Chapter 1: Fundamentals of Financial Management 3 CE Hours
Expiration Date : Febuary 5, 2026 Learning objectives
Comprehend the prohibition for use of debit cards in condominiums. Understand the required bank information that a condominium must send to the DBPR annually. Comprehend accrual, cash, and fund accounting. Identify required financial reports. Understand financial records retention requirements. Be familiar with association income tax laws. monies owed by members to the association, and available remedies. We reference provisions of the Florida Residential Landlord and Tenant Act that are applicable to associations that collect rent from members’ tenants. Additionally, we explain estoppel requirements and allowable fees; accrual, cash, and fund accounting. Finally, we describe the financial reporting requirements.
After completing this course, the learner will be able to: Understand the unbudgeted expenses and special assessments. Identify how associations may use surplus funds. Understand association investments. Recognize how the association collects assessments, and the remedies for delinquencies that are available to associations. Understand collections, liens, and foreclosure processes. Course overview In this course, we discuss several of the many aspects of financial management in community associations. It includes topics like financial records, unbudgeted expenses and they may be funded by the association. We discuss in limited detail the board of directors’ responsibility when considering special assessments, investment of funds, transferring funds, and borrowing money on behalf of the association. We also discuss the collection of
INTRODUCTION
● Calculate and prepare certificates of assessment and estoppel certificates. ● Collect amounts due to the association before filing a civil action. ● Complete forms related to the management of a community association that have been created by statute or by a state agency. ● Comply with the association’s governing documents and the requirements of law as necessary to perform such practices. ● Control or disburse funds of a community association. ● Coordinate maintenance for a residential community association. ● Coordinate or perform maintenance for real or personal property and other related routine services involved in the operation of a community association. ● Determine amounts due to the association. ● Draft meeting notices and agendas. ● Prepare budgets or other financial documents for a community association. In the following pages, we address these activities and provide more detailed information of what constitutes financial management from a CAM/CABs perspective.
It is quite common for a CAM to be involved in the annual budget preparation. Their input is significant because the CAM is the gatekeeper of events and activities that relate to the financial management of an association. Management is a primary source of information that chronicles and measures the activities of a community association. The CAM, for example, usually is involved in knowing when maintenance is required, which entity will perform it (under contract or by in- house personnel), if it is a regular or unique occurrence, scheduling the maintenance activities involved, overseeing the completion of the maintenance work, and recording the cost. Once the CAM has seen the process through, they document the information, inform the board, advise the accounting personnel, and update the records. It is the CAM who recognizes expenses and incomes and how they affect the budget and the financial health of the association. F.S. 468 Part VIII provides that a CAM/CAB has many responsibilities regarding the fundamental aspects of financial management of a community association including assuring that the financial and other records of the association are appropriately maintained. Provisions a CAM/CAB’s responsibilities for financial management come from F.S. 468 Part VIII, F.S. 455, 718, 719, 720, and 721 as well as the Florida Supreme Court Opinion #SC 13-889 (regarding UPL): The Condominium, Cooperative, HOA, and Timeshare Acts require that associations maintain certain financial records. Financial records are comprised of all records that chronicle, measure, and communicate financial data and statistics, whether they are maintained in a computerized (electronic) system or on a manual spreadsheet. Many of these records are used during the preparation of the budget.
FINANCIAL RECORDS
● Equipment maintenance records ● Information from utilities ● Bids - past 12 months ● Minutes of meetings ● Warranties ● Changes in wages, tax rates, etc.
● Bank statements ● Engineering reports ● Maintenance records ● Invoices - past 12 months ● Aging reports - past 12 months ● Contracts ● Insurance policies ● Most recent property appraisal ● Manager’s reports - past 12 months ● Most recent legal status reports
Financial Records List ● Approved budget ● Balance sheet ● Most recent financial reports ● Budget - last year ● Detailed receipts of expenses ● Detailed revenue information
● Owner ledgers ● Vendor ledgers ● Reserve schedule ● Tax records ● Legal status reports
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Book Code: CAMFL1524
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