Academy/Community Management Companies
Financial management
What your manager actually handles with association money, and the three reports your board should never skip.
The manager typically handles billing, payroll, and budget preparation, but does not decide financial policy. The board's job is oversight: review an income and expense statement, a balance sheet, and a delinquency aging report at every meeting, and confirm the association, not just the manager, carries its own fidelity bond.
What the manager handles, and what stays the board's call
A management contract usually puts the mechanics of association money in the manager's hands: billing owners, collecting payments, cutting checks, running payroll for any onsite staff, and preparing a draft budget for the board to review. This is policy execution, not policy making. The manager's duty spans "financial operations (billing, payroll, budget preparation), administrative tasks... and building maintenance oversight," but the manager "does not set policy. That is done by the board of directors."
In practice that means the manager can draft a budget, but the board adopts it. The manager can flag a delinquent account, but the board decides how collections escalate. If a proposed budget or spending decision shows up as a manager recommendation rather than a board vote, that is normal. If it shows up with no board vote at all, that is not.
Three reports to expect at every meeting
A board cannot exercise its fiduciary duty over money it never looks at. Practitioner guidance sets a floor for what belongs on the agenda every time the board meets, not quarterly, not when someone asks.
"At every board meeting, review the income and expense statement, the balance sheet, and the aging report."
Source: HOA Financial Reporting Guide, EffortlessHOA
The aging report shows who owes the association money and for how long, the piece a manager can easily bury in a single "collections are on track" line if the board never asks to see it directly. A budget-to-actual comparison, checking real spending against the adopted budget, is recommended on top of these three, run monthly or quarterly rather than at every single meeting.
Protecting the association's money
Two safeguards matter beyond simply reading the reports. First, fidelity coverage: at least under Florida law, the association itself, separate from anything the management company carries, must maintain insurance or a bond covering everyone who controls or disburses its funds. Confirm whether your state imposes an equivalent requirement; where it does not, treat the bond as a best practice to negotiate into the contract, not an assumed legal floor.
"The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association."
Source: Florida Statutes §720.3033(5), The Florida Senate
Second, conflicts of interest. A manager who steers vendor selection while quietly collecting a referral fee has stopped acting solely for the association. The industry's own conduct standard for certified managers is explicit that this is not acceptable practice.
"Refuse to accept any form of gratuity, compensation, or other remuneration from individuals or companies that may improperly influence the manager's decisions."
Source: Standards of Professional Conduct (CMCA), CAMICB
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
Your treasurer says the board only needs to see the bank balance each meeting. What is missing?
The manager carries her own personal insurance. Does that satisfy Florida's fidelity bond requirement for the association?
A landscaping vendor offers the manager a personal referral bonus for steering the bid their way. What should happen?
Sources
- Standards of Professional Conduct (CMCA), Community Association Managers International Certification Board (CAMICB)
- Responsibilities of a Community Manager, CAI, HOAresources
- Florida Statutes §720.3033(5), The Florida Senate
- HOA Financial Reporting Guide, EffortlessHOA
Related elsewhere in the Academy
Community Management Companies
Next, see exactly what your manager's monthly report package should include.
Whether the association is legally required to carry its own fidelity bond, and how long financial records must be retained, vary by state and by your governing documents. Check both before assuming the practices described here are mandatory rather than best practice.