BOARD'S FINANCIAL DUTIES

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In addition to managing the common areas, HOA boards of directors are responsible for managing the association's finances. Following is a summary of their obligations:

Financial Oversight. Boards must exercise reasonable care when overseeing the association's money. To that end, they should adopt a conflict of interest policy.
Bank Accounts. Boards must set up separate operating and reserve accounts.
Reserve Funds. Boards must establish and properly fund reserves for the future repair and replacement of major common components.
Review Finances. Boards must establish monthly financial statements and review them monthly.
Approve Fund Transfers. Depending on the amounts, boards must approve the transfer of funds from operating and reserve accounts.
Make Prudent Investments. Boards should obtain a reasonable return on the investments without jeopardizing capital.
Internal Controls. Boards should establish internal financial controls to prevent embezzlement.
Insurance. Boards are required to purchase a fidelity bond and cyber crime insurance to protect against loss.
Financial Records. Boards must maintain accurate financial records which can be used to generate annual financial statements for the membership.
Budget and Assess. Boards must budget for the association's financial needs and then assess the membership sufficient to meet their obligations.
Collection Policy. Boards must establish and follow strong collection policies.
Taxes. Boards must file annual tax returns.

Additional Information. For more detailed information see the following financial menus:

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