Smart HOA Finance
Review the Money
A consistent monthly review helps the board understand what happened, notice important changes, and identify questions that need follow-up.
Financial Information to Review Each Month
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Balance sheet
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Income and expense statement
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Budget-to-actual report
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Bank statements
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Bank reconciliations
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Amounts owed to the association
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Unpaid bills and other obligations
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Reserve balances and activity
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Check register or payment details
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General ledger details
What Deserves Closer Attention
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Significant financial changes
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Large budget variances
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Unexplained transfers
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Reserve withdrawals or transfers
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Growing or overdue receivables
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Unexpected or unusual expenses
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New or unexpected vendor changes
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Missing or unclear documentation
A Monthly Review Example
The monthly financial report shows landscaping expenses significantly over budget.
The board compares the expense with prior months and asks why costs increased. The increase may be reasonable, but the board should understand the explanation and determine whether follow-up is needed.
Questions to Ask
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What changed, and why?
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Are expenses within budget and properly approved?
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Is there documentation supporting the transaction?
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Are there unusual or unexplained items?
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What questions or concerns need follow-up?
Put Monthly Reviews Into Practice
Use the free Monthly Financial Review Checklist to help your board review financial reports, identify important changes, document questions, and follow up on unresolved items.
You don't need to understand or complete every item right away. Start with what you know and build your understanding over time.
Next Step: Verify the Money
Reviewing financial information helps the board identify changes and questions. Verification goes further by confirming important balances and transactions using reliable, independent records.