Budgeting and the Bottom Line Reviewing Your Association's Budget

Preparing the annual budget is by no means an easy task. Those charged with preparing condominium or HOA budgets will soon begin reviewing costs, gathering data and projecting expenses for the coming year. Communities, businesses, individuals, families, groups and organizations of all kinds must have a budget in place in order to navigate both everyday expenses and unexpected costs, while maintaining a certain life or business style. A well-defined, well-written budget is a powerful financial tool allowing funds to be saved and/or allocated for specific costs and projects; budgeting is a way to estimate expenses and allow for those funds to be available when needed.

Budgeting for condo and HOA communities actually involves not one, but two budgets, each covering a specific range of expenditures. Recurring (and more or less predictable) expenses such as taxes, utilities, staff salaries, insurance and maintenance are the line items most frequently found in the operating budget. Major projects, and long term plans, and emergency funds are budgeted for in the capital budget,and those items will vary, depending on the individual community’s needs, wants, and means.

While expenses are divided into operating or capital expenses, income is generally obtained only from HOA dues or fees, and any fines or penalties incurred and repaid by residents. When any member of the board is unclear or confused on which budget should be assigned which cost, it can be difficult for the board to function properly and to uphold the fiduciary duties for the community. That's why it's important for every board member to have at least a working familiarity with the way their community's budgets function and interact.

The Budgeting Process

Reviewing the existing budget and formulating a budget for the upcoming year is an annual duty for the HOA board. Marc Rodriguez, LCAM, CMCA, director of management services for Association Services of Florida often finds that the community association manager (CAM) will prepare the first draft. “The manager will typically use prior year figures, historical information, and estimates for future projects in the drafting stage. The draft budget is then usually reviewed by the treasurer or the budget/finance committee.”

After any changes and adjustments are made, the board will likely hold a budget workshop meeting for additional fine-tuning, and then formally approve the budget in a final board meeting. “In Florida, the association is required to notify all members of when and where the budget meeting is being held and a copy of the proposed budget must be mailed 14 days in advance of the meeting,” says Rodriguez. Ultimately the budget is approved by the board.


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  • Is there a Florida statue 720 requirement that an annul budget be voted on or can it just be presented. What happens if the governing declaration require the annual budget be voted to approve by the members
  • Does the condo President have to attend the budget meeting?
  • hoa budget. our budget reflects expenses 57% vs reserves 43 %. total budget 386828.88. i think the expenes are too high and need to be reduced? The highest expenses are Landscaping $57780.--; c&t building repairs $ 12180.-- ; water $ 13200.--(pool & spa); electricity $ 14400.--; Sprinkler repair 10080.--; insurance $ 22080.--; management services $ 18120.--; are there guidelines out there for how much to spent on what? please help j.kiesel
  • Should fixed asset purchases that are not in reserves be included in Operations budget? Should proceeds from sale of shares by the association be included in the Operations budget? Should principle on shareholder loan proceeds be included in Operations budget?
  • can the budget be revised once approved by board
  • Once a budget is passed, can monies be taken from one account and used for something else? Example, "if there is money in a paving account can it be transferred to pool repair account," if needed.
  • Is it mandatory for FL Statue 720 HOA Act to post on our HOA Website....a copy of insurance, the monthly balance sheet and expense report or can BOD provide it to a difficult resident directly requesting info by email from manager? Many pages and time consuming to post on Website. Thanks.