Why Do Associations Have A Budget? Operating an association can be compared to running a business. The board of directors of every corporation must have a plan to anticipated revenues and expenses for the upcoming year. The board protects the stockholders by estimating how much money must be earned in order to pay the corporation’s expenses. Condominium associations are operated in much the same manner. An association’s budget assists the board of directors by projecting expenses and creating a benchmark by which to compare the board’s stewardship of the financial assets of the association. The budget provides for control over certain restricted funds of the association. It also identifies how much money must be collected from the unit owners and how often the collection must be made. Basically, the budget is simply a map that will guide the board in making decisions during the course of the year. Since the budget is only an estimate of future expenses unexpected events may occur that will require the board to make changes to the budget during the budget period.
Posted on: Sat, 01 Nov 2014 13:14:54 +0000