to consult with an accountant or lawyer with expertise in this area.
Community associations that seek outside help can avoid common pitfalls that might lead to legal issues in the future. When your board seeks outside advice, ensure you research carefully the professionals you are considering working with.
HOA board members can have difficulty presenting HOA budgets. This is particularly the case if they haven’t done this before. However, to ensure a smooth budget presentation, the board should come prepared. Members must ensure the accuracy of information and explain each line item to residents. Also, they should consider using comparison columns and visual aids.