A homeowners association is led by competent leaders in the form of a board of directors. One of the members in an HOA board is the treasurer. But, beyond being responsible for money matters, what does an HOA treasurer do? Let’s find out.
What Tasks Does an HOA Treasurer Do?
Whether you are a new board treasurer or still considering running for the position, it is important to know the roles and responsibilities of an HOA treasurer. So, what does a treasurer do? How exactly do you fit into an HOA board? And what tasks does an HOA treasurer do on a regular basis? Take a look at them below:
1. Keep Financial Records
The HOA board treasurer is responsible for maintaining financial records. This includes keeping track of all financial transactions, recording them according to your association’s basis of accounting, creating financial statements, and drafting HOA treasurer reports. Additionally, you must store copies of important financial documents, such as invoices and receipts. Accurate reporting can only be achieved through meticulous work and attention to detail.
2. Prepare Budgets
Together with the HOA president, manager, and CPA, the treasurer is tasked with the duty to create annual budgets. The budget serves a critical function within the HOA. Without it, you cannot compute HOA dues. Operating an association without a budget to guide its finances is like driving with a blindfold on — senseless and dangerous.
3. Collect Assessments
After calculating how much to charge homeowners (based on the annual budget), it is one of the HOA treasurer responsibilities to collect assessments. The HOA treasure role also involves monitoring any delinquent HOA dues and knowing how to deal with them. Remember that dues are an HOA’s primary source of income. So, without them, your association would have no way of paying for expenses.
If you have an HOA collection agency or management company, then you may not need a hands-on approach. Regardless, you must still stay on top of dues collection and delinquent accounts.
4. Facilitate Audits
One of the duties of an HOA treasurer is to facilitate audits. Depending on your state laws and governing documents, your HOA may need to perform audits at least once a year. Florida, for instance, requires HOAs to conduct financial reviews. While the HOA treasurer does not perform the audit themselves, it is their job to make sure an audit takes place regularly. An independent audit of your HOA’s financials must be conducted by a third party, preferably a Certified Public Accountant (CPA).
5. Conduct a Reserve Study
Every so often, your HOA will need to undergo a reserve study to calculate how healthy your reserve fund is. Your reserve fund is very important — it exists to cover large replacement costs and emergency expenses. To ensure your reserves stay in good condition, you must keep it at an optimal level. As the HOA treasurer, it is your responsibility to make sure reserve studies happen at regular intervals.
6. File Taxes
The treasurer of an HOA board must also oversee the filing of tax returns. Taxes are complicated, and not all HOA board treasurers have the knowledge and experience to correctly file them. As such, you will need the help of an accountant or an HOA management company. Whether or not you choose to outsource this task, one of the HOA treasurer duties is to make sure tax filing is accomplished.
7. Take Care of Insurance
A homeowners association is a valuable entity. And, what do you do with valuables? You make sure they are covered in case of emergencies. A good way to do this is to take out comprehensive insurance policies. That is also part of a treasurer’s roles. As board treasurer, you must ensure your association has all types of insurance, including fidelity, casualty, and worker’s comp.
8. Keep Investments Safe
If your homeowners association has investment policies, the treasurer must see to it that they are kept safe. Not all investments promise security. And, since you are using the organization’s funds, it is imperative to go for safe investments with the highest yields. Stay away from risky investments!
9. Issue Payments
When vendor invoices come around, it is the treasurer’s job to make sure they are processed. Beyond simply processing these invoices, you must also construct an efficient system that will ensure payments are made on time. Late payments will significantly hurt your association’s working relationship with its vendors. Therefore, you must see to it that no late or duplicate payments come out of the process.
10. Make Decisions
This is important for treasurers to be aware of. Frequently, when mistakes are looked into, a treasurer will explain that they were simply handling it the way the previous officer instructed them to. However, if the previous treasurer was handling it wrong, that mistake is carried forward. It is good to ask questions and get assistance from a predecessor, but the bottom line is that you need to practice making decisions you are comfortable with based on your own experience and knowledge.
11. Study the Declaration
The homeowners association declaration and bylaws is a wealth of information because it contains the documentation of how the HOA is run. In it, you will find what board members are responsible for and how they should conduct themselves in their roles. The treasurer is elected to handle the money, and by reading carefully, you will understand what is expected of you.
12. Review What You Are Doing
Reviewing work for accuracy is a must. You can look it over yourself, but it can also be helpful to have another officer go over it with fresh eyes. This is because, oftentimes in the HOA, large amounts of money are handled, and one mistake can throw everything off. It is better to double-check rather than have a missed mistake cause a larger problem later.
13. Take Advantage of Resources
Taking advantage of all the resources available to you will help you carry out your treasury responsibilities. You can start with your predecessor (remembering to make your own decisions). There are also great software programs that can help you run things smoothly, as well as organizations you can join including the MMHA and others. Finally, your accountant or lawyer likely has the experience that can benefit you. Just apply the same perspectives you would use in handling your own money to help you be an effective and successful treasurer.
Qualities of an HOA Treasurer
For potential HOA treasurers, it is not enough to know what do treasurers do. You should also know what qualities you must have in order to fulfill the responsibilities of a board treasurer. Here are the traits of an effective HOA treasurer:
- Organized and methodical
- Meticulous and detail-oriented
- Willing to learn new things
- Practices transparency
- A genuine desire to help the community
The Importance of a Qualified Treasurer
The treasurer is essential to any HOA board of directors. Without one, the association’s financials will come undone at the seams. Budgets would fall apart and investments will fail. While it is possible to still operate with just an HOA manager, none can compare to the attention and dedication of an effective board treasurer. Now that you know what does an HOA treasurer do, you can fulfill your role to the best of your abilities.
The duties of an HOA treasurer can be a burden, especially with a full-time job outside of the association and a family to take care of. If you need to share the workload with someone, contact a remote HOA management company like us today.
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