HOA Budget Preparation Checklist

Run this checklist to prepare an annual budget for your HOA

Introduction:

Record basic details

Set target date for approval

Current financial status:

Review the most recent budget

Evaluate any significant variances

Goals:

Define and prioritize three to five goals

Determine ways of achieving the goals

Projected expenses:

List all HOA expenses

Determine the average monthly cost

Calculate the total annual budget

Projected income/funding:

List all sources of income

Project total annual income

Putting it all together:

Document financial data in a budget spreadsheet

Finalize the budget

Approval: Annual budget

Sources:

Related checklists:

Introduction:

Preparing an annual budget for your HOA can be a long and arduous process, but it doesn't have to be. By efficiently gathering all of the information you need and following clear steps, you can implement a new budget in no time.

A well-prepared budget is an effective management tool as it enables you to see if you are on track to meet goals or if corrections are needed mid-course.

Run this HOA Budget Preparation Checklist on an annual basis, ideally 3 months before the end of the fiscal year, to prepare your budget as efficiently as possible.

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Record basic details

HOA - Name

HOA President - Name

Budget term (fiscal year)

Is this the first budget your HOA has created?

Contact for approval

Contact for approval (e.g. Treasurer) - Name

Set target date for approval

Before you begin preparing the budget, set a target date for approval.

Target date for approval

Current financial status:

Review the most recent budget

Before you begin planning the new budget, it's essential that you have a good understanding of the association's current financial status.

Review the most recent budget to gain an understanding of where the HOA's finances currently stand and identify significant variances that need to be addressed.

Most recent budget (file)

Evaluate any significant variances

As you review the most recent budget, analyze and evaluate any significant variances to understand if there are any adjustments that need to be made when planning the current budget.

Note down any significant variances below along with a brief evaluation of their cause and potential impact on future budgets.

Significant variances in the previous budget

Goals:

Define and prioritize three to five goals

List three to five goals for the upcoming year using the form fields below.

The goals should be:

1

Realistic
2

Actionable
3

Measurable

Examples of clear goals:

Reduce vendor expenses by 5%

Reduce repair costs by 10%

Ensure that the goals are aligned with the HOA's strategic priorities.

Prioritize the goals so you can assign responsibilities and monitor performance accordingly.

Goal 1

Goal 2

Goal 3

Determine ways of achieving the goals

Once you have defined a handful of goals that are aligned with the community's strategic priorities, record the ways in which you and your team will go about achieving them.

What needs to be done, and by whom, to give you the best chance of success when you review the budget this time next year?

Achieving goal 1

Achieving goal 2

Achieving goal 3

Projected expenses:

List all HOA expenses

List all of the expenses incurred by your association. These are generally broken down into the following main categories:

1

Utilities (e.g. water, gas, electricity)
2

Maintenance
3

Repair
4

Insurance

List of expenses

Determine the average monthly cost

A significant portion of HOA expenses comes from vendor services.

Ideally, you don’t want to have to estimate vendor costs in your budget. To ensure accuracy, send out Requests for Proposals (RFPs) for all your contracted services, including those for:

Pool management,
Lawn care and landscaping
Snow and trash removal
Insurance policies, audits, and tax preparations.

Make sure you’re getting the best deal and don’t be afraid to negotiate with your current or new vendors. The first estimate doesn’t have to be accepted if you think changes should be made.

Average monthly cost

Calculate the total annual budget

Now that you've estimated the average monthly cost of all expenses, multiply that by 12 to get the estimated annual budget.

Average monthly cost: {{form.Average_monthly_cost}}

Total annual budget

Projected income/funding:

List all sources of income

Once you've done the expenses side of the budget, list all of your association's sources of income and/or funding that represents the money you have to spend during the upcoming year.

Sources of income/funding: