Understanding HOA treasurer duties is important not only to the treasurer but also to the board and homeowners. For the former, it sheds light on what roles and responsibilities they must fulfill. Meanwhile, the latter keeps the treasurer accountable.
Where Are HOA Treasurer Duties Defined?
The duties of the HOA treasurer are typically defined by state laws, the association’s governing documents, or both.
In Texas, there is no statutory requirement for associations to elect a treasurer. The Business Organizations Code, which governs corporations, requires only a president and a secretary, with a treasurer optional. Associations in the state are generally organized as nonprofit corporations.
For a more detailed HOA treasurer job description, refer to the governing documents. The bylaws, in particular, define the board’s powers and duties.
What Does an HOA Treasurer Do?
In general, an HOA treasurer leads budget preparation, oversees dues collection, approves vendor invoices, signs checks, monitors the reserve fund, coordinates audits, files tax returns, prepares the HOA treasurer report, prepares financial statements, and maintains financial records.
Here is a breakdown of the HOA treasurer responsibilities.
1. Leads Budget Preparation
While annual budget planning is the HOA board’s job as a whole, the treasurer leads the charge. They take point in reviewing historical data, evaluating economic trends, and gauging vendor prices to project upcoming expenses.
If the governing documents require budget ratification, the treasurer usually presents the budget at a properly noticed meeting. They answer any questions or concerns that homeowners may have regarding the projections.
The treasurer also typically monitors day-to-day spending. If the HOA is on track to spend more on a particular line item than anticipated, they can alert other directors and make adjustments accordingly.
2. Oversees Dues Collection
Associations rely on regular dues and, sometimes, special assessments to fund both daily and long-term expenses. Homeowners must pay these dues to the HOA.
The treasurer oversees the collection, ensuring that owners pay on time and in full. Many communities offer multiple payment methods, so it is the treasurer’s job to monitor all these channels and update account balances as they come in.
Additionally, the treasurer is responsible for collecting unpaid dues. They coordinate with the HOA secretary to send nonpayment notices before levying late fees or interest charges. Together with the HOA attorney, the treasurer also pursues collection efforts, such as legal action, liens, and even foreclosure.
3. Approves Vendor Invoices
When vendors send their invoices to the HOA, the treasurer reviews each one to ensure legitimacy. They compare every invoice against the applicable vendor contract and confirm that the numbers are accurate. They also approve invoices after verifying that the vendor has completed the agreed-upon work.
It is the treasurer’s job to ensure that vendor bills are paid on time. This prevents service interruptions or delays and helps maintain a healthy relationship with service providers.
4. Signs Checks
The treasurer signs the checks for disbursements. For large expenditures, board approval is often required as an internal control. Some communities may require dual signatures, but banks don’t typically enforce this.
5. Monitors the Reserve Fund
An association’s reserves play a critical role in long-term financial stability. They cover the cost of major capital repairs and replacements once those components reach the end of their useful life.
One of the HOA treasurer’s duties is to manage the reserve fund. This includes monitoring bank balances, signing checks for reserve spending, and ensuring adequate funding. The treasurer uses the most recent reserve study to verify that contributions match the recommended funding plan.
6. Coordinates Audits
In Texas, single-family HOAs are not required to conduct audits, but condo associations are. According to Section 82.114 of the Uniform Condominium Act, condominiums must obtain an independent audit every year. The cost of the audit must be included in the annual budget.
After the audit, the association must make copies of it available to the unit owners. The treasurer typically assumes the responsibility of coordinating with a Certified Public Accountant (CPA) and providing the necessary financial records for the audit.
7. Files Tax Returns
Like it or not, associations are required to pay income tax and file tax returns to the Internal Revenue Service (IRS). Unless the treasurer is a tax professional, they will need assistance from an accountant.
The treasurer works with a CPA by supplying the necessary documents and answering questions. They must also ensure that the HOA meets the filing and tax-payment deadlines.
8. Prepares the HOA Treasurer Report
The treasurer’s report summarizes the association’s financial activities and current financial health. It shows the association’s cash flow and account balances, as well as a summary of income and expenses.
Additionally, the report reveals if the HOA is on track with the projected budget. Most reports also depict the association’s delinquency rate without disclosing the names or any identifying information of delinquent owners.
Preparing this report is one of the key HOA treasurer duties. The treasurer must also present this report at the annual membership meeting. This keeps homeowners in the loop and promotes transparency within the community.
9. Prepares Financial Statements
Financial statements inform the board’s decisions. They tell the HOA whether it’s going in the right direction by illustrating the association’s income, expenses, and equity.
The HOA treasurer is normally in charge of preparing these statements. They may work with a CPA, who will pull all financial data from the general ledger.
Typical financial statements include:
- Balance Sheet
- Income Statement
- Budget vs. Actual Report
- Cash Flow Statement
- Delinquency Report
- Accounts Payable Report
- Reserve Fund Statement
10. Maintains Financial Records
Finally, the HOA treasurer must keep all financial records in a secure place. According to Texas law (Section 209.005 for HOAs and Section 82.1141 for condos), the records retention requirements are as follows:
- Financial books and records (7 years)
- Account records of owners (5 years)
- Tax returns and audits (7 years)
The treasurer must also comply with owners’ records requests. In Texas, owners have a right to examine and copy certain documents, including financial books and records.
Professional Assistance
For volunteer directors, it is often difficult to keep track of and fulfill HOA treasurer duties. Hiring an HOA management company can greatly alleviate the treasurer’s workload, with a dedicated manager and accounting department to help complete tasks.
PAMco offers exceptional HOA financial services to communities in Central Texas. Call us today at 512-918-8100 or contact us online to learn more!
