Blowing the Budget - Does It Matter?

There is a reason why a business develops a budget. It's a spending plan. It's important. It should be followed. But it's not rigid. If it needs to be adjusted during the year, it can be. 

The HOA's Procedures Reference Manual (PRM) has important detail pertaining to the budget. The HOA is supposed to develop the expenses first; i.e., by using history and reasonable estimates of expenses for the coming year. Then the Income Budget is determined.

The PRM requires a budget to be balanced. The Finance Committee and the Board ignored that for the 2024 Budget. The year started with a $27,000 deficit.

Over-spending began showing up in the monthly financial statement as early as the February 29, 2024 statement. It got worse every month.

At no time, ever, during 2024 did the Treasurer give an actual Treasurer's Report and tell the Board what was happening. At no time did the Board address at a monthly, public board meeting what was happening and ask questions or express concerns.

By October 31, 2024 the over-spending, including the initial $27,000 deficit, was almost $150,000, which is more the 10% of the budget. 

A professional HOA management company would have warned the board about over-spending. It would have cautioned the Board to get finances under control. Did it? The CAMS website says that it "has the experience, knowledge and specific industry expertise needed to provide the highest level of service and trusted guidance to your community. Our community management team is made up of local experts available in each of the areas we serve throughout North and South Carolina."

Did the Summit's HOA get that service and guidance? Did CAMS experts help the HOA's Board?

If CAMS did provide expertise, service, and guidance, did the Board follow it?

Maybe that's why the HOA is only in the hole by $150,000 (for the first ten months).

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