The Role of Your Condo Board Treasurer
The members of your condominium board carry out a variety of important leadership functions, and each role on the board has unique responsibilities. Ahead of determining which role might be right for you, it's essential to understand the duties of each position.
The condo board treasurer's contributions are integral to the success of your condo corporation. In this article, we will highlight the role of the condo board treasurer and the impact this role has on your community's health and future growth.
The Condo Board Treasurer…
… is the interpreter of the condo corporation’s finances
Condo boards are composed of diverse people with different abilities, backgrounds and priorities. Safety, quality of life, compliance and maintenance are a few examples on which board members share a common goal and tend to focus on. While this is also important for the condo board treasurer, his or her main priority is the financial health of the condominium.
The condo board treasurer must always speak for the community's financial stability. In this role, the treasurer has a high level of fiduciary obligations in the care and duty for all financial transactions for the property. They also function as the liaison with the property management company, property manager, accountants, auditors, bankers, investment advisors, reserve planner, and more.
…looks at the association’s long-term financial picture
The condo board treasurer may serve several functions, but their key duties will typically include:
the development and ongoing review of the annual operating budget
overseeing the corporation's reserve fund plan and expenditures
working with investment advisors to determine the best vehicles for the safety and return on investment of the condo corporation's funds
directing the collection of arrears
Suppose the condo corporation employs the services of a professional management company. In that case, the treasurer is supported by the property management's team of financial experts, and the job is considerably less demanding. A good management company will ensure that assets are secure and proper internal controls are in place.
A property management company will typically provide the board with comprehensive financial reports each month that can include:
Income and expense details
Budget analysis details forecasting total years expenditures based on actuals and budgets
Arrears list with collection activity
Payables detail ― both outstanding and all disbursements made
Security deposit listing
This takes a lot of the administrative work that can be associated with the role of a condo board treasurer off their plate — allowing the treasurer to spend less time on reporting and more time acting on the information that has been provided in those reports.
When a condo board gets a new member, they may not have a clear understanding of the role a reserve fund plays in the future of the community. This is understandable because the ins and outs of how a reserve fund works can be pretty tricky. It's up to the condo board treasurer to know those ins and outs and educate the board on the proper use of these funds and how to apply them appropriately. It is the treasurer's duty to protect these funds, ensure they are set aside for future capital expenditures, and not allow them to be used as a supplement to the operating or contingency fund.
…focuses on the details
There is no doubt the condo board treasurer plays a fundamental role in maintaining the financial well-being of the condominium. It's his or her duty to take charge of the specifics of financial management, interpret the monthly financial statements delivered by the management company and report to the board in a way that all members can understand.
It is essential to understand that though many functions fall under the condo board treasurer's area of responsibility, it's not up to him or her to personally complete those tasks. Rather, the condo board treasurer oversees the conscientious completion of these duties by the appropriate vendors, such as the property management company, the corporation's auditor and insurance and investment advisors. Together they work to determine the annual budget, prepare the annual audits, and much more.
…plays a pivotal role in budget preparation
Working alongside the property management team and others, the condo board treasurer plays a big part when it comes to preparing the condo corporation's budget. When preparing the annual budget, the condo board treasurer must perform the following tasks:
Review all contracts – all existing contracts need to be reviewed to ensure they are being fulfilled, the pricing is correct, and the services are still required.
Contact utilities – Knowing if prices are expected to increase is imperative as those price increases need to be accounted for and worked into the new budget.
Review financial statements – While financial reports are reviewed on a regular basis, it's important to look at the full fiscal year when planning the following year's budget. The current financial position of the condo corporation needs to be evaluated to determine where there may be shortages or excesses so necessary adjustments can be made.
Review recent reserve study – The health of a condo corporation's reserve fund is imperative to the maintenance of the community.
…works as a team with the board to make their community great
The duties of the condo board treasurer may be very different from the responsibilities the other board members have. While the treasurer’s main focus is on the corporation’s financials, each member of the board shares fiduciary obligations with them and they all share a common responsibility to the community to care for it and ensure it’s best interests come first. However, all these important positions must work together to ensure their community is running smoothly and is a desirable home for residents and future residents alike.
When deciding to run for your condo's board, it's important to remember it's not an individual sport. You will be acting on behalf of your community and working closely with other community members. To succeed in the role of condo board treasurer or any position on the board, it's important that you understand each other's roles and responsibilities so you can work harmoniously together for the greater good.
For more information on being an efficient condo board and how you can benefit from the support of a professional property management company, contact FirstService Residential, North America's leading property management company.