Academy/Financial Statements for Non-Accountants
Financial dashboards
A board dashboard is a shortcut to numbers you already have, not a new report to prepare.
A board financial dashboard is a one-page summary that pulls four numbers into view: cash position, budget-versus-actual variance, receivables aging, and reserve percent funded. No statute or accounting standard dictates its format. The layout and the tool are a board and management choice, built from figures your manager and CPA already track.
The four numbers worth putting on one page
Cash position tells you what is actually in the bank, confirmed by a monthly bank reconciliation against the bank's own records.
Budget-versus-actual variance compares what the association planned to spend and collect against what actually happened this period. See the budget-vs-actual report lesson for how to read one.
Receivables aging shows how much owners currently owe in unpaid assessments and how long each balance has been outstanding, the early signal for a collections problem before it shows up in cash. See accounts receivable.
Reserve percent funded compares the current reserve balance to the total future repair and replacement obligation identified in the association's own reserve study, not to last year's balance or to any fixed target. See reserve fund.
"a necessary control to safeguard cash against fraud and losses, and to ensure the accuracy of accounting records"
Source: BARS GAAP Manual, Bank Reconciliations, Washington State Office of the State Auditor
Why no two associations' dashboards match
The operating fund pays for what the community uses today: landscaping, utilities, insurance, payroll. The reserve fund pays for what it will need tomorrow: roofs, pavement, elevators. A dashboard exists to make that split visible at a glance, but nothing requires it to look any particular way.
What your board is required to review each month varies by state and by your governing documents. Some states set a detailed monthly checklist; others set little or nothing. GAAP governs how a CPA prepares, compiles, reviews, or audits the underlying statements once an engagement starts, but it does not prescribe a one-page summary for board use. Check your bylaws and your state's statute before assuming a dashboard format is required at all.
What a dashboard can't tell you
A rising reserve balance is not the same as a fully funded reserve. Percent funded depends on the total obligation in your reserve study, and a bigger balance can still sit next to a badly underfunded roof if replacement is due sooner than the balance covers.
A positive number on the income side is not the same as cash in hand. Most associations recognize assessment revenue in the period it is assessed, not the period it is collected, so a healthy-looking month can coexist with a flat bank balance if a chunk of that income is still sitting unpaid in receivables.
How reserve funding is regulated, and whether a reserve study is even required, varies by state. Ask your manager or CPA what your own state and governing documents require before treating any dashboard number as a compliance measure rather than a management tool.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
The dashboard shows the reserve fund balance up 20% from last year. What can the board actually conclude?
The dashboard shows positive net income for the month, but the cash balance barely moved. What's the likely explanation?
Which addition to the dashboard gives the board the earliest warning of a growing collections problem?
Sources
- BARS GAAP Manual, Bank Reconciliations, Washington State Office of the State Auditor
- Operating Fund vs. Reserve Fund: The Critical Distinction Every HOA Board Must Understand, Common Interest Community Standards Council
- The difference between accounts receivable and accounts payable, AccountingTools
- Income statement definition, AccountingTools
Financial Statements for Non-Accountants
Once you know what belongs on the page, see how to read the variance report behind it.
What your board is required to review each month, and how reserve funding is regulated, varies by state and by your governing documents. Check both before assuming your dashboard covers everything required of your association.