A Primer for Concerned Boards
Atlanta, GA—As a condo owner, protecting your building’s financial stability is of paramount importance in maintaining the value of your investment and your quality of life. As stories of mismanagement and fraud continue to come to light, boards are well advised to institute a workable system of financial checks and balances for their properties. There needs to be someone looking at the management reports every month, making sure that there are funds available for operating expenses, capital improvements, etc., and determining how to invest the property’s funds. All board members should read and review the monthly management financial report from your Atlanta property management company and the board should establish rules for bill payment and contract bidding that are implemented by the property manager. Policies should be written out so that everyone has a clear understanding of how the property’s finances function.
Bidding and Purchasing Procedures
When it comes to large construction or repair projects, solicit at least three competitive bids. Boards should have multiple sources for all bids, not only from your Atlanta condominium association management company but from a list compiled by the board or committee volunteers. It’s also a good idea to regularly bid out vendor service contracts to get the best service at the best price. A list of annual contract should be maintained so that future boards know what bids should be solicited every year to maintain competitive pricing.
The Monthly Financial and Management Reports
In order to keep track of your Atlanta condominium association’s income, disbursements and investments, boards must have reliable, easy-to-read and timely reports. Insist on a management report that contains copies of all bank statements, a cash flow reconciliation for each bank account; clear explanations for every line item on the budget and every element of income as well as disbursements; a breakdown of the amount spent and a comparison year to date and a clear explanation of all payments made the preceding month. Your checking account report should contain a list of all checks issued by number, date, amount, and vendor.
Setting & Monitoring the Budget
A comprehensive budget is essential to your Atlanta condominium association’s financial stability. Establish a well-thought-out and detailed budget, broken out among operating expenses and major expenditures such as capital improvements and repairs. The budget should be included in your Atlanta condominium association’s monthly financial report and reviewed to determine which items are exceeding expectations and where a surplus or deficit exists.
These financial checks and balances can alert you to problems early on so you can take steps to correct them and will help keep your Atlanta condominium association in good financial health.
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