HOA Budgeting Basics | The Uncommon Area Ep. 99

Most HOA boards read the budget every month. Almost none read the balance sheet, and that is where financial trouble actually shows up first.

Host Matthew Holbrook talks with Stacie Donnelly, CFO of Condominium Financial Management, and Bob Spillar, a longtime HOA board member and California Legislative Action Committee member, about what to check on a balance sheet before approving next year's budget, including unfunded reserves, prepaid insurance, cash basis versus accrual basis budgeting, budget surpluses, reserve funding, California's budget mailing deadline, and how to read an accounts receivable aging report.

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00:00 Cold open and welcome

00:25 Framing the topic: budgeting and financial planning

00:38 The number one red flag: the balance sheet

01:46 Balance sheet 101: what board members should actually look at

03:15 Educating newer board members on financial reporting

05:05 Case study: how a prepaid insurance policy should behave

07:21 Accounts receivable and how to read an aging report

13:10 Cash basis vs. accrual basis budgeting

14:10 Why accrual still matters at year end audit

14:59 Should a surplus reduce next year's assessments

19:58 Common mistakes in reserve funding

22:17 The deferred maintenance analogy

23:21 A real world reserve percentage example

24:28 The five assets that drive most reserve funding

26:10 The most frustrating part of the annual budget process

27:20 Key data points that move next year's budget

28:35 Why timeliness makes or breaks a budget cycle

29:34 California's budget mailing deadline explained

31:11 The cost of missing the deadline: the 20 percent cap

32:53 Advice for an incoming board member

34:22 Where boards make their biggest financial mistakes

35:16 Wrap up and final thoughts