You know your HOA board members serve a crucial role in preserving the well-being of the community. Your treasurer is responsible for managing the finances and ensuring long-term stability.  But do you understand the  critical functions your treasurer performs? Read on to get insights into how their responsibilities shape the financial outlook and longevity of your community.

What are the responsibilities of an HOA treasurer?

1. Oversees long-term financial health

The primary duty of the treasurer is to manage and safeguard the financial health of the association, making sure that funds are properly allocated, recorded, and used efficiently to maintain the community’s well-being. That role includes several key functions:

a) Develops the annual operating budget

The treasurer plays a pivotal role in creating and managing the annual operating budget, which serves as the financial roadmap for the association. The treasurer works with the board and management team to develop a comprehensive budget that accounts for all expected income and expenditures. The budget needs to include enough funds to cover operating expenses, maintenance, and future capital needs. This involves:

• Revenue projections: Estimating the revenue from assessments and other income sources
• Expense management: Allocating funds for regular operational expenses such as landscaping, repairs, utilities, and management fees
• Contingency planning: Ensuring there is a buffer for unexpected costs

The treasurer must regularly review the budget, adjusting for any unforeseen expenses or changes in revenue. They must also make regular reports to the rest of the board so that all of leadership is always up to date on the association’s financial standing.

b) Manages the reserve fund

Managing the association’s reserve funds is the most important responsibility of the treasurer when it comes to the long-term financial health of the association. These funds are set aside for future capital projects such as roof replacements, structural repairs, and other significant expenditures. Proper reserve funding is essential to ensure the community remains financially healthy in the long run. The treasurer:

• Works with financial experts to ensure that the reserve fund is adequately funded based on reserve studies and future repair estimates.
• Assesses the community’s long-term needs and ensures funds are available when large-scale projects arise.
• Manages the reserve fund in a way that helps avoid the need for hefty and unexpected sudden special assessments.

Important: The laws that govern association reserves may change rapidly as legislatures respond to changing market conditions. This article is not meant to be legal advice on how to fund and maintain your reserves. If you have questions about your association’s reserves, check with your professional property management partner and your association attorney. To learn more about the new requirements, visit our Legislative Updates page.

2. Educates the board and community

While financial management is the core responsibility of the treasurer, they must also be adept at educating the board and the wider community about financial matters. Not all board members or residents have a deep understanding of HOA finances, especially regarding reserve funds. The treasurer serves as a key educator, helping everyone involved understand how finances impact the community, in both the short- and long-term. A treasurer who can communicate clearly to people with less information and knowledge about finances helps residents feel secure that their money is being spent wisely.

"Often, we see people with backgrounds in accounting or finance gravitate toward the treasurer role. It's a natural fit," explains Maureen Connolly, client accounting business partner at FirstService Residential. "But we don't want to discourage invested and engaged community members from taking on that responsibility just because they don't have that existing knowledge. The right property management partner will have the expertise to help any treasurer navigate the role and educate their community."

Transparency and clarity are always the best choice when it comes to communicating about association finances.

• Explains financial reports: The treasurer must regularly present financial reports to the board and, in some cases, the community. These reports detail the current financial status of the association, including income, expenses, and the reserve fund balance.
• Addresses community questions and concerns: The treasurer often becomes the go-to person for any financial questions or concerns raised by the board or residents. They need to be knowledgeable and prepared to answer inquiries regarding assessments, delinquencies, budget allocation, and more.

3.  Provides a moderating voice and advocates for stability

The board is made up of individuals with different priorities and focuses, which can range from maintaining safety to enhancing quality of life or ensuring compliance with rules. However, the treasurer’s priority must always remain focused on the financial health of the community. As the voice of financial stability, the treasurer:

• Makes sure that the board takes a fiscally responsible approach to decisions, especially when new projects or expenses are proposed.
• Emphasizes the importance of building and maintaining strong reserves for future needs, even when there is pressure to reduce assessments or increase spending on short-term projects.
• Acts as the liaison between the board and external financial professionals, including auditors, accountants, bankers, and reserve specialists. The treasurer guarantees that the community receives sound financial advice and manages these relationships effectively.

4. Manages financial operations

While the treasurer is ultimately responsible for the financial health of the association, they are not expected to perform every financial task personally. Instead, the treasurer oversees professionals and vendors hired by the association to ensure that financial operations run smoothly.
The treasurer collaborates with certified public accountants (CPAs), auditors, and other financial experts to handle complex financial tasks, completed in accordance with industry best practices and legal requirements. Those include:

• Ensuring taxes are filed accurately and on time.
• Overseeing the completion of audits to provide transparency and accountability for the association’s finances.

The treasurer is also responsible for making sure that vendors are paid on time and that financial records related to these transactions are properly maintained. This includes payments for services such as landscaping, maintenance, security, and more. Of course, working with a professional property management company with great bookkeeping and payments support makes that task much easier for the treasurer.

5. Focuses on the details

Beyond managing the big-picture financial health of the association, the treasurer also handles the finer details that keep the community running smoothly. They often work with a professional manager to handle the sheer volume of paperwork needed. This role includes:

• Maintaining accurate financial records, including budgets, assessments, expenses, and tax filings, is essential to ensure transparency and accountability.
• Overseeing the community’s insurance policies to ensure adequate coverage for property and liability risks. The treasurer works closely with insurance providers to review and update policies as needed.
• The treasurer manages the association’s investment portfolio, working with financial advisors to ensure that funds are invested safely and in line with the association’s goals.
• The treasurer oversees the collection of delinquent assessments, working with collection agencies or attorneys if necessary to recover outstanding payments.

The role of the treasurer in an HOA is critical to the financial well-being and future growth of the community. Through effective budgeting, reserve fund management, financial education, and detailed oversight, an effective treasurer makes sure that the association remains financially healthy, secure, and prepared for the future.

Understanding the full scope of the treasurer’s responsibilities is essential for all board members, as their work impacts the entire community. For more insights into the roles and responsibilities of board members, and how a professional property management partner can help lighten the workload, contact FirstService Residential.