Budget Planning and Insurance Bids

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Budget Planning and Insurance Bids

Published August 2019

Editor’s Note: These contributions address several important elements to consider when planning for the financial success of one’s community association.


The Budgeting Process—CIRA Basics
By Mark Gerstle, CPA, CFF & Robert Rosen, CPA
Gerstle, Rosen & Goldenberg P.A.

     The most important task undertaken by an association’s board of directors and property manager is the budget process and determining the use of association dues.

  1. Start Understanding Your Balance Sheet—Cash vs. Equity, What’s Available to Spend? 
    The cash balance at a particular date represents what is in the bank, but by itself does not reveal whether the money is already committed. Looking at the balance sheet in totality paints abetter picture.
  2. Have Policies and Procedures Guidelines 
    Establish policies and procedures that define operations and establish operating and reserve benchmarks.
  3. Prepare a Timetable / Draft to Adoption 
    The initial projections on the following year’s budget should begin in July or August. Then schedule draft, final, mailing, and adoption and reserve waivers.
  4. Prepare Operating Projections / Support Schedules 
    Review the general ledger for coding accuracy. Pay particular attention to items labeled as repairs that should be reserve expenses.
  5. Prepare Capital Expenditures / Deferred Maintenance 
    Know the next cycle of major projects. Don’t use a reserve category coded as “deferred maintenance” unless budgeted.
  6. Follow Through / Monitor Variances in Expenses and Other Revenues 
    In the end, know what you have and understand what you need. Monitor monthly financial reports for the changing nature of budget variances and operating results so that there are no surprises.

For more information on Gerstle, Rosen & Goldenberg P.A., visit www.grcpa.com.


Start Your Budget Planning Early!
By Lindsay Heysler
Business Development & Marketing Manager
Seacrest Services

     Unfortunately, no community association can escape the dreaded budget season. However, starting the budget process early can set your association up for success. Preferably, budget preparation should begin in the third quarter of your fiscal year. By starting early, your budget committee or board will have ample time to check current expenses and identify planned increases. When beginning to evaluate your community’s budget, be sure to examine all contractual expenses to determine if increases are anticipated for the upcoming year. Contact your association’s insurance agent to determine any increases in premiums or rates. We all dread an increase in maintenance dues, but communities age and maintenance projects are unavoidable, so be rational and carefully evaluate all your line items when preparing your new budget. At Seacrest Services, we provide one-on-one budget planning assistance with our accounting team to all our communities to ensure your association is financially prepared for the future.

     For more information on Seacrest Services, call (561) 656-6354 or visit www.seacrestservices.com.


Annual Association Insurance Bids—An Opportunity with Many Rewards
By Regan Marock
Director of Business Development
AKAM On-Site Inc.

     The annual bidding process for your commercial insurance can be a rewarding opportunity. This exercise allows you to review your current and future needs. Start 60 days ahead to give your current third-party insurance agent, and other agents, adequate time. When preparing the bid, compare existing terms without having to lower coverage, increase deductibles, lower the rating of the carriers or have relevant exclusions, among other factors. Success with this bid can have a big impact on your budget.

     For more information on AKAM On-Site, call (954) 843-2526, email rmarock@akam.com, or visit akamonsite.com.