To function correctly, a homeowners' association (HOA) must have a board of directors that's authorized to act on a community's behalf, create and enforce community guidelines, and maintain shared spaces. Generally, the HOA board has four officer positions: president, vice president, secretary, and treasurer. Each officer has specific duties and responsibilities related to the operation of the association. Read on to learn more about the role of the HOA board treasurer.
What does the board treasurer do?
The HOA board treasurer acts as the financial manager for the association. He or she is responsible for the association funds and maintaining all financial records. From billing and collections to disbursement of funds, the treasurer oversees all things financial.
What makes a good board treasurer?
The importance of the HOA board treasurer shouldn’t get overlooked, and finding the right person for the job is crucial to the success of the association. Some treasurers may not feel comfortable handling the association’s financial operations, so may not be as involved in the role. On the other hand, the opposite can occur, and the treasurer may become too involved or make suggestions that aren’t in line with appropriate business practices. It’s best to select someone with an accounting background and sound business judgment to serve as the treasurer.
What are the primary duties of the board treasurer?
The treasurer is the custodian of the funds, securities, and financial records of the association. While specific roles and responsibilities vary by association, primary duties typically include:
- Reviewing financial records for accuracy
- Overseeing billing and collections
- Ensuring timely payment of invoices
- Making necessary investments of the association’s funds
- Confirming audits and reserve studies get performed
Sometimes, an association manager or management company handles funds and day-to-day record-keeping functions. If this is the case, the treasurer’s duties include ensuring appropriate parties follow the association’s governing documents and bylaws in maintaining all financial records and reports.
Budget Preparation: The Board Treasurer’s Most Important Task
As the leader in preparing the annual budget, the board treasurer must be willing and able to fulfill this crucial task with expert thoroughness. In preparing the budget, the treasurer must:
1. Review all contracts.
All contracts should be reviewed to ensure they are being fulfilled, the pricing is correct, and the services are still required. The contract and pricing review should be completed early on in case new contracts or vendors are needed.
2. Contact utilities.
Board members should contact all utilities to find out if prices are expected to increase and calculate this into the working budget.
3. Review financial statements.
It’s important to review the income statement, the balance sheet, and the comparative budget for the current fiscal year to evaluate the association's current financial position. The board must determine where there are shortages and excesses and make necessary adjustments.
4. Review recent reserve study.
Make sure the association’s reserves are properly funded so money is available in case a reserve component requires maintenance. Reserve expenses should also get allocated as recommended by the professional reserve study analyst to avoid special assessments.
Understanding Other Board Roles
Each officer plays a vital role in the operation of the association, and understanding each key player is essential to the success of the community. To learn more about the HOA board secretary, read our previous post, “HOA 101: Understanding the Role of the Board Secretary.”