Even in the best of economic times, preparing a condominium’s annual budget is a tiresome task, fraught with uncertainty, estimations and shifting numbers.
Now, factor in one of the most challenging economic downturns in a century with cash-strapped owners who may be “skipping” monthly maintenance fees or common charges—or even winding up in foreclosure—and you have a downright daunting task.
The importance and economic challenges of this year’s annual budget are not underestimated by CPA Gary Rosen, with the East Brunswick-based Wilken & Guttenplan, PC accounting firm. “A budget is a tool put in place in the beginning of the year to determine the quality of life and level of services that you want to have within the community. Make that budget not only looking from an internal view, but also external, as to what’s happening in the industry and the economy as a whole.”
Getting that “plan” into action is no small feat but it does follow a consistent path year after year. Usually, beginning in July or August, the management company or the association’s treasurer will conduct the upfront preparation, analysis and initial drafting of the budget. As with most things in life, the upfront preparation proves to be the most overwhelming yet most important aspect of the budget process.
By September, the first draft will be presented to the association, and after an average of three meetings, a finalized budget is put to vote for approval by the end of December. From start to finish, close to half a year is devoted to the budget process.