The list of HOA treasurer duties is extensive and varied. The treasurer is responsible for managing the association’s finances, which involves several overlapping tasks. While a financial background isn’t typically required, it does help, but so does hiring an HOA management company.
The Importance of Understanding HOA Treasurer Duties
Every homeowners association has a set of board directors, one of which is the treasurer. The treasurer is responsible for all things finance-related, including budgeting, collecting dues, and preparing financial reports.
It is essential for both homeowners and board members to understand what the HOA treasurer’s duties entail. In doing so, those who wish to run for the position can start on the right foot and support better execution. They don’t have to waste time floundering or figuring out what to do.
Moreover, understanding the treasurer’s duties allows for more accountability. When everyone knows what the treasurer is responsible for, they can keep tabs on them and call out any signs of negligence or misdeed.
What Does an HOA Treasurer Do?
While exact HOA treasurer duties and responsibilities can vary, they generally include budget preparation, dues collection, financial reporting, bank reconciliation, reserve fund oversight, audits and tax filings, internal controls, insurance management, and financial transparency.
Let’s discuss these below.
1. Budget Preparation
The treasurer leads the creation of the association’s annual budget. Together with the rest of the board, the treasurer projects revenue and expenses for the coming year. This serves as the basis for calculating owner dues.
Throughout the year, the treasurer is also responsible for monitoring the budget and ensuring the HOA sticks to it. Consistent tracking helps prevent budget shortfalls and keep the association in the green.
2. Dues Collection
A primary role of the HOA treasurer is to collect dues and assessments. They make sure that every owner pays their dues on time and in full. If someone defaults on their payments, the treasurer can work with the rest of the board to initiate collection actions.
3. Financial Reporting
Preparing financial statements is one of the most important (yet difficult) HOA treasurer duties. These reports typically include balance sheets, income statements, budget vs. actual reports, and general ledgers. The treasurer must also maintain accurate receipts and invoices.
4. Bank Reconciliation
The treasurer reconciles bank accounts by comparing bank statements with the association’s internal ledger. This helps the community ensure a healthy and accurate cash flow. If there are discrepancies, the treasurer traces the origin and corrects the numbers.
5. Reserve Fund Oversight
If an association maintains a reserve fund, one of the HOA treasurer’s responsibilities is to track and manage this fund. Several states require associations to fund reserves, including Delaware (Section 81-315), Florida (Section 720.303), and Nevada (Section 116.3115).
The treasurer ensures that there are enough funds in the reserves to cover long-term capital repairs and replacements. They also include reserve contributions in budget planning and keep the reserve fund separate from the operating account.
If an association is required to conduct a reserve study, the treasurer works with a specialist to fulfill this obligation.
6. Audits and Tax Filings
Associations must pay income tax and file tax returns. The treasurer coordinates with the association’s CPA to facilitate taxes and ensure the HOA doesn’t miss the deadline. Moreover, if an audit is required, the treasurer works with a third-party CPA or auditor to conduct one.
7. Internal Controls
Perhaps one of the more overlooked HOA treasurer duties is the facilitation of internal controls. Every association should have its own set of checks and balances to prevent financial misconduct. Common safeguards include requiring dual signatures, processing payments separately, and segregating duties.
8. Insurance Management
Most associations are required by law or their governing documents to maintain certain types of insurance policies. Common ones include property insurance, liability insurance, and fidelity bonds. The treasurer works with the association’s carrier to ensure these policies are fair, up-to-date, and meet requirements.
9. Financial Transparency
Homeowners have a right to know how the association is doing financially. This is where the HOA treasurer report comes in. The treasurer prepares and presents this report at annual and board meetings.
A treasurer report shows the financial summary of the association, depicting its cash position, income, expenses, and overall health. Apart from that, the treasurer must also share regular financial statements with both homeowners and board members.
Does the HOA Treasurer Need an Accounting Background?
While it is a plus, the HOA treasurer job description does not usually require a financial or accounting background.
Board members are volunteers, which means they may not always possess the right experience or formal training that is typically related to their role. Some communities, particularly small ones, simply rely on volunteers who are willing and available.
Of course, that doesn’t mean financial or accounting education isn’t valued. In fact, it gives candidates more of an edge when running for the position of treasurer. Still, the governing documents hold the final say on the qualifications for the role.
Even without a background in the subjects, treasurers can still perform their duties well. Many associations invest in onboarding, training, and continuous education. These help arm board members — treasurer included — with the knowledge and skills they need to fulfill their obligations effectively.
HOA Treasurer Duties FAQs
Does an HOA need a treasurer?
The requirement for a treasurer depends on state laws and the governing documents, but most associations certainly need one. Some examples of states that require the election of a treasurer include Delaware (Section 81-306), Nevada (Section 116.3106), and West Virginia (Section 36B-3-106).
Can anyone be HOA treasurer?
A homeowner can become treasurer if they meet the eligibility requirements and successfully secure the votes to win the position. Most associations require candidates to own a unit or home within the association, be at least 18 years of age, and be in good standing.
Can the HOA treasurer also be president?
Yes, it is possible for a treasurer to also be the president of the HOA, but it ultimately depends on state laws and the association’s bylaws. Some states allow one director to hold two officer titles, but others only allow one officer role per person or limit the types of roles that may be merged.
That said, even if the HOA allows it, merging the roles of treasurer and president can create serious problems. There are issues with conflicts of interest, fraud, and a lack of transparency.
Does the HOA treasurer have unlimited authority?
No, the HOA treasurer does not have unlimited authority. Their authority is restricted to what state laws and the governing documents permit. The treasurer does not have the ability to make unilateral decisions. They get one vote in decisions, the same as every other director.
Does the HOA treasurer get paid?
Generally, associations do not pay the HOA treasurer a salary. Compensation can compromise a director’s motivations and volunteer status, which can void certain legal protections. Still, some governing documents allow payment.
What are the qualities of a good HOA treasurer?
A good HOA treasurer must at least be financially literate, with high ethical standards and integrity since they work with money. Additionally, the treasurer must possess good communication skills, attention to detail, and a willingness to learn. Beyond that, they must know how to be a team player, as the job entails working with other people.
Help Should Always Be Welcome
The role of HOA treasurer is arguably one of the most difficult in an association board. It comes with countless HOA treasurer duties, each one as important as the last. To prevent burnout and support financial success, many communities opt to hire a professional management company.
Are you looking for a trusted partner in HOA or condo management? Westward360 serves communities across the United States. Get started on more effective management by contacting us online or requesting a proposal!
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