Issue link: https://hub.associaonline.com/i/802839
5 THE FIRST STEP TO BUILDING A SUCCESSFUL COMMUNITY IS UNDERSTANDING AND EMBRACING THE REQUIREMENTS OF IMPORTANT COMMUNITY FUNCTIONS. ASK THESE KEY QUESTIONS. Do you understand the legal structure of your association? This first question focuses on the foundation of your community and your role as a board member. You must have a basic understanding of the specific requirements needed to comply with your governing documents as well as state and federal law. Without this basic understanding, you cannot form the basis for your decision-making process. Do you understand the financial condition of your association? The objective of this question is for you to look at the big picture, not at how much it costs to change a light bulb. You will need four documents to provide you with the necessary information: the most current month's balance sheet and revenue and expense report, along with this year's budget and the most recent reserve study. Reviewing the current year's balance sheet will reveal: The current revenue and expense report will tell you if you are operating within budget for the current fiscal year. The current budget will provide information on all of the services and projects funded for this year. The cash flow schedule in the reserve study will inform you of the funding required over the next 30 years to keep your association's common elements properly maintained. Do you understand the human resources available to your association? Allocating human resources, including the time of the volunteer board of directors, is just as important as the financial resources. Therefore, it is essential to be aware of the services outsourced to professionals versus the services that are absorbed by volunteers. Do you have a professional management firm? Will you be delegating projects to volunteer committees? Every association is different so a quick assessment of human resources will be helpful to the planning process. 1. 2. 3. • How much cash you have; • How much money is owed to the association; and • How much the association owes to vendors and/or lenders Preparation