A Budget planning is a key component of any association's operations and preparation, and usually falls on the property manager's shoulders. However, he or she does more than just what the title implies—the manager is a "jack of all trades"—they must oversee daily operations in addition to acting as a liaison to the board on a variety of issues from financial matters to refereeing disputes amongst homeowners.
A condominium development has many physical components, all of which may need significant repair or replacement at a given time. The property manager routinely collects monthly maintenance fees, works with the board on preparing its budget, works with the super to ensure that all building systems are operating efficiently, and must be aware of all repairs being done on the property as well as the vendors being used.
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The property manager's duties regarding the annual budget vary according to what management company the building uses. According to Frank Juranich, vice president of finance for C & R Realty, a property management firm located in Englewood, "Some companies, such as ours, have our own financial division with accountants that work on accounts payable and receivable, payrolls, bookkeeping, and collection." He becomes involved with the manager when preparing the budget by going through the year-to-date actual expenditures and then going over pending contracts with the manager, including what's up for renewal and what the contracts might look like. Then, by working backward, he creates a budget and the draft.
Other management companies, Juranich says, have the actual manager handle the preparation process. "Some smaller management companies will have a dedicated financial person for that, and those managers usually do the best they can," he says.
Gary A. Sherman, CPA and partner for Rosenberg Rich Baker Berman and Company, an accounting and consulting firm based in Bridgewater, says the property manager "should be the liaison between the board and the financial management arm of the management company." He says the manager knows the property, the finances, and the needs of the trustees and the association. When preparing the budget, "whether they do it on their own or work with the treasurer or a finance committee, they generally should take the ball by early August or at the latest September so a draft can be reviewed by the board," Sherman adds. "It should not be the CPA's role to initiate—it should be the property manager's responsibility to initiate the process."